NCLH 2Q 2013 CONFERENCE CALL NOTES

FY 2013 guidance range (mid-point) unchanged but 3Q yield pressured by Alaska 

"While the addition of Norwegian Breakaway to our fleet was undoubtedly the highlight of the quarter, our strong results, which include our twentieth consecutive quarter of year-over-year Adjusted EBITDA growth, are equally as notable. Other initiatives in the quarter, from the refinancing of certain credit facilities to further optimize our capital structure, to the enhancements carried out on Pride of America at her recent dry-dock, demonstrate our culture of leaving no stone unturned in order to add incremental value for our shareholders and enhance the cruise experience for our guests."

- Kevin Sheehan, president and chief executive officer of Norwegian Cruise Line

CONF CALL 

  • Breakaway Plus1 -coming 4Q 2015; Plus 2 -coming Spring 2017
  • Guest satisfaction at record levels
  • Tempered expectations 'on the margin'
  • NCC within expectations

Q & A

  • Disappointed with several weeks of bookings (1st-time cruisers slow to book) but believe bookings are back to normal
    • 3Q:  Alaska pressured with more capacity 
    • Caribbean/Bahamas holding on
    • Europe is settling out
    • 3Q/4Q/2014:  feeling pretty good with bookings (higher YoY)
    • Pricing is 'ok' for the rest of the year
  • Onboard revenues were strong - Breakaway had positively impacted #s, casino strength, Breakaway had great business at specialty restaurants; US customers continue to drive onboard spend
  • Breakaway not as positive when compared with Epic's inaugural bookings
  • Some of cruise players are doing more promotions to fill their ships
  • Europe - bottoming out in terms of ticket yield
  • Quantum competition: not worried, New Jersey port is not New York
  • 2013 midpoint expense guidance moved up 50bps - 3 dry docks (new timing), additional advertising for Breakaway
    • Conservative?  Confident on reaching where analysts expect the company to be.
  • Did not reduce headcount through economic downturn
  • Potential secondary offering from Apollo?  No comment
  • FCF - believe in 2H 2014 that stock repurchase is most attractive option