NCL CORPORATION REPORTS THIRD QUARTER AND
FIRST NINE MONTHS RESULTS FOR 2005
MIAMI – November 22, 2005 - NCL Corporation
Ltd. (“NCL” or the “Company”) reported
net income of $36.6 million on total revenues of $495.3
million for its third quarter ended September 30, 2005.
This compares to net income of $40.3 million on total revenues
of $410.9 million for the third quarter of 2004.
Net income for the nine months ended September
30, 2005 was $47.9 million on revenues of $1.2 billion,
compared to net income of $29.0 million on revenues of $1.0
billion for the same period in 2004. Earnings for the nine
months ended September 30, 2005 include a $21.8 million
foreign exchange translation gain on NCL’s euro-denominated
debt.
Quarter Results
Driven primarily by a 13.0% increase in Capacity Days and
a strong growth in Net Yields, total revenues for third
quarter of 2005 increased 20.5% compared to the third quarter
of 2004. Net Yields for the third quarter of 2005 increased
6.5% compared to the prior year, due to higher cruise ticket
prices and an increase in onboard spending. Gross Yields
increased 6.7% from the third quarter of 2004.
Net Cruise Costs per Capacity Day for the
third quarter of 2005 increased 8.8% compared to third quarter
of 2004. The increase in these costs was due to higher payroll
and related expenses, increased fuel costs, and costs associated
with the introduction of Pride of America and Norwegian
Jewel. The growth in payroll and related expenses is primarily
attributable to increased payroll costs associated with
U.S. crew used in the company’s inter-island cruises
in Hawaii, which began operations in June 2004 and expanded
to two ships with the introduction of Pride of America at
the end of the second quarter of 2005. During the quarter,
average fuel prices increased 44% to $297 per metric ton
from $206 per metric ton in 2004. The increase in payroll
and related expenses and fuel costs accounted for 4.7 and
3.8 percentage points, respectively, of the increase in
Net Cruise Costs. Gross Cruise Costs per Capacity Day increased
8.2%.
“Our third quarter results continue
to illustrate a robust demand for our cruise vacations,”
said Colin Veitch, president and chief executive officer
of NCL Corporation Ltd. “While the expansion of our
Hawaii operations and the rising price of fuel negatively
impacted the quarter’s results, we are very pleased
with our year-to-date results. Despite these cost pressures,
our year-to-date operating income per capacity day increased
a very encouraging 19%. We are excited about our future
as we continue to focus on our strategy to renew our fleet
and expand our Hawaii operations.”
Year to Date Results
Total revenues for the nine months ended September 30, 2005
increased by 19.9% compared to the nine months ended September
30, 2004. This increase was primarily attributable to an
11.8% increase in Capacity Days and a 7.8% increase in Net
Yields. Consistent with the company’s results for
the three months ended September 30, 2005, the strong growth
in Net Yields for the nine months ended September 30, 2005
was due to higher cruise ticket prices and an increase in
onboard spending. Gross Yields increased 7.3% compared to
the nine months ended September 30, 2004.
Net Cruise Costs per Capacity Day for the
nine months ended September 30, 2005 increased 7.5% compared
to the same period in the prior year. Also consistent with
the third quarter results, the increase in these costs was
primarily due to increases in both payroll and related expenses
and fuel costs. Average fuel prices for the first nine months
of 2005 increased 36% to $266 per metric ton from $196 per
metric ton for the same period of 2004. The increase in
payroll and related expenses and fuel costs accounted for
4.9 and 3.0 percentage points, respectively, of the increase
in Net Cruise Costs. These increases were partially offset
by other operating efficiencies. Gross Cruise Costs per
Capacity Day increased 7.1%.
Outlook
Looking forward to the 2006 booking environment, demand
is stronger than at the same time last year and early indications
point to a positive yield environment.
The company has scheduled a conference call
at 10 a.m. eastern standard time today to discuss its earnings.
This call can be listened to live or on a delayed basis,
on the company’s web site at www.ncl.com/investors.
Terminology and Non-GAAP Financial
Measures
Capacity Days
Capacity Days represent double occupancy per cabin multiplied
by the number of cruise days for the period.
Gross Cruise Costs
Gross Cruise Costs represent the sum of total operating
expenses and marketing, general and administrative expenses.
Gross Yields
Gross Yields represent total revenues per Capacity Day.
Net Yields
Net Yields represents total revenues less commissions, transportation
and other expenses, and onboard and other expenses per Capacity
Day. We utilize Net Yields to manage our business on a day-to-day
basis and believe that it is the most relevant measure of
our pricing performance and is commonly used in the cruise
industry to measure pricing performance.
Net Cruise Costs
Net Cruise Costs represent Gross Cruise Costs excluding
commission, transportation and other expenses and onboard
and other expenses. In measuring our ability to control
costs in a manner that positively impacts net income, we
believe changes in Net Cruise Costs to be the most relevant
indicator of our performance and is commonly used in the
cruise industry as a measurement of costs.
Passenger Cruise Days
Passenger Cruise Days represent the number of passengers
carried for the period, multiplied by the number of days
in their respective cruises.
Occupancy Percentage
Occupancy Percentage, in accordance with cruise industry
practice, represents the ratio of Passenger Cruise Days
to Capacity Days. A percentage in excess of 100 indicates
that three or more passengers occupied some cabins.
Click
here to view NCL Corporation LTD. Consolidated Statements
of Operations, Balance Sheets, Cash Flows, and Non-GAAP
Reconciling Information.
This earnings release may contain
statements, estimates or projections that constitute “forward-looking
statements” as defined under U.S. federal securities
laws. Generally, the words “will,” “may,”
“believes,” “expects,” “intends,”
“anticipates,” “projects,” “plans,”
“seeks,” and similar expressions are intended
to identify forward-looking statements, which are not historical
in nature. Forward looking statements involve risks and
uncertainties that could cause actual results, performance
or achievements to differ significantly from NCL’s
historical results or those implied in forward-looking statements.
These risks include, but are not limited to, changes in
general economic, business, and geo-political conditions;
introduction of competing itineraries and other products
by other companies; lack of acceptance of new itineraries,
products or services by our targeted customers; changes
in cruise capacity, as well as capacity changes in the overall
vacation industry; changes involving the tax, environmental
and other regulatory regimes in which the company operates;
the impact of pending or threatened litigation; delivery
schedules of new ships; emergency ship repairs; accidents
and other incidents affecting the health, safety, security
and vacation satisfaction of passengers and causing damage
to ships; reduced consumer demand for cruises as a result
of any number of reasons, including armed conflict, terrorists
attacks, geo-political and economic uncertainties or the
unavailability of air service, and the resulting concerns
over safety and security aspects of traveling; impact of
spread of contagious diseases; the ability to obtain financing
on terms that are favorable or consistent with our expectations;
changes in interest rates, oil prices or foreign currency
rates; the implementation of regulations in the United States
requiring United States citizens to obtain passports for
travel to additional foreign destinations; weather; and
other risks discussed in NCL’s filings with the Securities
and Exchange Commission. You should not place undue reliance
on forward-looking statements as a prediction of actual
results. NCL expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statements to reflect any change in expectations or events,
conditions or circumstances on which any such statements
are based.
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