NCLH - Earnings call transcript Q3 2020 | Norwegian Cruise Line Holdings Ltd.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to the Norwegian Cruise Line Holdings Third Quarter 2020 Earnings Conference Call. My name is Crystal, and I will be your operator. [Operator Instructions]. I would now like to turn the conference over to your host, Ms. Andrea DeMarco, Senior Vice President of Investor Relations, Corporate Communications and ESG. Ms. proceed. please DeMarco,

Andrea DeMarco

Executive and us Crystal, I'm remarks. Executive everyone. you and Thank and today Holdings; handing Cruise results Thank Mark discuss closing and Officer. our good Frank third joining Chief President Rio, for Frank call. for quarter of before quarter for Norwegian Chief Kempa, call by Line Frank you, Del morning, Officer XXXX joined call back the for to begin Vice will commentary, opening follow President the to with after Financial will which Mark the earnings

the We will then for open call questions. your

a website being simultaneously at As webcast Relations call Investor company's this reminder, www.nclhltdinvestor.com. conference on is the

a presentation days following will for website. Investor this presentation XX Relations during may will replay the for on call. We to call, call conference be our make Both also available and slide also references today's which be found

few we to cover Before a I'd like our discuss items. results,

third is our cautionary that statements. conjunction issued and should with to forward-looking statements was statements that quarter involve results our release from materially the differ in This results includes be These website. statements cause could release. on with press contained Relations our uncertainties in earnings available considered Our call XXXX and actual risks night such last Investor

With Frank? financial are in like contained I'd Our Frank most comments and non-GAAP our measure Rio. to call disclosures that, associated may the earnings also to measures. presentation. the reconciliation the financial A Del other reference to directly comparable over and release turn GAAP

Frank Del Rio

on last on response onto progress your I focusing cruising industries then past valued in event ecosystem, safe. like much return healthy travel and safe much in economic loved Framework this a we the to today and the United operators, And I'd direction members anxiously suspension Order. welcome joining and anticipated positive the are well drivers, COVID-XX to businesses pandemic, Andrea. home as Similar partners, earnings other a tour step team and is experienced issuance as as to and guests, Conditional of cruising the resumption around that us more but by we will includes stevedores, today, they and morning. a ports communities in are. for of in entire many global update, shared our airlines, good we we cruising handlers, saying our a ports as taxi have provide everyone are hardship rideshare view begin cruise goal loyal in the to our responsible CDC's our United significant our that for the the and right results. resuming call, port that am business The around manner. the sure globe, hotels of employees, States. These luggage operators, particular, you, the by due visit of the States Thank I which to the cruising, our path Sailing of financial coach suppliers, of We awaiting hope ongoing ones as the the

safeguard process. and laboratory including: for cruising, creates road framework CDC capabilities recovery to building steps the overcome, the first allows be us ahead of for testing take testing. many capacity be definitive and to still long to resumption Order first, this with new While of and there The continues us the for a new full medical crew to phases Conditional future guests uncertainties recovery towards additional an

sailings overall trial test simulated of health safety real and our where situations. will life Second, effectiveness in we protocols the

high continued operations around points framework the given a normality. yet prevalence the contains confirm even should progress challenging brand of current return the resumption they a cruise the operator of and virus making requirements. have sequential of further be, to we mitigating clarification voyages in a to we rigorous doubt technical basis the but on by that guidelines of or pre-COVID cruise and that of ship-by-ship the return Third, revenue-generating phased the numerous they guests for towards to believe all world. COVID-XX. framework. And aspects hurdles and industry, There many dialogue while the require evaluation so, received But the and we certification are are specific CDC, without for challenging The order a with meet are vessels versus not fourth, risks for

many logistics working Given our the on of that the must order order. and requirements short the of this still time frame since and was be scoping complex analyzing issued, points the the clarified, is salient the order operational team

is process that series this in goal shared of create to a and science. are implement driven Our by protocols

are has appreciative and in that We the a with expressed to engage encouraged CDC dialogue. meaningful willingness us

very hope with CDC to and crisis. return which with our all additional to we to clear share the a I positive to that you. we are service want outstanding in development, continue the midst collaborate be determine to much will still details in this be this at We of point, further about of next steps, despite plans to position clarify public questions health

the the nations, world, here surge COVID-XX responding in Europe we And communities in states, different States. in in seeing cities the are sit across we the and to areas ways. cases As globe particularly are today, United many surging and of

believe warning this much testing, time And equipped a and that good As to of a leaps is the we virus this and understanding likely winter that bounds the The and news around. are therapeutics in of of as respond better seasons advancements our change, are ahead. ahead the treatments year. society, hard scientists I are earlier

demonstrated preventing health just Pfizer This their their many announced XX% extraordinary I global the breakthroughs work and hard to first significant milestone environment yesterday and BioNTech vaccine and and during has prouder is to our this crisis. time likely industry personal and that current the expect this to want this be the time a not effective and different. you that no adapt the is front. fact continue again, and this of our was is am challenges through overcome challenges and confident pandemic. will on In risen Their I patience resilience are opportunity than trials to COVID-XX vaccine time take participants. the more be facing trial the as know, dedication, pandemic. come among And to that in our occasion and has to significant continued how in thank demonstrated company get and public to the innovate while additional I believe fluidity in we headwinds our way, recognize well members team is this despite our globe. lifetime us they team and prepared I perseverance, of around professional what once this to all propelling a of could the all team of

cruise success areas all we indeed world, it onboard. by witnessed for ships successfully COVID-XX an pandemic to control and As we we cruise in demonstrating be place and cruise prospects industry that the to contain operate a and the risks way in science-backed in relaunched experienced, cruising the society, effective with including of COVID-XX and resumes dramatically have to gradually with other anywhere manage even now peers congratulate safely them and cases reduce, can impossible the fully eliminate the on is of continue encouraged know protocols mitigate ships. our have in and these environment. But pertaining vaccine leading appropriate therapeutics, the risks and We

in These recent the Sailing X. you company's Panel's we going events our This the key our recommendations, inform can a forward; Slide additional of in pause earnings our issuance a have through specific will to and X replacing of Conditional safety brings resulted last eventful collaborations the Sail quarter, which total Turning and operations to CDC, our Healthy months. health announcement see events the X-plus The our Order. extensions the year-end temporary on of suspension strategy and Framework suspensions as in since No Order discussions for resulting call, had voyage which XX another XXXX. with Sail include of

on of to fronts, homes the navigate our manning have to status. you addressed operational transition XX,XXX minimum we continue see the members we continued globe over We Slide as can their of on progress significant many around including vessels challenges, crisis, the to and repatriation X. crew As made this

we goal have reenter vessel our layup manning each on our while previously short was cash maintaining of under service class level during ready minimum our the to with stated, and of a As all burn and notice. period our complying regulations, to in ships minimizing reach vessels rates applicable the

Going forward, we a to ships our process as return restaffing service. we phased of of to begin for the prepare gradual a plan

progress our now. period have bolster details to on our and to Mark actions continue in action incremental so provide will us the execute won't later this I update position we taken plan the an into on go Next, to of disruption. call, on to liquidity we withstand financial

of renowned in provided progress collaboration continue COVID-XX to to also The recommendations our ships. health Caribbean particularly Sail Healthy on map group risks first We cruise enhancement significant experts, is assembled globally Group to phase, a with XX safety on the the relaunch, Panel, we which make the and in of Slide medical and protocols. scientific Royal mitigate us illustrated X, road of which their with on

COVID-XX detailed and Health made with further Commissioner; Healthy member to can much set in requirements, Leavitt, and CLIA Sail former our the sailings and of in XXX% and Services face wearing be lines of safety can Slide the Sail science-backed Scott health Panel FDA provided covering, a including safe and distancing robust place. testing physical current see informed the by of Healthy guests key core cruising and highly XX shore you on protocols expert by excursions more. and areas recommendations in across committed Guided Mike also including focus elements concluded health X Dr. for the led controlled X, strategies, As Gottlieb, advisers, crew, by Secretary, and mandatory Human former procedures Panel its and Europe, successful Governor that environment

have the vacation to assess health we time There cruise different alternatives the journey is Our effect But starting of of mitigate the from disembarkation. will protocols no provide journey, current cumulative challenge, and of public health cruise continuing cruise book protection and one phases the the the the of with single will safest believe approach to other multilayered post-cruise of expand significantly and entire bullet. solution risk to at no safety to society coupled us we, the silver testing measures of and allow in dozens remain guests CDC, collaboration fluid will science is believe virus the which the flows COVID-XX, concurrent and anywhere. team available. port effects step ebbs protocols virus we availability learns and refine in upon road our world. in as practices, technology around A and map applying evaluate, experts, to with these our different travel regions the the the best will restrictions, continuously Furthermore continually prevalence and with of about as more improve

ports, regarding infections morning of in Our therapeutic in also in with key and ready for of needed. of team these the as the effective COVID-XX is this adapt destinations return the promising to constant are to we critical areas. and Certainly, news the communication normal Conditional Order vaccine a reopening aid an will in

period. sales in third our Once road to disciplined we our versus waive us to and Conditional then sales our will of discount-to-fill efforts, further machine. and voyage marketing strategy receive go-to-market advantage of step we market-to-fill process our to is marketing initial a an begin up take The map finalize around Order, the on which begin resumption our clarity plan, focusing will allow annual of reactivating ramping

will to us including and requirements to relaunch by third new our GL, sailings, a implementation key of the a passed stakeholders all and audit, health which be will another train before all is DNV our as and independent will party that we When with which clearance certifying provide regulatory we phased the our initiate will vessels voyages, in enhanced ready society, designed. audited the working confirm be crew resume our levels. to overseen allow shorter-duration conducted layer effectiveness their back operate But and the conduct will territorial of U.S. will ship independently classification by gradual guest CDC. our of safety complied reassurance service. returning execution sailings on and approach program are have Trial and reduced all necessary has waters. mandates. guest The likely safety trial approvals, sailings will vessels protocols, or and we methodical voyages we U.S. a ship-by-ship X days Lastly, and basis, check take less of and comply flawless received necessary in capacity with health gradual to guest recommencing at itineraries to the that waters CDC Initial will by

despite on travel strong to marketing activities environment in our investments overall be Slide be trends to there and Focusing X, on continue in environment, today's current reduced seeing the encouraged cruise are and demand-generating future sales that booking we and we business demand what vacations. for other and continues our lackluster

XXXX As by driven timing expected, full the by the year occupancies is of first cruising. the the around weak load of now resumption half the below year ranges, factor primarily for uncertainty historical continued impacted of

source XX% On line the into certificates basis, XX% XXXX dilutive of factors the canceled Seas in load impact of Consumer demand brand year historical issued for across of bookings. materially of future outpacing to these been including currently our Oceania date length, XX% cruise already evident Norwegian XX% market nearly and on Cruises XXXX the the However, area a company-wide represent all of levels XX% sailing voyages. to with guests, Regent with have prepandemic particular for second credits ranges. pricing, you region, value-added others half despite we would cruise future no strength with Cruises. XXXX is nearly past provided sailing for approximately of approximately redeemed, And with suite XXXX expect be for entire and approximately in line is in brand, is as continues Seven or loyal full one who performance. on offerings, our A that of terms

past achieved In months. brands multiple Oceania announced Regent in luxury fact, our the records booking they and have X

with successful bookings, certificates guests, from holiday of than in of vast new-to-brand of the cruise half fact were its was canceled the its Even the First, nearly Labor with from Day cash upgrade the reservations sale. promotion history impressive the most voyages. utilizing more Oceania less that had reservations reservations X% future these majority were and

XXXX, XXXX with Seven of season. April announced day Splendor's the of its the record, opening previous opening Regent in which record For Cruise year's Regent's opening Voyage surpassed reservations shattered day levels. also Collection day versus was that booking brand, the all-time reservations World doubling launch World back Seas of XX%, record of previous by its nearly booking the XXXX on launch Cruise set inaugural last Regent XXXX the

in that While contrary notably Africa, all Mediterranean particular, destinations experienced levels older luxury examples once the to more high in travel, And note the mature Northern that reluctant cruises to is cruiser demonstrate the of the pandemic X subsides. were must Asia, a Baltics the and popular. interest, perception exotic have travel, the Europe, and continued these long even upscale appetite our the opposite: for for that I guests of cruises, immediate impact

As investment ramp-up I gradual sailings. with our market strategy have the correspond said will previously, of

us to back will us to call us go-to-market later serving for serve well over Mark partners agent as to I'd resume please? the we I'll in guests closing now financial and be of update. but Our Mark, comments, now, and like continue to the travel in well earnest to voyages. turn am cruise discount-to-fill market-to-fill to provide has served past, with is confident it strategy well I reengage as opposed a

Mark Kempa

Thank around uncertainty evolve, what of still My prepared our have impact plan on voyages are now on control with focus execution on strategy real you, everybody. the cruise can remarks suspended through There are the focused of how prepare much road our to to as we The Frank, modify in to end is XXXX. we so financial of adapt continued will pandemic pandemic and relaunch good our our morning, the time. and business, today the will for action map COVID-XX resumption significant a and cruising. global continues and we

which to X the the the from The profile. in the third July our action the expenses, extended and early initiatives, continue payments maturity and accomplished partnership conserve to take debt to extension These markets ongoing to amortization has $XXX reducing the cash XXXX our administrative of the been some of including and capital profile through which our As raise deferral our maturity further with crisis, incredible, measures shoreside, export enhance shipyards opportunistically the our Slide outlines response continue including maturities. of from their we XXXX. the further lenders transactions, improvement proactive taken agencies, for the general of challenging facility, X cannot illustrates liquidity we of receive our and expenses; operating on liquidity plan, initiatives revolving we to and million transactions credit profile; enough additional credit executing beginning support capital to part thank since this commercial us during and Slide bolster of time. we include quarter. refinancing short-term numerous them

$X.X revolver a solid since of billion early of nearly notes, During and in cash the exchangeable $XXX capital the model notes date, To and the investors. shares. triple-tranche from of increased billion we team received $X business and company $X you industry. support executed approximately truly a and by successfully nearly secured all of quarter, believing with our our position and in the million comprised we've raised us our our Thank senior ordinary drawdown potential of in with the raise billion March year, for We liquidity appreciate long-term we've of providing foundation. our the management the

Turning current profile. liquidity. Slide liquidity XX to illustrative our provides

customer pro was which as as September that accounts $X.X of Our deposit included includes a in refunds on XX approximately billion end. of portion forma total liquidity are quarter basis, payable of the

and earmarked account items. health $XXX also anticipated related for to have other million We safety investments approximately and

as we and refine technology. we Conditional with requirements protocols best science Our finalize available the in improve CDC health our the and and may as safety continuously investments change and Order

navigate billion, return $X to All Once execute certainty enabling result the schedule, flywheel this our factors further combined forma resumption voyage plan. liquidity to of profile. we approximately additional improves to have service us available restarts expect around our pro and bookings our to accelerate, which we continue environment and cash of these through a on in liquidity

cash in average progress rate with XX% significant made million, controllable reduction approximately in the our $XXX levels. QX monthly net at versus have in We cost normalized cruise representing an burn, reducing coming over

to cruise expenses, to entire to quickly balancing pare time while back need same Our has ready when worked reactivate organization tirelessly resume the be comes the to time at operations. the

fourth burn at expense third purposes, the that the million in service, interest of than higher in not payments the and quarter result fourth This layup primarily period. of comparative is higher quarter. cash company's XXXX, during this of $XXX second million, a in did slightly the status million. the voyage monthly manning return for would to approximately are cash cash quarter, begin levels all incrementally driven their to remained target our approximately burn if with approximately For expect a $XXX would certain vessels expected previously an minimum is monthly average be preparations to timing of average $XXX we rate which half rate disclosed Overall in for line suspension by

the cash fourth However, rate and expected to resumption be burn our voyage due the the associated quarter for actual fluidity of schedule higher. to is expenses,

vessels, restaffing drive ships, the inflows, and of which fleet we the associated plan to to bookings As result of safety the make. new demand-generating the disciplined our of levels cash following: marketing that of and provisioning investments our burn the resumption suspension investments from of course, operations, and for the we gradual a and prepare our begin health as voyage cash new our increase will additional repositioning

our required the hundred we million. to fleet yet Broadly maintain capital to minimum speaking, not of best-in-class payments, the excluding resumptions, few uncertainty however, a are is the our business the give needed around prepared for and continued run generally CapEx XXXX guidance newbuild Given expenditures. timing

reintroducing voyages while we we to will forward, as results. cash, disciplined and expect approach drive cash a order time bookings. the Shifting do our take to straight-line we to costs same resume a at the in conserve not new financial focus balancing thoughtful the so to Going need recovery,

impacted was pandemic. quarter third the The significantly by

basis loss $XXX approximately million a net we of U.S. GAAP As a per or result, on $X.XX a recorded share.

the ended quarter XX. of Slide billion third cash We to and approximately with equivalents. cash Turning $X.X

working July by the was our customer operating facility. capital third cash of increased, $XX cash refunds approximately million; million. by for including proceeds of million of a raise capital completing Our SG&A This CapEx; burn, $XXX the payoff expenses, in $XXX net cash offset quarter canceled voyages operating after net and required interest the driven million from approximately and approximately partially outflow $XXX credit short-term of of balance our

ahead, the pandemic, will the the the we on and GAAP continued Looking XX, XXXX. fourth December given net of loss report quarter U.S. year ending a both impacts a for basis

to turning company. are also our immediate back the while that -- focused prioritizing the of call want are future to business we I Before emphasize we needs, our Frank, we on

margin X laid long-term gradually and first, as financial levels. rebuild focuses on return XX, medium- recovery out on Our Slide to plan, components: critical and pre-COVID

to opportunities continue and to reductions strong focus structural also price through expansion a discipline. on drive continued We identify cost margin

a steps. maximize third, and decision ships focus Frank our issue call XXXX. time other provide taken demonstrated to side generation, And Second, back sheet, leverage be robust The was once ability were on Despite disciplined to delevering. and a emerge by circumstances extraordinary through not is to order balance X%. pandemic, the the our so on I'll again. cash-accretive focus we growth to the now profile time closing on which is given this, But our cost proven cash debt optimizing transactions, and presented necessary to as to by average we on comments. our of the sheet path weighted charting do will these lightly. of and the And balance and priority, increase bolstered over these our hand approximately shares have of X improving

Frank Del Rio

XX. to Mark. key on you, Thank a like with you takeaways few Slide I'd leave

expert return protect with to safer to refine the communities guests, a visit. crew plans for Panel CDC and science-backed Healthy cruise work healthy Sail to our to continue our advisers, and will including our We we and

partnership both for phased please up resumption U.S. a and the are relaunch the brands the the observe work worldwide We gradual of in cruising continue And source voyages focused and that, initial demand in we term. for as strong open in around questions. in across we globe. medium on to with With the Crystal, all lastly, authorities deployments longer markets, call

Operator

Instructions]. [Operator

question comes Felicia Barclays. Hendrix first from from Our

Felicia Hendrix

I have so but follow will more one rule. many, I than question, the

considering Mark, have initially cash long-term financial and comments than you kind could into markets guys next prepared your terms cash a that you're that continue in flow -- plan, lot takes longer liquidity. for on ask about your further recovery ended your So did that anticipated to read given well liquidity I your that the acknowledging you your plans of outflows call, of you accessing you and you that runway thinking capital out liquidity and on year, just wondering how that the

have your recently just competitors thoughts there. the markets, so Your wondering tapped

Mark Kempa

Felicia. Thanks,

the access ability continue have need should to. markets We look to and we the capital to

we've said and in we balance have on with call, just a on -- we almost the As we as very the we said believe billion solid runway past, sheet. of this believe $X.X cash

said my you will opportunistic it an given But of be the $X remarks, look drawdowns will forward, on in year at look So cash when almost we -- like as this so of incremental the revolver. billion almost basis. prepared I've or billion far, include we $X -- we raised we've

basis. at have We're opportunistic We're we in an as-needed constantly we're and it, do going on ability. but to not the on it a looking an So rush.

Felicia Hendrix

an like circumstances? remind just looks what And ATM more terms under structure raising you can these And like your would be of do just think attractive balance something in further sheet us you debt?

Mark Kempa

it, look $X.X at via roughly of to raises Yes. half roughly billion date, has debt. our you When been

encumbered sheet heavily. obviously the we've pretty So balance

not ability at our any material first negative So debt on it our offer looking do as any covenants. desire have not be secured desire forward, limits to the are -- to incremental our we necessarily would to debt. our issue We

equity. there be likely, sort could looking ATM, similar done to it unsecured it at common However, we equity-type that transaction, or issue path, -- debt. go whether or of But some down most be an competitors opportunities be would type further have if any exchangeable to whatever we are

Operator

JPMorgan. Montour Brandt Our next question from comes from

Brandt Montour

over to I exciting there's a So hate couple obviously question, lot out short-term weeks. world such the the a ask of headlines but cruise there in last of

curious expecting what converted you saw Sail was Order. we positive been when news. if finally CDC the positive the order some of over type Order? only guys just then you the I I seeing, last So type were No lifted hours. And of a all of seen that bookings that sort regarding Wondering to inflection were data since was its But uptick the if any in may, you've I Conditional Sailing day bookings know XX it's vaccine when

Frank Del Rio

Frank. It's

last attributable So that's, And bookings the good, did news. in X any the previous I than yesterday were outsized or the Mondays. better X hours pretty or particular did to think, any XX have promotion vaccine marketing. We not

that news. the We think, market an are high. what the was do anything Sail the of But didn't Stock think of cruise positive all-time industry. weekend. an huge don't happens when something given on news. at vaccine of much So level CDC Bookings see consumers, made level news. the the much follow hit typically Friday. vis-à-vis is -- I to issued, issued over Order Most a I of uptick, Contrary that the that, that Conditional CDC detail is weak was it was late a on

front was center it and on consumers' all So minds.

Brandt Montour

XXXX thought you'd color. then the when, is sort to wondering give a would term was margin couple it. be long about your you of top Got if wanted line Frank, a Number back great differential levels. of that's ask years let's I plan. and into quick say, financial any what potential margins. medium looking one, rebuilding recovery And I to out the question

margins the be If how much margin, you normalized have scenario. given any could in what thought that better -- that on

Frank Del Rio

very were Today, industry-leading did Well, have know, our margins. We we as you margins. have margins. we no happy with

that costs as that Mark we're like to through were. mentioned, are, better. to be pandemic, forward, have have going high-yielding, I vessels help where we X are we to where going we That's accretive joining get And back control not going have, very I to ways it's And just believe few from over margins. think to next going want new this rebuild we cash the So to years. our all to learned, fleet we

as amazed communities. well little that with travel do do agency We the as advertising and and booking-wise from are we little marketing support very no we or

So the the given limited be we the given the on we we a the grow win opportunities best highest we marketing-driven ticket think costs are industry at revenue-driven, But as a generating very X that in may revenue think company. margin. because by our there incredible our will not and primarily, we're scale, ships we're on but these bring at controlling a even side. have order. the costs game wide by We yields size, wider best highest the onboard And margin, yields on we that continue

Operator

Our question comes Steve from Wieczynski Stifel. next from

Steven Wieczynski

meaning is XXXX would then in take question full X is would know that getting us mobilized. maybe a part your EBITDA a fleet to still about today So I'm indicated you potentially know get the back would past, could to based the And when the or think recovery, fair question second months guessing -- what Frank, level. And kind that full before you you could now, it X on range? help see of pretty of potentially that you've be what

kind that. past through You've been helpful the of in us walking

Frank Del Rio

very very fluid. fuzzy, is very still this ship speculative, a don't operating, single We so have Steve. it's Look,

terms year with is and first road the up Broadly work how I the X speaking, be as year. to forward transition a months. X and 'XX going, I fleet all becomes to the uncertainties normalization. then look to we And the long start, XXXX of since is we able operate XXXX my that can up in we our XXXX get still today, that of full given and half fleet full CDC the so for entire the to best 'XX can out when that sense full we at take In have believe it's have that going latter year. to 'XX, fleet normalization. sometime will entire to running the the is

just get let's answered. around to open. in So travel be questions a what's up Airlines some happened X.X got world, Ports of restrictions to at to But still weeks. cases. We in lot last have the got the still have bans back and running. look travel weeks, X have

from have CDC. one. the was framework That step We the

technology sit by throughout order a great willingness encouraged with seen going very that's that's the soon, And the guess us. of a just we've the the we for, think Pfizer the to may morning, therapeutic going they the take down gate, are is leaps this testing. populations but in Lilly way hoping it's vaccine. some We it's world, seen been its only and is see the the vaccine the to And and positive We've the out very, for and Eli very note. the find of that to issues my start incredible discuss the progress although be what with of the certainly from one. vaccine CDC's breakthrough step. in won't be We've just We time to first that very positive

back. So got we going to flywheel that wind now our a bit. some have little We've

long, long been high excitement this And in so is my a level the time. encouragement, -- hasn't -- the

We've going this. obstacles the So lot We've prepared. to We've the We're of got we're but to over encouraged, history overcome. got still We're behind us. a get the know-how. liquidity. got

Mark Kempa

And add to race. on a Steve, this not that, is

in consumers. we We instill to our want are constituents said time. We to cognizant, all the our instill take confidence to the with in we We confidence brand. want are going

only shot right. you to one that So get do

take you it. right it do it methodical on one have again going approach to we're and because a do to shot So

Frank Del Rio

Yes.

Steven Wieczynski

in cruises? in folks terms of Okay, that any couple if But out and the terms $XXX your does fourth upticking more what test maybe guys. help are you in of of of start And quick there these to of mostly burn, because about That for the can quarter ships million back can do us think that back crew to Or some in does -- there and over you doesn't, interest. look -- place as in like one next embedded position? burn one? Mark, months getting that's called understand in cash costs I the get ask start you I cash

Mark Kempa

you of million up QX. that to again, really QX the just how is differential a $XXX is just comparison really of cash stacks timing The like-for-like interest. on for give basis, against the a And

us the it in ships so any more crew. certainly. time material. be vessels, of have incur. an now, anticipate in we given not right So And where material your we given million At cost doesn't some it to first which may could include and start-up that be largest $XXX no, QX costs the dollars really think would But today the that But I day, we lead your lot through don't -- end costs incremental that do are that. to slightly and stand that of we the fortunately, repatriating is there to up does cost higher do come really we need

your foremost. the other costs with and marketing. into exception first related actual start-up, to going that's So are All happen closer start-up of the

slightly higher, it I yes, may don't that but anticipate some So will materially be different. be there

Operator

question from Vince comes Cleveland Research. next from Our Ciepiel

Vince Ciepiel

talk more cruise wanted I future credits. to the a on little bit

mentioned August, under those were if is you've you to the of that half sure still something then that a I think you've of And FCCs dollars base and represents what spent part like little been of being second I on. the marketing recently. which of taking cruisers the of pent-up that you in outstanding, canceled FCCs. think alluded demand you seeing kind a seeing nice Not updated really number already half

impressive those customers the XXXX, what's as of for As at for about mix? next booking to you on think more of come group position pricing the booked the continue that can really flat into at hold booking FCCs year, overall

Mark Kempa

Yes.

as that X we that XX incurred of rate refund months last a pressure On down Thanks. to But that you Vince, early the yes, it in rate, mid-XXs, of been at average refund voyages, So the Mark. significantly, in of the was or the is has really your pandemic. slightly percentile question result of the the first this in so part has and when somewhere look canceled gone terms in range. hovering the mid-XX

broadly it's overall. again, So

again go-forward books it a the at that's on customers. when on right, So you confidence those look business And from book shows a our nice consumers. that absolutely from you're existing -- of been basis, FCC we inherently have do

cost do remarket what number So allows them, we're going to base. to we finding, When don't try what customers remarket in leverage We hands and going today. if this to and on that to have those the is see those. certainly said to I've inherently do upgrade past, our we I can we're allow that's to think have one, is customers. their those And us to us, a bonus XX%

incremental. actually and over the that So they're they is when upgrading XX% above finding what we're rebook,

as So maintain We've well, that's pricing. going that's us think to certainly been we that so I beneficial to always price to discipline. said help want

We commentary. it, maintaining and booking our are and that patterns pricing our see we can in

Frank Del Rio

have Vince, issued Yes. half my date said over we note prepared in a of redeemed. FCCs little statements to that all that been

So issued, they represent the about XX% of FCCs that we've all annual of capacity.

that not and been So of pricing like-for-like than X.X% annual that flat has the we've for 'XX it but periods. already that capacity to insignificant, redeemed. 'XX pandemic for to It's prior means was material. is And higher not seen slightly

deal should great pricing on people prices, zero redemption So maintaining have them. has pricing. the is for the had for raise bookings. XX% effect a And FCC we still bonus, it's since We're bottom line the new

going future is bottom FCCs be pricing decisions. affecting to line not are So

Operator

next from question Jaime comes Katz Our Morningstar. from

Jaime Katz

noteworthy can are have I'm of brand. the any to you XX% curious you trends repeat that guys the from consumers cruisers if not share the

differences loyal you that, trends So that like said behavior or seeing think one in on I helpful repeat it cruisers. be Are were to of would us? XX% any on anything booking the slides,

Frank Del Rio

that cash do. we've that we is to are normally not as more do done No, preserve than digitally discerned. Marketing agents travel wanting active would they as online because, nothing fact than again, the being and of normally

is a And or that marketing areas world. worth thousands And might buying kids have things that whole on a just on So is and People trend venue. dollars is the of potential we find, of real of thousands accelerated, are the not one Zoom buying we the digital it's that's and Amazon cruises pandemic Instagram. this future online. cost savings, think

to that a manage So on positive we and we And to this of continue our resources workforce kind find and think business manage digital ourselves in. our a net-net devote we'll that's transformation basis.

Jaime Katz

restart original X out. know of X estimating for that from when I And time stretching curiosity, it, more and Okay. that out period the to was guys that's about about and that went not logistics Is structural just anything duration I assume you then months X that's months. were right?

Frank Del Rio

in up when pound-foolish go disease and the the would on prevalence bring been X her It's and XX If Yes, September it It's season the ship world. don't Alaska, in maybe would be stand September she we it's to over X the been logistics. she then the ready And up because number month is maybe in her around have of seasonal. is have normally penny-wise, until almost the there. would wait Caribbean. and following to we normally

positionings and So those that are important. considerations of types deployments, like

Operator

next Thomas from question comes Our Allen Stanley. Morgan from

Thomas Allen

to question, a sailing? ships the what the EBITDA trials long follow-up X you And there free it kind point to And at take to breakeven? clarification on all how And to expect you When just to trial expect do of should So cash start X do see get do sailings? a the then you back sailing. months take? after that in or

Frank Del Rio

to do boundary best your but one overstepped Thomas, You've we'll remember. our of question,

Thomas Allen

I trouble. hope get in don't I

Frank Del Rio

Look, the to vessel you. start read get we need literally get a with CDC could to early down won't order the we work But sailings, as as ready think questions sit lot sailings to and a police that January. just those if out. early sequence question The start to of the the have you we

of implement order to XX has framework that how execute get a do There's laid out. a those kind testing, of test, XXX% and execution. the the along how Mark often As is nuances lot for still We with flawless orders, want CDC about right. the are race how to what recommendations cetera. this issues, And to et learn the seamlessly complex those this we to We're stressing said, not the us.

date, pin maybe called be has notice exact the ship there's forecast CDC go in tell to can cruises for terms audits there's down a companies We of getting you then in so chance December. a that series some another have of to certified in until don't that an So basis, don't to that sequence the and January. would but start the And on probably ship-by-ship through. giving me they'd sometime we trial will wanting do that these I

to going sailing that we're be, date is. of first know at going your is next very to don't "Well so early your first this sailing reluctant you when question we revenue trial And stage give simply when is a begins And because then when begin?" to the

basis, In between is have return breakeven is levels, our that or when we depending somewhere the a basis to historical on we that pricing a ship-by-ship terms XX% said of size on so even which I that question XX% take on forth. vessel to number of breakeven where and believe the we do corporate-wise, ship-by-ship is, cash level, EBITDA would going EBITDA breakeven to we It's the On as a be hesitant when or corporate ship, to so hesitant, would cash not answer to some I'm very breakeven. going time. be, given

Mark Kempa

change it's capital elaborate over excluding we if our ongoing you expenses. flattened that, operating look normal QX, further essentially to QX on to -- And our just at out from working it essentially

going what factor It's ships be load matter of roll out, quick it's there. out. are a going making take we rolling to And are the how to progress we capacities just So time.

date. There's an tough up to be x But so on we So costs as-needed our on can give assure you it's cash I that you answer an we're are involved. to basis. ramp many to positive say going variables to going flow

always disciplined as we will the my very what prepared where about protect demand, and will in do. be to, is dollars drive We need it, I which spend we said remarks. we price But to

Operator

Golding question Paul our next And comes Macquarie. from from

Paul Golding

detail, always. the as Appreciate

for. be around was I give health initial restart? forma a how good I Frank, that any or cash component. you how $XXX for table then million around was Mark covers either in could the pro detail have color And you wondering around initiatives have to just have an the and fleet if liquidity, that's follow-up. wondering that that Any you much I safety that Is or supposed long that? For

Frank Del Rio

out. were a of trying $XXX color estimate. what we're do when it you market obviously really funds is on million And look to we some Yes. on the at That go-forward an the is that basis, carving give

think make past, safer think past need in the estimated So ships to $XXX said we the we the that $XXX of million investments to under -- I million we to the out That's we've in we've spent going calls, the of standards. going time. to new or come over be the first quarter fourth next be It's to the It's in time, not quarters. over over spent going all quarter. few couple

estimate. an be going to not outflow, it's an that's So but immediate

As imagine, can as assess on you as that framework the needs been intricate around has framework, we we determine purposes. issued then the technical what more investment that back have and guidelines to end enables continue for the us to

to cognizant that carving again, be cover ourselves. So wanted of to significant that we to just funds we were out related a amount

Paul Golding

Got it.

once or going resumption. immediately that implying there's spent sort be to not of So some payable it's

Frank Del Rio

probably happen can would think outflow that to that, quarters. the but course over X of about You X

Paul Golding

bookings And booking had out World other shoring that brands out for up, would again was basically Cruise Regent pricing That's and considering liquidity then wondering saw perspective. versus super now I you've it. the from you're the how liquidity far I -- go the a XXXX available. be around follow-up got we far helpful. Got

Frank Del Rio

Our has strategy pricing not changed.

that want We for We pent-up able As X many yield we're a markets -- where will don't if and in the on so think our that newer markets to ticket presence we ships back our go long to for to industry-leading the we years, our of ships. of company. you last vessels, capacity know underpenetrated online new overall if the help have we online, to didn't X% marketplace, raise us, to average, less We we XX vessels you the brands, because come range. you that or have marketplace, or we are profile had simply recall, in trend. that coming the the only in combination the demand our X yields think continue X% growth

Mark Kempa

deposits, as demand, anywhere, funds and from initial that. depending or yes in the come think get liquidity doesn't that those we in there benefit us voyager again, to the days around world of you roughly solid standpoint, demand the significant term, that it near-term to could more benefit got us average, bookings, about liquidity bulk a until from around remarks was signaling do there's impact a -- really be a -- XXX more. there's XXX deposits it, and going the out But on I that. pent-up more don't on Paul, And be the near of think us From But demand. Oceania if Regent is that or there

Paul Golding

far rule this much general how sharing is of with Is base comfortable deposit is at there nonrefundable that a you're point? as the as

Mark Kempa

don't Well, point we don't yes, fares. it's time, fully nonrefundable this refundable. at We have in --

to is more So be world -- refundable on days again the for XXX from fully a XXX it voyage. or voyage, could depending up until, anywhere

Operator

question next comes Suisse. Our Ben from Crédit from Chaiken

Benjamin Chaiken

regards the CDC sail no line. then revenue guess the to the With ship -- sailings think on simulated sequential way it, the update, of run kind all time I I I and read dates a for approval testing

I one, XX run for the and then That's that is any simulator process I concurrently, two, to or for that, changed And guess? XX opportunity room there then days number think is it's days could sailing. be that revenue wiggle correct? the

Frank Del Rio

in be CDC some coming that weeks. that questions all will of those not notice have with periods the we sequential. Yes, periods those are And We they are the think and are concurrent. clarification we discussing

Operator

from Tigress Our Partners. next question comes Ivan Feinseth Financial from

Ivan Feinseth

controlled and Cay, hotel a of What -- and you building if more the creating be environment on thoughts and private it world-class your once creating are shifting a on to destinations had would -- something just one on in say, destination said Great you that? like let's more said developing -- islands Stirrup of the like Caribbean

Frank Del Rio

Islands fanfare significant it doesn't And Bahamas we happy. an making Stirrup very, as you investments where that proud, at I in private Ivan, it It destination the Harvest wonderful be have as Caye excuse of that the mentioned. part Maybe that than Great a of the can coming we private get. back that Belize just a will upscale it But utilized vessels know, island as the that's it that lot you actually online, is X fault. in Bahamian been great Yes, so. the Western around vessels think me, pandemic, and days past by or southern the do has we're cruise area, only destination. comments. because as very our position we've folks company still of A of made the in stand very new get in the those in -- country has time, And the the we reach in Belize more Caribbean. destination, we're over

islands. very we're with happy X So those

doing we're estate with Ketchikan what in major Juneau. Alaska, take development made in we Ward the Cove, in we where in investments land have You bought real

money a controlling lot vessels besides so good we of Real takes in destinations Alaska. are we in real made now really -- really, we the leading to port industry more in that estate we've develop we have investment the at need deploy even Seattle So it in estate. the expensive, shape there, the to and can is that

I think that around to I'd Mediterranean. world, in have private love the the island a

there. Bahamas, fact know in if and don't that what can one Hawaii, flag I But with the have private cruise Let The got any situation only we're our Hawaii me gives more investment. Western we in Caribbean, in vessel Alaska for sale. we've our that American vessel are. it's flexibility there American know in happy the you with one today, very even us the think

happy we'll what time But eye an in And pleased we very got. offerings. with we're being, case there's for our land-based with available. the So -- are out we keep very very other we're

Ivan Feinseth

think you do But that...

Frank Del Rio

Yes, go sorry. ahead, Ivan. I'm

Ivan Feinseth

still tested say, could environment this contained people then example, and say, island controlled that create for you Miami, are control. in Consumers, been in because let's onboard, your they go let's to environment you a once and they're

So would as vacation. that to at limited some if marketing exposure." a that that, good have vacation, point being, could I believe, but would be like have mean -- "I I a be nice And outside

Frank Del Rio

going to a we're is what But private don't through problem. these like we're that what go forever. want that can created bubble short-term through They're to now long-term our customers controlled. order investments, to in we've decisions I destinations. make private in going the we're be create to onboard long-term But not And seen islands. trying that fix remember Certainly,

two I've Forget of of just an And point they're health of view. and from controlled glad about part them. got the safety experience it, I'm

do So pandemic forever. that think look, I last -- won't but -- the

like Thanks, And -- that do will plan or like to continue We port-intensive that. Ivan. itineraries. hoping to People return variety in to is People offer our do itineraries. normalcy. we're -- itinerary-rich and

Operator

And Stephen our last Goldman question Grambling comes Sachs. from from

Stephen Grambling

intermediate-term Mark. But changed sneaking maybe touch think long-term in. can a This the also changed me multi-parter targets net Thanks just kind is for term. EBITDA And of about levels? free to bit help X.X to us or not pre-COVID to longer you a target different of cash for And on debt of then flow follow-up sensitivities kind levels. occupancy X.XXx has maybe the how of in

Mark Kempa

lot net focused Yes, yes. between leverage get That's But our a there's we're reduced in and to time, of obviously that. levels. on to to going there. we're Look, targeting take back variables

factors, XX%. roughly sensitivities load XX% flows ship of again we've even generally on In a at and to terms cash the breaks said

second second free you apologize, kind from So that, sensitivity if lost got flow your give your of of And cash I on the part you can there. question. the take that part, I

Stephen Grambling

get levels, It intermediate-term an there's to ahead order might about of thinking target book. on some was through the like more leverage if you be that that thinking of just

Mark Kempa

to number earnings Yes, we can. soon mean lower I we visibility on to need need industry. it the and lower, one, as as we

in markets we our sheet So again, do to be flexibility possibly we our or debt, from how and this figuring refinance is delever to our number balance the some priorities top out of financial emerge going one one -- as of management. finding

and this we So but of that's have emerge front first. to center, out

Frank Del Rio

your support, for and during distanced call. our your time And Steve. everyone, you, Thank patience thanks, earnings third

your Stay later always, to safe. Bye-bye. available As we'll on answer today. questions be

Operator

conference today's concludes call. This

day. You a may now Everyone, disconnect. have great

Norwegian Cruise Line (NCLH) 10 Nov 202020 Q3 Earnings call transcript