NCLH - Earnings call transcript Q2 2021 | 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 Second Quarter 2021 Earnings Conference Call. My name is Roshea, and I will be your operator. [Operator Instructions].

As a reminder to all participants, this conference is being recorded. I would now like to turn the conference over to your host, Ms. President Relations, Vice ESG. Communications Senior DeMarco, of Corporate Investor and Andrea Ms. please DeMarco, proceed.

Andrea DeMarco

Scott today, of company's discuss and Drug guest Thank Mark Global Frank handing We I'm to morning, before us you, Cruise and Financial and Dr. good Commissioner Thank Roshea, begin Administration, Officer. with commentary, of Chairman Officer everyone. book, back Health for joining Vice call Frank Council the closing the Rio, remarks. second a Norwegian and welcome President Former U.S. XXXX Food will opening Chief Chief Executive by Holdings; for soon-to-be-released quarter like you after Gottlieb, the Wellness Spreads. Executive earnings financial the would today of SailSAFE author to call. and to us also joined Line Del which our results special Frank President Kempa, our call joining for follow Uncontrolled Mark our of and will and

will for your then questions. call open We the

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

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

begin, we items. I'd Before like to few cover a just

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

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

Frank Del Rio

everyone. Andrea, good and you, Thank morning,

all loved you as and of well that I always, joining as today your healthy remain ones hope As us safe.

for and remarks, many this her calls I you like taking we Congratulations, more the assume and all luxury brand, the than today a SailSAFE appointment for Health miss Relations, Global pleasure working together health of are to news, our load to former Dr. Before and Gottlieb. our earnings other her, Commissioner, good the I Seven for the into first Wellness of who and Andrea will record-setting to calendar Council we of resumption Cruises. to of the this experience it you we morning's Officer return over translated am commentary we of our her Washington guest operations remotely focus continue will XX have mentioned, strength on record tomorrow, Jessica. Gottlieb the Investor to we months. I Chief come XXXX in our already first best company, on Marketing the finally comprehensive heard call person if public States relaunch haven't experts Seas but pricing XX-ship our Communications is plan of and new a After prepared on the made in truly into go from and XX a would John, as the meet Sales and Vice of us and special my Andrea FDA time we luck exciting a for Jessica day very entire year milestone, new Dr. progress for with United the our reach which crews back. in on phased over to fleet we demand, has her beyond. cruising, Andrea with wish Today, Regent will consumer record our very off long-awaited Corporate role. in and of Scott our After Seattle, say pleased And we X. met, September today, as year beginning from and prepare very a ship have President kick also that our already as role grade ESG to have congratulate

you centered see Slide key on As return is X to plan can X, service our around phases.

cornerstone. EMA-authorized developed and our health FDA-, for or crew multilayered mandatory at SailSAFE WHO- guests vaccinations First, safety its including strategy, and all we

In undergo the routine addition, embarkation, prior to terminal we guests testing. weekly and all at test crew all

are to and adapt restrictions health flawless any Against on Next, we we a as our we which our expect have borders for of to needed, in backdrop, fleet. vaccinated which a April close still the intently remain to and global availability, public recent environment, for ready fleet, announced port see phase of now affect relaxation voyage And restrictions on some by XXXX. in opening of encouraged COVID we the weeks, keeping the watch and ever-changing to vigilant resumption changes particularly execution travel we all lastly, X, our planned Overall, ships focused travel complete XX are of plans relaunch operations. travelers. could

of help the Comeback of The quarantine. earlier other are designed which weeks entry ready a as introduction world, remain in to officially from aboard our went relaunch allow countries in are the preboarding few last commenced with and a both expect Isles XX execute Jade, in operating a without implement vaccination demonstrated place to to Cruise A the cruise suite that world-class our off and voyage after and can than of Canada the EU and has out and our our operating, restrictions now previously by thank strict from Slide seamlessly that the November, X Norwegian days, company. finally and Great needed. and and plans but ships strategy time hitch delivered voyage robust Canada the of vessels. our plans up who, COVID-XX closures the pleased travelers not officers say in few Travel on XXX goes return are even port the more could other protocols in without not X vessel. you And After Just details mitigate requirements, our comprehensive same protocols to Jade weeks, we go, I months Norwegian and U.K. testing of ago, adapt crew resumption backup cruise come, to be past week transmission moved as the assumption cruise and brand announced. to our experience by service Athens. ready U.S. working to of out vaccinated and we parts travelers that the its do Greek of and allowing months Many to have announced exceptional new guests adapted special plans

crew which revenue As our this our an XXXX indication first focused service significantly of exceeded over target, onboard on actual delivery, on results by was this top-notch XX%.

sailings of All guests, and of out for our tirelessly day grateful want passionate stakeholders Norwegian this the return I am most support thanks our for to many the Jade's States. their anticipated Encore, dedicated Alaska and also newest Norwegian first Coast loyal successful incredible in valued such work return-to-cruise with a will and ship, line's team. X-night debut our during as in prepare is the moment, to challenging sincere team her we cruising of around our truly all day patience make world express our to a critical talented privilege the to relaunch the I partners alongside and and ramp and Seattle. Tomorrow, times these to much members just to travel come, including for up plans. United to West our innovative work from

not owe years, in industry members we We fully vaccination XX from our everything of guests visit mission. every devastated revenue is we the world. filed science-backed guest cruise and including Alaska, a vision frontier, safety on the a a looking providing small the we to keeping plan all commitment have say tremendous actions and our capital families, the confirm most protocols request and society population to Florida the at had it this throughout popular environment a of the variant, That of our guests our enterprise we vaccinated with In difficult and last health virus vessels heard pleasure It of critical that, COVID. health nor the are for for this beat is mission. The under mean robust best are the reflect we during our cruise agree circumstances large, been our and I requires and X. relief accordance status Delta elected including of the everyone, today. the suspension. to sailings global outlined all prolonged to the with the especially our that at one and best business they our in taken We departing some to tagline. be guests, it. preliminary neighbors return to confirm and from tested address on month, our and with to communities, am to legal stakeholders to path Florida. Miami, injunction our of Combating I is to the Miami state their rise status in destinations crew to will safe friends of in private State #X federal safety we can we to our our leaders, again and businesses forward our able historic the the the port Florida resume once to communities guest loss allow current crew in from, coastal who Having virus. of work like doing guests confident have cruise part. visit economic We sure for who will step courts by officials, deliver order I'd The we federal sailing make the enormously back do a is dedicated the nearly much-needed health Slide our that in to board next of deep relaunch having Federal this that a with that peoples have families possible State do which and those we to last empathy When tourism to in the governments this must has local, been communities and Court us explore priority, for do on bringing at the SailSAFE is our challenge. vaccination an sail plus our hope levels slogan unprecedented

a right And at all ships important want operates our prepare important and tagline. over to world, science guide has have preboarding the place without priority We sail our far not of is and to takes been than Nothing vaccines health and ports in ports. and of is a pursue commitment vaccinations, to we and slogan and Health and testing safety now. us this every fundamental how XXX% Florida medicine principle from around great in that away of use policy to our length safety. to tool. commitment the tool guests and is service, to to we most more Again, coupled available issue crew the crew company XXX Our most with our powerful testing all except return routine never to and nor are levels. have nearly stakeholders. expense And gone this to philosophy this guests, to developed

our Given is safety I'd that for also them program. Health Gottlieb? expert, today, the a the SailSAFE floor Gottlieb his is world-renowned Dr. we who Global to of only health but and Council, our Chairman like give on Dr. not have and thoughts Wellness here

Scott Gottlieb

and to you, over Frank. be of great on you pleasure and year's culmination safety today collaboration to Norwegian's a enhancing health a witness It's the Thank protocols. with here

be scientific the experts the as fully the onboard approach a population can't anywhere medical Council reduces mitigated. mitigates society. of it's way potential fully possible to cruise mitigate Even or or and the tested with breakthrough our and the introduction relaunch cases. greatest on support of and risk any fully SailSAFE the and of All effective virus the spread cruising a to recommend extent ship But however, severity else to vaccinated vaccines, risk this most the in significantly

in the current any turning perhaps cases, into U.K. further While is several in if weeks. corner we'll the the fueling is surge. the And hopefully epidemic believe this I Delta variant we're next guide, a be rise

boarding even meantime, In hit against taking highly of the the the their fact, the This to look universal with forward some we're Norwegian surge And in provides, seeing the sectors. showing goes layers prior Delta COVID-XX, protocols can well coupling travel I of tomorrow waves Norwegian with additional of are with hospitality effective controlled in the and vaccines multiple to including cruise against some are extra ship in In could environment vaccines And of offer what the testing by south the to states one peak. is protection indication Encore. a safest already our options. beyond you seeing Delta be it hardest starting epidemic step practice the ship. that variant. on other vacation the

Frank Del Rio

you, Dr. your us. of hard and thank provided the that guidance to Health Thank Global work the Wellness again, and have insights. members for expert council Council Gottlieb, I, all you and for want SailSAFE the you the and

X. world. swing, full which we record of especially demand a for vacations for of marketing is demand-generating Slide demand our experienced our we'll cruise pent-up brands. partners book a Now voyage short, of our of place of to pent-up investments you travel vacations, absence our all complement protocols plan booking This can and and XXXX is throughout unparalleled are trends, shift full discussion in even I very our pricing. as future on with considering is by position the record-breaking in safety for that across strength this all-important impressive reduced true In sailings, strong demand when demand see significantly cruise our despite demonstrated and agent X more levels speak the outsized have The resumption

at to now evident X the through future point the of we those including are we record ahead time XXXX fully continues record XX of strength be than are is year XXXX, look levels. sequentially credits. versus and same ahead and booking as effect fleet And The to weeks wide X a XXXX, our meaningfully full For strong margin. higher by the is but you levels load becomes our when factor level and curve completed when booked of years Pricing X is move year throughout particularly even ago, at dilutive XXXX's also rollout cruise experiencing operational. we in

booked comprised XX% cash remainder of of bookings. approximately addition, bookings of cruise comprised with in is position new In our future the XXXX credit

even we X/X approximately strong XXXX both than it history, the launch in itineraries. only of which broke guests XX% is opening demand approximately day saw doubt XXXX expectations Cruise bookings. Seven this future third demand and a our in exotic seeing, was and cruise loyal record have Cruise. The strong strongest beyond our far, month, for Regent the year from its also booking Seas World comprise World Cruise So a of evidence under guests, X This new-to-brand Cruise, for the the day is World Last past XXX-night further Cruises but redeemed. the cruisers outstanding credits and continued extending in been these easily sold all sailing, in Not are long for increase also of new-to-brand XXXX. The at line's a a out surpassed row. World hours higher pricing the without

again, have in which is real. As said time positive continued trajectory the an our the Last reached inflection I time quarter, throughout ticket pent-up build, and quarter. sales we point advanced demand its

Our builds. $XXX basis or versus advanced the a over million approximately ticket sales quarter's on prior gross XX% increased

continue to of As momentum to rest this expect our we we phasing begin the fleet, in sequentially. accelerate

planned any of ships, the as of is look future, Prima to we for we first Norwegian the In the May, Norwegian from X the unveiled this a the new XX% new ship-within-a-ship booking Prima, in Bliss however, lines Line and prices concept which vessels XXXX by booking opportunity line's other growth have seen emerge impressive. unlike marked ever best doubling in on X, a Slide outdoor crisis outdoor with Cruise Class class well stunning, groundbreaking As most we can guests more absolutely see Her the week approximately She pools at Norwegian brand a set pool summer than which of decade. the ship offering the the ship, of is record, XXXX, Prima, previous and space with the the in level. fleet before. is deck cruise higher deck than Bliss importantly, multiple in infinity Norwegian nearly she rendering best new ship hit launch day you we will next May for record any space commanded. Debuting take in other single debut total as to Most resonating vast also sales any including first walkways. haven have initial and as

Turning X. Slide to

Explorer the Cruises, Seven of the Seas luxurious a reveals her XXXX leading be from world's inaugural ship, after month. Seven Seven Seas had sister also fourth guests newest Regent sixth Seas of ship ship to announcement the unveiled quarter are fleet. host name more unveiled There to Grandeur to open which her Grandeur, will exciting and XXX in is Seven Seas the Seas for in most next launch come its reservations We Seven Splendor. an set and with and season

Regent XX, our on XXXX. can but of in coming In to growth the you not is unserved the penetrate top X back online lines. growth XXXX and represent smaller These newbuilds force, product is joined As approximately Slide to benefit also diversify when see Seven year higher approximately with XXXX, November our profile XX%. ships us and in With have and fleet capacity prepandemic ships new fleet the of berths, XX which bottom ships in our fleet levels of our a markets a by only X strongly footprint and growing with launched we of an and approximately fleet, Seas of addition underserved through XX,XXX Encore, positions XXXX which further meaningful X the Splendor, XX% than both in be full XXXX XXXX. we industry-leading Norwegian both which XXXX newbuilds, February globally, drive additional our expect our our expected full offerings to to

track capacity to As revenue our turn that growth. Slide absorb speaks outsized demonstrates, and EBITDA XX record our for excellent and cash successfully ability capacity itself into clearly growth flow in net

to remarks. provide a Our as back the be provide our performance historical closing years on flow, over come later now earnings new deliveries. of and to But to to our ship ships in continue for cash efforts I call like accretive industry-leading are with well Mark new to to be I'll an addition our financial update. the to into expect Mark? I'd as turn and update the expected ESG

Mark Kempa

Thank you, Frank.

remarks Our execution of all-important the action our return I made financial significant continued phased am today we've focus COVID-XX will cruising. our on plan. our voyage our liquidity resumption the profile to pleased with plan, on progress and

mentioned, Frank As ready Seattle here to Norwegian we relaunch Encore tomorrow. in are

have plan resumption We and this are the of place comprehensive phased on voyage in a execution relaunch. focused

approximately by reinspiration and Nautica, new fleet XX% extensive have capacity, of will quarter than expect an The dock We last the April year-end. our representing third join total by dry our XX better XXXX. ship, rest to capacity, and Oceana's the of end emerge and the representing ships, ships, X, of on after of X XX% operating approximately the

environment we our reached we've fluid. to While global the health milestones several road recognize is important that in still recovery,

and plan. focused on our relaunch conserve remain available our cost all we cash and So maximize financial we pulling execute to as flexibility maintaining levers discipline

implement COVID-XX operations our in see the action Slide halt March worked quickly XX, financial to can in global plan. since you XXXX, of As cruise we on

During in by expenditures over expenses capital XX%. we and nearly operations, pause reduced by successfully XX% the operating

But measures the cash strategic liquidity taken our increase to our costs to the second strong of while action manner our we so plan. a will balance a several disciplined ships maintaining expected. proactive needs in return ready we've will financial additional we on and profile. quarter, As Since beginning as do service, to

times. supply marketing We million partners during by nonessential financing program extremely for banking demand-generating continue thank credit costs, support commitments our significantly expenditures. reduce we challenging to newbuild the approximately and want cover their We our modification to these of X or costs expenses to our amended continued In capital owner defer near-term and premium $XXX for increase to fees. company July, facilities

Turning approximately to We with provides a on of June as cash us XX. significant of and environment flexibility our financial fluid liquidity to billion to XX. Slide navigate continue cash on cash This and through burn had $X.X this return-to-service execute and plan. equivalents

second the by $XXX per approximately additional than This average cash was in for relaunches $XXX month. million the rate was As of monthly our expenses. higher quarter, cash guidance driven burn plan our voyage for million and slightly of our restart associated announcement ship resumption burn the

rate implementing As million bookings. not demand-generating third both vessels, provisioning average and investments. are expect increase entering expenses with related we service. repositioning, marketing to vessels of protocols approximately inflows expected Restart restart new our burn $XXX the new to to as burn this primarily that cash our quarter, health expenses of Note measured monthly does accelerate stopping cash for and additional estimate cash safety include and a existing from ramp-up and

balancing take at continue as reintroducing same a bookings. resume, drive need the the approach will We voyages time, cash to disciplined new to costs to while

for on depreciation based guidance course and assist inflection XX capital cash reach expenditures. have details certain the newbuild-related we plan, resumption with crucial amortization, first positive interest additional XXXX. turning Slide we quarter provided of the ahead, to metrics, modeling, with Looking of To over and including expect point expense a flow operating our

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

decreased interest Our cash million and of $XXX canceled second net including cash approximately which CapEx, burn, SG&A, by cash approximately other for primarily includes $XX expenses, $XXX capital and outflow operating the million, approximately safety working driven refunds operating balance of investments. health in and quarter of million customer and voyages

to continue crisis relaunch focus over through future. I call Before few quarters, that the we our and not to off back our the next this have fleet reiterate we taken Frank, handing the navigate to want as

to closing recovery maximize optimize that, generation With one on medium- Our margin the long-term call to and relaunch to our executing I'll rebuild Slide hand drive balance and and continue back outlined as sheet. to XX closer to and cash financial comments. provide Frank expansion, bring us step milestones flow our plan on

Frank Del Rio

Thank you, Mark.

we our comprehensive global the like program, we shown publication ESG of up Before on milestones XX. our wrap update Slide our an This sustainability remarks, our journey ESG prepared on on Sustain, & provide reached to report, with I'd which starting several Sail key summer, first included SASB a Accounting to This forward the significant report, in transparency. aligning a encourage was disclosures you our Board haven't is step you Standards our to look so or on which Sustainability website the take our done index. efforts I enhance if with all at And already.

our which We stakeholders. pillars Sustain integrity developed Sail redesigned and around with strengthening our X collaboration also and unveiled internal & cross-functional sailing accountability. empowering program, through include is impact, and pillars communities The operating environmental structured with key safely, external people, reducing

In will sustainability to addition, which critical we provide stakeholders. the to new achieve the report, believe Development also a make we a for goals aligned where the our can to have disclosure United we more Goals sustainable Nations we and website, have all Sustainable XX In future identified to to use contribution developed conjunction greatest we continue have with all. of

On XXXX technologies the X in resulted XX% including front, reducing XX-ship of have climate seek continuously consumption fuels; action investing approximately pleased newly program capacity our key footprint alternative intensity; a implementing is identifying day to We reduction investments our And announce action in exploring and systems program. reach carbon goal long-term offset and from This created and centered we carbon technologies, a carbon around strategy including to fuel were ongoing to consumption. XXXX environmental areas, in by reduce neutrality. ambitious fact, per and of minimizing fleet. our overall in for entire our fuel our to opportunities

further through fuel-efficient we of XXXX, rates. our more our in new and to introduction see the With intensity X vessels expect improvement

gap In bridge of ongoing dioxide have near-term committed credits metric available. our period rate, measurable become we to emissions This new over X in efforts reduce a step initiatives million the a to will help which last purchasing to technologies in equivalent X-year our year. carbon offset is reductions, high-quality greenhouse beginning verified the emissions tons gas decarbonization addition carbon to until

car. offset it is neutrality. in an X increase the goal our of passenger miles sizable. average of it purchases to Our in put is million-ton billion help commitment X.X us To carbon over equivalent we plan to driven reach by years future perspective, And

progress lasting We we corporate made look details of we committed are with you are leaders. we impact I very and ESG, the additional responsible proud forward as ESG ESG and on our to citizens have to the far a journey. continue so sharing in as making world on

Turning to with XX. to leave I'd you takeaways. final like key Slide few a

we we taking by the First, our manner to and return universal brands. forefront demonstrated across vaccination preboarding great as the our testing putting are safety policy resume mandatory of at possible our service with length X are health in to cruising the safest and

fleet in by XXXX. Cruise with execution has have focused full and plan operation Great voyage resumption a Our April X, target to Comeback commenced, are we our on the flawless of our phased

our prospects, have to the and We full out pricing cruising. recent forward to very significant U.S. booking which on of have are will on we with road step official we and monumental milestones in another return encouraged as days Tomorrow, experience our by the with to reached continue us, And lastly, we we recovery pandemic while in financial growth ahead take emerge trends value for guests. And exceptional coming relaunch. experiences we and for for And future forward what the that, the memories providing our to vacation with focus we beyond. from longer-term cruising we demand a for profile, to positive and shareholder strong XXXX still will meaningful an a results boost expect we Overall, provide have attractive and long years. well-thought lifetime and open back can to best, getting look questions. do we call I our

Andrea DeMarco

not refrain will first asking Before cooperation question, take questions we litigation. we commenting question. regarding any we the in regard your Roshea, please pending this take as We ask appreciate be from you further. and first understanding any please our that

Operator

[Operator Instructions].

from first line the Your Wieczynski with question of Steve Stifel.

Steven Wieczynski

Yes.

to path So capacity if question you clearly you you kind breakeven right. you're would Mark, making are level? let's make in that on of the be guess that XX% heard heard when standpoint. in service. of year, map kind your target in service of as now, full now some of fleet that what the that assumptions think And will your I the nice to goes road that the you And is, I you be into maybe what to the by sure that back right then say have back you're of I on correctly get XQ, by get I want a stay -- end I to that

Mark Kempa

Steve, question. thank you the for

Based resumption first, correct. -- plan. talk about our So let's you're our on absolutely voyage

know, flow, As very plan inflows we've that, cash launch we yes, over when be And that's away. just regular as not we operating fleet to contribution and disciplined very X and with been vessels, course XXXX. perspective, of think to the we measured XX% sometime operation the our of our that from only first a flow very We've result And the of -- the race months quarter in being both and that's positive to said we first a XX% look we've year-end. to of in each We the by approximately of at put been expect to cash you vessels. X to the disciplined. in our interested our have are methodical,

that trends we've talking ships we're our generate booking starts pleased cash that about. and service, as we So with to been the Obviously, flywheel that very seen. we've that restart enter

a -- We there. we solid with returning have plan, little of game bit on a very operations. pleased. of anything, our risk to flow-positive cash measured always we're So But we think there's plan don't out based think

Steven Wieczynski

I or get changes been I that the the your of last And you requirement mean, It's terms Okay. Frank, with preboarded seen we've so. to around operators on peers tested week -- or in want mask changes board. over ask about going mandates, get the the then, all seen. [indiscernible] we've tested to before

the Just understand now? Or is psychology folks think are to to what want you forget do of to these you of do Meaning, to does? a going this it. going think what -- say, this passenger right cruise some the do

date? Or this you do a affecting Let's right now? later at your how is customer book think

Frank Del Rio

our seeing what in not it's look, Steve, trends. we're booking

prepared at it's very weeks passengers. early until to a we a at we compared to advantage, Holdings precursor, know, March. year. in Line moved do as 'XX, very, my everybody competitive be so. time that's this frankly. said not record as Norwegian approximately And And were quite has we're came remarks, as Cruise in mentioned to crew As we vaccinated, when haven't ahead and to late We that. I as think going early, where you for cruise XXXX And a out from we were XX we safe And

travel see And because Cruise Norwegian spoke the Earth, who pandemic, following begun safely. have to in it. are a do Norwegian to safest platform Line place the Dr. And measures early Line to at becomes on allows to of During Gottlieb that. Cruise ship. they glad to now travel suit want I'm to a have announced just introduce about be my some industry the you the on people peers willing on. It about that least we

competitive a is it me, advantage. to So

in to the We continue is visit right way the safety will And the possible we thing. we -- to and that every our do of and can. health we guests communities protect continue

Operator

next the Sachs. of Your question line with Goldman Grambling Stephen

Stephen Grambling

thinking the each How a as and be the inflow over Should costs amount that in expecting restart? should mentioned, we you fully be quarter similar little Or And coming we be moving loaded? customer up of till running? should bit the up front-end a restart course the quarters. about deposit the

Mark Kempa

it's Steve, Mark.

deposits prior look versus in So million we at on customer quarter, basis. our customer $XXX gross our increased a look, our the deposits, said when as remarks, we XX% prepared roughly

to relaunch the get obviously, as restart continue accelerate. closer to operating, to we and expect we voyages and that we So

we So the cost, -- When everything expected. incurring, look, we're costs our they're that. at they're normal, relaunch all very, look that with pleased we're very

vessel at look Again, out of or course from ships be -- many the there the is X,XXX next You how the X loaded relocating we're Most across ordinary. over restarting some X,XXX onetime globe. to going costs. of front-end to it's nothing crew per you're whether There's X months. the of

time. and to hopefully XX cash of first the X expect importantly, But the we So and for ramping our and And at as the are most That load as seen of rest will just XX to gate. out fleet. that normal slowly XX% that the -- well vessels completed Those -- and to a But have you initial been that are which that's then with most to factors settle. as -- onetime vessels have either up And operating then voyages starting to by important. typical. our of are for Jade. short over sail we've start some case Norwegian our coming will then as said positive we in vessels cost. And are flow initial that voyages factor back balance publicly, be we've very load the very, our ramping

Stephen Grambling

I even jour, the on which sailing how the du helpful. you impact, requirements risk sneak otherwise? And impact the of you kind bookings about super from have pricing imposed seen about Delta more of such of talked further this but and is vaccine bit [indiscernible] in, more can Maybe XXX% variant if any a topic would one you if it on That's recently? kind think are as little

Frank Del Rio

Look, Frank. it's modest new have net the surfaced. Delta the activity sequential. our when decrease It booking has month variant during Steve, July a seen we of is in

which is again. for pronounced So XXXX. year year. operating XXXX -- a not us I'm is in that get The more to It's for it's significant. -- ships on not in focus focused transitional sailings, the

cruise do muscle Onboard great went Mark hitch. to Norwegian a We As how It vessels. was without customers remember off of launch have roof. a time. The very We the had successful operate mentioned, memory. do revenue through Jade.

XX and The of Delta course pad, year population a we're XX-week have we be will to this insurance off such We on It's are of with so wonderful speak, effects. bookings a a certainly is have speak, forward certainly course very it Dr. that have. we it's races. lasting cushion to through discussing is so -- Gottlieb, quickly. to to don't wonderful transitory, run temporary variant ever. advance, to ahead think the prior going we best of so weeks our a the very, In It's think phenomenon. the And likely good to that our have. to the encouraged policy But again, having the

Operator

on with JPMorgan. line Montour of question Brandt next the Your

Brandt Montour

want official your in to how you're the understand, on Mark, comment. this thinking occupancies. relaunching. maybe to Congratulations I alluded about And I Frank, But want you to prior

still weeks us ship all sort the that full in of a of COVID last in your you While scenario changed get safe? is masks? plans? and among at without has to that under Delta? that is Is because you're few XXX% that And And vaccinated, can

Frank Del Rio

Yes.

full after is mentioned, way range starting spent in factor. Mark the that XX% load the levels. resume fill can think a speak. It's not we conducting upgrade air the new throughout the safely operations, every environment, we train And everyone that tens to our of to fleet, our in believe days, at As requirement. well, to test protocols vessels XX% we're we we trying capacity. of we load. all days, we vessel something dollars CDC That's yes, vaccinated increase we'll in so to we it, crew, XX% vessel have after at operate And feet If to systems as fully pier, filtration wet, get of where have start in that the to responsible we XX way XX a It's anyone's goes a not place, mandate. will prepandemic that the millions the are where

staggered. It will see. will be We

in be council, sail yes, our cruise along the second we none, of public believe kind learn protocols our in achieved. are they that, and not And But safety just that way, environment. and again, will believe to but which so We the the industry, that by any way. can does

Mark Kempa

taking, that, hospitality and look in we're the any most we at vis-à-vis and look that today's the Brandt, measures world, the our science And all is other technology. driven at what just to venue one of customers I experiences we Yes. you can want on type add when providing to safest that that we are based

So our all an that, that, X that's we advantage of brands. for believe again,

Scott Gottlieb

We who the do on creating And to on safer XXX% measures make have emerges to ship, into onboard create place secondary environment, it ship. having Scott. the onboard enter environment. you're environment given we've therapeutics a to of is that that the the treatment, We're risk this to ICU-level vessel, And during become that can onboard they taking best vaccinated have substantially population the ship. Yes. do relative safe then a before the going and testing procedures it's reduce ill how to feel passengers we've becomes to our do advanced an case on you the options measures seek to other risk people some more of measures of much a much confident you to the to people of environment, control introduction, have the significant that have a virus the available, in tried if engage ships, offboard And care in getting having control you kinds a safer a the we may the including if have the measures -- spread on and may to that environment. introduction not ship, And risk vacation, only leisure predictable taken, this cruise.

tried engage reasonable possible to to safest take in every create for environment at every we've measure step, someone activity. to So the leisure

Brandt Montour

a you guess, talk off? seeing And spend guess, apples-to-apples, that since color. you're guess, on the of in a Frank, great metric XX%. on about really the basis, then that also load, XXXX, on less can That's second sort a to have up going with from and you the onboard spend consumer on of gave, mix take on ship where my I person would ship? I really that what just impressive have all per But little ship be right, question the obviously bit first out that that That's it's is statistic. you on ship seen I Is

Mark Kempa

Brandt, I'll Yes, that take one.

look it on at per and at measure of at vessel, we basis. we're when in spend, more the -- day So on a we person the totality per that look look we a looking at certainly, while onboard importantly,

areas. when spend. So look that followed casino. of mix when then food a ex customer Shore measure it beverage the and levels. U.S.-based at European-based. look majority of the itinerary by passengers, And is the what then it, was similar the intense, similar your look basis on XXXX's you probably think trends a to I that's and And the apples-to-apples an of record yes, it predominantly was And voyage, of you and voyage very at spending was -- normal willing is from you

we're we're trends great willing that it's to. spend. Customers used are that seeing to to see the So

very, While very early, encouraging. it is certainly it's

Operator

Our next question line Research. of with Cleveland Vince Ciepiel

Vince Ciepiel

things business? Number positive sounds of of you It there's first in quarter, deposits timing help the are nicely, cash us even for and move in at to Great. of think some an and deleveraging the XXXX. flow about direction. going point, right building maybe Can like expectation path the the

Mark Kempa

Yes. Mark. it's Vince,

We focused are that. on intensely

get recall, of had X.X As path we forward, to on stated of really we you get lever we look a a sheet want premature our X. goals when to obviously, bit in to our to But decide this. levels. get we're leverage to to to are a telegraph were going now those It's then we'll as result Xs. to as right And the X.XX. can into or up XXXX, We've look below to the obviously balance

could be path very a XXXX of year subsequent cash generation. terms we're before, seeing the said that if nice on today, flow in we've and continues As EBITDA it

So delevering assist help to with that us and story. that's going certainly

So we it. focused are on

quarter generation. focused to subsequently our We conservative of the that, going do And have into and know on flow the not will plan, can if cash that our that's XXXX. the lost cash we positive turn said of we right we're now, in sight can that's and to experience customers. best of And that over because to providing expect we I significant But relaunching important. course expect relaunch first we've reiterate, we flow we be

that's that to when feel about within we of And a positive, be cash that. pretty So proud X-month period a flow tremendous. from restart we're pretty think you

again, that, off. spins that So months cash restarting the we the next fleet. that And look flow over few forward our of

Vince Ciepiel

question. another And

that of can a already kind now. glimpse look once go a You for mean XX%, think to path 'XX and of pricing get leisure. When path into people into ability had the of 'XX industry, the you ahead pent-up nights, other it the that levels you've yield right unleashing at X% of and 'XX, ahead in about of what hotel leisure aspects demand, XXXX. Pricing is for and industry XX%

as right of next about the it? over of to Or in ahead way So than is 'XX for little just think bit the better that pricing ahead even out couple could years, look years curious, you a be cruise?

Frank Del Rio

credits, yields. -- is in up I the of specific out think the to -- when I effects like-for-like if give is it's speak, It's future public, the strip up that. you cruise hesitate any dilutive significantly, year-over-year so than pricing to multiples of you better but the numbers, growth pricing, what to you typical the our

the going so dilutive not FCCs in else of these also, refund to future XXXX. it's or to the of that be the And demand have as end XXXX Slide And these end at at our we're will advantage XXXX, cruise in I by The it. is pent-up we're or all believe they growth. and taking with, future I will mentioned, look XX, have used We remember, FCCs be whatever real, in. paid do certificates deal to which customer

our cash Look 'XX. net we XX% that how growth more of have end gross outsized outsized growth. at EBITDA turn ability to and capacity coming revenue absorb capacity historic growth, online and through We the the growth growth into

years. come higher in be few Four be They're we're looking So the going over to much next and 'XX online to than corporate delivery of these going very average. forward vessels They're them 'XX. accretive. to taking the of

believe that, a we So that's setup. wonderful

line all before it's buy we what cash the We're The hitting cruise to We're start look bullish we a top first to perhaps going investment cash? operate opportunistically do: to back do then to well, we're in business. is mentioned go to used took are what cash problem Mark on delevering this stock we know cruise was that hit, to to dividend. to to do that on how if a this generating survive to going boardroom pandemic, the going grade. and with on was, debt to We companies were biggest cylinders. expand sit pay so, we're going to company. going this the down business. paying We And NCLH and all pandemic around do the As start again,

what We haven't what seeing we that allow to pent-up demand forgotten how from exactly best. do pandemic. -- to do that customers the And over do us we're the

So we're future. on very much bullish the

Operator

the of Robin question Farley Next UBS. with line

Robin Farley

you Great. Two the you expense X 'XX this percent cost us, question you've Can on year? questions. next laid months One us help I And spend also might is if or are be the credits. that of on you carbon then carbon but what of sort in for -- quantify your your know of Florida-based out in what ships credits? an mentioned remind restart, your could

Mark Kempa

would when X then months, I the one out Norwegian think out have with so Miami next to X look that over believe be of -- of Robin, vessels being the -- the we operating And first in Florida, we mid- I Gem late rest on December. August late on roughly online XX. come

a question I something X. second excited this. really is think our related the efforts This about of to credits. last We're taken hard on we're part your the And ESG very over stance was or year to we're about. We've committed this. carbon the serious

these on purchasing a few dollars million carbon we So credits. spent

can all we it's to reduce waste we're I technology, footprint. at gas think together carbon with recovery, investments where heat other to fleet, that, exhaust that the we our continue whether with investments cleaning make looking viable our

believe at to Florida about Florida-based X and next the when to it's first over you back vessels, XX% out months. XX% -- fleet the So sailing our the of just part, I of look

Robin Farley

not credit I yet, will carbon the has balance And and run P&L great. -- sheet you've guess operating? then through that on It's run the Okay, right? expense you're That's through somewhere, it. when the purchased

Mark Kempa

in That we want I highlight of But It's over that course not the a a related it's years. consume as Yes. a X next that fuel the million pro get rata again, fashion dollars. few X the it's will to amount. expensed to to significant

So even statements. it look going see it's our -- at you're you to not financial when

Operator

with Morningstar. the comes next from Our line of Katz question Jaime

Jaime Katz

your given the what October? for new cruisers, September U.S. to commented and composition that to was European of itineraries looking to disproportionate X/X the and Cruise of Regent My exposure the looks actually cruisers for that, the In questions Seas in that like addition think Seven forward, I guys on some brand. of bookings you are World had

that saw is you in in there So passengers? that's different noteworthy you've maybe seen passengers from those anything what new past

Frank Del Rio

a the Yes. on are roughly and Norwegian of Typically, from the customers from that operates the brand in are U.S., the cruise world. for half Europe, customers rest half the the

XX%. On jump of neighborhood Isles the first we to cruises seen X Norwegian Jade in that the Greek out Athens, the have number of

not have of pent-up indexed the Americans overall places such is wanting able many like long-haul higher time by travel for been go to demand we're Greece. that long Americans for to that these a seeing overseas plans So cruising period

to good But the And we perhaps demand sustainable able be we world want So sort long have that Europeans, see short our as fill the burned Americans to board. is in demand that's don't in the medium think marketing ships. to pent-up sales term, it's platforms this or the strength over we're term and of throughout to off. it's whether the across strong the seeing come to

Jaime Katz

that's to debt are service And the that maybe on then raised maybe on the pause cycle, in on a you in the cycle? something the refi some is focus Or steps you COVID for as the now debt taking some just bigger fleet? balance the as with guys of restarting far early operating sheet, of that

Mark Kempa

above. of on the Well, all we're focused

our restarting lost balance immediate we on focus, the sheet not is our operations, and have While balance opportunities. of obviously, sight sheet management

looking some look at. XX.XX at, clawback ability and something some in So higher-priced we've continue have we our opportunities around XX.XX have opportunities in of that. believe, been possibly to we to there some is notes, it's the I where notes, our And

sheet those We want what the those we once right But So visibility we we're at a few vessels the exercising operating. the some of in we important course to our it. that opportunities that's most the getting opportunities looking for over going get have water see get all you're around us in have. future is to now thing and at that, on more management -- is think and looking us the balance vessels I

Operator

your on And question of Wedbush. next line Hardiman James the with

James Hardiman

me. A questions couple for clarification Maybe a here. of

be be like year about a all when like it is plus. So the your said be, feels your least but ramp you've digest fleet it will occupancy ship, seems XXX% quarter. second XXX%, normal and ramp, Obviously, kind one occupancy but back pretty could quarter that expectation next I will fleet what of to on of the at

Frank, sort what you the is ahead So targeting first That point normal that in the of in like, that line. of of sort weren't of finish you're a that's a little you but terms peers. earlier so the much starting more quarter? Seems made bit some so your interested like of line, maybe seems

Mark Kempa

it's Mark. James,

strong So look, for time we at look quarter, are the But you and let very here. XXXX quarter, back line third in you look I me just when go think periods. those at second seeing bookings

Something and strength we seeing reduced significant capacity, on spend just Even are significant those X Norwegian at said vessels. voyages. first about Jade's we

so I I well, or normal X course to it's speak. is X vessels the Again, we QX, QX. do online our going essentially that the X of while coming over So coming are in vessels as on are to look to believe XX have, think, pretty next quarters, think,

want be than don't load But their the at of lucky, anticipate our it's And vast all we we're or sooner certainly, some if majority we vessels second normal not should our to the had make that. about back care the that the that time cruises levels. our we and factor create we So that shareholders maybe from We by quarter, We've taken that we're right. sure want launching. in to to to do our and And customers 'XX. want confidence stand all we're learning this employees.

and And water. XXXX So right the fleet focused 'XX, now, in -- getting we're about we all beyond. -- back look but excited the on we're

the So wet ships got in again. just to forward but looking go we've good, getting

James Hardiman

think if then it. Obviously, a Got billion stand about bit $X.XX of of cash, parts. here. net billion are a I And little lot debt encouraging. we about do really to $X math in But That's today. here trying moving as there of

month a we I'm Presumably, million in that out, trying burn $XXX to once the quarter. get quarter. another fourth third down cash to said just that of the in comes figure balance the You've the sheet think net in inflection before you it Is that what that of positive point? like? flow $X billion hit cash ballpark of another maybe to point inflection looks debt

Mark Kempa

think Look, it I you James. right, said

to from did in in in we we the to that $XXX expect quarter. see roughly the But as quarter. growth We're And our comments, that ticket I the and highlight million we burn we said fourth you sales. And -- expect If and include quarter $X.X we XQ. and in does have roughly math I will advanced the going that inflows at clearly obviously, ramp first third significant second up, billion. stated that not today, look that, customer

balance where the in do XXXX, quarter is flow cash we've cash course when you you and to today the at of you math So our triangulate cash. the generation positive is and kind fact over be subsequent and be of can of where look to our the that the cash we first stated that expect going

liquidity where we're significant we taken comfortable We we foundation. is are where a strong have get measures So today. We've our to today. believe

long we our reasonably resumption resumption we're here strong execute position our So that can on as as we we feel very in as on -- voyage a plan, sit today. very,

Operator

final with Patrick question from the Truist. line comes of Scholes your And

Charles Scholes

beverage? seeing for wondering the also and labor you United -- supply situation the ingredients international supply to chain labor domestically problems and food with chain as the company, it for your like far for for in severe States folks basic light situation we're more also food, In and what's relates of shortage the the with I'm

Mark Kempa

look, Patrick, immune to we're not it.

world other our back of in received have lot collective the remember unlike majority work. And assistance. a employees, bargaining quite those to of areas I vast -- that the of a for come We and labor place most think not, have force, ship-based, of as vast government company have for overseas. those do majority, agreements comes employees. to to which is you ecstatic crew the frankly, our have benefit from our are excited our is we the employees, And

joy So in the are opportunity back of on because just come want break to they excited. to see employees they they When tears again. have They vessel, work. down we the to work

around of model. So portion operating we sector don't or labor our issues labor anticipate any the the

consumables, good things of not that fashioned it. yes, terms old In food, we're of nature, immune to

seeing inflationary are some We pressure.

being over We of the have XX started probably some think renegotiate end advantage to months that last and costlier. in we been up -- the of to just But chain supply -- see reprice laggards some of going it to stabilize. there's equally, there's the there's as be And take we've lot and where on areas able a course, slightly contracts.

we're seeing from some benefit that. So

good think laser-focused focused on We're of advantage have to it, in on XXXX side. And opportunity we're cost we're but it. we a seen. we the take some to renegotiations of not So immune we've the

So we're forward to it. looking

Frank Del Rio

Bye-bye. voice thanks, cruising Well, our to start season in for season this off excited of Alaska in the Thanks our everyone, -- to Okay. maiden U.S. Seattle us much. joining very from morning. the Encore's kick We'll see here next and for we're you here -- the you comeback by quarter. can be see tone our We're

Operator

concludes today's conference call. This

You may now disconnect.

Norwegian Cruise Line (NCLH) 6 Aug 212021 Q2 Earnings call transcript