Disposal Mandate in Relation to the Future Disposal of Ordinary Shares of Norwegian Cruise Line Holdings Ltd

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Genting Hong Kong Limited, you should at once hand this circular to the purchaser or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

Genting Hong Kong Limited (Continued into Bermuda with limited liability) (Stock Code: 678)

DISPOSAL MANDATE IN RELATION TO THE FUTURE DISPOSAL OF ORDINARY SHARES OF NORWEGIAN CRUISE LINE HOLDINGS LTD.

POSSIBLE VERY SUBSTANTIAL DISPOSAL AND NOTICE OF SPECIAL GENERAL MEETING

The notice convening the special general meeting (“SGM”) of Genting Hong Kong Limited (the “Company”) to be held at Suite 1501, Ocean Centre, 5 Canton Road, Tsimshatsui, Kowloon, Hong Kong SAR on Friday, 15 June 2018 at 11:30 a.m. (or as soon as practicable immediately after the conclusion or adjournment of the annual general meeting of the Company convened to be held at 11:00 a.m. on the same day and at the same place) is set out on pages 172 to 174 of this circular. The form of proxy enclosed with this circular, together with any power of attorney or other authority under which the form of proxy is signed or a notarially certified copy of that power or authority, shall be deposited at the Corporate Headquarters of the Company at Suite 1501, Ocean Centre, 5 Canton Road, Tsimshatsui, Kowloon, Hong Kong SAR, or at the office of the Company’s Hong Kong Branch Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong SAR, or at Genting Hong Kong Limited, c/o Genting Management and Consultancy Services Sdn Bhd at 24th Floor, Wisma Genting, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting and any adjournment thereof and in default the form of proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude shareholders from attending and voting in person at this meeting (or any adjourned meeting thereof) should they so wish.

25 May 2018 CONTENTS

Page

DEFINITIONS ...... 1

LETTER FROM THE BOARD

INTRODUCTION ...... 5

THE PREVIOUS DISPOSALS ...... 6

FUTURE DISPOSAL OF NCLH SHARES ...... 6

DISPOSAL MANDATE ...... 7

SALE PROCEEDS ...... 9

INFORMATION ABOUT THE PARTIES ...... 10

REASONS FOR AND BENEFITS OF THE FUTURE DISPOSAL ...... 11

FINANCIAL EFFECTS ON THE GROUP ...... 11

IMPLICATIONS UNDER THE LISTING RULES ...... 12

GENERAL ...... 13

SPECIAL GENERAL MEETING ...... 13

RECOMMENDATION ...... 14

ADDITIONAL INFORMATION ...... 14

APPENDIX I – FINANCIAL INFORMATION OF NCLH ...... 15

APPENDIX II – UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP ...... 131

APPENDIX III – ADDITIONAL INFORMATION OF THE GROUP ...... 144

APPENDIX IV – GENERAL INFORMATION ...... 159

NOTICE OF SPECIAL GENERAL MEETING ...... 172

FORM OF PROXY

i DEFINITIONS

In this circular, the following expressions have the meanings set out below unless the context otherwise requires:

“Apollo” Apollo Global Management, LLC, its subsidiaries and the affiliated funds it manages

“Apollo Funds” NCL Athene LLC, AIF VI NCL (AIV), L.P., AIF VI NCL (AIV II), L.P., AIF VI NCL (AIV III), L.P., AIF VI NCL (AIV IV), L.P., Apollo Overseas Partners (Delaware) VI, L.P., Apollo Overseas Partners (Delaware 892) VI, L.P., Apollo Overseas Partners VI, L.P., Apollo Overseas Partners (Germany) VI, L.P., AAA Guarantor – Co- Invest VII, L.P., AIF VI Euro Holdings, L.P., AIF VII Euro Holdings, L.P., Apollo Alternative Assets, L.P., Apollo Management VI, L.P. and Apollo Management VII, L.P., and which are affiliates of Apollo

“Approved Sale Shares” the maximum number of Remaining NCLH Shares (i.e. 3,148,307 NCLH Shares) or such number of Remaining NCLH Shares then held by Star NCLC as shall represent the difference between the maximum number of 3,148,307 NCLH Shares and the number of Remaining NCLH Shares actually sold by Star NCLC during the period from the date of this circular up to the date of the SGM

“AUD” Australian dollar(s), the lawful currency of Australia

“Board” the board of Directors

“Capital Changes” an alteration to the nominal value of the NCLH Shares as a result of consolidation, subdivision or reclassification, or an issue of NCLH Shares to Star NCLC by way of capitalization of profits or reserves or by way of a scrip dividend of NCLH during the Mandate Period

“Company” Genting Hong Kong Limited, an exempted company continued into Bermuda with limited liability having its Shares listed on the Main Board of the Stock Exchange

“Director(s)” the director(s) of the Company

“Disposal Announcements” the announcements of the Company dated 13 August 2017, 17 November 2017 and 1 March 2018, respectively, in relation to the Previous Disposals

“Disposal Mandate” the specific mandate to be granted by the Shareholders to the Directors to effect disposal(s) from time to time of such number of Approved Sale Shares which, when aggregated with the Company’s disposals of NCLH Shares by Star NCLC in the previous 12-month period, will amount to a very substantial disposal of the Company under Chapter 14 of the Listing Rules

1 DEFINITIONS

“EUR” Euro(s), the lawful currency of the European Union

“Future Disposal” disposal of any of the Remaining NCLH Shares by Star NCLC from time to time

“Group” the Company and its subsidiaries

“HK$” Hong Kong dollar(s), the lawful currency of the Hong Kong SAR

“HKFRS” Hong Kong Financial Reporting Standards

“Hong Kong SAR” the Hong Kong Special Administrative Region of the PRC

“Latest Practicable Date” 17 May 2018, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

“Mandate Period” A period of 12 months from the date of passing the relevant resolution(s) in respect of the Disposal Mandate at the SGM

“Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules

“MV Werften” shipbuilding business of the Group comprising of three shipyards in Germany located respectively in Wismar, Rostock and Stralsund for, amongst others, the construction of cruise ships

“NCLH” Norwegian Cruise Line Holdings Ltd., a company incorporated under the laws of Bermuda having its NCLH Shares listed on the New York Stock Exchange under the symbol “NCLH”

“NCLH Shares” the ordinary shares of NCLH with a par value of US$0.001 per share

“Previous Disposals” as such term is defined in the section headed “THE PREVIOUS DISPOSALS” of this circular

“PRC” the People’s Republic of China

“Remaining NCLH Shares” 3,148,307 NCLH Shares beneficially owned by Star NCLC, representing approximately 1.40% of the total issued and outstanding shares of NCLH

“RM” Malaysian Ringgit(s), the lawful currency of Malaysia

2 DEFINITIONS

“S$” Singapore dollar(s), the lawful currency of Singapore

“SEC” The U.S. Securities and Exchange Commission

“Secondary Public Offering” a secondary public offering by way of a marketed underwritten offering or a block trade, in both of which cases Star NCLC will enter into an underwriting agreement with reputable investment bank(s) as underwriter(s) pursuant to which Star NCLC agrees to sell and the underwriter(s) agree to purchase the target shares. In a typical marketed underwritten offering, the underwriter(s) will market the offering to the public before entering into the underwriting agreement and the purchase price will be determined based on the market responses while in a typical block trade, the underwriter(s) will purchase the target shares first and will market the target shares afterwards

“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“SGM” the special general meeting to be convened by the Company at Suite 1501, Ocean Centre, 5 Canton Road, Tsimshatsui, Kowloon, Hong Kong SAR on Friday, 15 June 2018 at 11:30 a.m. (or as soon as practicable immediately after the conclusion or adjournment of the annual general meeting of the Company convened to be held at 11:00 a.m. on the same day and at the same place) to consider and, if thought fit, to approve the Future Disposal and the grant of the Disposal Mandate, notice of which is set out on page 172 and 174 of this circular

“Share(s)” the ordinary share(s) with a par value of US$0.10 each in the share capital of the Company

“Shareholder(s)” holder(s) of Share(s)

“Star NCLC” Star NCLC Holdings Ltd., a limited liability company incorporated under the laws of Bermuda and a wholly-owned subsidiary of the Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“subsidiary” or “subsidiaries” has the meaning ascribed to it under the Listing Rules

“TPG Funds” TPG Viking, L.P., TPG Viking AIV I, L.P., TPG Viking AIV II, L.P. and TPG Viking AIV-III, L.P., which are affiliates of TPG Global, LLC and its affiliates

3 DEFINITIONS

“Underwriting Agreements” the underwriting agreements dated 10 August 2017, 15 November 2017 and 27 February 2018, as referred to in the Disposal Announcements, among Star NCLC, NCLH, other selling shareholders and certain underwriters

“US GAAP” the generally accepted accounting principles in the United States of America

“US$” United States dollar(s), the lawful currency of the United States of America

“%” Per-cent

4 LETTER FROM THE BOARD

Genting Hong Kong Limited (Continued into Bermuda with limited liability) (Stock Code: 678)

Board of Directors: Registered office: Executive Directors: Canon’s Court Tan Sri Lim Kok Thay 22 Victoria Street (Chairman and Chief Executive Officer) Hamilton HM 12 Mr. Lim Keong Hui Bermuda (Executive Director – Chairman’s Office and Chief Information Officer) Corporate headquarters and principal place of business in Hong Kong: Independent Non-executive Directors: Suite 1501 Mr. Alan Howard Smith Ocean Centre (Deputy Chairman) 5 Canton Road Mr. Lam Wai Hon, Ambrose Tsimshatsui Mr. Justin Tan Wah Joo Kowloon Hong Kong SAR

25 May 2018

To the Shareholders

Dear Sir or Madam,

DISPOSAL MANDATE IN RELATION TO THE FUTURE DISPOSAL OF ORDINARY SHARES OF NORWEGIAN CRUISE LINE HOLDINGS LTD.

POSSIBLE VERY SUBSTANTIAL DISPOSAL

INTRODUCTION

The Board announced on 17 April 2018 that the Company proposed to seek advance approval from the Shareholders the Disposal Mandate authorizing the Board to effect disposal(s) from time to time during the Mandate Period of the Remaining NCLH Shares (in whole or in part) which when aggregate with the Previous Disposals and any further disposal of NCLH Shares in the previous 12-month period may amount to a very substantial disposal of the Company under Chapter 14 of the Listing Rules.

5 LETTER FROM THE BOARD

The purpose of this circular is to give you further details of the Disposal Mandate, the Future Disposal, a notice of the SGM and such other information as required by the Listing Rules.

THE PREVIOUS DISPOSALS

On 10 August 2017 (New York time), Star NCLC entered into an underwriting agreement with Apollo Funds and TPG Funds, as selling shareholders, and Citigroup Global Markets Inc., Barclays Capital Inc. and Goldman Sachs & Co. LLC as underwriters, and NCLH, pursuant to which Star NCLC sold 7,500,000 NCLH Shares to the underwriters at the selling price of US$54.57 per NCLH Share (the “August Disposal”).

On 15 November 2017 (New York time), Star NCLC entered into an underwriting agreement with Apollo Funds, as selling shareholders, and Morgan Stanley & Co. LLC as underwriter, and NCLH, pursuant to which Star NCLC sold 5,000,000 NCLH Shares to the underwriter at the selling price of US$54.11 per NCLH Share (the “November Disposal”).

On 27 February 2018 (New York time), Star NCLC entered into an underwriting agreement with Apollo Funds, as selling shareholders, and Morgan Stanley & Co. LLC as underwriter, and NCLH, pursuant to which Star NCLC sold 9,750,000 NCLH Shares to the underwriter at the selling price of US$55.80 per NCLH Share (the “February Disposal”, together with the August Disposal and November Disposal, the “Previous Disposals”).

The Group’s strategy has been to realize cash inflow from its investment in NCLH which has come to the exit phase and to capture return at opportune times, subject to favorable prevailing share prices and market sentiment.

The Board considers that the Previous Disposals were good opportunities for the Group to realize cash inflow from realization of its investment in NCLH, which has come to the exit phase.

FUTURE DISPOSAL OF NCLH SHARES

As announced in the Disposal Announcements, Star NCLC, a wholly-owned subsidiary of the Company, entered into the Underwriting Agreements to sell 7,500,000, 5,000,000 and 9,750,000 NCLH Shares in the August Disposal, the November Disposal and the February Disposal, respectively, representing, on an aggregated basis, 22,250,000 NCLH Shares and approximately 9.74% of the total issued and outstanding NCLH Shares. After completion of the Previous Disposals, Star NCLC had disposed of an aggregate of 22,250,000 NCLH Shares and continues to own 3,148,307 NCLH Shares, representing approximately 1.40% of the total issued and outstanding NCLH Shares.

Depending on prevailing market conditions and subject to any contractual selling restrictions, Star NCLC may from time to time in the future continue to dispose of the Remaining NCLH Shares to realize its investments in NCLH. The Future Disposal together with the Previous Disposals may, on an aggregated basis, constitute a very substantial disposal of the Company under Chapter 14 of the Listing Rules and require Shareholders’ approval in a general meeting of the Company.

6 LETTER FROM THE BOARD

Given the volatility of the stock market, disposing shares at the best possible price requires prompt disposal actions at the right timing and it would not be practicable to seek prior Shareholders’ approval for each disposal of such number of the Remaining NCLH Shares which, when aggregated with the Company’s disposals of the NCLH Shares in the previous 12-month period, may constitute a very substantial disposal by the Company.

To allow flexibility in effecting Future Disposal of the Remaining NCLH Shares at appropriate occasions, the Company proposes to seek from its Shareholders the Disposal Mandate subject to the parameters below. There is no assurance that the Company will proceed with the Future Disposal within any particular time frame after obtaining the Disposal Mandate. Whether and when the Company will embark on the Future Disposal depends on a number of factors including the then prevailing market prices and market conditions at the relevant time.

DISPOSAL MANDATE

The Disposal Mandate to be sought from the Shareholders will be on the following terms:

1. Mandate Period

– for a period of 12 months from the passing of the relevant resolution(s) in respect of the Disposal Mandate at the SGM.

2. Maximum Number of NCLH Shares to be Disposed

– the Disposal Mandate authorizes and empowers the Board to sell up to the maximum number of the Approved Sale Shares.

3. Scope of Authority

– the Directors are authorized and empowered to determine, decide, execute and implement with full discretion all matters relating to the Future Disposal from time to time during the Mandate Period, including but not limited to the number of batches of disposals, the number of Approved Sale Shares to be sold in each disposal, the timing of each disposal, the manner of disposal (whether through Secondary Public Offering(s) or sales in the open market), the target purchasers, the selling price (subject to the parameters set out in paragraph 5 below) and to do all such acts and things, including but not limited to, execution of all documents which the Directors deem necessary, appropriate or desirable to implement and give full effect to the Future Disposal and the transactions contemplated thereunder or in connection with the exercise of the Disposal Mandate.

7 LETTER FROM THE BOARD

4. Manner of Disposal

– apart from disposal in the open market at market price on the New York Stock Exchange, the Company may also dispose of the Approved Sale Shares during the Mandate Period through Secondary Public Offering(s) by entering into underwriting agreement(s) with reputable investment banks as underwriter(s). The terms and conditions of such Secondary Public Offering(s) will be negotiated on an arms’ length basis.

5. Mechanism for Setting Selling Price

– the selling price per Approved Sale Share that is to be sold through Secondary Public Offering(s) shall represent no more than 20% discount to the average closing price of the NCLH Shares in the five (5) trading days immediately prior to the date of the relevant underwriting agreement; and

– whether the disposal is made in the open market at market price or through Secondary Public Offering(s), the minimum selling price per Approved Sale Share shall not be less than US$43.86.

6. Capital Restructuring of NCLH

– If and when there shall be any Capital Changes of NCLH, the number of Approved Sale Shares shall be adjusted accordingly and the minimum selling price per Approved Sale Shares shall be adjusted by multiplying US$43.86 by the total number of NCLH Shares in issue immediately before the Capital Changes and divided by the total number of NCLH Shares in issue immediately thereafter. If and when there shall be an issue of NCLH Shares to Star NCLC by way of a rights issue during the Mandate Period, the number of Approved Sale Shares shall be adjusted to include such new NCLH Shares issued to Star NCLC.

The maximum 20% discount to the average closing price of the NCLH Shares in the five (5) trading day period represents the maximum discount to the referenced average closing price which the Company may consider in the exercise of the Disposal Mandate in the context of Secondary Public Offering(s), having regard to the then prevailing share price performance and market sentiment. The minimum selling price of US$43.86 per Remaining NCLH Share was determined with reference to a discount of 20% to the average selling price per NCLH Share disposed of by the Group in the Previous Disposals, being the average of the per NCLH Share selling prices of US$54.57, US$54.11 and US$55.80 in the August Disposal, November Disposal and February Disposal, respectively. The Company considers that the minimum selling price will allow flexibility for the Directors to accommodate fluctuation in market conditions in the exercise of the Disposal Mandate and at the same time reflect the lowest acceptable price to dispose of the Approved Sale Shares, and is thus fair and reasonable as far as the Company and the Shareholders are concerned.

8 LETTER FROM THE BOARD

The closing prices per NCLH Share as quoted on the New York Stock Exchange for the five trading days immediately preceding the Latest Practicable Date and the Latest Practicable Date, as compared against the minimum selling price of US$43.86 per Remaining NCLH Share is as follows:

Closing price Percentage of as quoted on premium as the New York compared to Date (New York Time) Stock Exchange US$43.86

10 May 2018 51.40 17.19% 11 May 2018 51.46 17.33% 14 May 2018 51.42 17.24% 15 May 2018 51.71 17.90% 16 May 2018 52.50 19.70% 17 May 2018 52.49 19.68%

Based on the unaudited financial information of NCLH for the three months ended 31 March 2018, the net asset value per NCLH Share as at 31 March 2018 was US$25.10, as compared to the minimum selling price per Approved Sale Share of US$43.86, the minimum selling price per Approved Sale Share represents a 74.74% premium to the net asset value per NCLH Share as at 31 March 2018.

It is expected that the purchasers of the Approved Sale Shares and their respective ultimate beneficial owners will be third parties independent of and not connected with the Company and its connected persons (as defined in the Listing Rules). In the event that any purchaser of the Approved Sale Shares is a connected person of the Company, the Company will strictly comply with the announcement, reporting and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

SALE PROCEEDS

The Company will apply the sale proceeds from the Future Disposal as (i) capital expenditure for the Group, which includes but is not limited to the purchase of property, plant and equipment such as construction of ships; and/or (ii) funding new investments of the Group should suitable opportunities arise. As at the Latest Practicable Date, the Company had no plan of utilisation of any of the sale proceeds as disclosed in (i) and (ii) above. Thus, the Company is not in position to determine a breakdown of use of sale proceeds.

Due to the adoption of Hong Kong Financial Reporting Standards 9 “Financial Instruments” (effective from 1 January 2018), the Group has reclassified the investment in NCLH as financial assets at fair value through profit or loss and all the related cumulative fair value gains had been transferred from the available-for-sale investments reserve to retained earnings on 1 January 2018.

9 LETTER FROM THE BOARD

Based on the carrying amount of the Remaining NCLH Shares as at 31 December 2017 in accordance with the Group’s books and records which was approximately US$167.6 million, and on the assumption that the maximum number of Approved Sale Shares (i.e. 3,148,307 NCLH Shares) are disposed of by Star NCLC pursuant to the Disposal Mandate at the minimum selling price US$43.86 (before deduction of any transaction related expenses of approximately US$0.5 million) per Approved Sale Share, the expected loss on the disposal of all the Approved Sale Shares is approximately US$29.6 million. Taking into consideration of the aforementioned cumulative fair value gains transferred to retained earnings on 1 January 2018, the total gain on disposal would be approximately US$4.2 million.

Based on the closing price of US$52.49 per NCLH Share as quoted on the New York Stock Exchange on the Latest Practicable Date, the aggregate market value of the Approved Sale Shares is approximately US$165.3 million. On the assumption that the maximum number of Approved Sale Shares (i.e. 3,148,307 NCLH Shares) are disposed of by Star NCLC pursuant to the Disposal Mandate at US$52.49 (before deduction of all of any transaction related expenses) per Approved Sale Share, the expected loss on the disposal of all the Approved Sale Shares is approximately US$2.4 million. Taking into consideration of the aforementioned cumulative fair value gains transferred to retained earnings on 1 January 2018, the total gain on disposal would be approximately US$31.4 million. The Shareholders however should note that the actual amounts of the proceeds, accounting gain or loss and the effects on the net assets and earnings of the Group in relation to the Future Disposal would depend on the actual selling price(s) of the Approved Sale Shares and the actual number of the Remaining NCLH Shares to be disposed of by Star NCLC.

INFORMATION ABOUT THE PARTIES

The Company

The principal activity of the Company is investment holding. The Company’s subsidiaries are principally engaged in the business of cruise and cruise-related operations, shipyard operations and leisure, entertainment and hospitality activities.

NCLH

NCLH is a leading global cruise line operator company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. NCLH has a net asset value of approximately US$5,749.8 million as at 31 December 2017. The following information is a summary of the consolidated financial statements of NCLH for each of the two financial years ended 31 December 2016 and 31 December 2017, respectively:

For the year ended For the year ended 31 December 2016 31 December 2017 US$’000 US$’000

Net income before taxes 640,303 770,614 Net income 633,085 759,872 Net income attributable to NCLH 633,085 759,872

1 To be updated based on the closing price on the day immediately before the date of this circular. LETTER FROM THE BOARD

If the maximum number of Approved Sale Shares (i.e. 3,148,307 NCLH Shares) are disposed of by Star NCLC pursuant to the Disposal Mandate, the percentage of the NCLH Shares held by Star NCLC will decrease from approximately 1.40% to nil.

REASONS FOR AND BENEFITS OF THE FUTURE DISPOSAL

The Group’s strategy has been to realize cash inflow from its investment in NCLH which has come to the exit phase and to capture return at opportune times. The Company will arrange the sale of the Remaining NCLH Shares through Secondary Public Offering(s) or sales in the open market depending on the share price and market sentiment. However, given that the number of the Remaining NCLH Shares which the Company only holds is 3,148,307 NCLH Shares, and according to public information published by the New York Stock Exchange as at the Latest Practicable Date, the 90-day average daily volume was 2,032,856 NCLH Shares only, which is less than the number of the Remaining NCLH Shares, as such, it might not be feasible and commercially justifiable for the Company to sell the Remaining NCLH Shares in the open market.

According to HKFRS, the book gain or loss of the Future Disposal is calculated by the excess of sale proceeds (after deduction of the expenses) over the carrying value of Approved Sale Shares as at 31 December 2017, despite the potential book loss as a result of the Future Disposal, the sale of the Approved Sale Share at the minimum selling price of US$43.86 would increase the cash and cash equivalent of the Group and on that basis the Board considers the Future Disposal as a good opportunity for the Group to realize cash inflow from realization of its investment in NCLH.

The Directors believe that the Future Disposal and the Disposal Mandate are fair and reasonable. The Board (including the Independent Non-executive Directors) considers that the Future Disposal represents a good opportunity to increase the cash flow of the Group. The Board is also of the view that the Future Disposal will be conducted in the best interest of the Company and the Shareholders as a whole and the Disposal Mandate will give flexibility to the Directors to dispose of the Remaining NCLH Shares at the appropriate times and prices in order to maximize the return to the Group.

Financial Effect ON the Group

As at 31 December 2017, the audited consolidated total assets and total liabilities of the Group were approximately US$7,145.0 million and US$2,565.8 million, respectively. Based on the unaudited pro forma financial information of the Group as set out in Appendix II of this circular, assuming the

11 LETTER FROM THE BOARD

Future Disposal had been completed on 31 December 2017 at the minimum selling price of US$43.86 per NCLH Share, the unaudited pro forma consolidated total assets and total liabilities of the Group would be approximately US$7,115.0 million and US$2,565.8 million, respectively.

For the year ended 31 December 2017, the Group recorded an audited total comprehensive loss for the year of approximately US$45.4 million. Based on the unaudited pro forma financial information of the Group as set out in Appendix II of this circular, assuming the Future Disposal had been completed on 1 January 2017 at the minimum selling price of US$43.86 per NCLH Share, the unaudited pro forma consolidated total comprehensive loss of the Group for the year ended 31 December 2017 would be approximately US$75.5 million.

Based on the closing price of US$52.49 per NCLH Share as quoted on the New York Stock Exchange on the Latest Practicable Day, the aggregate market value of the Approved Sale Shares is approximately US$165.3 million. On the assumption that the maximum number of Approved Sale Shares (i.e. 3,148,307 NCLH Shares) are disposed of by Star NCLC pursuant to the Disposal Mandate at US$52.49 (before deduction of all of any transaction related expenses) per Approved Sale Share, the expected loss on the disposal of all the Approved Sale Shares is approximately US$2.4 million. The estimated book loss is based on the excess of sales proceeds (before deduction of the relevant estimated expenses) of approximately US$165.3 million over the carrying value of the Approved Sale Shares as at 31 December 2017 of approximately US$167.6 million. Considered the estimated transaction related expenses of approximately US$0.5 million, the Group’s cash and cash equivalents as a result of the Future Disposal would increase by approximately US$164.8 million and its financial assets at fair value through profit or loss would reduce by approximately US$165.3 million. Accordingly, the Group’s total assets would decrease by approximately US$0.5 million and there would be no change in the total liabilities of the Group.

IMPLICATIONS UNDER THE LISTING RULES

The Future Disposal together with the Previous Disposals as disclosed by the Disposal Announcements on 13 August 2017, 17 November 2017 and 1 March 2018 respectively, may, on an aggregated basis, constitute a very substantial disposal of the Company under Chapter 14 of the Listing Rules and will require Shareholders’ approval in a general meeting of the Company.

Given the volatility of the stock market, disposing shares at the best possible price requires prompt disposal actions at the right timing and it would not be practicable to seek prior Shareholders’ approval for each such disposal of further Approved Sale Shares that requires Shareholders’ approval. To allow flexibility in effecting future disposals of the Approved Sale Shares at appropriate times, the Company proposes to seek from its Shareholders in advance the Disposal Mandate subject to the parameters above.

Pursuant to Rule 14.68(2)(a)(i) of the Listing Rules, this circular should contain (i) the financial information of NCLH prepared by the Directors in accordance with the accounting policies of the Company and (ii) such financial information shall be reviewed by the auditors of the Company. Given that (a) NCLH, being a company listed on the New York Stock Exchange, is required to publish the audited financial information in accordance with US GAAP under the relevant regulatory requirements; (b) the Remaining NCLH Shares only represent an insignificant stake of approximately 1.40% held by the Group in NCLH; and (c) after completion of the disposal of 10,000,000 NCLH Shares by Star NCLC on

2 To be updated based on the closing price on the day immediately before the date of this circular. LETTER FROM THE BOARD

26 May 2015, Star NCLC only held 40,569,334 NCLH Shares and NCLH ceased to be an associate of the Company. Since then, Star NCLC became an insignificant shareholder of NCLH and no longer has any access, and is unable to obtain, the underlying books and records of NCLH that are necessary to prepare the financial information of NCLH as required under Rule 14.68(2)(a)(i) or a line-by-line reconciliation of the audited financial information of NCLH for the three years ended 31 December 2015, 2016 and 2017 for the differences between US GAAP and HKFRS. A waiver has been granted by the Stock Exchange from strict compliance with Rule 14.68(2)(a)(i) of the Listing Rules on 13 April 2018. This circular has included, as alternative disclosure, the audited financial information of NCLH for the three years ended 31 December 2015, 2016 and 2017 prepared by NCLH under US GAAP.

If, during the period from the date of this circular up to the date of the SGM, the Company continues to dispose of further Remaining NCLH Shares which will constitute a notifiable transaction, the Company will strictly comply with Chapter 14 of the Listing Rules. In the event that any purchaser of the Remaining NCLH Shares is a connected person of the Company, the Company will strictly comply with the announcement, reporting and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Further announcement(s) on the disposal of the Remaining NCLH Shares will be made if such disposal (or disposals aggregated since the date of (a) approval of the Disposal Mandate; or (b) an announcement relating to Previous Disposal(s), whichever is later) will constitute a discloseable transaction under the Listing Rules. The Company will also make an announcement as soon as possible after all the Remaining NCLH Shares have been disposed under the Disposal Mandate or the expiration of the Disposal Mandate if the Company still holds any NCLH Share at that time.

To the best of the knowledge and belief of the Directors having made all reasonable enquiries, as at the Latest Practicable Date, no Shareholder has a material interest in the Future Disposal and the Disposal Mandate. Accordingly, it is expected that no Shareholder is required to abstain from voting at the SGM.

GENERAL

There is no assurance that the Company will proceed with the Future Disposal after obtaining the Disposal Mandate. Whether and when the Company will proceed with the Future Disposal or not will depend on a number of factors including without limitation the prevailing market sentiments and market conditions at the proposed time of executing the Future Disposal. The Shareholders and other public investors of the Company are therefore advised to exercise extreme caution when dealing in the Shares.

SPECIAL GENERAL MEETING

The Directors have resolved to convene the SGM to consider and, if thought fit, to approve the Future Disposal and the Disposal Mandate by the Shareholders. A notice of the SGM is set out on pages 172 to 174 of this circular. Voting at the SGM on the resolution will be taken by poll.

13 LETTER FROM THE BOARD

The form of proxy, together with any power of attorney or other authority under which the form of proxy is signed or a notarially certified copy of that power or authority, shall be deposited at the Corporate Headquarters of the Company at Suite 1501, Ocean Centre, 5 Canton Road, Tsimshatsui, Kowloon, Hong Kong SAR, or at the office of the Company’s Hong Kong Branch Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong SAR, or at Genting Hong Kong Limited, c/o Genting Management and Consultancy Services Sdn Bhd at 24th Floor, Wisma Genting, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the SGM and any adjournment thereof and in default the form of proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude Shareholders from attending and voting in person at the SGM (or any adjourned meeting thereof) should they so wish.

RECOMMENDATION

The Directors believe that the Future Disposal and the Disposal Mandate are fair and reasonable and are in the interest of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Future Disposal and the Disposal Mandate.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

Yours faithfully, For and on behalf of the Board of Genting Hong Kong Limited Tan Sri Lim Kok Thay Chairman and Chief Executive Officer

14 APPENDIX I FINANCIAL INFORMATION OF NCLH

PUBLISHED FINANCIAL INFORMATION OF NCLH FOR THE THREE YEARS ENDED 31 DECEMBER 2015, 2016, 2017

Financial information of NCLH for each of the three years ended 31 December 2015, 2016 and 2017 is disclosed in the following documents which are extracted from the audited financial statements and have been published on the website of the U.S. Securities and Exchange Commission (https://www. sec.gov) and the website of NCLH (http://www.nclhltdinvestor.com/) respectively:

1. audited financial statements of NCLH for the year ended 31 December 2017

2. audited financial statements of NCLH for the year ended 31 December 2016

3. audited financial statements of NCLH for the year ended 31 December 2015

Within the notes to financial information of NCLH, “we”, “ours” and “the Company” refer to NCLH Group.

15 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Operations (in thousands, except share and per share data)

Year Ended December 31, 2017 2016 2015

Revenue Passenger ticket $ 3,750,030 $ 3,388,954 $ 3,129,075 Onboard and other 1,646,145 1,485,386 1,215,973

Total revenue 5,396,175 4,874,340 4,345,048

Cruise operating expense Commissions, transportation and other 894,406 813,559 765,298 Onboard and other 319,293 298,886 272,802 Payroll and related 803,632 746,142 666,110 Fuel 361,032 335,174 358,650 Food 198,357 200,071 179,641 Other 486,924 456,393 412,948

Total cruise operating expense 3,063,644 2,850,225 2,655,449

Other operating expense Marketing, general and administrative 773,755 666,156 554,999 Depreciation and amortization 509,957 432,495 432,114

Total other operating expense 1,283,712 1,098,651 987,113

Operating income 1,048,819 925,464 702,486

16 APPENDIX I FINANCIAL INFORMATION OF NCLH

Year Ended December 31, 2017 2016 2015

Non-operating income (expense) Interest expense, net (267,804) (276,859) (221,909) Other income (expense), net (10,401) (8,302) (46,668)

Total non-operating income (expense) (278,205) (285,161) (268,577)

Net income before income taxes 770,614 640,303 433,909 Income tax expense (10,742) (7,218) (6,772)

Net income $ 759,872 $ 633,085 $ 427,137

Weighted-average shares outstanding Basic 228,040,825 227,121,875 226,591,437

Diluted 229,418,326 227,850,286 230,040,132

Earnings per share Basic $ 3.33 $ 2.79 $ 1.89

Diluted $ 3.31 $ 2.78 $ 1.86

The accompanying notes are an integral part of these consolidated financial statements.

17 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Comprehensive Income (in thousands)

Year Ended December 31, 2017 2016 2015

Net income $ 759,872 $ 633,085 $ 427,137

Other comprehensive income (loss): Shipboard Retirement Plan (40) 497 1,102 Cash flow hedges: Net unrealized gain (loss) related to cash flow hedges 304,684 1,711 (262,852) Amount realized and reclassified into earnings 36,795 95,969 91,742

Total other comprehensive income (loss) 341,439 98,177 (170,008)

Total comprehensive income $ 1,101,311 $ 731,262 $ 257,129

The accompanying notes are an integral part of these consolidated financial statements.

18 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Balance Sheets (in thousands, except share data)

December 31, 2017 2016

Assets Current assets: Cash and cash equivalents $ 176,190 $ 128,347 Accounts receivable, net 43,961 63,215 Inventories 82,121 66,255 Prepaid expenses and other assets 216,065 153,276

Total current assets 518,337 411,093

Property and equipment, net 11,040,488 10,117,689 Goodwill 1,388,931 1,388,931 Tradenames 817,525 817,525 Other long-term assets 329,588 238,673

Total assets $ 14,094,869 $ 12,973,911

Liabilities and shareholders’ equity Current liabilities: Current portion of long-term debt $ 619,373 $ 560,193 Accounts payable 53,433 38,002 Accrued expenses and other liabilities 513,717 541,753 Advance ticket sales 1,303,498 1,172,870

Total current liabilities 2,490,021 2,312,818

Long-term debt 5,688,392 5,838,494 Other long-term liabilities 166,690 284,873

Total liabilities 8,345,103 8,436,185

19 APPENDIX I FINANCIAL INFORMATION OF NCLH

December 31, 2017 2016

Commitments and contingencies (Note 11) Shareholders’ equity: Ordinary shares, $.001 par value; 490,000,000 shares authorized; 233,840,523 shares issued and 228,528,562 shares outstanding at December 31, 2017 and 232,555,937 shares issued and 227,243,976 shares outstanding at December 31, 2016 233 232 Additional paid-in capital 3,998,694 3,890,119 Accumulated other comprehensive income (loss) 26,966 (314,473) Retained earnings 1,963,128 1,201,103 Treasury shares (5,311,961 ordinary shares at December 31, 2017 and December 31, 2016 at cost) (239,255) (239,255)

Total shareholders’ equity 5,749,766 4,537,726

Total liabilities and shareholders’ equity $ 14,094,869 $ 12,973,911

The accompanying notes are an integral part of these consolidated financial statements.

20 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Cash Flows (in thousands)

Year Ended December 31, 2017 2016 2015

Cash flows from operating activities Net income $ 759,872 $ 633,085 $ 427,137 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 521,484 445,635 450,335 (Gain) loss on derivatives (103) 79 26,525 Deferred income taxes, net 9,153 (2,448) 1,269 Gain on contingent consideration – – (43,400) Write-off of financing fees 6,705 18,930 4,070 Provision for bad debts and inventory 2,431 3,866 5,029 Share-based compensation expense 87,039 66,414 42,209 Changes in operating assets and liabilities: Accounts receivable, net 15,050 (20,983) (14,803) Inventories (17,129) (9,184) (4,408) Prepaid expenses and other assets (22,714) (18,534) (10,325) Accounts payable 14,047 (5,755) (52,723) Accrued expenses and other liabilities 55,894 (6,410) (5,350) Advance ticket sales 154,012 134,971 218,260 Payment of original issue discount – – (1,647)

Net cash provided by operating activities 1,585,741 1,239,666 1,042,178

Cash flows from investing activities Additions to property and equipment, net (1,372,214) (1,092,091) (1,121,984) Net proceeds from sale of Hawaii land-based operations 499 – – Promissory note 165 – – Cash received on settlement of derivatives 2,346 131 2,832 Cash paid on settlement of derivatives (35,694) (36,954) (86,351) Investment in trademark – – (750)

Net cash used in investing activities (1,404,898) (1,128,914) (1,206,253)

21 APPENDIX I FINANCIAL INFORMATION OF NCLH

Year Ended December 31, 2017 2016 2015

Cash flows from financing activities Repayments of long-term debt (1,916,885) (3,744,029) (1,569,313) Repayments to Affiliate – (18,522) (37,042) Proceeds from long-term debt 1,816,390 3,753,928 1,855,809 Proceeds from employee related plans 30,032 9,169 69,985 Net share settlement of restricted share units (6,342) – – Purchases of treasury shares – (49,999) (107,256) Deferred financing fees and other (56,195) (48,889) (16,995)

Net cash provided by (used in) financing activities (133,000) (98,342) 195,188

Net increase in cash and cash equivalents 47,843 12,410 31,113 Cash and cash equivalents at beginning of year 128,347 115,937 84,824

Cash and cash equivalents at end of year $ 176,190 $ 128,347 $ 115,937

Supplemental disclosures (Note 14)

The accompanying notes are an integral part of these consolidated financial statements.

22 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Changes in Shareholders’ Equity (in thousands)

Accumulated Additional Other Total Ordinary Paid-in Comprehensive Retained Treasury Shareholders’ Shares Capital Income (Loss) Earnings Shares Equity

Balance, December 31, 2014 $ 230 $ 3,702,344 $ (242,642) $ 140,881 $ (82,000) $ 3,518,813

Share-based compensation – 42,209 – – – 42,209 Issuance of shares under employee related plans 2 69,983 – – – 69,985 Treasury shares – – – – (107,256) (107,256) Other comprehensive loss – – (170,008) – – (170,008) Net income – – – 427,137 – 427,137

Balance, December 31, 2015 232 3,814,536 (412,650) 568,018 (189,256) 3,780,880

Share-based compensation – 66,414 – – – 66,414 Issuance of shares under employee related plans – 9,169 – – – 9,169 Treasury shares – – – – (49,999) (49,999) Other comprehensive income – – 98,177 – – 98,177 Net income – – – 633,085 – 633,085

Balance, December 31, 2016 232 3,890,119 (314,473) 1,201,103 (239,255) 4,537,726

Share-based compensation – 87,039 – – – 87,039 Issuance of shares under employee related plans 1 30,031 – – – 30,032 Change in accounting policy (share-based forfeitures) – (2,153) – 2,153 – – Net share settlement of restricted share units – (6,342) – – – (6,342) Other comprehensive income – – 341,439 – – 341,439 Net income – – – 759,872 – 759,872

Balance, December 31, 2017 $ 233 $ 3,998,694 $ 26,966 $ 1,963,128 $ (239,255) $ 5,749,766

The accompanying notes are an integral part of these consolidated financial statements.

23 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Notes to the Consolidated Financial Statements

1. Description of Business and Organization

We are a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. As of December 31, 2017, we had 25 ships with approximately 50,400 Berths. We plan to introduce seven additional ships through 2025 and we have an option to introduce two additional ships for delivery in 2026 and 2027, subject to certain conditions. Norwegian Bliss and Norwegian Encore are on order for delivery in the spring of 2018 and fall of 2019, respectively. We also have an Explorer Class Ship, Seven Seas Splendor, on order for delivery in the winter of 2020. Project Leonardo will introduce an additional four ships with expected delivery dates through 2025. These additions to our fleet (exclusive of the option for two additional ships) will increase our total Berths to approximately 72,300.

Norwegian commenced operations from Miami in 1966. In February 2000, Genting HK acquired control of and subsequently became the sole owner of the Norwegian operations.

In January 2008, the Apollo Holders acquired 50% of the outstanding ordinary share capital of NCLC. As part of this investment, the Apollo Holders assumed control of NCLC’s Board of Directors. Also, in January 2008, the TPG Viking Funds acquired, in the aggregate, 12.5% of NCLC’s outstanding share capital from the Apollo Holders.

In February 2011, NCLH, a Bermuda limited company, was formed with the issuance to the Sponsors of, in aggregate, 10,000 ordinary shares, with a par value of $.001 per share. In January 2013, NCLH completed its IPO, pursuant to which it sold 27,058,824 ordinary shares for net proceeds, after deducting underwriting discounts and commissions and expenses, of approximately $473.9 million. In connection with the consummation of the IPO, the Sponsors’ ordinary shares in NCLC were exchanged for the ordinary shares of NCLH, and NCLH became the owner of 100% of the ordinary shares and parent company of NCLC (the “Corporate Reorganization”). At the same time, NCLH contributed $460.0 million to NCLC and the historical financial statements of NCLC became those of NCLH. The Corporate Reorganization was effected solely for the purpose of reorganizing our corporate structure. NCLH had not, prior to the completion of the Corporate Reorganization, conducted any activities other than those incidental to its formation and to prepare for the Corporate Reorganization and the IPO. As the economic position of the investors did not change as part of the Corporate Reorganization it was considered a nonsubstantive merger from an accounting perspective.

In November 2014, we completed the Acquisition of Prestige. We believe that the combination of Norwegian and Prestige creates a cruise operating company with a rich product portfolio and strong market presence.

The Sponsors have completed numerous Secondary Equity Offerings and as of December 31, 2017 have reduced their ownership to 16.8% of NCLH’s ordinary shares (we refer you to Note 7 – “Related Party Disclosures”).

2. Summary of Significant Accounting Policies

Basis of Presentation

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and contain all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Estimates are required for the preparation of consolidated financial statements in accordance with generally accepted accounting principles and actual results could differ from these estimates. All significant intercompany accounts and transactions are eliminated in consolidation.

Reclassification

Certain amounts in prior periods have been reclassified to properly reflect promotional discounts allocated between passenger ticket revenue to onboard and other revenue. During the fourth quarter of 2017 we reclassified $21.9 million of revenue from passenger ticket revenue to onboard and other revenue for the prior three quarters. This cumulative adjustment for 2017 amends the multi-element allocation of revenue between these two financial statement line items. This change does not impact total revenue or net income, nor did it impact any periods in 2016 or 2015.

24 APPENDIX I FINANCIAL INFORMATION OF NCLH

Cash and Cash Equivalents

Cash and cash equivalents are stated at cost, and include cash and investments with original maturities of three months or less at acquisition and also include amounts due from credit card processors.

Restricted Cash

Restricted cash consists of cash collateral in respect of certain agreements and is included in prepaid expenses and other assets and other long-term assets in our consolidated balance sheets.

Accounts Receivable, Net

Accounts receivable are shown net of an allowance for doubtful accounts of $5.9 million and $4.7 million as of December 31, 2017 and 2016, respectively.

Inventories

Inventories mainly consist of provisions, supplies and fuel and are carried at the lower of cost or net realizable value using the first-in, first-out method of accounting.

Advertising Costs

Advertising costs are expensed as incurred except for those that result in tangible assets, including brochures, which are treated as prepaid expenses and charged to expense as consumed. Advertising costs of $2.4 million and $1.3 million as of December 31, 2017 and 2016, respectively, are included in prepaid expenses and other assets. Expenses related to advertising costs totaled $289.1 million, $270.5 million and $232.2 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Earnings Per Share

Basic EPS is computed by dividing net income by the basic weighted-average number of shares outstanding during each period. Diluted EPS is computed by dividing net income by diluted weighted-average shares outstanding. A reconciliation between basic and diluted EPS was as follows (in thousands, except share and per share data):

Year Ended December 31, 2017 2016 2015

Net income $ 759,872 $ 633,085 $ 427,137

Basic weighted-average shares outstanding 228,040,825 227,121,875 226,591,437 Potentially dilutive shares 1,377,501 728,411 3,448,695

Diluted weighted-average shares outstanding 229,418,326 227,850,286 230,040,132

Basic EPS $ 3.33 $ 2.79 $ 1.89 Diluted EPS $ 3.31 $ 2.78 $ 1.86

For the years ended December 31, 2017, 2016 and 2015, a total of 5.6 million, 7.1 million and 2.8 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive.

25 APPENDIX I FINANCIAL INFORMATION OF NCLH

Property and Equipment, Net

Property and equipment are recorded at cost. Major renewals and improvements that we believe add value to our ships are capitalized as a cost of the ship while costs of repairs and maintenance, including Dry-dock costs, are charged to expense as incurred. During ship construction, certain interest is capitalized as a cost of the ship. Gains or losses on the sale of property and equipment are recorded as a component of operating income (expense) in our consolidated statements of operations.

Depreciation is computed on the straight-line basis over the estimated useful lives of the assets, after a 15% reduction for the estimated residual values of ships as follows:

Useful Life

Ships 30 years Computer hardware and software 3-10 years Other property and equipment 3-40 years Leasehold improvements Shorter of lease term or asset life Ship improvements Shorter of asset life or life of the ship

Long-lived assets are reviewed for impairment, based on estimated future undiscounted cash flows, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Assets are grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. We consider historical performance and future estimated results in our evaluation of potential impairment and then compare the carrying amount of the asset to the estimated future cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, we measure the amount of the impairment by comparing the carrying amount of the asset to its fair value. We estimate fair value based on the best information available utilizing estimates, judgments and projections as necessary. Our estimate of fair value is generally measured by discounting expected future cash flows at discount rates commensurate with the associated risk.

Goodwill and Tradenames

Goodwill represents the excess of cost over the fair value of net assets acquired. Goodwill and other indefinite-lived assets, principally tradenames, are reviewed for impairment on an annual basis or earlier if there is an event or change in circumstances that would indicate that the carrying value of these assets may not be fully recoverable. We use the Step 0 Test which allows us to first assess qualitative factors to determine whether it is more likely than not (i.e., more than 50%) that the fair value of a reporting unit is less than its carrying value. For tradenames we also provide a qualitative assessment to determine if there is any indication of impairment. In order to make this evaluation, we consider the following circumstances as well as others:

• Changes in general macroeconomic conditions such as a deterioration in general economic conditions; limitations on accessing capital; fluctuations in foreign exchange rates; or other developments in equity and credit markets;

• Changes in industry and market conditions such as a deterioration in the environment in which an entity operates; an increased competitive environment; a decline in market-dependent multiples or metrics (in both absolute terms and relative to peers); a change in the market for an entity’s products or services; or a regulatory or political development;

• Changes in cost factors that have a negative effect on earnings and cash flows;

• Decline in overall financial performance (for both actual and expected performance);

• Entity and reporting unit specific events such as changes in management, key personnel, strategy, or customers; litigation; or a change in the composition or carrying amount of net assets; and

• Decline in share price (in both absolute terms and relative to peers).

26 APPENDIX I FINANCIAL INFORMATION OF NCLH

We have concluded that our business has three reporting units. Each brand, Norwegian, Regent and Oceania Cruises, constitutes a business for which discrete financial information is available and management regularly reviews the operating results and, therefore, each brand is considered an operating segment.

For our annual impairment evaluation, we performed a Step 0 Test for the Norwegian, Regent Seven Seas and Oceania Cruises reporting units. As of December 31, 2017, there was $523.0 million, $462.1 million and $403.8 million of goodwill for the Oceania Cruises, Regent Seven Seas and Norwegian reporting units, respectively. As of December 31, 2017, our annual review consisting of the Step 0 Test supports the carrying value of these assets.

Revenue and Expense Recognition

Deposits received from guests for future voyages are recorded as advance ticket sales and are subsequently recognized as passenger ticket revenue on a pro-rata basis over the period of the voyage, concurrent with recognition of onboard and other revenue and with recognition of all associated direct costs of a voyage as cruise operating expenses. Guest cancellation fees are recognized in passenger ticket revenue in the month of the cancellation.

Certain of our product offerings are accounted for under the guidance included within multi-element arrangements and result in an allocation of the fair value between passenger ticket revenue and onboard and other revenue.

Revenue and expenses include port fees and taxes. The amounts included on a gross basis are $327.4 million, $286.6 million and $243.8 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Debt Issuance Costs

Debt issuance costs related to a recognized debt liability are presented in the consolidated balance sheets as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. For line of credit arrangements and for those debt facilities not fully drawn we defer and present debt issuance costs as an asset. These deferred issuance costs are amortized over the life of the loan agreement. The amortization of deferred financing fees is included in depreciation and amortization expense in the consolidated statements of cash flows; however, for purposes of the consolidated statements of operations it is included in interest expense, net.

Foreign Currency

The majority of our transactions are settled in U.S. dollars. Gains or losses resulting from transactions denominated in other currencies are recognized in income at each balance sheet date. We recognized losses for the year ended December 31, 2017 of $14.2 million and gains were approximately $4.5 million and $11.0 million for the years ended December 31, 2016 and 2015, respectively.

Derivative Instruments and Hedging Activity

We enter into derivative contracts to reduce our exposure to fluctuations in foreign currency exchange rates, interest rates and fuel prices. The criteria used to determine whether a transaction qualifies for hedge accounting treatment includes the correlation between fluctuations in the fair value of the hedged item and the fair value of the related derivative instrument and its effectiveness as a hedge. As the derivative is marked to fair value, we elected an accounting policy to net the fair value of our derivatives when a master netting arrangement exists with our counterparties.

A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability may be designated as a cash flow hedge. Changes in fair value of derivative instruments that are designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) until the underlying hedged transactions are recognized in earnings. To the extent that an instrument is not effective as a hedge, gains and losses are recognized in other income (expense), net in our consolidated statements of operations. Realized gains and losses related to our effective fuel hedges are recognized in fuel expense. For presentation in our consolidated statements of cash flows, we have elected to classify the cash flows from our cash flow hedges in the same category as the cash flows from the items being hedged.

27 APPENDIX I FINANCIAL INFORMATION OF NCLH

Concentrations of Credit Risk

We monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. Credit risk, including but not limited to counterparty non-performance under derivative instruments, our New Revolving Loan Facility and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions and insurance companies that we have well-established relationships with and that have credit risks acceptable to us or the credit risk is spread out among a large number of creditors. We do not anticipate non-performance by any of our significant counterparties.

Insurance

We use a combination of insurance and self-insurance for a number of risks including claims related to crew and guests, hull and machinery, war risk, workers’ compensation, property damage, employee healthcare and general liability. Liabilities associated with certain of these risks, including crew and passenger claims, are estimated actuarially based upon known facts, historical trends and a reasonable estimate of future expenses. While we believe these accruals are adequate, the ultimate losses incurred may differ from those recorded.

Income Taxes

Deferred tax assets and liabilities are calculated in accordance with the liability method. Deferred taxes are recorded using the currently enacted tax rates that apply in the periods that the differences are expected to reverse. Deferred taxes are not discounted.

We provide a valuation allowance on deferred tax assets when it is more likely than not that such assets will not be realized. With respect to acquired deferred tax assets, future reversals of the valuation allowance will first be applied against goodwill and other intangible assets before recognition of a benefit in our consolidated statements of operations.

Share-Based Compensation

We recognize expense for our share-based compensation awards using a fair-value-based method. Share-based compensation expense is recognized over the requisite service period for awards that are based on a service period and not contingent upon any future performance. We refer you to Note 9 – “Employee Benefits and Share-Based Compensation.”

Segment Reporting

We have concluded that our business has a single reportable segment. Each brand, Norwegian, Oceania Cruises and Regent constitutes a business for which discrete financial information is available and management regularly reviews the operating results and, therefore, each brand is considered an operating segment. Our operating segments have similar economic and qualitative characteristics, including similar long-term margins and similar products and services; therefore, we aggregate all of the operating segments into one reportable segment.

Revenues by destination were as follows (in thousands):

Year Ended December 31, 2017 2016 2015

North America $ 3,285,903 $ 3,132,208 $ 2,743,007 Europe 1,347,381 1,148,403 1,120,705 Asia-Pacific 394,631 196,978 198,131 Other 368,260 396,751 283,205

Total Revenues $ 5,396,175 $ 4,874,340 $ 4,345,048

28 APPENDIX I FINANCIAL INFORMATION OF NCLH

Substantially all of our long- lived assets are located outside of the U.S. and consist primarily of our ships. We have 17 ships with Bahamas registry with a carrying value of $8.0 billion as of December 31, 2017 and 16 ships with Bahamas registry with a carrying value of $7.1 billion as of December 31, 2016. We have seven ships with Marshall Island registry with a carrying value of $1.9 billion as of December 31, 2017 and 2016. We also have one ship with U.S. registry with a carrying value of $0.3 billion as of December 31, 2017 and 2016.

Recently Issued Accounting Guidance

In December 2017, the Tax Cuts and Jobs Act (“the Act”) was enacted. Among other provisions, the Act reduces the U.S. federal corporate tax rate from 35% to 21%. The SEC staff issued SAB No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. As of December 31, 2017, we have not completed the accounting for the tax effects of enactment of the Act; however, as described below, we have made a reasonable estimate of the effects on existing deferred tax balances. These amounts are provisional and subject to change. The most significant impact of the Act for the Company was a $7.4 million reduction of the value of net deferred tax liabilities (which represent future tax expenses) that was recorded as a discrete tax benefit as a result of lowering the U.S. corporate income tax rate from 35% to 21%. The tax benefit represents a provisional amount and the Company’s current best estimates. Any adjustments recorded to the provisional amount through the end of 2018 will be included in income from operations as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon the Company’s current interpretation of the Act and may change as the Company receives additional clarification and implementation guidance. Other aspects of the Act are either not applicable or not expected to have a material impact on the Company’s financial statements.

In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-12. The objectives of this ASU are to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and to make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. This ASU is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. We will adopt in the first quarter of 2018. For cash flow hedges, a cumulative-effect adjustment relating to the elimination of the separate measurement of ineffectiveness to accumulated other comprehensive income is required with a corresponding adjustment to the opening balance of retained earnings. The presentation and disclosure guidance is required prospectively.

In January 2017, the FASB issued ASU No. 2017-04 which simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The guidance is effective for annual or any interim goodwill impairment tests in years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect to early adopt this guidance. We will evaluate the impact upon adoption of this guidance to our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16 which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. We will adopt the new standard effective January 1, 2018, using the modified retrospective transition approach through a cumulative-effect adjustment of $19.1 million to retained earnings as of the effective date. The cumulative-effect adjustment captures the write-off of previously unamortized deferred income tax expense from past intra-entity transfers involving assets other than inventory, and recognition of any new deferred tax assets, net of necessary valuation allowance and other liabilities for amounts not previously recognized under U.S. GAAP.

In August 2016, the FASB issued ASU No. 2016-15 which amends Topic 230 (Statement of Cash Flows) to eliminate discrepancies in reporting certain items in the statement of cash flows. We will adopt a retrospective application in the first quarter of 2018. Currently, the only transactions that will require a reclassification is in connection with our debt extinguishment and deferred financing fees.

29 APPENDIX I FINANCIAL INFORMATION OF NCLH

In February 2016, the FASB issued ASU No. 2016-02 which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The ASU requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The ASU further modifies lessors’ classification criteria for leases and the accounting for sales-type and direct financing leases. The ASU will also require qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from leases. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption permitted. The ASU is to be applied using a modified retrospective approach. To evaluate the impact of the adoption of this guidance, we are currently reviewing our existing leases and evaluating contracts to determine what might be considered a lease under the new guidance.

In May 2014, the FASB issued ASU No. 2014-09 which requires entities to recognize revenue through the application of a five-step model, including identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligation and recognition of revenue as the entity satisfies the performance obligations. We will adopt a modified retrospective application in the first quarter of 2018. We have reviewed our contract and business processes and we are concluding on changes to our controls to support recognition and disclosure requirements. Based on our evaluation to date, we determined no significant changes are required to our business processes, systems and controls to effectively report revenue recognition under the new standard. Upon adoption we will reclassify to prepaid expenses and other assets from advanced ticket sales certain deferred costs incurred to obtain our contracts. Adoption of the new standard will require additional disclosures, however, it is not expected to materially change the timing, classification or amount of revenue recognized in our consolidated financial statements.

3. Goodwill and Intangible Assets

Goodwill and tradenames are not subject to amortization. As of December 31, 2017 and 2016, the carrying values were $1.4 billion for goodwill and $0.8 billion for tradenames.

The gross carrying amounts of intangible assets included within other long-term assets, the related accumulated amortization, the net carrying amounts and the weighted-average amortization periods of the Company’s intangible assets are listed in the following tables (in thousands, except amortization period):

December 31, 2017 Weighted- Gross Average Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years)

Customer relationship $ 120,000 $ (66,866) $ 53,134 6.0 Licenses 3,368 (1,601) 1,767 5.6 Non-compete agreements 660 (660) – 1.0

Total intangible assets subject to amortization $ 124,028 $ (69,127) $ 54,901

December 31, 2016 Weighted- Gross Average Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years)

Customer relationship $ 120,000 $ (36,593) $ 83,407 6.0 Licenses 3,368 (807) 2,561 5.6 Non-compete agreements 660 (495) 165 1.0

Total intangible assets subject to amortization $ 124,028 $ (37,895) $ 86,133

License (Indefinite-lived) $ 4,427 $ – $ –

30 APPENDIX I FINANCIAL INFORMATION OF NCLH

The aggregate amortization expense is as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Amortization expense $ 31,232 $ 22,160 $ 73,207

The following table sets forth the Company’s estimated aggregate amortization expense for each of the five years below (in thousands):

Amortization Year ended December 31, Expense

2018 $ 26,163 2019 18,489 2020 9,906 2021 75 2022 75

4. Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) for the year ended December 31, 2017 was as follows (in thousands):

Change Accumulated Change Related to Other Related to Shipboard Comprehensive Cash Flow Retirement Income (Loss) Hedges Plan

Accumulated other comprehensive income (loss) at beginning of year $ (314,473) $ (307,618) $ (6,855) Current period other comprehensive income before reclassifications 304,226 304,684 (458) Amounts reclassified 37,213 36,795(1) 418(2)

Accumulated other comprehensive income (loss) at end of year $ (26,966) $ 33,861(3) $ (6,895)

(1) We refer you to Note 8 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

(3) Of the existing amounts related to derivatives designated as cash flow hedges, approximately $9.4 million of gain is expected to be reclassified into earnings in the next 12 months.

31 APPENDIX I FINANCIAL INFORMATION OF NCLH

Accumulated other comprehensive income (loss) for the year ended December 31, 2016 was as follows (in thousands):

Change Accumulated Change Related to Other Related to Shipboard Comprehensive Cash Flow Retirement Income (Loss) Hedges Plan

Accumulated other comprehensive income (loss) at beginning of year $ (412,650) $ (405,298) $ (7,352) Current period other comprehensive income before reclassifications 1,776 1,711 65 Amounts reclassified 96,401 95,969(1) 432(2)

Accumulated other comprehensive income (loss) at end of year $ (314,473) $ (307,618) $ (6,855)

(1) We refer you to Note 8 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

Accumulated other comprehensive income (loss) for the year ended December 31, 2015 was as follows (in thousands):

Change Accumulated Change Related to Other Related to Shipboard Comprehensive Cash Flow Retirement Income (Loss) Hedges Plan

Accumulated other comprehensive income (loss) at beginning of year $ (242,642) $ (234,188) $ (8,454) Current period other comprehensive income (loss) before reclassifications (262,227) (262,852) 625 Amounts reclassified 92,219 91,742(1) 477(2)

Accumulated other comprehensive income (loss) at end of year $ (412,650) $ (405,298) $ (7,352)

(1) We refer you to Note 8 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

32 APPENDIX I FINANCIAL INFORMATION OF NCLH

5. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

December 31, 2017 2016

Ships $ 11,814,409 $ 10,781,703 Ships improvements 1,060,049 807,233 Ships under construction 521,597 450,372 Land and land improvements 37,535 37,535 Other 487,921 483,744

13,921,511 12,560,587 Less: accumulated depreciation (2,881,023) (2,442,898)

Property and equipment, net $ 11,040,488 $ 10,117,689

The increase in ships was primarily due to the addition of Norwegian Joy. Depreciation and amortization expense for the years ended December 31, 2017, 2016 and 2015 was $510.0 million, $432.5 million and $432.1 million, respectively. Repairs and maintenance expenses including Dry-dock expenses were $157.2 million, $155.4 million and $124.8 million for the years ended December 31, 2017, 2016 and 2015, respectively, and were recorded within other cruise operating expense.

Ships under construction include progress payments to the shipyard, planning and design fees and other associated costs. Capitalized interest costs which were primarily associated with the construction or revitalization of ships amounted to $29.0 million, $33.7 million and $31.9 million for the years ended December 31, 2017, 2016 and 2015, respectively.

6. Long-Term Debt

Long-term debt consisted of the following:

Interest Rate Balance December 31, Maturities December 31, 2017 2016 Through 2017 2016 (in thousands)

$875.0 million senior secured revolving credit facility 3.27% – 2021 $ 78,000 $ – $750.0 million senior secured revolving credit facility – 2.70% 2021 – 129,000 Term Loan A 3.32% – 2021 1,385,196 – $1,506.6 million term loan A facility – 2.77% 2021 – 1,459,033 $375.0 million Term Loan B (1) 3.18% – 2021 371,914 – $700.0 million 4.750% senior unsecured notes 4.75% 4.75% 2021 693,413 691,767 $600.0 million 4.625% senior unsecured notes – 4.63% 2020 – 592,031 €662.9 million Norwegian Epic term loan (2) 3.44% 3.00% 2022 328,646 395,830 €308.1 million Pride of Hawai’i loan (2) 2.31% 1.83% 2018 18,438 54,601 $334.1 million Norwegian Jewel term loan – 1.83% 2017 – 26,919 €258.0 million Pride of America Hermes loan (2) – 1.90% 2017 – 12,654 €529.8 million Breakaway one loan (2) 2.97% 2.49% 2025 415,039 469,100 €529.8 million Breakaway two loan (2) 4.50% 4.50% 2026 482,133 537,478 €590.5 million Breakaway three loan (2) 2.98% 2.98% 2027 595,494 653,474 €729.9 million Breakaway four loan (2) 2.98% 2.98% 2029 758,595 150,834 €126 million Norwegian Jewel term loan (2) – 1.82% 2017 – 7,260 €126 million Norwegian Jade term loan (2) – 1.82% 2017 – 7,531 €666 million Seahawk 1 term loan (2) 3.92% 3.92% 2030 184,837 137,514 €666 million Seahawk 2 term loan (2) 3.92% 3.92% 2031 90,351 42,083

33 APPENDIX I FINANCIAL INFORMATION OF NCLH

Interest Rate Balance December 31, Maturities December 31, 2017 2016 Through 2017 2016 (in thousands)

Sirena loan 2.75% 2.75% 2019 27,344 40,465 Explorer newbuild loan 3.43% 3.43% 2028 295,093 320,821 Marina newbuild loan (3) 2.00% 1.54% 2023 245,706 290,416 Riviera newbuild loan (4) 2.11% 1.81% 2024 292,183 337,174 Capital lease and license obligations Various Various 2028 45,383 42,702

Total debt 6,307,765 6,398,687 Less: current portion of long-term debt (619,373) (560,193)

Total long-term debt $ 5,688,392 $ 5,838,494

(1) Includes original issue discount of $0.9 million as of December 31, 2017.

(2) Currently U.S. dollar-denominated.

(3) Includes premium of $0.2 million as of December 31, 2017 and 2016.

(4) Includes premium of $0.2 million and $0.3 million as of December 31, 2017 and 2016, respectively.

NCLC, a subsidiary of NCLH, entered into a Third Amended and Restated Credit Agreement, dated as of October 10, 2017, with a subsidiary of NCLC, as co-borrower and JPMorgan Chase Bank, N.A. (“JPM”), as administrative agent. This facility revised the $750.0 million senior secured credit facility to, among other things, (a) reprice and increase the existing $750 million revolving credit facility to a new $875 million revolving credit facility (the “New Revolving Loan Facility”), (b) reprice the approximately $1,412 million principal amount outstanding under the existing senior secured term A facility to (the “New Term A Loan Facility”), and (c) add a new $375 million term B loan facility due 2021 (the “New Term B Loan Facility”). The applicable margin under the New Term A Loan Facility and New Revolving Loan Facility is determined by reference to a total leverage ratio, with an applicable margin of between 2.00% and 1.25% with respect to Eurocurrency loans and between 1.00% and 0.25% with respect to base rate loans. The margin for borrowings under the New Term A Loan Facility and New Revolving Loan Facility is 1.75% with respect to Eurocurrency borrowings and 0.75% with respect to base rate borrowings. The applicable margin under the New Term B Loan Facility is 1.75% with respect to Eurocurrency loans and 0.75% with respect to base rate loans. NCLC used proceeds from the New Term B Loan Facility and cash on hand for the Redemption (as defined below).

Concurrent with the refinancing of its loan facilities as described above, on October 10, 2017, NCLC completed the redemption of all its outstanding 4.625% Senior Notes due 2020 (“Notes”), at a price including accrued and unpaid interest, of $1,044.41 per $1,000 of outstanding principal amount of Notes so redeemed (the “Redemption”) using the proceeds from the New Term Loan B Facility and cash on hand. No Notes remained outstanding after the redemption.

Interest expense, net for the year ended December 31, 2017 was $267.8 million which included $32.5 million of amortization of deferred financing fees and a $23.9 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2016 was $276.9 million which included $34.7 million of amortization of deferred financing fees and a $27.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2015 was $221.9 million which included $36.7 million of amortization of deferred financing fees and a $12.7 million loss on extinguishment of debt.

Certain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio, maintain certain other ratios and restrict our ability to pay dividends. Substantially all of our ships and other property and equipment are pledged as collateral for certain of our debt. We believe we were in compliance with our covenants as of December 31, 2017.

34 APPENDIX I FINANCIAL INFORMATION OF NCLH

The following are scheduled principal repayments on long-term debt including capital lease obligations as of December 31, 2017 for each of the next five years (in thousands):

Year Amount

2018 $ 619,373 2019 626,334 2020 622,129 2021 2,571,257 2022 431,674 Thereafter 1,553,815

Total $ 6,424,582

We had an accrued interest liability of $31.9 million and $32.5 million as of December 31, 2017 and 2016, respectively.

7. Related Party Disclosures

Transactions with Genting HK and the Apollo Holders

As of December 31, 2017, the ownership percentages of NCLH’s ordinary shares were as follows:

Number of Percentage Shareholder Shares Ownership

Apollo Holders (1) 25,478,782 11.2% Genting HK (2) 12,898,307 5.6%

(1) The Apollo Holders include NCL Athene LLC, AIF VI NCL (AIV), L.P., AIF VI NCL (AIV II), L.P., AIF VI NCL (AIV III), L.P., AIF VI NCL (AIV IV), L.P., Apollo Overseas Partners (Delaware) VI, L.P., Apollo Overseas Partners (Delaware 892) VI, L. P., Apollo Overseas Partners VI, L.P., Apollo Overseas Partners (Germany) VI, L.P., AAA Guarantor – Co-Invest VII, L.P., AIF VI Euro Holdings, L.P., AIF VII Euro Holdings, L.P., Apollo Alternative Assets, L.P., Apollo Management VI, L.P. and Apollo Management VII, L.P.

(2) Genting HK owns our ordinary share indirectly through Star NCLC Holdings Ltd., a Bermuda wholly-owned subsidiary.

In December 2015, we repurchased 348,553 ordinary shares under NCLH’s repurchase program as a part of a Secondary Equity Offering by the Apollo Holders and Genting HK for approximately $20.0 million.

In June 2012, we exercised our option with Genting HK to purchase Norwegian Sky. We paid the total amount of $259.3 million to Genting HK in connection with the Norwegian Sky Purchase Agreement as of December 31, 2016 and no further payments are due.

8. Fair Value Measurements and Derivatives

Fair value is defined as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

Fair Value Hierarchy

The following hierarchy for inputs used in measuring fair value should maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available:

Level 1 Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement dates.

35 APPENDIX I FINANCIAL INFORMATION OF NCLH

Level 2 Significant other observable inputs that are used by market participants in pricing the asset or liability based on market data obtained from independent sources.

Level 3 Significant unobservable inputs we believe market participants would use in pricing the asset or liability based on the best information available.

Derivatives

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We attempt to minimize these risks through a combination of our normal operating and financing activities and through the use of derivatives. We assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the cash flow of our hedged forecasted transactions. We use regression analysis for this hedge relationship and high effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the fair values of the derivative and the hedged forecasted transaction. Cash flows from the derivatives are classified in the same category as the cash flows from the underlying hedged transaction. The determination of ineffectiveness is based on the amount of dollar offset between the cumulative change in fair value of the derivative and the cumulative change in fair value of the hedged transaction at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge, or if the hedged forecasted transaction is no longer probable of occurring, then the amount recognized in accumulated other comprehensive income (loss) is released to earnings. In addition, the ineffective portion of our highly effective hedges is recognized in earnings immediately and reported in other income (expense), net in our consolidated statements of operations. There are no amounts excluded from the assessment of hedge effectiveness and there are no credit-risk-related contingent features in our derivative agreements.

We monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. Credit risk, including but not limited to counterparty non-performance under derivatives is not considered significant, as we primarily conduct business with large, well-established financial institutions that we have established relationships with and that have credit risks acceptable to us or the credit risk is spread out among a large number of creditors. We do not anticipate non-performance by any of our significant counterparties.

The following table sets forth our derivatives measured at fair value and discloses the balance sheet location (in thousands):

Asset Liability December 31, December 31, December 31, December 31, Balance Sheet location 2017 2016 2017 2016

Fuel swaps designated as Prepaid expenses and $ 19,220 $ 20,288 $ 2,406 $ – hedging instruments other assets Other long-term assets 19,854 – 3,469 – Accrued expenses and – – 3,348 44,271 other liabilities Other long-term liabilities 576 13,237 2,148 38,608

Foreign currency forward Prepaid expenses and 52,300 – 730 – contracts designated as other assets hedging instruments Other long-term assets 85,081 14 – – Accrued expenses and – – – 61,788 other liabilities Other long-term liabilities – – – 88,920

Interest rate swaps Accrued expenses and – – 1,020 3,331 designated as hedging other liabilities instruments Other long-term liabilities – – – 1,151

The fair values of swap and forward contracts are determined based on observable inputs and utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity and other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest yield curves. The Company determines the value of options and collars utilizing an option pricing model based on inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets. The option pricing model used by the Company is an industry standard model for valuing options and is used by the broker/dealer community. The inputs to this option pricing model are the option strike price, underlying

36 APPENDIX I FINANCIAL INFORMATION OF NCLH

price, risk-free rate of interest, time to expiration, and volatility. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. Our derivatives and financial instruments were categorized as Level 2 in the fair value hierarchy, and we had no derivatives or financial instruments categorized as Level 1 or Level 3.

Our derivative contracts include rights of offset with our counterparties. We have elected to net certain assets and liabilities within counterparties when the rights of offset exist. We are not required to post cash collateral related to our derivative instruments.

The following table discloses the gross and net amounts recognized within assets and liabilities (in thousands):

Gross Gross Gross Amounts Total Net Amounts Net December 31, 2017 Amounts Offset Amounts Not Offset Amounts

Assets $ 176,455 $ (6,605) $ 169,850 $ (127,924) $ 41,926 Liabilities 6,516 (576) 5,940 (1,020) 4,920

Gross Gross Gross Amounts Total Net Amounts Net December 31, 2016 Amounts Offset Amounts Not Offset Amounts

Assets $ 20,302 $ – $ 20,302 $ (14) $ 20,288 Liabilities 238,069 (13,237) 224,832 (155,190) 69,642

Fuel Swaps

As of December 31, 2017, we had fuel swaps maturing through December 31, 2020 which are used to mitigate the financial impact of volatility in fuel prices pertaining to approximately 1.2 million metric tons of our projected fuel purchases.

The effects on the consolidated financial statements of the fuel swaps which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Gain (loss) recognized in other comprehensive income (loss) – effective portion $ 50,263 $ 127,470 $ (173,513) Loss recognized in other income (expense), net – ineffective portion (317) (12,850) (16,011) Amount reclassified from accumulated other comprehensive income (loss) into fuel expense 29,721 85,448 75,808

We had fuel swaps that matured which were not designated as cash flow hedges. These fuel swaps were previously designated as cash flow hedges and were dedesignated due to a change in our expected future fuel purchases mix.

The effects on the consolidated financial statements of the fuel swaps which were dedesignated and recognized into earnings were as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Amount reclassified from accumulated other comprehensive income (loss) into other income (expense), net $ – $ 2,994 $ 10,000 Loss recognized in other income (expense), net – (271) (4,727)

37 APPENDIX I FINANCIAL INFORMATION OF NCLH

Foreign Currency Options

We had foreign currency options that matured which consisted of call options with deferred premiums. These options were used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. If the spot rate at the date the ships were delivered was less than the strike price under these option contracts, we would have paid the deferred premium and would not exercise the foreign currency options.

The effects on the consolidated financial statements of the foreign currency options which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense $ 1,320 $ 1,320 $ 1,320

Foreign Currency Forward Contracts

As of December 31, 2017, we had foreign currency forward contracts which are used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. The notional amount of our foreign currency forward contracts was €1.9 billion, or $2.3 billion based on the euro/U.S. dollar exchange rate as of December 31, 2017.

The effects on the consolidated financial statements of the foreign currency forward contracts which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Gain (loss) recognized in other comprehensive income (loss) – effective portion $ 254,070 $ (124,058) $ (84,187) Loss recognized in other income (expense), net – ineffective portion (73) (270) (343) Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense 3,121 2,625 116

The effects on the consolidated financial statements of the foreign currency forward contracts which were not designated as hedging instruments were as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Gain (loss) recognized in other income (expense), net $ – $ (6,133) $ 684

Foreign Currency Collar

We had foreign currency collars that matured and were used to mitigate the volatility of foreign currency exchange rates related to our ship construction contracts denominated in euros.

The effects on the consolidated financial statements of the foreign currency collar which was designated as a cash flow hedge was as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense $ (364) $ (364) $ (364)

38 APPENDIX I FINANCIAL INFORMATION OF NCLH

The effect on the consolidated financial statements of the foreign currency collar which was not designated as a cash flow hedge was as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Gain (loss) recognized in other income (expense), net $ – $ 10,312 $ (26,249)

Interest Rate Swaps

As of December 31, 2017, we had interest rate swap agreements to hedge our exposure to interest rate movements and to manage our interest expense. The notional amount of outstanding debt associated with the interest rate swap agreements was $218.6 million as of December 31, 2017.

The effects on the consolidated financial statements of the interest rate swaps which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Gain (loss) recognized in other comprehensive income (loss) – effective portion $ 351 $ (1,701) $ (5,152) Gain (loss) recognized in other income (expense), net – ineffective portion – 3 (23) Amount reclassified from other comprehensive income (loss) into interest expense, net 2,997 3,946 4,614

Other

The carrying amounts reported in the consolidated balance sheets of all other financial assets and liabilities approximate fair value.

Long-Term Debt

As of December 31, 2017 and 2016, the fair value of our long-term debt, including the current portion, was $6,448.6 million and $6,525.7 million, respectively, which was $23.5 million higher and $11.6 million higher, respectively, than the carrying values. The difference between the fair value and carrying value of our long-term debt is due to our fixed and variable rate debt obligations carrying interest rates that are above or below market rates at the measurement dates. The fair value of our long-term debt was calculated based on estimated rates for the same or similar instruments with similar terms and remaining maturities resulting in Level 2 inputs in the fair value hierarchy. Market risk associated with our long-term variable rate debt is the potential increase in interest expense from an increase in interest rates. The calculation of the fair value of our long-term debt is considered a Level 2 input.

Non-recurring Measurements of Non-financial Assets

Goodwill and other indefinite-lived assets, principally tradenames, are reviewed for impairment on an annual basis or earlier if there is an event or change in circumstances that would indicate that the carrying value of these assets may not be fully recoverable.

39 APPENDIX I FINANCIAL INFORMATION OF NCLH

9. Employee Benefits and Share-Based Compensation

Share-Based Compensation

As a result of NCLH’s adoption of ASU No. 2016-09, beginning in the first quarter of 2017, NCLH began accounting for forfeitures as they occur, rather than estimating expected forfeitures. Pursuant to the modified-retrospective application, the net cumulative effect of this change was recognized as a $2.2 million increase to retained earnings as of January 1, 2017 (we refer you to our consolidated statements of changes in shareholders’ equity).

Amended and Restated 2013 Performance Incentive Plan (“Restated 2013 Plan”)

In January 2013, NCLH adopted the 2013 Performance Incentive Plan which provided for the issuance of up to 15,035,106 of NCLH’s ordinary shares pursuant to awards granted under the plan, with no more than 5,000,000 shares being granted to one individual in any calendar year. In May 2016, the plan was amended and restated pursuant to approval from the Board of Directors and NCLH’s shareholders. Among other things, under the Restated 2013 Plan, the number of NCLH’s ordinary shares that may be delivered pursuant to all awards granted under the plan was increased by an additional 12,430,000 shares to a new maximum aggregate limit of 27,465,106 shares. Additionally, the expiration date of the Restated 2013 Plan was extended to March 30, 2026. Share options under the plan are granted with an exercise price equal to the closing market price of NCLH shares at the date of grant. The vesting period for time-based options is typically set at 3, 4 or 5 years with a contractual life ranging from 7 to 10 years. The vesting period for time-based restricted share units is generally 3 years. Forfeited awards will be available for subsequent awards under the Restated 2013 Plan.

Share Option Awards

No share option awards were granted in 2017. The fair value of each time-based option award is estimated on the date of grant using the Black-Scholes option-pricing model. The estimated fair value of the share options, less estimated forfeitures, is amortized over the vesting period using the straight- line vesting method. The assumptions used within the option-pricing model for the time-based awards are as follows:

2016 2015

Dividend yield –% –% Expected share price volatility 30.36%-33.01% 32.32%-45.33% Risk-free interest rate 1.20%-1.48% 1.34%-1.92% Expected term 6.00 years 6.00-6.50 years

The performance-based options awarded to our President and Chief Executive Officer in August 2015 are subject to performance conditions such that the number of awards that ultimately vest depends on the adjusted earnings per share (“Adjusted EPS”) and adjusted return on invested capital (“Adjusted ROIC”) achieved by the Company during the performance period compared to targets established at the award date. Because the terms of the performance-based awards provide discretion to make certain adjustments to the performance calculation, the service inception date of these awards precedes the grant date. Accordingly, the Company recognizes compensation expense beginning on the service inception date and remeasures the fair value of the awards until a grant date is established. The estimate of the awards’ fair values will be fixed in the period in which the grant date occurs, and cumulative compensation expense will be adjusted based on the fair values calculated using the Black-Scholes option-pricing model at the grant date. The fair value for the option awards for which a grant date has not been established is estimated on the last date of the reporting period using the Black-Scholes option-pricing model. The estimated fair value of the share options is amortized over the requisite service period using the straight-line vesting method. The assumptions used within the option-pricing model for the performance-based awards for which share-based compensation expense was recognized during 2017, 2016 and 2015 are as follows:

2017 2016 2015

Dividend yield –% –% –% Expected share price volatility 25.97% 25.97%-30.21% 29.31%-29.86% Risk-free interest rate 1.81% 1.01%-1.93% 1.76% Expected term 4.20 years 4.38-5.13 years 4.88-5.38 years 40 APPENDIX I FINANCIAL INFORMATION OF NCLH

The fair value of the market-based share option awards awarded to our President and Chief Executive Officer is estimated using a Monte-Carlo model which values financial instruments whose value is dependent on share price by sampling random paths for share price. The key inputs for the simulation include current share price, risk free rate, and share price volatility. For each simulated path, the model checks if the simulated share price reaches the vesting threshold during the performance period. For each path that reaches the vesting threshold, the payoff upon vesting is calculated. The fair value of the equity award is determined by averaging the expected payoff across all simulated paths and discounting the average to the valuation date.

The below table summarizes the key inputs used in the Monte-Carlo simulation:

2015

Dividend yield –% Expected share price volatility 30.00% Risk-free interest rate 1.34% Expected term Mid-point from vesting to assumed options expiration

The following is a summary of option activity under NCLH’s Amended and Restated 2013 Performance Incentive Plan for the year ended December 31, 2017 (excludes the impact of 208,335 previously awarded performance-based options as no grant date has been established):

Weighted- Average Aggregate Number of Share Weighted-Average Contractual Intrinsic Option Awards Exercise Price Term Value Time- Performance- Market- Time- Performance- Market- Based Based Based Based Based Based (in Awards Awards Awards Awards Awards Awards (years) thousands)

Outstanding as of January 1, 2017 7,775,058 432,978 208,333 $ 48.04 $ 23.86 $ 59.43 7.81 $ 35,429 Granted – 156,249 – – 59.43 – Exercised (738,672) (121,509) – 34.02 19.00 – Forfeited and cancelled (455,488) (93,749) – 54.27 59.43 –

Outstanding as of December 31, 2017 6,580,898 373,969 208,333 $ 49.18 $ 31.39 $ 59.43 6.99 $ 50,021

Vested and expected to vest as of December 31, 2017 6,580,898 373,969 – $ 49.18 $ 31.39 $ – 6.98 $ 50,021

Exercisable as of December 31, 2017 4,061,424 373,969 – $ 47.98 $ 31.39 $ – 6.69 $ 39,115

41 APPENDIX I FINANCIAL INFORMATION OF NCLH

The weighted-average grant-date fair value of time-based options granted during the years 2016 and 2015 was $17.11 and $20.90, respectively. The weighted-average reporting period date/established grant-date fair value of performance-based options for which share-based compensation was recognized during 2017, 2016 and 2015 was $8.55, $8.67 and $17.07, respectively. The weighted-average grant-date fair value of market-based options granted during the year 2015 was $12.37. The total intrinsic value of share options exercised during the years 2017, 2016 and 2015 was $18.9 million, $5.2 million and $68.0 million and total cash received by the Company from exercises was $27.4 million, $7.6 million and $69.1 million, respectively. As of December 31, 2017, there was approximately $27.6 million, $0, and $0 of total unrecognized compensation cost, related to time- based, performance-based with an established grant date, and market-based options, respectively, granted under our share-based incentive plans which is expected to be recognized over a weighted-average period of 0.9 years, 0 years, and 0 years, respectively.

Restricted Ordinary Share Awards

The following is a summary of restricted share activity of NCLH shares for the year ended December 31, 2017:

Number of Weighted- Time-Based Average Grant Awards Date Fair Value

Non-vested as of January 1, 2016 16,872 $ 7.63 Vested (16,014) 4.91

Non-vested and expected to vest as of December 31, 2017 858 $ 58.33

As of December 31, 2017, there was $25 thousand of total unrecognized compensation cost related to non-vested restricted ordinary share awards. The cost is expected to be recognized over a weighted-average period of 1.0 year. Restricted shares, with the exception of those related to the Management Exchange Agreement (which maintained their original vesting conditions of time and performance and have all vested or been forfeited as of December 31, 2017) vest in substantially equal quarterly installments over 1 or 2 years or in annual installments over 4 years. The total fair value of shares vested during 2017, 2016, and 2015 was $0.1 million, $1.1 million, and $40.9 million, respectively.

Restricted Share Units (“RSUs”)

On August 1, 2017, NCLH awarded a target number of 79,073 performance-based RSU’s to our President and Chief Executive Officer. The exact number of shares delivered in satisfaction of the performance-based RSUs will be determined based on the achievement of certain pre-established performance targets. On March 1, 2017, NCLH awarded 1.7 million time-based RSUs to our employees which vest equally over three years. Additionally, on March 1, 2017, NCLH awarded 121,000 performance-based RSUs to certain members of our management team which vest upon the achievement of certain pre-established performance targets.

The fair value of the time-based and performance-based RSUs is equal to the closing market price of NCLH shares at the date of grant. The performance-based RSUs awarded to our President and Chief Executive Officer are subject to performance conditions such that the number of awards that ultimately vest depends on the Adjusted EPS and Adjusted ROIC achieved by the Company during the performance period compared to targets established at the award date. Because the terms of the performance-based awards provide discretion to make certain adjustments to the performance calculation, the service inception date of these awards precedes the grant date. Accordingly, the Company recognizes share-based compensation expense beginning on the service inception date and remeasures the fair value of the awards until a grant date occurs. The estimate of the awards’ fair value will be fixed in the period in which the grant date occurs, and cumulative share- based compensation expense will be adjusted based on the fair value at the grant date.

The fair value of the market-based RSUs awarded to our President and Chief Executive Officer is estimated using a Monte- Carlo model which values financial instruments whose value is dependent on share price by sampling random paths for share price. The key inputs for the simulation include current share price, risk free rate, and share price volatility. For each simulated path, the model checks if the simulated share price reaches the vesting threshold during the performance period. For each path that reaches the vesting threshold, the payoff upon vesting is calculated. The fair value of the equity grant is determined by averaging the expected payoff across all simulated paths and discounting the average to the valuation date.

42 APPENDIX I FINANCIAL INFORMATION OF NCLH

The below table summarizes the key inputs used in the Monte-Carlo simulation:

2015

Dividend yield 0% Expected share price volatility 30.00% Risk-free interest rate 1.34% Expected term Mid-point from vesting to assumed awards expiration

The following is a summary of the RSUs activity for the year ended December 31, 2017 (excludes the impact of 329,146 performance-based RSUs as no grant date was established):

Weighted- Weighted- Weighted- Number of Average Number of Average Number of Average Time-Based Grant Date Performance- Grant Date Market-Based Grant Date Awards Fair Value Based Awards Fair Value Awards Fair Value

Non-vested as of January 1, 2017 1,305,335 $ 50.38 – $ – 50,000 $ 59.43 Granted 1,803,327 $ 51.13 37,500 $ 49.76 – – Vested (447,669) $ 50.55 (15,000) $ 49.76 – – Forfeited or expired (105,516) $ 50.76 (22,500) $ 49.76 – –

Non-vested as of December 31, 2017 2,555,477 $ 50.86 – $ – 50,000 $ 59.43

Non-vested and expected to vest as of December 31, 2017 2,555,477 $ 50.86 – – – $ –

As of December 31, 2017, there was $89.1 million, $0 and $0 of total unrecognized compensation cost related to non-vested time-based, non-vested performance-based awards with an established grant date and market-based RSUs, respectively. The cost is expected to be recognized over a weighted- average period of 1.9 years, 0 years and 0 years, respectively, for the time-based, performance-based and market-based RSUs. Total taxes paid pursuant to net share settlements in 2017 were $6.3 million.

Employee Stock Purchase Plan (“ESPP”)

In April 2014, NCLH’s shareholders approved the ESPP. The purpose of the ESPP is to provide eligible employees with an opportunity to purchase NCLH’s ordinary shares at a favorable price and upon favorable terms in consideration of the participating employees’ continued services. A maximum of 2,000,000 of NCLH’s ordinary shares may be purchased under the ESPP. To be eligible to participate in an offering period, on the grant date of that period, an individual must be customarily employed by the Company or a participating subsidiary for more than twenty hours per week and for more than five months per calendar year. Participation in the ESPP is also subject to certain limitations. The ESPP is considered to be compensatory based on: a) the 15% purchase price discount and b) the look-back purchase price feature. Since the plan is compensatory, compensation expense must be recorded in the consolidated statements of operations on a straight-line basis over the six-month withholding period. As of December 31, 2017 and 2016, we had a $1.5 million and $1.3 million liability, respectively, for payroll withholdings received.

43 APPENDIX I FINANCIAL INFORMATION OF NCLH

The compensation expense recognized for share-based compensation for the years ended December 31, 2017, 2016 and 2015 was as follows:

Share-Based Compensation Expense Classification of expense 2017 2016 2015 (In thousands)

Payroll and related (1) $ 9,455 $ 7,793 $ – Marketing, general and administrative (2) 77,584 58,621 42,209

Total share-based compensation expense $ 87,039 $ 66,414 $ 42,209

(1) Amounts relate to equity granted to certain of our shipboard officers.

(2) Amounts relate to equity granted to certain of our corporate employees.

Employee Benefit Plans

We offer annual incentive bonuses pursuant to our Restated 2013 Plan for our executive officers and other key employees. Bonuses under the plan become earned and payable based on the Company’s performance during the applicable performance period and the individual’s continued employment. Company performance criteria include the attainment of certain financial targets and other strategic objectives.

Certain employees are employed pursuant to agreements that provide for severance payments. Severance is generally only payable upon an involuntary termination of the employment by us without cause or a termination by the employee for good reason. Severance generally includes a series of cash payments based on the employee’s base salary (and in some cases, bonus), and our payment of the employee’s continued medical benefits for the applicable severance period.

We maintain a 401(k) Plan for our shoreside employees, including our executive officers. Participants may contribute up to 100% of eligible compensation each pay period, subject to certain limitations. We make matching contributions equal to 100% of the first 3% and 50% of amounts greater than 3% to and including 10% of each participant’s contributions subject to certain limitations. In addition, we may make discretionary supplemental contributions to the Plan, which shall be allocated pro rata to each eligible participant based on the compensation of the participant relevant to the total compensation of all participants. Our matching contributions are vested according to a five-year schedule. The 401(k) Plan is subject to the provisions of ERISA and is intended to be qualified under section 401(a) of the U.S. Internal Revenue Code (the “Code”).

Our matching contributions are reduced by amounts forfeited by those employees who leave the 401(k) Plan prior to vesting fully in the matching contributions. Forfeited contributions of $0.3 million, $0.1 million and $0.4 million were utilized in the years ended December 31, 2017, 2016 and 2015, respectively.

We maintained a Supplemental Executive Retirement Plan (“SERP”), which is a legacy unfunded defined contribution plan for certain executives who were employed by the Company in an executive capacity prior to 2008. The SERP was frozen to future participation following that date. The SERP provided for Company contributions on behalf of the participants to compensate them for the benefits that are limited under the 401(k) Plan. We credited participants under the SERP for amounts that would have been contributed by us to the Company’s previous Defined Contribution Retirement Plan and the former 401(k) Plan without regard to any limitations imposed by the Code. Participants did not make any elective contributions under this plan. We have discontinued this plan following the 2015 contributions and we paid the previously deferred contributions to participants in early 2017 following the expiration of the required twelve month waiting period. As of December 31, 2016, the aggregate balance of participants’ deferred compensation accounts under the SERP Plan was $0.5 million.

We recorded combined total expenses related to the above 401(k) Plan and SERP of $7.3 million, $6.4 million and $5.3 million for the years ended December 31, 2017, 2016 and 2015, respectively.

44 APPENDIX I FINANCIAL INFORMATION OF NCLH

Effective January 2009, we implemented the Shipboard Retirement Plan which computes benefits based on years of service, subject to eligibility requirements of the Shipboard Retirement Plan. The Shipboard Retirement Plan is unfunded with no plan assets. The current portion of the projected benefit obligation of $1.1 million and $1.2 million was included in accrued expenses and other liabilities as of December 31, 2017 and 2016, respectively, and $23.5 million and $21.4 million was included in other long-term liabilities in our consolidated balance sheets as of December 31, 2017 and 2016, respectively. The amounts related to the Shipboard Retirement Plan were as follows (in thousands):

As of or for the Year Ended December 31, 2017 2016 2015

Pension expense: Service cost $ 1,987 $ 1,863 $ 1,793 Interest cost 887 874 738 Amortization of prior service cost 378 378 378 Amortization of actuarial loss 40 54 99

Total pension expense $ 3,292 $ 3,169 $ 3,008

Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 22,605 $ 21,078 $ 19,730 Service cost 1,987 1,863 1,793 Interest cost 887 874 738 Actuarial gain (loss) 458 (65) (625) Direct benefit payments (1,350) (1,145) (558)

Projected benefit obligation at end of year $ 24,587 $ 22,605 $ 21,078

Amounts recognized in the consolidated balance sheets: Projected benefit obligation $ 24,587 $ 22,605 $ 21,078

For the Year Ended December 31, 2017 2016 2015

Amounts recognized in accumulated other comprehensive income (loss): Prior service cost $ (4,537) $ (4,915) $ (5,293) Accumulated actuarial loss (3,426) (3,008) (3,126) Accumulated other comprehensive income (loss) $ (7,963) $ (7,923) $ (8,419)

The discount rates used in the net periodic benefit cost calculation for the years ended December 31, 2017, 2016 and 2015 were 4.0%, 4.3% and 3.8%, respectively, and the actuarial loss is amortized over 18.85 years. The discount rate is used to measure and recognize obligations, including adjustments to other comprehensive income (loss), and to determine expense during the periods. It is determined by using bond indices which reflect yields on a broad maturity and industry universe of high-quality corporate bonds.

The pension benefits expected to be paid in each of the next five years and in aggregate for the five years thereafter are as follows (in thousands):

Year Amount

2018 $ 1,050 2019 1,032 2020 1,035 2021 1,126 2022 1,217 Next five years 8,691

45 APPENDIX I FINANCIAL INFORMATION OF NCLH

10. Income Taxes

We are incorporated in Bermuda. Under current Bermuda law, we are not subject to tax on income and capital gains. We have received from the Minister of Finance under The Exempted Undertakings Tax Protection Act 1966, as amended, an assurance that, in the event that Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance, then the imposition of any such tax shall not be applicable to us or to any of our operations or shares, debentures or other obligations, until March 31, 2035.

The components of net income before income taxes consist of the following (in thousands):

Year Ended December 31, 2017 2016 2015

Bermuda $ – $ – $ – Foreign – Other 770,614 640,303 433,909

Net income before income taxes 770,614 640,303 433,909

The components of the provision for income taxes consisted of the following (expense) benefit (in thousands):

Year Ended December 31, 2017 2016 2015

Current: Bermuda $ – $ – $ – United States 1,828 (8,736) (4,621) Foreign – Other (4,617) (2,166) (882)

Total current: (2,789) (10,902) (5,503)

Deferred: Bermuda – – – United States (8,439) 3,684 (1,269) Foreign – Other 486 – –

Total deferred: (7,953) 3,684 (1,269)

Income tax expense $ (10,742) $ (7,218) $ (6,772)

Our reconciliation of income tax expense computed by applying our Bermuda statutory rate and reported income tax expense was as follows (in thousands):

Year Ended December 31, 2017 2016 2015

Tax at Bermuda statutory rate $ – $ – $ – Foreign income taxes at different rates (28,188) (10,721) (7,864) Tax contingencies 11,184 (533) (283) Return to provision adjustments (1,397) 418 1,370 Benefit from change in tax rate 7,659 24 5 Valuation allowance – 3,594 –

Income tax expense $ (10,742) $ (7,218) $ (6,772)

46 APPENDIX I FINANCIAL INFORMATION OF NCLH

Deferred tax assets and liabilities were as follows (in thousands):

As of December 31, 2017 2016

Deferred tax assets: Loss carryforwards $ 58,789 $ 103,191 Other 2,106 1,564 Valuation allowance (42,154) (64,573)

Total net deferred assets 18,741 40,182

Deferred tax liabilities: Property and equipment (30,869) (44,398)

Total deferred tax liabilities (30,869) (44,398)

Net deferred tax liability $ (12,128) $ (4,216)

We have U.S. net operating loss carryforwards of $254.8 million and $256.3 million for the years ended December 31, 2017 and 2016, respectively, which begin to expire in 2023. We have state net operating loss carryforwards of $8.9 million and $12.4 million for the years ended December 31, 2017 and 2016, respectively, which expire in the years 2025 through 2035. In 2016, based on the weight of available evidence, we reversed a valuation allowance in the amount of $3.6 million with respect to the U.S. deferred tax assets of one of our U.S. subsidiaries.

Included above are deferred tax assets associated with our operations in Norway for which we have provided a full valuation allowance. We have Norway net operating loss carryforwards of $13.9 million and $22.9 million for the years ended December 31, 2017 and 2016, respectively, which can be carried forward indefinitely.

Included above are deferred tax assets associated with our branch operations in the U.K. for which we have provided a full valuation allowance. We have U.K. net operating loss carryforwards of $8.3 million and $9.5 million for the years ended December 31, 2017 and 2016, respectively, which can be carried forward indefinitely.

Included above are deferred tax assets associated with Prestige for which we have provided a full valuation allowance. We have U.S. net operating loss carryforwards of $177.8 million and $151.2 million for the years ended December 31, 2017 and 2016, respectively, which begin to expire in 2023. Section 382 of the code may limit the amount of taxable income that can be offset by the Prestige NOL carryforwards.

The Act was enacted on December 22, 2017. Among other provisions, the Act reduces the U.S. federal corporate tax rate from 35% to 21%. The SEC staff issued SAB No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. As of December 31, 2017, we have not completed the accounting for the tax effects of enactment of the Act; however, as described below, we have made a reasonable estimate of the effects on existing deferred tax balances. These amounts are provisional and subject to change. The most significant impact of the Act for the Company was a $7.4 million reduction of the value of net deferred tax liabilities (which represent future tax expenses) that was recorded as a discrete tax benefit as a result of lowering the U.S. corporate income tax rate from 35% to 21%. The tax benefit represents a provisional amount and the Company’s current best estimate. Any adjustments recorded to the provisional amount through the end of 2018 will be included in income from operations as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon the Company’s current interpretation of the Act and may change as the Company receives additional clarification and implementation guidance. Other aspects of the Act are either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.

47 APPENDIX I FINANCIAL INFORMATION OF NCLH

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):

As of December 31, 2017 2016

Unrecognized tax benefits, beginning of the year $ 11,144 $ 11,174 Gross increases in tax positions from prior periods 300 250 Gross decreases in tax positions from prior periods – (280) Gross increases in tax positions from current periods – – Settlement of tax positions (250) – Lapse of statute of limitations (10,662) –

Unrecognized tax benefits, end of year $ 532 $ 11,144

During the year, $10.7 million of unrecognized tax benefits were reversed due to the expiration of the statute of limitations. If the $0.5 million of unrecognized tax benefits at December 31, 2017 were recognized, our effective tax rate would be minimally affected. We believe that there will not be a significant increase or decrease to the tax positions within 12 months of the reporting date. We recognize interest and penalties related to unrecognized tax benefits in income tax expense.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and foreign jurisdictions. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by authorities for years prior to 2014, except for years in which NOLs generated prior to 2014 are utilized.

Due to our international structure as well as the existence of international tax treaties that exempt taxation on certain activities, the repatriation of earnings from our subsidiaries would have no tax impact.

We derive our income from the international operation of ships. We are engaged in a trade or business in the U.S. and receive income from sources within the U.S. Under Section 883, certain foreign corporations are exempt from U. S. federal income or branch profits tax on U.S.-source income derived from or incidental to the international operation of ships. Applicable U.S. treasury regulations provide that a foreign corporation will qualify for the benefits of Section 883 if, in relevant part: (i) the foreign country in which the corporation is organized grants an equivalent exemption for income from the operation of ships of sufficiently broad scope to corporations organized in the U.S., and (ii) the foreign corporation has one or more classes of stock that are “primarily and regularly traded on an established securities market” in the U.S. or another qualifying country. We believe that we qualify for the benefits of Section 883 because we are incorporated in qualifying countries and our ordinary shares are primarily and regularly traded on an established securities market in the U.S.

11. Commitments and Contingencies

Operating Leases

Total expense under non-cancelable operating lease commitments, primarily for offices, motor vehicles and office equipment was $17.0 million, $15.0 million and $12.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017, minimum annual rentals for non-cancelable leases with initial or remaining terms in excess of one year were as follows (in thousands):

Year Amount

2018 $ 15,204 2019 14,788 2020 14,185 2021 13,227 2022 13,277 Thereafter 61,110

Total minimum annual rentals $ 131,791

Rental payments applicable to such operating leases are recognized on a straight-line basis over the term of the lease.

48 APPENDIX I FINANCIAL INFORMATION OF NCLH

Ship Construction Contracts

Project Leonardo will introduce an additional four ships with expected delivery dates through 2025 and we have an option to introduce two additional ships for delivery in 2026 and 2027, subject to certain conditions. The four Leonardo ships are each approximately 140,000 Gross Tons with approximately 3,300 Berths. We have an Explorer Class Ship, Seven Seas Splendor, on order for delivery in the winter of 2020. This ship is approximately 55,000 Gross Tons and 750 Berths. We have two Breakaway Plus Class Ships, Norwegian Bliss and Norwegian Encore, on order for delivery in the spring of 2018 and fall of 2019, respectively. These ships are approximately 168,000 Gross Tons each with approximately 4,000 Berths each. The combined contract price of the seven ships on order was approximately €5.5 billion, or $6.6 billion based on the euro/U.S. dollar exchange rate as of December 31, 2017. We have obtained export credit financing for each of the ships which is expected to fund approximately 80% of the contract price of each ship expected to be delivered through 2025, subject to certain conditions. For ships expected to be delivered after 2023, the contract prices are subject to adjustment under certain circumstances.

In connection with the contracts to build the ships, we do not anticipate any contractual breaches or cancellation to occur. However, if any such events were to occur, it could result in, among other things, the forfeiture of prior deposits or payments made by us and potential claims and impairment losses which may materially impact our business, financial condition and results of operations.

As of December 31, 2017, minimum annual payments for non-cancelable ship construction contracts with initial or remaining terms in excess of one year were as follows (in thousands):

Year Amount

2018 $ 1,016,892 2019 893,881 2020 469,334 2021 172,872 2022 968,340 Thereafter 2,616,900

Total minimum annual payments $ 6,138,219

Port Facility Commitments

As of December 31, 2017, future commitments to pay for usage of certain port facilities were as follows (in thousands):

Year Amount

2018 $ 30,509 2019 21,460 2020 21,928 2021 18,179 2022 5,137 Thereafter 41,095

Total port facility future commitments $ 138,308

Other Commitments

The FMC requires evidence of financial responsibility for those offering transportation on passenger ships operating out of U.S. ports to indemnify passengers in the event of non-performance of the transportation. Accordingly, each of our three brands are required to maintain a $30.0 million third- party performance guarantee in respect of liabilities for non-performance of transportation and other obligations to passengers. The guarantee requirements are subject to additional consumer price index-based adjustments. Also, each of our brands have a legal requirement to maintain a security guarantee based on cruise business originated from the U.K. As of December 31, 2017, approximately British Pound Sterling 11.8 million was in place as to support our security guarantees. We also are required by other jurisdictions to establish financial responsibility to meet liability in the event of non-performance of our obligations to passengers from those jurisdictions.

49 APPENDIX I FINANCIAL INFORMATION OF NCLH

From time to time, various other regulatory and legislative changes have been or may in the future be proposed that may have an effect on our operations in the U.S. and the cruise industry in general.

Litigation

Nonetheless, the ultimate outcome of these claims and lawsuits that are not covered by insurance cannot be determined at this time. We have evaluated our overall exposure with respect to all of our threatened and pending litigation and, to the extent required, we have accrued amounts for all estimable probable losses associated with our deemed exposure. We are currently unable to estimate any other potential contingent losses beyond those accrued, as discovery is not complete nor is adequate information available to estimate such range of loss or potential recovery. However, based on our current knowledge, we do not believe that the aggregate amount or range of reasonably possible losses with respect to these matters will be material to our consolidated results of operations, financial condition or cash flows. We intend to vigorously defend our legal position on all claims and, to the extent necessary, seek recovery.

12. Other Income (Expense), Net

Other income (expense), net was $10.4 million in 2017, $8.3 million in 2016 and $46.7 million in 2015. In 2017, the expense was primarily due to foreign currency exchange losses. In 2016, the expense was primarily related to $16.1 million of unrealized and realized losses on fuel swap derivative hedge contracts partially offset by $4.5 million of gains on foreign currency exchange and $3.9 million of gains on foreign currency exchange derivative hedge contracts. In 2015, the expense was primarily related to $30.7 million of losses from the dedesignation of certain fuel swap derivative hedge contracts and the ineffectiveness of settled fuel swaps in 2015. Also included in 2015 was an expense of $26.2 million related to the fair value adjustment of a foreign exchange collar which did not receive hedge accounting treatment partially offset by $11.0 million of foreign currency transaction gains.

13. Concentration Risk

We contract with a single vendor to provide many of our hotel and restaurant services including both food and labor costs. We incurred expenses of $152.3 million, $137.2 million and $122.4 million for the years ended December 31, 2017, 2016 and 2015, respectively, which are recorded in payroll and related in our consolidated statements of operations.

14. Supplemental Cash Flow Information

For the years ended December 31, 2017, 2016 and 2015, we paid interest and related fees of $313.8 million, $303.2 million and $218.3 million, respectively.

For the year ended December 31, 2017, we had non-cash investing activities for property and equipment of $20.0 million and non-cash investing activities in connection with capital leases of $13.3 million. For the year ended December 31, 2016, we had non-cash investing activities in connection with property and equipment of $26.7 million. For the year ended December 31, 2015, we had non-cash investing activities in connection with capital leases of $31.1 million and non-cash investing activities for capital expenditures of $41.1 million. For the years ended December 31, 2017, 2016 and 2015, we paid income taxes of $11.7 million, $8.8 million and $10.3 million, respectively.

15. Quarterly Selected Financial Data (Unaudited) (in thousands, except per share data)

First Quarter Second Quarter Third Quarter Fourth Quarter 2017 2016 2017 2016 2017 2016 2017 2016

Total revenue $ 1,150,781 $ 1,077,632 $ 1,344,103 $ 1,186,835 $ 1,651,738 $ 1,484,736 $ 1,249,553 $ 1,125,137 Operating income 119,734 131,282 275,071 227,018 476,820 413,614 177,194 153,550 Net income 61,910 73,229 198,473 145,246 400,692 342,378 98,797 72,232 Earnings per share: Basic $ 0.27 $ 0.32 $ 0.87 $ 0.64 $ 1.76 $ 1.51 $ 0.43 $ 0.32 Diluted $ 0.27 $ 0.32 $ 0.87 $ 0.64 $ 1.74 $ 1.50 $ 0.43 $ 0.32

50 APPENDIX I FINANCIAL INFORMATION OF NCLH

The seasonality of the North American cruise industry generally results in the greatest demand for cruises during the Northern Hemisphere’s summer months. This predictable seasonality in demand has resulted in fluctuations in our revenue and results of operations. The seasonality of our results is increased due to ships being taken out of service for regularly scheduled Dry-docks, which we typically scheduled during non-peak demand periods.

16. Subsequent Event

On January 30, 2018, the Company and Wendy A. Beck, the Company’s Executive Vice President and Chief Financial Officer, announced that Ms. Beck would be leaving the Company to pursue other career opportunities. Ms. Beck has agreed to continue in her current position as Executive Vice President and Chief Financial Officer through September 30, 2018 or any earlier date as may be determined by the Company (the “Succession Date”).

On February 2, 2018, a subsidiary of the Company entered into a Transition, Release and Consulting Agreement (the “Transition Agreement”) with Ms. Beck. Pursuant to the terms of the Transition Agreement, subject to Ms. Beck not voluntarily terminating her employment prior to the Succession Date, following the Succession Date, Ms. Beck will be entitled to receive the following benefits: (i) an amount equal to two times her base salary, which will be paid over a 12-month period, (ii) in recognition of her service and tenure, an amount equal to $4 million, paid in quarterly installments through December 30, 2019, (iii) continued COBRA benefits at the same cost as active employees (or pay in lieu of such benefits if the Company cannot provide such benefits) for up to 36 months, (iv) full acceleration of her outstanding time-based equity awards, (v) continued opportunity to vest in her only outstanding performance-based equity award, subject to the satisfaction of the applicable financial performance conditions for 2018, (vi) pro-rata portion of any bonus actually earned based on performance for 2018, and (vii) an executive-level cruise.

Pursuant to the terms of the Transition Agreement, Ms. Beck has agreed to provide consulting services to the Company for two years following the Succession Date to help with the transition and integrate her successor. Ms. Beck will receive $2 million, paid in six equal quarterly installments through December 30, 2019, for her consulting services.

51 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Operations (in thousands, except share and per share data)

Year Ended December 31, 2016 2015 2014

Revenue Passenger ticket $ 3,388,954 $ 3,129,075 $ 2,176,153 Onboard and other 1,485,386 1,215,973 949,728

Total revenue 4,874,340 4,345,048 3,125,881

Cruise operating expense Commissions, transportation and other 813,559 765,298 503,722 Onboard and other 298,886 272,802 224,000 Payroll and related 746,142 666,110 452,647 Fuel 335,174 358,650 326,231 Food 200,071 179,641 168,240 Other 456,393 412,948 271,784

Total cruise operating expense 2,850,225 2,655,449 1,946,624

Other operating expense Marketing, general and administrative 666,156 554,999 403,169 Depreciation and amortization 432,495 432,114 273,147

Total other operating expense 1,098,651 987,113 676,316

Operating income 925,464 702,486 502,941

Non-operating income (expense) Interest expense, net (276,859) (221,909) (151,754) Other income (expense), net (8,302) (46,668) (10,853)

Total non-operating income (expense) (285,161) (268,577) (162,607)

52 APPENDIX I FINANCIAL INFORMATION OF NCLH

Year Ended December 31, 2016 2015 2014

Net income before income taxes 640,303 433,909 340,334 Income tax benefit (expense) (7,218) (6,772) 2,267

Net income 633,085 427,137 342,601 Net income attributable to non-controlling interest – – 4,249

Net income attributable to Norwegian Cruise Line Holdings Ltd. $ 633,085 $ 427,137 $ 338,352

Weighted-average shares outstanding Basic 227,121,875 226,591,437 206,524,968

Diluted 227,850,286 230,040,132 212,017,784

Earnings per share Basic $ 2.79 $ 1.89 $ 1.64

Diluted $ 2.78 $ 1.86 $ 1.62

The accompanying notes are an integral part of these consolidated financial statements.

53 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Comprehensive Income (in thousands)

Year Ended December 31, 2016 2015 2014

Net income $ 633,085 $ 427,137 $ 342,601

Other comprehensive income (loss): Shipboard Retirement Plan 497 1,102 (2,311) Cash flow hedges: Net unrealized gain (loss) related to cash flow hedges 1,711 (262,852) (238,436) Amount realized and reclassified into earnings 95,969 91,742 13,354

Total other comprehensive income (loss) 98,177 (170,008) (227,393)

Total comprehensive income 731,262 257,129 115,208 Comprehensive income attributable to non-controlling interest – – 2,808

Comprehensive income attributable to Norwegian Cruise Line Holdings Ltd. $ 731,262 $ 257,129 $ 112,400

The accompanying notes are an integral part of these consolidated financial statements.

54 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Balance Sheets (in thousands, except share data)

December 31, 2016 2015

Assets Current assets: Cash and cash equivalents $ 128,347 $ 115,937 Accounts receivable, net 63,215 44,996 Inventories 66,255 58,173 Prepaid expenses and other assets 153,276 121,305

Total current assets 411,093 340,411

Property and equipment, net 10,117,689 9,458,805 Goodwill 1,388,931 1,388,931 Tradenames 817,525 817,525 Other long-term assets 238,673 259,085

Total assets $ 12,973,911 $ 12,264,757

Liabilities and shareholders’ equity Current liabilities: Current portion of long-term debt $ 560,193 $ 629,840 Accounts payable 38,002 45,488 Accrued expenses and other liabilities 541,753 646,449 Due to Affiliate – 20,769 Advance ticket sales 1,172,870 1,023,973

Total current liabilities 2,312,818 2,366,519

Long-term debt 5,838,494 5,767,697 Other long-term liabilities 284,873 349,661

Total liabilities 8,436,185 8,483,877

55 APPENDIX I FINANCIAL INFORMATION OF NCLH

December 31, 2016 2015

Commitments and contingencies (Note 12) Shareholders’ equity: Ordinary shares, $.001 par value; 490,000,000 shares authorized; 232,555,937 shares issued and 227,243,976 shares outstanding at December 31, 2016 and 232,179,786 shares issued and 227,815,301 shares outstanding at December 31, 2015 232 232 Additional paid-in capital 3,890,119 3,814,536 Accumulated other comprehensive income (loss) (314,473) (412,650) Retained earnings 1,201,103 568,018 Treasury shares (5,311,961 and 4,364,485 ordinary shares at December 31, 2016 and December 31, 2015, respectively, at cost) (239,255) (189,256)

Total shareholders’ equity 4,537,726 3,780,880

Total liabilities and shareholders’ equity $ 12,973,911 $ 12,264,757

The accompanying notes are an integral part of these consolidated financial statements.

56 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Cash Flows (in thousands)

Year Ended December 31, 2016 2015 2014

Cash flows from operating activities Net income $ 633,085 $ 427,137 $ 342,601 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 445,635 450,335 304,877 Loss on derivatives 79 26,525 7,274 Deferred income taxes, net (2,448) 1,269 6,187 Gain on contingent consideration – (43,400) – Write-off of financing fees 18,930 4,070 15,628 Provision for bad debts and inventory 3,866 5,029 – Share-based compensation expense 66,414 42,209 14,617 Changes in operating assets and liabilities excluding the impact of the Acquisition of Prestige: Accounts receivable, net (20,983) (14,803) (7,256) Inventories (9,184) (4,408) (261) Prepaid expenses and other assets (18,534) (10,325) (6,373) Accounts payable (5,755) (52,723) 960 Accrued expenses and other liabilities (6,410) (5,350) (18,706) Advance ticket sales 134,971 218,260 (23,947) Payment of original issue discount – (1,647) –

Net cash provided by operating activities 1,239,666 1,042,178 635,601

Cash flows from investing activities Acquisition of Prestige, net of cash received – – (826,686) Additions to property and equipment, net (1,092,091) (1,121,984) (964,640) Settlement of derivatives (36,823) (83,519) (5,334) Investment in trademark – (750) –

Net cash used in investing activities (1,128,914) (1,206,253) (1,796,660)

57 APPENDIX I FINANCIAL INFORMATION OF NCLH

Year Ended December 31, 2016 2015 2014

Cash flows from financing activities Repayments of long-term debt (3,744,029) (1,569,313) (1,688,720) Repayments to Affiliate (18,522) (37,042) (37,043) Proceeds from long-term debt 3,753,928 1,855,809 3,107,721 Proceeds from the exercise of share options 6,738 69,127 5,857 Proceeds from employee share purchase plan 2,431 858 – Purchases of treasury shares (49,999) (107,256) (82,000) NCLC partnership tax distributions – – (218) Deferred financing fees and other (48,889) (16,995) (116,181)

Net cash provided by (used in) financing activities (98,342) 195,188 1,189,416

Net increase in cash and cash equivalents 12,410 31,113 28,357 Cash and cash equivalents at beginning of year 115,937 84,824 56,467

Cash and cash equivalents at end of year $ 128,347 $ 115,937 $ 84,824

Supplemental disclosures (Note 15)

The accompanying notes are an integral part of these consolidated financial statements.

58 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Changes in Shareholders’ Equity (in thousands)

Accumulated Additional Other Retained Total Ordinary Paid-in Comprehensive Earnings Treasury Non-controlling Shareholders’ Shares Capital Income (Loss) (Deficit) Shares Interest Equity

Balance, December 31, 2013 $ 205 $ 2,822,864 $ (16,690) $ (197,471) $ – $ 22,358 $ 2,631,266

Share-based compensation – 14,617 – – – – 14,617 Transactions with Affiliates, net – (59) – – – – (59) NCLC partnership tax distributions – – – – – (218) (218) Proceeds from the exercise of share options 1 5,856 – – – – 5,857 Treasury shares – – – – (82,000) – (82,000) Acquisition of Prestige 20 834,122 – – – – 834,142 Other comprehensive loss – – (225,952) – – (1,441) (227,393) Net income – – – 338,352 – 4,249 342,601 Transfers from non-controlling interest 4 24,944 – – – (24,948) –

Balance, December 31, 2014 230 3,702,344 (242,642) 140,881 (82,000) – 3,518,813

Share-based compensation – 42,209 – – – – 42,209 Proceeds from the exercise of share options 2 69,125 – – – – 69,127 Proceeds from employee share purchase plan – 858 – – – – 858 Treasury shares – – – – (107,256) – (107,256) Other comprehensive loss – – (170,008) – – – (170,008) Net income – – – 427,137 – – 427,137

Balance, December 31, 2015 232 3,814,536 (412,650) 568,018 (189,256) – 3,780,880

Share-based compensation – 66,414 – – – – 66,414 Proceeds from the exercise of share options – 6,738 – – – – 6,738 Proceeds from employee share purchase plan – 2,431 – – – – 2,431 Treasury shares – – – – (49,999) – (49,999) Other comprehensive income – – 98,177 – – – 98,177 Net income – – – 633,085 – – 633,085

Balance, December 31, 2016 $ 232 $ 3,890,119 $ (314,473) $ 1,201,103 $ (239,255) $ – $ 4,537,726

The accompanying notes are an integral part of these consolidated financial statements.

59 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Notes to the Consolidated Financial Statements

1. Description of Business and Organization

NCLH is a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. We have 24 ships with approximately 46,500 Berths and plan to introduce eight additional ships through 2025 (we refer you to Note 16 – “Subsequent Events”).

Norwegian commenced operations from Miami in 1966. In February 2000, Genting HK acquired control of and subsequently became the sole owner of the Norwegian operations.

In February 2011, NCLH, a Bermuda limited company, was formed with the issuance to the Sponsors of, in aggregate, 10,000 ordinary shares, with a par value of $.001 per share. On January 24, 2013, NCLH consummated the IPO. In connection with the consummation of the IPO, the Sponsors’ ordinary shares in NCLC were exchanged for the ordinary shares of NCLH at a share exchange ratio of 1.0 to 8.42565 and NCLH became the owner of 100% of the ordinary shares and parent company of NCLC (the “Corporate Reorganization”). Accordingly, NCLH contributed $460.0 million to NCLC and the historical financial statements of NCLC became those of NCLH. The Corporate Reorganization was effected solely for the purpose of reorganizing our corporate structure. NCLH had not prior to the completion of the Corporate Reorganization conducted any activities other than those incidental to its formation and to preparations for the Corporate Reorganization and IPO. The Corporate Reorganization resulted in all parties being in the same economic position as they were immediately prior to the IPO. As the economic position of the investors did not change as part of the Corporate Reorganization it is considered a nonsubstantive merger from an accounting perspective.

As a result of the Corporate Reorganization, NCLC was treated as a partnership for U.S. federal income tax purposes, and the terms of the partnership (including the economic rights with respect thereto) were set forth in an amended and restated tax agreement for NCLC. Economic interests in NCLC were represented by the partnership interests established under the tax agreement, which we refer to as “NCL Corporation Units.” The NCL Corporation Units held by NCLH (as a result of its ownership of 100% of the ordinary shares of NCLC) represented a 97.3% economic interest in NCLC as of the consummation of the IPO. The remaining 2.7% economic interest in NCLC as of the consummation of the IPO was in the form of Management NCL Corporation Units held by management (or former management).

In November 2014, we completed the Acquisition of Prestige.

In the fourth quarter of 2014, all Management NCL Corporation Units were exchanged for NCLH ordinary shares and restricted shares. NCLH became the sole member and 100% owner of the economic interests in NCLC and the non-controlling interest no longer exists. Accordingly, NCLC is now treated as a disregarded entity for U.S. federal income tax purposes. No new NCLC profits interests or Management NCL Corporation Units will be issued; however, NCLH has granted, and expects to continue to grant, equity to its employees and members of its Board of Directors under its long-term incentive plan.

The Sponsors have completed numerous Secondary Equity Offerings and as of December 31, 2016 have reduced their ownership to 29.4% of NCLH’s ordinary shares (we refer you to Note 8 – “Related Party Disclosures”).

2. Summary of Significant Accounting Policies

Basis of Presentation

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and contain all normal recurring adjustments necessary for a fair statement of the results for the periods presented. Estimates are required for the preparation of consolidated financial statements in accordance with generally accepted accounting principles and actual results could differ from these estimates. All significant intercompany accounts and transactions are eliminated in consolidation.

60 APPENDIX I FINANCIAL INFORMATION OF NCLH

Reclassification

Certain amounts in prior periods have been reclassified to conform to the current period presentation. During the fourth quarter of 2016, we combined liabilities that were previously reflected in accounts payable with accrued liabilities in our consolidated balance sheets to better reflect all accruals in one caption. This change was applied retrospectively. As of December 31, 2016 and December 31, 2015, accrued liabilities increased and accounts payable decreased by $7.2 million and $5.9 million, respectively. This change does not impact net working capital movements, operating cash flows or total current liabilities.

Cash and Cash Equivalents

Restricted Cash

Restricted cash consists of cash collateral in respect of certain agreements and is included in prepaid expenses and other assets and other long-term assets in our consolidated balance sheets.

Accounts Receivable, Net

Accounts receivable are shown net of an allowance for doubtful accounts of $4.7 million and $3.7 million as of December 31, 2016 and 2015, respectively.

Inventories

Inventories mainly consist of provisions, supplies and fuel and are carried at the lower of cost or market using the first-in, first-out method of accounting.

Advertising Costs

Advertising costs are expensed as incurred except for those that result in tangible assets, including brochures, which are treated as prepaid expenses and charged to expense as consumed. Advertising costs of $1.3 million and $3.4 million as of December 31, 2016 and 2015, respectively, are included in prepaid expenses and other assets. Expenses related to advertising costs totaled $270.5 million, $232.2 million and $122.5 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Earnings Per Share

Basic EPS is computed by dividing net income attributable to Norwegian Cruise Line Holdings Ltd. by the basic weighted-average number of shares outstanding during each period. Diluted EPS is computed by dividing net income by diluted weighted-average shares outstanding. A reconciliation between basic and diluted EPS was as follows (in thousands, except share and per share data):

Year Ended December 31, 2016 2015 2014

Net income attributable to Norwegian Cruise Line Holdings Ltd. $ 633,085 $ 427,137 $ 338,352

Net income $ 633,085 $ 427,137 $ 342,601

Basic weighted-average shares outstanding 227,121,875 226,591,437 206,524,968 Potentially dilutive shares 728,411 3,448,695 5,492,816

Diluted weighted-average shares outstanding 227,850,286 230,040,132 212,017,784

Basic EPS $ 2.79 $ 1.89 $ 1.64 Diluted EPS $ 2.78 $ 1.86 $ 1.62

61 APPENDIX I FINANCIAL INFORMATION OF NCLH

For the years ended December 31, 2016, 2015 and 2014 a total of 7.1 million, 2.8 million and 3.2 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive.

Property and Equipment, Net

Depreciation is computed on the straight-line basis over the estimated useful lives of the assets and after a 15% reduction for the estimated residual values of ships as follows:

Useful Life

Ships 30 years Computer hardware and software 3-10 years Other property and equipment 3-40 years Leasehold improvements Shorter of lease term or asset life

Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or related asset life.

Long-lived assets are reviewed for impairment, based on estimated future cash flows, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Assets are grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. We consider historical performance and future estimated results in our evaluation of potential impairment and then compare the carrying amount of the asset to the estimated future cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, we measure the amount of the impairment by comparing the carrying amount of the asset to its fair value. We estimate fair value based on the best information available making whatever estimates, judgments and projections are considered necessary. The estimation of fair value is generally measured by discounting expected future cash flows at discount rates commensurate with the risk involved.

Goodwill and Tradenames

Goodwill represents the excess of cost over the fair value of net assets acquired. Goodwill and other indefinite-lived assets, principally tradenames, are reviewed for impairment on an annual basis or earlier if there is an event or change in circumstances that would indicate that the carrying value of these assets could not be fully recovered. We use the Step 0 Test which allows us to first assess qualitative factors to determine whether it is more likely than not (i.e., more than 50%) that the fair value of a reporting unit is less than its carrying value. In order to make this evaluation, we consider the following circumstances as well as others:

• General macroeconomic conditions such as a deterioration in general economic conditions; limitations on accessing capital; fluctuations in foreign exchange rates; or other developments in equity and credit markets;

• Industry and market conditions such as a deterioration in the environment in which an entity operates; an increased competitive environment; a decline in market-dependent multiples or metrics (in both absolute terms and relative to peers); a change in the market for an entity’s products or services; or a regulatory or political development;

• Changes in cost factors that have a negative effect on earnings and cash flows;

• Overall financial performance (for both actual and expected performance);

• Entity and reporting unit specific events such as changes in management, key personnel, strategy, or customers; litigation; or a change in the composition or carrying amount of net assets; and

• Share price (in both absolute terms and relative to peers).

62 APPENDIX I FINANCIAL INFORMATION OF NCLH

We also may conduct a quantitative assessment comparing the fair value of each reporting unit to its carrying value, including goodwill. This is called the Step I Test which consists of a combined approach using the expected future cash flows and market multiples to determine the fair value of the reporting units. Our discounted cash flow valuation reflects our projection for growth and profitability, taking into account our assessment of future market conditions and demand, as well as a determination of a cost of capital that incorporates both business and financial risks. We believe that the combined approach is the most representative method to assess fair value as it utilizes expectations of long-term growth as well as current market conditions.

In the third quarter of 2016, based on the performance of the Oceania Cruises reporting unit, we performed an interim goodwill impairment evaluation consisting of a Step I Test. Based on that evaluation, we determined that there was no impairment of goodwill because its fair value exceeded its carrying value. For our annual impairment evaluation, we performed a Step 0 Test for the Norwegian reporting unit and Step I Tests for the Regent Seven Seas and the Oceania Cruises reporting units. Based on those evaluations, we determined that there was no impairment of goodwill because the fair value of each reporting unit exceeded its carrying value. However, if the fair value of any reporting unit declines in future periods, its goodwill may become impaired at that time. As of December 31, 2016, there was $523.0 million, $462.1 million and $403.8 million of goodwill for the Oceania Cruises, Regent Seven Seas and Norwegian reporting units, respectively. As of December 31, 2016, our annual review consisting of the Step 0 and Step I Tests supports the carrying value of these assets.

We have concluded that our business has three reporting units. Each brand, Oceania Cruises, Regent and Norwegian, constitutes a business for which discrete financial information is available and management regularly reviews the operating results and, therefore, each brand is considered an operating segment.

Revenue and Expense Recognition

Deposits received from guests for future voyages are recorded as advance ticket sales and are subsequently recognized as passenger ticket revenue along with onboard and other revenue, and all associated direct costs of a voyage are recognized as cruise operating expenses on a pro-rata basis over the period of the voyage. Guest cancellation fees are recognized in passenger ticket revenue in the month of the cancellation. Certain of our product offerings are accounted for under the guidance included within multi-element arrangements and result in an allocation of the fair value between passenger ticket revenue and onboard and other revenue.

Revenue and expenses include port fees and taxes. The amounts included on a gross basis are $286.6 million, $243.8 million and $240.7 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Debt Issuance Costs

Foreign Currency

The majority of our transactions are settled in U.S. dollars. We translate assets and liabilities of our foreign subsidiaries at exchange rates in effect at the balance sheet date. Gains or losses resulting from transactions denominated in other currencies are recognized in our consolidated statements of operations within other income (expense), net and such gains were approximately $4.5 million, $11.0 million and $6.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Derivative Instruments and Hedging Activity

63 APPENDIX I FINANCIAL INFORMATION OF NCLH

Concentrations of Credit Risk

Insurance

Income Taxes

Share-Based Compensation

We recognize expense for our share-based compensation awards using a fair-value-based method. Share-based compensation expense is recognized over the requisite service period for awards that are based on a service period and not contingent upon any future performance. We refer you to Note 10 – “Employee Benefits and Share-Based Compensation.”

Segment Reporting

64 APPENDIX I FINANCIAL INFORMATION OF NCLH

Revenues by destination were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

North America $ 3,132,208 $ 2,743,007 $ 2,388,457 Europe 1,148,403 1,120,705 629,457 Asia-Pacific 196,978 198,131 41,261 Other 396,751 283,205 66,706

Total Revenues $ 4,874,340 $ 4,345,048 $ 3,125,881

Substantially all of our long–lived assets are located outside of the U.S. and consist primarily of our ships. We have 16 ships with Bahamas registry with a carrying value of $7.1 billion and $7.2 billion as of December 31, 2016 and 2015, respectively. We have seven ships with Marshall Island registry with a carrying value of $1.9 billion as of December 31, 2016 and six ships with Marshall Island registry with a carrying value of $1.4 billion as of December 31, 2015. We also have one ship with U.S. registry with a carrying value of $0.3 billion as of December 31, 2016 and 2015.

Recently Issued Accounting Policies

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04 which simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The guidance is effective for annual or any interim goodwill impairment tests in years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect to early adopt this guidance.

In August 2016, the FASB issued ASU No. 2016-15 which amends Topic 230 (Statement of Cash Flows) to eliminate discrepancies in reporting certain items in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods with early adoption permitted. The transition should be made using a retrospective approach. We do not believe that the adoption of this guidance will be material to our consolidated statements of cash flows.

In May 2016, the FASB issued ASU No. 2016-12 which addresses improvements to the guidance on revenue from contracts from customers regarding collectability, noncash consideration, and completed contracts at transition. Additionally, it provides a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The effective date of this guidance is upon adoption of ASU No. 2014-09 which is presented below. We are currently evaluating the impact of the adoption of this guidance to our consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-11 which is a rescission of Securities and Exchange Commission guidance related to the issuance of ASU No. 2014-09 which is presented below. The effective date of this guidance is upon adoption of ASU No. 2014-09. We are currently evaluating the impact of the adoption of this guidance to our consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-10 which does not change the core principle of the guidance in ASU No. 2014-09 but clarifies two aspects: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The effective date of this guidance is upon adoption of ASU No. 2014-09. We are currently evaluating the impact of the adoption of this guidance to our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09 to improve multiple aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods with early adoption permitted. We do not believe that the adoption of this guidance will be material to our consolidated financial statements.

65 APPENDIX I FINANCIAL INFORMATION OF NCLH

In February 2016, the FASB issued ASU No. 2016-02 which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The ASU requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The ASU further modifies lessors’ classification criteria for leases and the accounting for sales-type and direct financing leases. The ASU will also require qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from leases. The ASU is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption permitted. The ASU is to be applied using a modified retrospective approach. We are currently reviewing our existing leases to evaluate the impact of the adoption of this guidance to our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11 to simplify the measurement of inventory for all entities. This applies to all inventory that is measured using either the first-in, first-out or average cost method. The guidance requires an entity to measure inventory at the lower of cost and net realizable value. The guidance must be applied prospectively and will be effective for our interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of an interim or annual reporting period. We have evaluated the impact of the adoption of this guidance to our consolidated financial statements and there will not be a material impact to our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-05 to clarify a customer’s accounting for fees paid in a cloud computing arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license or if the arrangement should be accounted for as a service contract. This guidance will impact the accounting of software licenses but will not change a customer’s accounting for service contracts. The guidance will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. We have adopted this guidance and there has not been an impact to our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09 which requires entities to recognize revenue through the application of a five-step model, including identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligation and recognition of revenue as the entity satisfies the performance obligations. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. In August 2015, the FASB issued ASU No. 2015-14 deferring the effective date for one year. We can elect to adopt the provisions of ASU No. 2014-09 for annual periods beginning after December 15, 2017 including interim periods within that reporting period or we can elect to early adopt the guidance as of the original effective date. We expect to adopt a modified retrospective application for annual periods beginning after December 15, 2017. We have initiated an assessment of our systems, data and processes related to the implementation of this guidance. This assessment is expected to be completed during 2017. Additionally, we are currently evaluating our performance obligations and believe that our application of the guidance will not result in a material change to our revenue recognition.

3. Goodwill and Intangible Assets

Goodwill and tradenames are not subject to amortization. As of December 31, 2016 and 2015 the carrying values were $1.4 billion for goodwill and $0.8 billion for tradenames.

December 31, 2016 Weighted- Gross Average Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years)

Customer relationship $ 120,000 $ (36,593) $ 83,407 6.0 Licenses 3,368 (807) 2,561 5.6 Non-compete agreements 660 (495) 165 1.0

Total intangible assets subject to amortization $ 124,028 $ (37,895) $ 86,133

License (Indefinite-lived) $ 4,427 $ – $ –

66 APPENDIX I FINANCIAL INFORMATION OF NCLH

December 31, 2015 Weighted- Gross Average Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years)

Customer relationship $ 120,000 $ (15,527) $ 104,473 6.0 Backlog 70,000 (70,000) – 1.0 Licenses 3,368 (208) 3,160 5.6

Total intangible assets subject to amortization $ 193,368 $ (85,735) $ 107,633

License (Indefinite-lived) $ 4,427 $ – $ –

The aggregate amortization expense is as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Amortization expense $ 22,160 $ 73,207 $ 12,528

The following table sets forth the Company’s estimated aggregate amortization expense for each of the five years below (in thousands):

Amortization Year ended December 31, Expense

2017 $ 31,067 2018 26,163 2019 18,489 2020 9,906 2021 75

4. The Acquisition of Prestige

On September 2, 2014, NCLH entered into an agreement with funds affiliated with Apollo and other owners to acquire 100% of the equity of Prestige. On November 19, 2014, we completed the Acquisition of Prestige.

The Acquisition of Prestige and the principal factors that contributed to the recognition of goodwill are enhancements of our financial profile which created a company with increased economies of scale, greater operating leverage and synergies. These synergies include revenue enhancements and opportunities for savings in various areas. The Acquisition of Prestige also created a company with greater cash flow generation, accelerating the ability to delever our balance sheet.

Consideration for the Acquisition of Prestige consisted of $1.1 billion in cash and non-cash considerations of 19,969,889 NCLH ordinary shares valued at $834.1 million based on the closing market price of NCLH’s shares as of November 18, 2014 and contingent consideration valued at $43.4 million. In addition, we assumed debt of $1.6 billion from Prestige. The contingent consideration arrangement subjected NCLH to an additional cash payment of up to $50 million upon achievement of certain 2015 revenue milestones. The contingent consideration was valued using various projected 2015 revenue scenarios weighted by the likelihood of each scenario occurring. The probability weighted payout was then discounted at an appropriate discount rate commensurate for the risk of meeting the probabilistic cash flows. For more on the contingent consideration valuation, we refer you to “Valuation of Contingent Consideration” below.

Prestige is reported in our results of operations from the acquisition date which includes approximately $111.7 million of revenue and approximately $19.7 million of operating loss related to Prestige for the period ended December 31, 2014.

The excess of the cost of acquisition over the net of amounts assigned to the fair value of the assets acquired and the liabilities assumed is recorded as goodwill, which is not expected to be deductible for tax purposes.

67 APPENDIX I FINANCIAL INFORMATION OF NCLH

Based on this fair valuation, the purchase price was allocated as follows (in thousands):

Consideration Allocated:

Accounts receivable $ 6,916 Inventories 12,579 Prepaid expenses and other assets 48,670 Amortizable intangible assets 190,000 Property and equipment 2,175,039 Goodwill and tradenames 1,595,126 Other long-term assets 15,607 Current portion of long-term debt (97,006) Accounts payable (14,880) Accrued expenses and other liabilities (190,256) Advance ticket sales (439,313) Long-term debt (1,456,038) Other long-term liabilities (142,216)

Total consideration allocated, net of $295.8 million of cash acquired $ 1,704,228

Goodwill and intangible assets acquired included the following (in thousands):

Goodwill $ 985,126 Tradenames (indefinite lived) 610,000 Backlog (1 year amortization period) 70,000 Customer relationships (6 year amortization period) 120,000

Pro forma Financial Information (unaudited)

The following unaudited pro forma financial information presents the combined results of operations of NCLH and Prestige as if the Acquisition of Prestige had occurred on January 1, 2013. The pro forma results presented below for 2014 combine the historical results of NCLH and Prestige for 2014. The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations or financial condition that would have been reported had the Acquisition of Prestige been completed as of January 1, 2013 and should not be taken as indicative of our future consolidated results of operations or financial condition.

The unaudited pro forma financial information was as follows (in thousands, except per share data):

Year Ended December 31, 2014 2013

Total revenue $ 4,310,079 $ 3,704,692 Net income (loss) attributable to Norwegian Cruise Line Holdings Ltd. 497,020 (683) Earnings per share: Basic $ 2.21 $ – Dilutive $ 2.19 $ –

The unaudited pro forma financial information includes non-recurring pro forma adjustments of $57.5 million in acquisition related expenses within marketing, general and administrative expense, a purchase price adjustment decreasing passenger ticket revenue by $48.9 million, $15.4 million of expenses related to financing transactions in conjunction with the Acquisition of Prestige within interest expense and $70.0 million of amortization related to the backlog intangible asset in the year ended December 31, 2013.

68 APPENDIX I FINANCIAL INFORMATION OF NCLH

Valuation of Contingent Consideration

The contingent consideration was valued using various projected 2015 Net Revenue scenarios weighted by the likelihood of each scenario occurring. The probability-weighted payout was then discounted at an appropriate discount rate commensurate for the risk of meeting the probabilistic cash flows. As the fair value was measured based upon significant inputs that are unobservable in the market, it was classified as Level 3 in the fair value hierarchy. Level 3 consists of significant unobservable inputs we believe market participants would use in pricing the asset or liability based on the best information available. The significant unobservable inputs used in the fair value measurement of the Company’s contingent consideration are the estimated annual Net Revenue and the probabilities associated with attaining the threshold and target Net Revenue as defined by the Merger Agreement. A significant increase in the estimated Net Revenue or an increase in the probability associated with reaching the target could have resulted in a significantly higher fair value measurement. The maximum fair value would not be able to exceed $50 million, while an amount of Net Revenue less than 98% of target would result in no payout. For the year ended December 31, 2015, the fair value of the contingent consideration was reduced to zero based upon updates to the probability-weighted assessment of various projected revenue scenarios. The Net Revenue target was not met, and accordingly, we recognized a $43.4 million fair value adjustment during the year ended December 31, 2015, which was included in marketing, general and administrative expense.

The following table summarizes the change in fair value of the contingent consideration liability (in thousands):

Contingent Consideration Liability

Balance as of December 31, 2014 $ 43,400 Fair value adjustment (Level 3) (43,400)

Balance as of December 31, 2015 $ –

5. Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) for the year ended December 31, 2016 was as follows (in thousands):

Accumulated Other Change Related Change Related Comprehensive to Cash Flow to Shipboard Income (Loss) Hedges Retirement Plan

Accumulated other comprehensive income (loss) at end of year $ (314,473) $ (307,618)(3) $ (6,855)

(1) We refer you to Note 9 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

(3) Of the existing amounts related to derivatives designated as cash flow hedges, approximately $31.9 million of loss is expected to be reclassified into earnings in the next 12 months.

69 APPENDIX I FINANCIAL INFORMATION OF NCLH

Accumulated other comprehensive income (loss) for the year ended December 31, 2015 was as follows (in thousands):

Accumulated Other Change Related Change Related Comprehensive to Cash Flow to Shipboard Income (Loss) Hedges Retirement Plan

Accumulated other comprehensive income (loss) at end of year $ (412,650) $ (405,298) $ (7,352)

(1) We refer you to Note 9 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

Accumulated other comprehensive income (loss) for the year ended December 31, 2014 was as follows (in thousands):

Accumulated Other Change Related Change Related Comprehensive to Cash Flow to Shipboard Income (Loss) Hedges Retirement Plan

Accumulated other comprehensive income (loss) at beginning of year $ (16,690) $ (10,532) $ (6,158) Current period other comprehensive loss before reclassifications (239,597) (236,925) (2,672) Amounts reclassified 13,645 13,269(1) 376(2)

Accumulated other comprehensive income (loss) at end of year $ (242,642) $ (234,188) $ (8,454)

(1) We refer you to Note 9 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

6. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

December 31, 2016 2015

Ships $ 10,781,703 $ 10,266,874 Ships improvements 807,233 506,880 Ships under construction 450,372 300,575 Land and land improvements 37,535 19,138 Other 483,744 408,523

12,560,587 11,501,990 Less: accumulated depreciation (2,442,898) (2,043,185)

Property and equipment, net $ 10,117,689 $ 9,458,805

70 APPENDIX I FINANCIAL INFORMATION OF NCLH

The increase in ships was primarily due to the additions of Seven Seas Explorer and Sirena. Depreciation and amortization expense for the years ended December 31, 2016, 2015 and 2014 was $432.5 million, $432.1 million and $273.1 million, respectively. Repairs and maintenance expenses including Dry-dock expenses were $155.4 million, $124.8 million and $69.9 million for the years ended December 31, 2016, 2015 and 2014, respectively and were recorded within other cruise operating expense.

Ships under construction include progress payments to the shipyard, planning and design fees, loan interest and commitment fees and other associated costs. The interest costs capitalized were primarily associated with the construction or revitalization of ships which amounted to $33.7 million, $31.9 million and $22.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.

7. Long-Term Debt

Long-term debt consisted of the following:

Interest Rate Balance December 31, Maturities December 31, 2016 2015 Through 2016 2015 (in thousands)

$700.0 million 4.750% senior unsecured notes 4.75% – 2021 $ 691,767 $ – $600.0 million 4.625% senior unsecured notes 4.625% 4.625% 2020 592,031 590,037 €662.9 million Norwegian Epic term loan (1) 3.00% 2.43% 2022 395,830 460,870 $625.0 million senior secured revolving credit facility – 2.78% 2018 – 75,000 $750.0 million senior secured revolving credit facility 2.70% – 2021 129,000 – $350.0 million senior secured term loan facility – 4.00% 2021 – 338,353 $1,506.6 million term loan facility 2.77% 2.85% 2021 1,459,033 1,185,720 €308.1 million Pride of Hawai’i loan (1) 1.83% 1.27% 2018 54,601 89,867 $334.1 million Norwegian Jewel term loan 1.83% 1.28% 2017 26,919 53,534 €258.0 million Pride of America Hermes loan (1) 1.90% 1.64% 2017 12,654 37,778 €529.8 million Breakaway one loan (1) 2.49% 1.92% 2025 469,100 522,859 €529.8 million Breakaway two loan (1) 4.50% 4.50% 2026 537,478 592,531 €590.5 million Breakaway three loan (1) 2.98% 2.98% 2027 653,474 711,187 €729.9 million Breakaway four loan (1) 2.98% 2.98% 2029 150,834 108,964 €126 million Norwegian Jewel term loan (1) 1.82% 1.27% 2017 7,260 28,649 €126 million Norwegian Jade term loan (1) 1.82% 1.27% 2017 7,531 29,149 €666 million Seahawk 1 term loan (1) 3.92% 3.92% 2030 137,514 40,845 €666 million Seahawk 2 term loan (1) 3.92% 3.92% 2031 42,083 40,845 $680 million 5.25% senior unsecured notes – 5.25% 2019 – 670,059 Sirena loan 2.75% 2.75% 2019 40,465 53,229 Explorer newbuild loan 3.43% – 2028 320,821 – Marina newbuild loan (2) 1.54% 1.01% 2023 290,416 335,135 Riviera newbuild loan (3) 1.81% 1.08% 2024 337,174 382,173 Capital lease and license obligations Various Various 2028 42,702 50,753

Total debt 6,398,687 6,397,537 Less: current portion of long-term debt (560,193) (629,840)

Total long-term debt $ 5,838,494 $ 5,767,697

(1) Currently U.S. dollar-denominated.

(2) Includes premium of $0.2 million and $0.3 million as of December 31, 2016 and 2015, respectively.

(3) Includes premium of $0.3 million and $0.4 million as of December 31, 2016 and 2015, respectively.

71 APPENDIX I FINANCIAL INFORMATION OF NCLH

In June 2016, NCLC and Voyager Vessel Company, LLC, subsidiaries of NCLH, entered into a Second Amended and Restated Credit Agreement (the “Amended Senior Secured Credit Facility”) with a syndicate of banks which restates the Amended and Restated Credit Agreement, dated as of October 31, 2014 (the “Existing Senior Secured Credit Facility”). The Amended Senior Secured Credit Facility amends the Existing Senior Secured Credit Facility to, among other things, (i) (a) increase the aggregate amount of commitments under the Revolving Loan Facility from $625.0 million to $750.0 million (the “New Revolving Loan Facility”) and (b) increase the aggregate principal amount outstanding under the $1.38 billion term loan facility from $1.16 billion to $1.51 billion (the “New Term Loan A Facility”) and (ii) extend the maturity of the New Term Loan A Facility and the New Revolving Loan Facility to June 2021 (the “Extended Maturity Date”). The agreement incorporates a springing maturity date for the New Term Loan A Facility and the New Revolving Loan Facility such that both mature on the earlier date that is 91 days prior to the final maturity date of NCLC’s $600.0 million aggregate principal amount of 4.625% senior unsecured notes due 2020 (the “4.625% Notes”) if on such date (x) the 4.625% Notes have not been repaid (or refinanced with indebtedness maturing after the Extended Maturity Date) by such date and (y) free liquidity does not exceed the aggregate principal amount of outstanding 4.625% Notes by at least $50.0 million. NCLC used proceeds of approximately $1.59 billion from the New Term Loan A Facility and the New Revolving Loan Facility to prepay the entire outstanding principal amount of the Revolving Loan Facility, the $1.38 billion term loan facility and the $350.0 million term loan facility.

The New Term Loan A Facility and New Revolving Loan Facility bear interest at a rate per annum of (a) an adjusted LIBOR rate or (b) a base rate determined by reference to the greatest of (i) the federal funds rate plus 0.50%, (ii) the prime rate in effect on such day and (iii) the adjusted LIBOR rate plus 1%, in each case plus an applicable margin that is determined by reference to a total leverage ratio, with an applicable margin of between 2.25% and 1.50% with respect to Eurocurrency loans and between 1.25% and 0.50% with respect to base rate loans. The initial applicable margin for borrowings is 2.25% with respect to Eurocurrency borrowings and 1.25% with respect to base rate borrowings. The New Term Loan A Facility is paid in quarterly installments which commenced in September 2016, in a principal amount equal to (a) in the case of installments payable on or prior to June 6, 2018, 1.25% of the loans outstanding immediately after the closing date under the New Term Loan A Facility and (b) in the case of installments payable after June 6, 2018, 2.50% of the loans outstanding immediately after the closing date under the New Term Loan A Facility, with the remaining unpaid principal amount of loans under the New Term Loan A Facility due and payable in full at maturity on June 6, 2021. Principal amounts outstanding under the New Revolving Loan Facility are due and payable in full at maturity on June 6, 2021, subject to earlier repayment pursuant to the springing maturity date described above.

In addition to paying interest on outstanding principal under the borrowings, we are obligated to pay a quarterly commitment fee at a rate determined by reference to a total leverage ratio, with a maximum commitment fee of 40% of the applicable margin for Eurocurrency loans.

In July 2016, Breakaway Four, Ltd., as borrower, and NCLC, as guarantor, entered into a Supplemental Agreement, which amended the Breakaway four loan to, among other things, increase the aggregate principal amount of commitments under the multi-draw term loan credit facility from €590.5 million to €729.9 million.

In June 2016, we took delivery of Seven Seas Explorer. To finance the payment due upon delivery, we had export credit financing in place for 80% of the contract price. The associated $373.6 million term loan bears interest at 3.43% with a maturity date of June 30, 2028. Principal and interest payments shall be paid semiannually.

In December 2016, NCLC issued $700.0 million aggregate principal amount of 4.750% senior unsecured notes due December 2021 (the “Notes”) in a private offering (the “Offering”) at par. NCLC used the net proceeds from the Offering, after deducting the initial purchasers’ discount and estimated fees and expenses, together with cash on hand, to purchase its outstanding 5.25% senior notes due 2019 having an aggregate outstanding principal amount of $680 million. The redemption of the 5.25% senior notes due 2019 was completed in January 2017.

NCLC will pay interest on the Notes at 4.750% per annum, semiannually on June 15 and December 15 of each year, commencing on June 15, 2017, to holders of record at the close of business on the immediately preceding June 1 and December 1, respectively. NCLC may redeem the Notes, in whole or part, at any time prior to December 15, 2018, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but not including, the redemption date and a “make-whole premium.” NCLC may redeem the Notes, in whole or in part, on or after December 15, 2018, at the redemption prices set forth in the indenture governing the Notes. At any time (which may be more than once) on or prior to December 15, 2018, NCLC may choose to redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 104.750% of the face amount thereof with an amount equal to the net proceeds of one or more equity offerings, so long as at least 60% of the

72 APPENDIX I FINANCIAL INFORMATION OF NCLH

aggregate principal amount of the Notes issued remains outstanding following such redemption. The indenture governing the Notes contains covenants that limit NCLC’s ability (and its restricted subsidiaries’ ability) to, among other things: (i) incur or guarantee additional indebtedness or issue certain preferred shares; (ii) pay dividends and make certain other restricted payments; (iii) create restrictions on the payment of dividends or other distributions to NCLC from its restricted subsidiaries; (iv) create liens on certain assets to secure debt; (v) make certain investments; (vi) engage in transactions with affiliates; (vii) engage in sales of assets and subsidiary stock; and (viii) transfer all or substantially all of its assets or enter into merger or consolidation transactions. The indenture governing the Notes also provides for events of default, which, if any of them occurs, would permit or require the principal, premium (if any), interest and other monetary obligations on all of the then-outstanding Notes to become due and payable immediately.

Interest expense, net for the year ended December 31, 2016 was $276.9 million which included $34.7 million of amortization of deferred financing fees and a $27.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2015 was $221.9 million which included $36.7 million of amortization of deferred financing fees and a $12.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2014 was $151.8 million which included $32.3 million of amortization of deferred financing fees and $15.4 million of expenses related to financing transactions in connection with the Acquisition of Prestige.

The following are scheduled principal repayments on long-term debt including capital lease obligations as of December 31, 2016 for each of the next five years (in thousands):

Year Amount

2017 $ 560,193 2018 554,846 2019 561,687 2020 1,153,733 2021 2,193,823 Thereafter 1,490,322

Total $ 6,514,604

We had an accrued interest liability of $32.5 million and $34.2 million as of December 31, 2016 and 2015, respectively.

8. Related Party Disclosures

Transactions with Genting HK, the Apollo Holders and the TPG Viking Funds

As of December 31, 2016, the ownership percentages of NCLH’s ordinary shares were as follows:

Number of Percentage Shareholder Shares Ownership

Apollo Holders (1) 36,103,782 15.9% Genting HK (2) 25,398,307 11.2% TPG Viking Funds (3) 5,329,834 2.3%

73 APPENDIX I FINANCIAL INFORMATION OF NCLH

(2) Genting HK owns our ordinary share indirectly through Star NCLC Holdings Ltd., a Bermuda wholly-owned subsidiary.

(3) The TPG Viking Funds include TPG Viking, L.P., a Delaware limited partnership, TPG Viking AIV I, L.P., a Cayman Islands exempted limited partnership, TPG Viking AIV II, L.P., a Cayman Islands exempted limited partnership and TPG Viking AIV III, L.P., a Delaware limited partnership.

In September 2014, NCLH entered into the Merger Agreement with funds affiliated with Apollo and other owners for total consideration of $3.025 billion (including assumption of debt) in cash and stock. On November 19, 2014, we completed the Acquisition of Prestige.

In June 2012, we exercised our option with Genting HK to purchase Norwegian Sky. The purchase price was $259.3 million, which consisted of a $50.0 million cash payment and a $209.3 million payable to Genting HK, $79.7 million of such amount was paid to Genting HK within fourteen days of the consummation of the IPO, together with accrued interest thereon, and the remaining balance was repaid over seven equal semi-annual payments the first of which was due and paid in June 2013 and had a weighted-average interest rate of 1.52% through maturity. The fair value of the payable was $205.5 million based on discounting the future payments at an imputed interest rate of 2.26% per annum, which was commensurate with the Company’s borrowing rate for similar assets. The payable was collateralized by a mortgage and an interest in all earnings, proceeds of insurance and certain other interests related to the ship and is included in the balance sheet caption “Due to Affiliate” on our consolidated balance sheets. We have paid the total amount of $259.3 million to Genting HK in connection with the Norwegian Sky Purchase Agreement through December 31, 2016 and no further payments are due.

9. Fair Value Measurements and Derivatives

Fair Value Hierarchy

Level 1 Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement dates.

Level 2 Significant other observable inputs that are used by market participants in pricing the asset or liability based on market data obtained from independent sources.

Level 3 Significant unobservable inputs we believe market participants would use in pricing the asset or liability based on the best information available.

Derivatives

74 APPENDIX I FINANCIAL INFORMATION OF NCLH

We monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. Credit risk, including but not limited to counterparty non-performance under derivatives and our New Revolving Loan Facility, is not considered significant, as we primarily conduct business with large, well-established financial institutions that we have established relationships with and that have credit risks acceptable to us or the credit risk is spread out among a large number of creditors. We do not anticipate non-performance by any of our significant counterparties. The following table sets forth our derivatives measured at fair value and discloses the balance sheet location (in thousands):

The following table sets forth our derivatives measured at fair value and discloses the balance sheet location (in thousands):

Asset Liability December 31, December 31, December 31, December 31, Balance Sheet location 2016 2015 2016 2015

Fuel swaps designated as hedging Prepaid expenses and $ 20,288 $ – $ – $ – instruments other assets Accrued expenses and – – 44,271 128,740 other liabilities Other long-term liabilities 13,237 – 38,608 132,494

Foreign currency forward contracts Other long-term assets 14 3,446 – 1,370 designated as hedging instruments Accrued expenses and – – 61,788 8,737 other liabilities Other long-term liabilities – 551 88,920 24,181

Foreign currency collar not designated as Accrued expenses and – – – 42,993 a hedging instrument other liabilities

Interest rate swaps designated as Accrued expenses and – – 3,331 4,079 hedging instruments other liabilities Other long-term liabilities – – 1,151 3,395

The fair values of swap and forward contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The Company determines the value of options and collars utilizing an option pricing model based on inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets. The option pricing model used by the Company is an industry standard model for valuing options and is used by the broker/dealer community. The inputs to this option pricing model are the option strike price, underlying price, risk-free rate of interest, time to expiration, and volatility. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. Our derivatives and financial instruments were categorized as Level 2 in the fair value hierarchy, and we had no derivatives or financial instruments categorized as Level 1 or Level 3.

The following table discloses the gross and net amounts recognized within assets and liabilities (in thousands):

Gross Gross Gross Amounts Total Net Amounts Net December 31, 2016 Amounts Offset Amounts Not Offset Amounts

Assets $ 20,302 $ – $ 20,302 $ (14) $ 20,288 Liabilities 238,069 (13,237) 224,832 (155,190) 69,642

75 APPENDIX I FINANCIAL INFORMATION OF NCLH

Gross Gross Gross Amounts Total Net Amounts Net December 31, 2015 Amounts Offset Amounts Not Offset Amounts

Assets $ 3,446 $ (1,370) $ 2,076 $ (2,043) $ 33 Liabilities 344,619 (551) 344,068 (336,645) 7,423

Fuel Swaps

As of December 31, 2016, we had fuel swaps maturing through December 31, 2020 which are used to mitigate the financial impact of volatility in fuel prices pertaining to approximately 1.5 million metric tons of our projected fuel purchases.

The effects on the consolidated financial statements of the fuel swaps which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Gain (loss) recognized in other comprehensive income (loss) – effective portion $ 127,470 $ (173,513) $ (198,595) Loss recognized in other income (expense), net – ineffective portion (12,850) (16,011) (5,753) Amount reclassified from accumulated other comprehensive income (loss) into fuel expense 85,448 75,808 8,388

The effects on the consolidated financial statements of the fuel swaps which were dedesignated and recognized into earnings were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Amount reclassified from accumulated other comprehensive income (loss) into other income (expense), net $ 2,994 $ 10,000 $ – Loss recognized in other income (expense), net (271) (4,727) –

Fuel Collars and Options

We had fuel collars that matured and were used to mitigate the financial impact of volatility in fuel prices of our fuel purchases.

The effects on the consolidated financial statements of the fuel collars which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Loss recognized in other comprehensive income (loss) – effective portion $ – $ – $ (1,024) Loss recognized in other income (expense), net – ineffective portion – – (292) Amount reclassified from accumulated other comprehensive income (loss) into fuel expense – 248 1,888

76 APPENDIX I FINANCIAL INFORMATION OF NCLH

The effects on the consolidated financial statements of the fuel options which were not designated as hedging instruments were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Loss recognized in other income (expense), net $ – $ – $ (864)

Foreign Currency Options

The effects on the consolidated financial statements of the foreign currency options which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Loss recognized in other comprehensive income (loss) – effective portion $ – $ – $ (1,157) Loss recognized in other income (expense), net – ineffective portion – – (241) Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense 1,320 1,320 1,269

Foreign Currency Forward Contracts

As of December 31, 2016, we had foreign currency forward contracts which are used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. The notional amount of our foreign currency forward contracts was €2.6 billion, or $2.7 billion based on the euro/U.S. dollar exchange rate as of December 31, 2016.

The effects on the consolidated financial statements of the foreign currency forward contracts which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Loss recognized in other comprehensive income (loss) – effective portion $ (124,058) $ (84,187) $ (30,686) Loss recognized in other income (expense), net – ineffective portion (270) (343) (7) Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense 2,625 116 (243)

The effects on the consolidated financial statements of the foreign currency forward contracts which were not designated as hedging instruments were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Gain (loss) recognized in other income (expense), net $ (6,133) $ 684 $ –

77 APPENDIX I FINANCIAL INFORMATION OF NCLH

Foreign Currency Collar

We had foreign currency collars that matured and were used to mitigate the volatility of foreign currency exchange rates related to our ship construction contracts denominated in euros.

The effects on the consolidated financial statements of the foreign currency collar which was designated as a cash flow hedge was as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Loss recognized in other comprehensive income (loss) – effective portion $ – $ – $ (1,588) Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense (364) (364) (333)

The effect on the consolidated financial statements of the foreign currency collar which was not designated as a cash flow hedge was as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Gain (loss) recognized in other income (expense), net $ 10,312 $ (26,249) $ (6,980)

Interest Rate Swaps

As of December 31, 2016, we had interest rate swap agreements to hedge our exposure to interest rate movements and to manage our interest expense. The notional amount of outstanding debt associated with the interest rate swap agreements was $308.5 million as of December 31, 2016.

The effects on the consolidated financial statements of the interest rate swaps which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Loss recognized in other comprehensive income (loss) – effective portion $ (1,701) $ (5,152) $ (5,386) Gain (loss) recognized in other income (expense), net – ineffective portion 3 (23) – Amount reclassified from other comprehensive income (loss) into interest expense, net 3,946 4,614 2,385

The effects on the consolidated financial statements of the interest rates swap contract which was not designated as a hedging instrument was as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Loss recognized in other income (expense), net $ – $ (2) $ (3)

Other

The carrying amounts reported in the consolidated balance sheets of all other financial assets and liabilities approximate fair value.

78 APPENDIX I FINANCIAL INFORMATION OF NCLH

Long-Term Debt

As of December 31, 2016 and 2015, the fair value of our long-term debt, including the current portion, was $6,525.7 million and $6,495.5 million, respectively, which was $11.6 million higher and $6.6 million lower, respectively, than the carrying values. The difference between the fair value and carrying value of our long-term debt is due to our fixed and variable rate debt obligations carrying interest rates that are above or below market rates at the measurement dates. The fair value of our long-term debt was calculated based on estimated rates for the same or similar instruments with similar terms and remaining maturities resulting in Level 2 inputs in the fair value hierarchy. Market risk associated with our long-term variable rate debt is the potential increase in interest expense from an increase in interest rates. The calculation of the fair value of our long-term debt is considered a Level 2 input.

Non-recurring Measurements of Non-financial Assets

We believe our estimates and judgments with respect to our long-lived assets, principally ships, and goodwill and other indefinite-lived intangible assets are reasonable. Nonetheless, if there was a material change in assumptions used in the determination of such fair values or if there is a material change in the conditions or circumstances that influence such assets, we could be required to record an impairment charge. We estimate fair value based on the best information available making whatever estimates, judgments and projections considered necessary. For our Step I Test, the estimation of fair value measured by discounting expected future cash flows at discount rates commensurate with the risk involved are considered Level 3 inputs. As of December 31, 2016, our annual review supports the carrying value of these assets.

10. Employee Benefits and Share-Based Compensation

Management NCL Corporation Units

In 2009, we adopted a profits sharing agreement which authorized us to grant profits interests in the Company to certain key employees. These interests generally vested with the holders based on a combination of performance-based and time-based vesting metrics, each as specified in the profits sharing agreement and each holder’s award agreement. Genting HK, the Apollo Holders and the TPG Viking Funds were entitled to initially receive any distributions made by the Company, pro-rata based on their shareholdings in the Company. Once Genting HK, the Apollo Holders and the TPG Viking Funds received distributions in excess of certain hurdle amounts specified in the profits sharing agreement and each holder’s award agreement, each vested profits interest award generally entitled the holder of such award to a portion of such excess distribution amount. In connection with the Corporate Reorganization, NCLC’s outstanding profits interests granted under its profits sharing agreement to management (or former management) of NCLC were exchanged for an economically equivalent number of NCL Corporation Units. We refer to the NCL Corporation Units exchanged for profits interests granted under the profits sharing agreement as “Management NCL Corporation Units.” The Management NCL Corporation Units received upon the exchange of outstanding profits interests were subject to the same time-based vesting requirements and performance-based vesting requirements applicable to the profits interests for which they were exchanged.

We accounted for the exchange of the outstanding profits interests for the economically equivalent number of Management NCL Corporation Units and share-based option awards as an award modification. An award modification requires that the fair value of the awards immediately before the modification and immediately after the modification be determined. We engaged a third-party valuation firm to assist in the completion of a valuation which was derived using a binomial lattice model. It was determined that the post-modification award value derived greater value versus the pre- modification award value, resulting in the recognition of incremental compensation expense. At the date of award modification, approximately $5.5 million of incremental cost associated with vested awards was charged to share-based compensation, with the remaining unvested portion to be charged over the remaining vesting period.

The Management NCL Corporation Units, generally consisted of fifty percent of “Time-Based Units” (“TBUs”) and fifty percent of “Performance-Based Units” (“PBUs”). The TBUs generally vested over five years and upon a distribution event, the vesting amount of the PBUs was based on the amount of proceeds that are realized above certain hurdles.

79 APPENDIX I FINANCIAL INFORMATION OF NCLH

In the fourth quarter of 2014, all Management NCL Corporation Units were exchanged for NCLH ordinary shares and restricted shares under a management exchange agreement (the “Management Exchange Agreement”). NCLH became the sole member and 100% owner of the economic interests in NCLC and the non-controlling interest no longer exists as of December 31, 2014. Accordingly, NCLC is now treated as a disregarded entity for U.S. federal income tax purposes. No new NCLC profits interests or Management NCL Corporation Units will be issued; however, NCLH has granted, and expects to continue to grant, equity to its employees and members of its Board of Directors under its long-term incentive plan. The exchange for NCLH ordinary shares and restricted shares, per the Management Exchange Agreement, resulted in no incremental expense after applying the modification accounting treatment as substantially all key terms and conditions remained consistent.

As a result of a Secondary Equity Offering during August 2015, the last hurdle amount specified in the profits sharing agreement was reached and as such all outstanding PBUs vested.

The termination of employment may result in forfeiture of any non-vested TBUs. TBUs that were vested can be either continued by the Company or cancelled and paid to the employee. Cancellation could take place any time after termination but not before two years after the grant date.

Amended and Restated 2013 Performance Incentive Plan (“Restated 2013 Plan”)

In January 2013, the Company adopted the 2013 Performance Incentive Plan which provided for the issuance of up to 15,035,106 of NCLH’s ordinary shares pursuant to awards granted under the plan, with no more than 5,000,000 shares being granted to one individual in any calendar year. In May 2016, the plan was amended and restated pursuant to approval from the Board of Directors and Company’s shareholders. Among other things, under the Restated 2013 Plan, the number of the Company’s ordinary shares that may be delivered pursuant to all awards granted under the plan was increased by an additional 12,430,000 shares to a new maximum aggregate limit of 27,465,106 shares. Additionally, the expiration date of the Restated 2013 Plan was extended to March 30, 2026. Share options under the plan are granted with an exercise price equal to the closing market price of NCLH shares at the date of grant. The vesting period for time-based options is typically set at 3, 4 or 5 years with a contractual life ranging from 7 to 10 years. The vesting period for time-based restricted share units is generally 3 years. In connection with an amendment to our President and Chief Executive Officer’s employment agreement in August 2015, the Company awarded time-based, performance-based and market-based options and restricted stock unit awards to our President and Chief Executive Officer which vest upon the satisfaction of the specified performance period or the achievement of certain performance and market-related metrics during the term of the award agreements. Forfeited awards will be available for subsequent awards under the Restated 2013 Plan.

Share Option Awards

In March 2016, we granted 1.0 million share option awards to our employees at an exercise price of $50.31 with a contractual term of ten years. The share options vest equally over three years.

The fair value of each time-based option award is estimated on the date of grant using the Black-Scholes option-pricing model. The estimated fair value of the share options, less estimated forfeitures, is amortized over the vesting period using the straight-line vesting method. The assumptions used within the option-pricing model for the time-based awards are as follows:

2016 2015 2014

Dividend yield –% –% –% Expected share price volatility 30.36%-33.01% 32.32%-45.33% 48.30%-49.90% Risk-free interest rate 1.20%-1.48% 1.34%-1.92% 1.80%-2.02% Expected term 6.00 years 6.00-6.50 years 6.25 years

Expected volatility was determined based on the historical share prices in our industry. The risk-free rate was based on U.S. Treasury zero coupon issues with a remaining term equal to the expected option term at grant date. The expected term was calculated under the simplified method. Our forfeiture assumption is derived from historical turnover rates and those estimates are revised as appropriate to reflect the actual forfeiture results.

80 APPENDIX I FINANCIAL INFORMATION OF NCLH

The performance-based awards awarded to our President and Chief Executive Officer are subject to performance conditions such that the number of awards that ultimately vest depends on the adjusted earnings per share (“Adjusted EPS”) and adjusted return on invested capital (“Adjusted ROIC”) achieved by the Company during the performance period compared to targets established at the award date. Because the terms of the performance-based awards provide discretion to make certain adjustments to the performance calculation, the service inception date of these awards precedes the grant date. Accordingly, the Company recognizes compensation expense beginning on the service inception date and remeasures the fair value of the awards until a grant date is established. The estimate of the awards’ fair value will be fixed in the period in which the grant date occurs, and cumulative compensation expense will be adjusted based on the fair value calculated using the Black-Scholes option-pricing model at the grant date. The fair value for the option awards for which a grant date has not been established is estimated on the last date of the reporting period using the Black-Scholes option-pricing model. The estimated fair value of the share options is amortized over the requisite service period using the straight-line vesting method. The assumptions used within the option-pricing model for the performance-based awards for which share-based compensation expense was recognized during 2016 and 2015 are as follows:

2016 2015

Dividend yield –% –% Expected share price volatility 25.97%-30.21% 29.31%-29.86% Risk-free interest rate 1.01%-1.93% 1.76% Expected term 4.38-5.13 years 4.88-5.38 years

The fair value of the market-based share option awards awarded to our President and Chief Executive Officer is estimated using a Monte-Carlo model which values financial instruments whose value is dependent on share price by sampling random paths for share price. The key inputs for the simulation include current share price, risk free rate, and share price volatility. For each simulated path, the model checks if the simulated share price reaches the vesting threshold during the performance period. For each path that reaches the vesting threshold, the payoff upon vesting is calculated. The fair value of the equity grant is determined by averaging the expected payoff across all simulated paths and discounting the average to the valuation date.

The below table summarizes the key inputs used in the Monte-Carlo simulation:

2015

Dividend yield –% Expected share price volatility 30.00% Risk-free interest rate 1.34% Expected term Mid-point from vesting to assumed options expiration

81 APPENDIX I FINANCIAL INFORMATION OF NCLH

The following is a summary of share option activity under our Restated 2013 Plan for the year ended December 31, 2016 (excludes the impact of 364,584 performance-based awards as no grant date has been established):

Weighted- Average Aggregate Contractual Intrinsic Number of Share Option Awards Weighted-Average Exercise Price Term Value Time-Based Performance- Market-Based Time-Based Performance- Market-Based Awards Based Awards Awards Awards Based Awards Awards (years) (in thousands)

Outstanding as of January 1, 2016 7,702,071 432,752 208,333 $ 47.35 $ 19.00 $ 59.43 8.59 $ 104,864 Granted 1,095,000 52,083 – 49.88 59.43 – – – Exercised (235,555) (51,857) – 28.19 19.00 – – – Forfeited and cancelled (786,458) – – 49.82 – – – –

Outstanding as of December 31, 2016 7,775,058 432,978 208,333 $ 48.04 $ 23.86 $ 59.43 7.81 $ 35,429

Vested and expected to vest as of December 31, 2016 7,558,521 432,978 208,333 $ 48.01 $ 23.86 $ 59.43 7.60 $ 34,926

Exercisable as of December 31, 2016 2,539,348 432,978 – $ 43.30 $ 23.86 $ – 6.67 $ 24,272

The weighted-average grant-date fair value of time-based options granted during the years 2016, 2015 and 2014 was $17.11, $20.90 and $16.86, respectively. The weighted-average reporting period date/established grant-date fair value of performance-based options for which share-based compensation was recognized during 2016 and 2015 was $8.67 and $17.07, respectively. The weighted-average grant-date fair value of market-based options granted during the year 2015 was $12.37. The total intrinsic value of share options exercised during the years 2016, 2015 and 2014 was $5.2 million, $68.0 million and $4.5 million and total cash received by the Company from exercises was $7.6 million, $69.1 million and $6.1 million, respectively. As of December 31, 2016, there was approximately $70.2 million, $0, and $0.7 million of total unrecognized compensation cost net of estimate forfeitures, related to time-based, performance-based with an established grant date, and market-based options, respectively, granted under our share-based incentive plans which is expected to be recognized over a weighted-average period of 1.75 years, 0 years, and 0.54 years, respectively.

Restricted Ordinary Share Awards

The following is a summary of restricted share activity of NCLH shares for the year ended December 31, 2016:

Number of Weighted- Time-Based Average Grant Awards Date Fair Value

Non-vested as of January 1, 2016 43,653 $ 5.87 Vested (26,429) 4.79 Forfeited or expired (352) 2.50

Non-vested and expected to vest as of December 31, 2016 16,872 $ 7.63

As of December 31, 2016, there was $0.1 million of total unrecognized compensation cost related to non-vested restricted ordinary share awards. The cost is expected to be recognized over a weighted-average period of 0.44 years. Restricted shares, with the exception of those related to the Management Exchange Agreement, which maintain their original vesting conditions of time and performance, vest in substantially equal quarterly installments over 1 or 2 years or in annual installments over 4 years. The total fair value of shares vested during 2016, 2015, and 2014 was $1.1 million, $40.9 million, and $0.7 million, respectively.

82 APPENDIX I FINANCIAL INFORMATION OF NCLH

Restricted Share Units (“RSUs”)

In March 2016, we granted 1.2 million restricted share unit awards to our employees which vest equally over three years.

The fair value of the time-based and performance-based RSUs is equal to the closing market price of NCLH shares at the date of grant. The performance-based RSUs awarded to our President and Chief Executive Officer are subject to performance conditions such that the number of awards that ultimately vest depends on the Adjusted EPS and Adjusted ROIC achieved by the Company during the performance period compared to targets established at the award date. Because the terms of the performance-based awards provide discretion to make certain adjustments to the performance calculation, the service inception date of these awards precedes the grant date. Accordingly, the Company recognizes share-based compensation expense beginning on the service inception date and remeasures the fair value of the awards until a grant date occurs. The estimate of the awards’ fair value will be fixed in the period in which the grant date occurs, and cumulative share-based compensation expense will be adjusted based on the fair value at the grant date.

The below table summarizes the key inputs used in the Monte-Carlo simulation:

2015

Dividend yield 0% Expected share price volatility 30.00% Risk-free interest rate 1.34% Expected term Mid-point from vesting to assumed awards expiration

The following is a summary of the RSUs activity for the year ended December 31, 2016 (excludes the impact of 87,500 performance-based RSUs as no grant date was established):

Non-vested as of January 1, 2016 150,000 $ 59.43 – $ – 50,000 $ 59.43 Granted 1,328,490 $ 49.62 12,500 $ 50.00 – – Vested (50,000) $ 57.15 (12,500) $ 50.00 – – Forfeited or expired (123,155) $ 50.44 – – –

Non-vested as of December 31, 2016 1,305,335 $ 50.38 – $ – 50,000 $ 59.43

Non-vested and expected to vest as of December 31, 2016 1,267,692 $ 50.43 – – 50,000 $ 59.43

As of December 31, 2016, there was $45.1 million, $0 and $0.4 million of total unrecognized compensation cost net of estimated forfeitures related to non-vested time-based, non-vested performance-based awards with an established grant date and market-based RSUs, respectively. The cost is expected to be recognized over a weighted-average period of 2.19 years, 0 years and 0.54 years, respectively, for the time-based, performance-based and market- based RSUs. Total taxes paid pursuant to net share settlements in 2016 were $0.9 million.

83 APPENDIX I FINANCIAL INFORMATION OF NCLH

Employee Stock Purchase Plan (“ESPP”)

In April 2014, the Company’s shareholders approved the ESPP. The purpose of the ESPP is to provide eligible employees with an opportunity to purchase NCLH’s ordinary shares at a favorable price and upon favorable terms in consideration of the participating employees’ continued services. A maximum of 2,000,000 of the Company’s ordinary shares may be purchased under the ESPP. To be eligible to participate in an offering period, on the Grant Date of that period, an individual must be customarily employed by the Company or a participating subsidiary for more than twenty hours per week and for more than five months per calendar year. Participation in the ESPP is also subject to certain limitations. The ESPP is considered to be compensatory based on: a) the 15% purchase price discount and b) the look-back purchase price feature. Since the plan is compensatory, compensation expense must be recorded in the consolidated statements of operations on a straight-line basis over the six-month withholding period. As of December 31, 2016 and 2015, we had a $1.3 million and $1.1 million liability, respectively, for payroll withholdings received.

The compensation expense recognized for share-based compensation for the years ended December 31, 2016, 2015 and 2014 was as follows:

Share-Based Compensation Expense Classification of expense 2016 2015 2014 (In thousands)

Payroll and related (1) $ 7,793 $ – $ – Marketing, general and administrative (2) 58,621 42,209 20,627(3)

Total share-based compensation expense $ 66,414 $ 42,209 $ 20,627

(1) Amounts relate to equity granted to certain of our shipboard officers.

(2) Amounts relate to equity granted to certain of our corporate employees.

(3) Amount above includes $6.0 million of non-recurring charges associated with the Management Exchange Agreement.

Employee Benefit Plans

We maintain annual incentive bonus plans for our executive officers and other key employees. Bonuses under these plans become earned and payable based on the Company’s performance during the applicable performance period and the individual’s continued employment. Company performance criteria include the attainment of certain financial targets and other strategic objectives.

We maintain a 401(k) Plan for our shoreside employees, including our executive officers. Participants may contribute up to 100% of eligible compensation each pay period, subject to certain limitations. We make matching contributions equal to 100% of the first 3% and 50% of amounts greater than 3% to and including 10% of each participant’s contributions subject to certain limitations. In addition, we may make discretionary supplemental contributions to the Plan, which shall be allocated to each eligible participant on a pro-rata basis based on the compensation of the participant to the total compensation of all participants. Our matching contributions are vested according to a five-year schedule. The 401(k) Plan is subject to the provisions of ERISA and is intended to be qualified under section 401(a) of the U.S. Internal Revenue Code (the “Code”).

Our contributions are reduced by contributions forfeited by those employees who leave the 401(k) Plan prior to vesting fully in the contributions. Forfeited contributions of $0.1 million, $0.4 million and $0.1 million were utilized in the years ended December 31, 2016, 2015 and 2014, respectively.

84 APPENDIX I FINANCIAL INFORMATION OF NCLH

We maintained a Supplemental Executive Retirement Plan (“SERP”), which is a legacy unfunded defined contribution plan for certain executives who were employed by the Company in an executive capacity prior to 2008. The SERP was frozen to future participation following that date. The SERP provided for Company contributions on behalf of the participants to compensate them for the benefits that are limited under the 401(k) Plan. We credited participants under the SERP for amounts that would have been contributed by us to the Company’s previous Defined Contribution Retirement Plan and the former 401(k) Plan without regard to any limitations imposed by the Code. Participants did not make any elective contributions under this plan. As of December 31, 2016 and 2015, the aggregate balance of participants’ deferred compensation accounts under the SERP Plan was $0.5 million and $0.5 million, respectively. We have discontinued this plan following the 2015 contributions and will pay the deferred contributions to participants in early 2017 following the expiration of the required twelve month period.

We recorded expenses related to the above 401(k) Plan and SERP of $6.4 million, $5.3 million and $3.7 million for the years ended December 31, 2016, 2015 and 2014, respectively.

We maintained a Senior Management Retirement Savings Plan (“SMRSP”), which was a legacy unfunded defined contribution plan for certain employees who were employed by the Company prior to 2001. The SMRSP provided for Company contributions on behalf of the participants to compensate them for the difference between the qualified plan benefits that were previously available under the Company’s cash balance pension plan and the redesigned 401(k) Plan. We credited participants under the SMRSP Plan for the difference in the amount that would have been contributed by us to the Company’s previous Norwegian Cruise Line Pension Plan and the qualified plan maximums of the new 401(k) Plan. We have discontinued this plan following the 2015 contributions and will pay the deferred contributions to participants in early 2017 following the expiration of the required twelve month period.

Effective January 2009, we implemented the Shipboard Retirement Plan which computes benefits based on years of service, subject to eligibility requirements of the Shipboard Retirement Plan. The Shipboard Retirement Plan is unfunded with no plan assets. The current portion of the projected benefit obligation of $1.2 million and $1.1 million was included in accrued expenses and other liabilities as of December 31, 2016 and 2015, respectively and $21.4 million and $20.0 million was included in other long-term liabilities in our consolidated balance sheets as of December 31, 2016 and 2015, respectively. The amounts related to the Shipboard Retirement Plan were as follows (in thousands):

As of or for the Year Ended December 31, 2016 2015 2014

Pension expense: Service cost $ 1,863 $ 1,793 $ 1,393 Interest cost 874 738 728 Amortization of prior service cost 378 378 378 Amortization of actuarial loss 54 99 –

Total pension expense $ 3,169 $ 3,008 $ 2,499

Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 21,078 $ 19,730 $ 15,570 Service cost 1,863 1,793 1,393 Interest cost 874 738 728 Actuarial gain (loss) (65) (625) 2,689 Direct benefit payments (1,145) (558) (650)

Projected benefit obligation at end of year $ 22,605 $ 21,078 $ 19,730

Amounts recognized in the consolidated balance sheets: Projected benefit obligation $ 22,605 $ 21,078 $ 19,730

85 APPENDIX I FINANCIAL INFORMATION OF NCLH

As of or for the Year Ended December 31, 2016 2015 2014

Amounts recognized in accumulated other comprehensive income (loss): Prior service cost $ (4,915) $ (5,293) $ (5,671) Accumulated actuarial loss (3,008) (3,126) (3,849)

Accumulated other comprehensive income (loss) $ (7,923) $ (8,419) $ (9,520)

The discount rates used in the net periodic benefit cost calculation for the years ended December 31, 2016, 2015 and 2014 were 4.3%, 3.8% and 4.8%, respectively, and the actuarial loss is amortized over 18.89 years. The discount rate is used to measure and recognize obligations, including adjustments to other comprehensive income (loss), and to determine expense during the periods. It is determined by using bond indices which reflect yields on a broad maturity and industry universe of high-quality corporate bonds.

The pension benefits expected to be paid in each of the next five years and in aggregate for the five years thereafter are as follows (in thousands):

Year Amount

2017 $ 1,182 2018 1,077 2019 1,144 2020 1,154 2021 1,231 Next five years 8,185

11. Income Taxes

The components of net income before income taxes consist of the following (in thousands):

Year Ended December 31, 2016 2015 2014

Bermuda $ – $ – $ – Foreign – Other 640,303 433,909 340,334

Net income before income taxes 640,303 433,909 340,334

86 APPENDIX I FINANCIAL INFORMATION OF NCLH

The components of the provision for income taxes consisted of the following (in thousands):

Year Ended December 31, 2016 2015 2014

Current: Bermuda $ – $ – $ – United States (8,736) (4,621) 9,162 Foreign – Other (2,166) (882) (3,278)

Total current: (10,902) (5,503) 5,884

Deferred: Bermuda – – – United States 3,684 (1,269) (3,617) Foreign – Other – – –

Total deferred: 3,684 (1,269) (3,617)

Income tax benefit (expense) $ (7,218) $ (6,772) $ 2,267

Our reconciliation of income tax benefit (expense) computed by applying our Bermuda statutory rate and reported income tax expense was as follows (in thousands):

Year Ended December 31, 2016 2015 2014

Tax at Bermuda statutory rate $ – $ – $ – Foreign income taxes at different rates (10,721) (7,864) (2,813) Tax contingencies (533) (283) (275) Return to provision adjustments 418 1,370 14,444 Benefit from change in tax status 24 5 1,462 Valuation allowance 3,594 – (10,551)

Income tax benefit (expense) $ (7,218) $ (6,772) $ 2,267

Deferred tax assets and liabilities were as follows (in thousands):

As of December 31, 2016 2015

Deferred tax assets: Loss carryforwards $ 103,191 $ 85,939 Other 1,564 1,460 Valuation allowance (64,573) (61,437)

Total net deferred assets 40,182 25,962

Deferred tax liabilities: Property and equipment (44,398) (33,862)

Total deferred tax liabilities (44,398) (33,862)

Net deferred tax liability $ (4,216) $ (7,900)

87 APPENDIX I FINANCIAL INFORMATION OF NCLH

We have U.S. net operating loss carryforwards of $256.3 million and $197.0 million, for the years ended December 31, 2016 and 2015, respectively, which begin to expire in 2023. We have state net operating loss carryforwards of $12.4 million and $10.7 million for the years ended December 31, 2016 and 2015, respectively, which expire in the years 2025 through 2035. In 2016, based on the weight of available evidence, we reversed a valuation allowance in the amount of $3.6 million with respect to the U.S. deferred tax assets of one of our U.S. subsidiaries.

Included above are deferred tax assets associated with our operations in Norway for which we have provided a full valuation allowance. We have Norway net operating loss carryforwards of $22.9 million and $35.1 million for the years ended December 31, 2016 and 2015, respectively, which can be carried forward indefinitely.

Included above are deferred tax assets associated with our branch operations in the U.K. for which we have provided a full valuation allowance. We have U.K. net operating loss carryforwards of $9.5 million and $12.5 million for the years ended December 31, 2016 and 2015, respectively, which can be carried forward indefinitely.

On November 19, 2014, we acquired the stock of Prestige. Included above are deferred tax assets associated with Prestige, including net operating loss carryforwards of $151.2 million and $126.9 million for the years ended December 31, 2016 and 2015, respectively, which begin to expire in 2023. In 2014, we recorded a valuation allowance of $36.5 million with respect to the Prestige deferred tax assets based on the weight of available evidence. Section 382 of the Code may limit the amount of taxable income that can be offset by the Prestige NOL carryforwards.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):

As of December 31, 2016 2015

Unrecognized tax benefits, beginning of the year $ 11,174 $ 11,174 Gross increases in tax positions from prior periods 250 – Gross decreases in tax positions from prior periods (280) –

Unrecognized tax benefits, end of year $ 11,144 $ 11,174

If the $11.1 million unrecognized tax benefits at December 31, 2016 were recognized, our effective tax rate would be affected. We believe it is reasonably possible that the expiration of statute of limitations could result in significant reductions to our unrecognized tax benefits within 12 months of the reporting date. We recognize interest and penalties related to unrecognized tax benefits in income tax expense.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and foreign jurisdictions. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by authorities for years prior to 2011, except for years in which NOLs generated prior to 2011 are utilized.

88 APPENDIX I FINANCIAL INFORMATION OF NCLH

12. Commitments and Contingencies

Operating Leases

Total expense under non-cancelable operating lease commitments, primarily for offices, motor vehicles and office equipment was $15.0 million, $12.6 million and $9.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016, minimum annual rentals for non-cancelable leases with initial or remaining terms in excess of one year were as follows (in thousands):

Year Amount

2017 $ 15,759 2018 15,574 2019 15,130 2020 14,565 2021 14,284 Thereafter 76,279

Total minimum annual rentals $ 151,591

Rental payments applicable to such operating leases are recognized on a straight-line basis over the term of the lease.

Ship Construction Contracts

We have Norwegian Joy, Norwegian Bliss and one additional Breakaway Plus Class Ship on order for delivery in the spring of 2017, spring of 2018 and the fall of 2019, respectively. These ships will be amongst the largest in our fleet, each reaching approximately 164,600 Gross Tons. The combined contract price of these three ships is approximately €2.6 billion, or $2.7 billion based on the euro/U.S. dollar exchange rate as of December 31, 2016.

We have export credit financing in place that provides financing for 80% of their contract prices. We have an Explorer Class Ship on order with an original contract price of approximately €422.0 million, or approximately $443.8 million based on the euro/U.S. dollar exchange rate as of December 31, 2016. We have export credit financing in place that provides financing for 80% of the contract price. The Explorer Class Ship is expected to be delivered in the winter of 2020.

In connection with the contracts to build the ships, we do not anticipate any contractual breaches or cancellation to occur. However, if any would occur, it could result in, among other things, the forfeiture of prior deposits or payments made by us and potential claims and impairment losses which may materially impact our business, financial condition and results of operations.

As of December 31, 2016, minimum annual payments for non-cancelable ship construction contracts with initial or remaining terms in excess of one year were as follows (in thousands):

Year Amount

2017 $ 976,005 2018 981,534 2019 869,745 2020 326,711

Total minimum annual payments $ 3,153,995

89 APPENDIX I FINANCIAL INFORMATION OF NCLH

Port Facility Commitments

As of December 31, 2016, future commitments to pay for usage of certain port facilities were as follows (in thousands):

Year Amount

2017 $ 54,301 2018 36,584 2019 29,895 2020 30,360 2021 30,838 Thereafter 105,015

Total port facility future commitments $ 286,993

Other Commitments

The FMC requires evidence of financial responsibility for those offering transportation on passenger ships operating out of U.S. ports to indemnify passengers in the event of non-performance of the transportation. Accordingly, each of our three brands are required to maintain a $30.0 million third- party performance guarantee in respect of liabilities for non-performance of transportation and other obligations to passengers. The guarantee requirements are subject to additional consumer price index-based adjustments. Also, our brands have a legal requirement to maintain a security guarantee based on cruise business originated from the U.K. As of December 31, 2016, approximately British Pound Sterling 10.5 million was in place as a security guarantee. We also are required to establish financial responsibility by other jurisdictions to meet liability in the event of non-performance of our obligations to passengers from those jurisdictions.

Litigation

13. Other Income (Expense), Net

Other income (expense), net was $8.3 million in 2016, $46.7 million in 2015 and $10.9 million in 2014. In 2016, the expense was primarily related to $16.1 million of unrealized and realized losses on fuel swap derivative hedge contracts partially offset by $4.5 million of gains on foreign currency exchange and $3.9 million of gains on foreign currency exchange derivative hedge contracts. In 2015, the expense was primarily related to $30.7 million of losses from the dedesignation of certain fuel swap derivative hedge contracts and the ineffectiveness of settled fuel swaps in 2015. Also included in 2015 was an expense of $26.2 million related to the fair value adjustment of a foreign exchange collar which does not receive hedge accounting treatment partially offset by $11.0 million of foreign currency transaction gains. In 2014, the expense was primarily related to $7.2 million of losses on foreign currency exchange derivative hedge contracts and the fair value adjustment of a foreign exchange collar which does not receive hedge accounting treatment, $6.9 million of losses related to fuel swap derivative hedge contracts and $3.0 million of losses related to a deferred revenue adjustment partially offset by $6.0 million of gains on foreign currency exchange.

90 APPENDIX I FINANCIAL INFORMATION OF NCLH

14. Concentration Risk

We contract with a single vendor to provide many of our hotel and restaurant services including both food and labor costs. We incurred expenses of $137.2 million, $122.4 million and $11.4 million for the years ended December 31, 2016, 2015 and 2014, respectively, which are recorded in payroll and related in our consolidated statements of operations.

15. Supplemental Cash Flow Information

For the years ended December 31, 2016, 2015 and 2014, we paid interest and related fees of $303.2 million, $218.3 million and $233.5 million, respectively. For the year ended December 31, 2016, we had non-cash investing activities in connection with property and equipment of $26.7 million and for the year ended December 31, 2015, we had non-cash investing activities in connection with capital leases of $31.1 million. For the year ended December 31, 2015 and 2014 we had non-cash investing activities for capital expenditures of $41.1 million and $13.0 million, respectively. For the year ended December 31, 2014, we had a non-cash investing and financing activity related to a seller financed capital expenditure of $82.0 million. For the years ended December 31, 2016, 2015 and 2014, we paid income taxes of $8.8 million, $10.3 million and $9.8 million, respectively.

16. Subsequent Events

In February 2017, we announced that we plan to introduce an additional four ships with expected delivery dates through 2025 and we have an option to introduce two additional ships for delivery in 2026 and 2027, subject to certain conditions. These four ships are each 140,000 gross tons with approximately 3,300 Berths. The contract price for each of the four ships is approximately €800.0 million, subject to certain conditions, or $841.4 million based on the exchange rate as of December 31, 2016. We have obtained export credit financing for the four ships to fund approximately 80% of the contract price of each ship expected to be delivered through 2025, subject to certain conditions.

17. Quarterly Selected Financial Data (Unaudited) (in thousands, except per share data)

First Quarter Second Quarter Third Quarter Fourth Quarter 2016 2015 2016 2015 2016 2015 2016 2015

Total revenue $1,077,632 $ 938,182 $1,186,835 $1,085,433 $1,484,736 $1,284,910 $1,125,137 $1,036,523 Operating income 131,282 60,349 227,018 217,383 413,614 306,832 153,550 117,922 Net income (loss) attributable to Norwegian Cruise Line Holdings Ltd. 73,229 (21,456) 145,246 158,494 342,378 251,787 72,232 38,312 Earnings (loss) per share: Basic $ 0.32 $ (0.10) $ 0.64 $ 0.70 $ 1.51 $ 1.11 $ 0.32 $ 0.17 Diluted $ 0.32 $ (0.10) $ 0.64 $ 0.69 $ 1.50 $ 1.09 $ 0.32 $ 0.17

91 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Operations (in thousands, except share and per share data)

Year Ended December 31, 2015 2014 2013

Revenue Passenger ticket $ 3,129,075 $ 2,176,153 $ 1,784,439 Onboard and other 1,215,973 949,728 785,855

Total revenue 4,345,048 3,125,881 2,570,294

Cruise operating expense Commissions, transportation and other 765,298 503,722 455,816 Onboard and other 272,802 224,000 195,526 Payroll and related 666,110 452,647 340,430 Fuel 358,650 326,231 303,439 Food 179,641 168,240 136,785 Other 412,948 271,784 225,663

Total cruise operating expense 2,655,449 1,946,624 1,657,659

Other operating expense Marketing, general and administrative 554,999 403,169 301,155 Depreciation and amortization 432,114 273,147 215,593

Total other operating expense 987,113 676,316 516,748

Operating income 702,486 502,941 395,887

Non-operating income (expense) Interest expense, net (221,909) (151,754) (282,602) Other income (expense) (46,668) (10,853) 1,403

Total non-operating income (expense) (268,577) (162,607) (281,199)

92 APPENDIX I FINANCIAL INFORMATION OF NCLH

Year Ended December 31, 2015 2014 2013

Net income before income taxes 433,909 340,334 114,688 Income tax benefit (expense) (6,772) 2,267 (11,802)

Net income 427,137 342,601 102,886 Net income attributable to non-controlling interest – 4,249 1,172

Net income attributable to Norwegian Cruise Line Holdings Ltd. $ 427,137 $ 338,352 $ 101,714

Weighted-average shares outstanding Basic 226,591,437 206,524,968 202,993,839

Diluted 230,040,132 212,017,784 209,239,484

Earnings per share Basic $ 1.89 $ 1.64 $ 0.50

Diluted $ 1.86 $ 1.62 $ 0.49

The accompanying notes are an integral part of these consolidated financial statements.

93 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Comprehensive Income (in thousands)

Year Ended December 31, 2015 2014 2013

Net income $ 427,137 $ 342,601 $ 102,886

Other comprehensive income (loss): Shipboard Retirement Plan 1,102 (2,311) 2,538 Cash flow hedges: Net unrealized gain (loss) related to cash flow hedges (262,852) (238,436) 2,247 Amount realized and reclassified into earnings 91,742 13,354 (4,128)

Total other comprehensive income (loss) (170,008) (227,393) 657

Total comprehensive income 257,129 115,208 103,543 Comprehensive income attributable to non-controlling interest – 2,808 900

Comprehensive income attributable to Norwegian Cruise Line Holdings Ltd. $ 257,129 $ 112,400 $ 102,643

The accompanying notes are an integral part of these consolidated financial statements.

94 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Balance Sheets (in thousands, except share data)

December 31, 2015 2014

Assets Current assets: Cash and cash equivalents $ 115,937 $ 84,824 Accounts receivable, net 44,996 32,432 Inventories 58,173 56,555 Prepaid expenses and other assets 121,305 109,924

Total current assets 340,411 283,735

Property and equipment, net 9,458,805 8,623,773 Goodwill 1,388,931 1,388,931 Tradenames 817,525 817,525 Other long-term assets 259,085 355,032

Total assets $ 12,264,757 $ 11,468,996

Liabilities and shareholders’ equity Current liabilities: Current portion of long-term debt $ 629,840 $ 576,947 Accounts payable 51,369 101,983 Accrued expenses and other liabilities 640,568 552,514 Due to Affiliate 20,769 37,948 Advance ticket sales 1,023,973 817,207

Total current liabilities 2,366,519 2,086,599

Long-term debt 5,767,697 5,503,076 Due to Affiliate – 18,544 Other long-term liabilities 349,661 341,964

Total liabilities 8,483,877 7,950,183

95 APPENDIX I FINANCIAL INFORMATION OF NCLH

December 31, 2015 2014

Commitments and contingencies (Note 12) Shareholders’ equity: Ordinary shares, $.001 par value; 490,000,000 shares authorized; 232,179,786 shares issued and 227,815,301 shares outstanding at December 31, 2015 and 230,116,780 shares issued and 227,630,430 shares outstanding at December 31, 2014 232 230 Additional paid-in capital 3,814,536 3,702,344 Accumulated other comprehensive income (loss) (412,650) (242,642) Retained earnings 568,018 140,881 Treasury shares (4,364,485 and 2,486,350 ordinary shares at December 31, 2015 and December 31, 2014, respectively, at cost) (189,256) (82,000)

Total shareholders’ equity 3,780,880 3,518,813

Total liabilities and shareholders’ equity $ 12,264,757 $ 11,468,996

The accompanying notes are an integral part of these consolidated financial statements.

96 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Cash Flows (in thousands)

Year Ended December 31, 2015 2014 2013

Cash flows from operating activities Net income $ 427,137 $ 342,601 $ 102,886 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 450,335 304,877 245,111 Loss (gain) on derivatives 26,525 7,274 (861) Deferred income taxes, net 1,269 6,187 2,844 Gain on contingent consideration (43,400) – – Write-off of financing fees 4,070 15,628 36,357 Provision for bad debts and inventory 5,029 – – Share-based compensation expense 42,209 14,617 23,075 Changes in operating assets and liabilities excluding the impact of the Acquisition of Prestige: Accounts receivable, net (14,803) (7,256) (3,198) Inventories (4,408) (261) (4,034) Prepaid expenses and other assets (10,325) (6,373) (15,667) Accounts payable (50,730) 315 7,662 Accrued expenses and other liabilities (8,343) (18,061) 25,925 Advance ticket sales 218,260 (23,947) 55,181 Payment of original issue discount (1,647) – –

Net cash provided by operating activities 1,041,178 635,601 475,281

Cash flows from investing activities Acquisition of Prestige, net of cash received – (826,686) – Additions to property and equipment, net (1,121,984) (964,640) (877,282) Settlement of derivatives (83,519) (5,334) (17,569) Investment in intangible asset (750) – –

Net cash used in investing activities (1,206,253) (1,796,660) (894,851)

97 APPENDIX I FINANCIAL INFORMATION OF NCLH

Year Ended December 31, 2015 2014 2013

Cash flows from financing activities Repayments of long-term debt (1,569,313) (1,688,720) (2,393,613) Repayments to Affiliate (37,042) (37,043) (116,694) Proceeds from long-term debt 1,855,809 3,107,721 2,522,311 Proceeds from the issuance of ordinary shares, net – – 473,914 Proceeds from the exercise of share options 69,127 5,857 2,020 Proceeds from employee share purchase plan 858 – – Purchases of treasury shares (107,256) (82,000) – NCLC partnership tax distributions – (218) – Deferred financing fees and other (15,995) (116,181) (57,401)

Net cash provided by financing activities 196,188 1,189,416 430,537

Net increase in cash and cash equivalents 31,113 28,357 10,967 Cash and cash equivalents at beginning of year 84,824 56,467 45,500

Cash and cash equivalents at end of year $ 115,937 $ 84,824 $ 56,467

Supplemental disclosures (Note 15)

The accompanying notes are an integral part of these consolidated financial statements.

98 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Consolidated Statements of Changes in Shareholders’ Equity (in thousands)

Accumulated Additional Other Retained Total Ordinary Paid-in Comprehensive Earnings Treasury Non-controlling Shareholders’ Shares Capital Income (Loss) (Deficit) Shares Interest Equity

Balance, December 31, 2012 $ 25 $ 2,327,097 $ (17,619) $ (299,185) $ – $ 8,466 $ 2,018,784

Share-based compensation – 33,056 – – – 19 33,075 Transactions with Affiliates, net – (70) – – – – (70) Corporate Reorganization – (20,176) – – – 20,176 – IPO proceeds, net 179 473,735 – – – – 473,914 Proceeds from the exercise of share options 1 2,019 – – – – 2,020 Other comprehensive income – – 929 – – (272) 657 Net income – – – 101,714 – 1,172 102,886 Transfers from non-controlling interest – 7,203 – – – (7,203) –

Balance, December 31, 2013 205 2,822,864 (16,690) (197,471) – 22,358 2,631,266

Balance, December 31, 2014 230 3,702,344 (242,642) 140,881 (82,000) – 3,518,813 Share-based compensation – 42,209 – – – – 42,209 Proceeds from the exercise of share options 2 69,125 – – – – 69,127 Proceeds from employee share purchase plan – 858 – – – – 858 Treasury shares – – – – (107,256) – (107,256) Other comprehensive loss – – (170,008) – – – (170,008) Net income – – – 427,137 – – 427,137

Balance, December 31, 2015 $ 232 $ 3,814,536 $ (412,650) $ 568,018 $ (189,256) $ – $ 3,780,880

The accompanying notes are an integral part of these consolidated financial statements.

99 APPENDIX I FINANCIAL INFORMATION OF NCLH

Norwegian Cruise Line Holdings Ltd. Notes to the Consolidated Financial Statements

1. Description of Business and Organization

NCLH is a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. We have 22 ships with approximately 45,000 Berths and will introduce five additional ships through 2019. Our ships currently offer itineraries to more than 510 destinations worldwide.

Norwegian commenced operations from Miami in 1966. In February 2000, Genting HK acquired control of and subsequently became the sole owner of the Norwegian operations.

In November 2014, we completed the Acquisition of Prestige.

The Sponsors have completed numerous Secondary Equity Offerings and as of December 31, 2015 owned 29.3% of NCLH’s ordinary shares (we refer you to Note 8 – “Related Party Disclosures”).

100 APPENDIX I FINANCIAL INFORMATION OF NCLH

2. Summary of Significant Accounting Policies

Basis of Presentation

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and contain all normal recurring adjustments necessary for a fair statement of the results for the periods presented. Estimates are required for the preparation of consolidated financial statements in accordance with generally accepted accounting principles and actual results could differ from these estimates. All significant intercompany accounts and transactions are eliminated in consolidation.

Reclassification

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

Cash and Cash Equivalents

Restricted Cash

Restricted cash consists of cash collateral in respect of certain agreements and is included in prepaid expenses and other assets and other long-term assets in our consolidated balance sheets.

Accounts Receivable, Net

Accounts receivable are shown net of an allowance for doubtful accounts of $3.7 million and $2.8 million as of December 31, 2015 and 2014, respectively.

Inventories

Inventories mainly consist of provisions, supplies and fuel and are carried at the lower of cost or market using the first-in, first-out method of accounting.

Advertising Costs

Advertising costs are expensed as incurred except for those that result in tangible assets, including brochures, which are treated as prepaid expenses and charged to expense as consumed. Advertising costs of $12.5 million and $14.3 million as of December 31, 2015 and 2014, respectively, are included in prepaid expenses and other assets. Expenses related to advertising costs totaled $232.2 million, $122.5 million and $89.0 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Earnings Per Share

101 APPENDIX I FINANCIAL INFORMATION OF NCLH

Year Ended December 31, 2015 2014 2013

Net income attributable to Norwegian Cruise Line Holdings Ltd. $ 427,137 $ 338,352 $ 101,714

Net income $ 427,137 $ 342,601 $ 102,886

Basic weighted-average shares outstanding 226,591,437 206,524,968 202,993,839 Potentially dilutive shares 3,448,695 5,492,816 6,245,645

Diluted weighted-average shares outstanding 230,040,132 212,017,784 209,239,484

Basic EPS $ 1.89 $ 1.64 $ 0.50 Diluted EPS $ 1.86 $ 1.62 $ 0.49

Property and Equipment, Net

Depreciation is computed on the straight-line basis over the estimated useful lives of the assets and after a 15% reduction for the estimated residual values of ships as follows:

Useful Life

Ships 30 years Computer hardware and software 3-10 years Other property and equipment 3-40 years Leasehold improvements Shorter of lease term or asset life

Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or related asset life.

Goodwill and Tradenames

Goodwill represents the excess of cost over the fair value of net assets acquired. Goodwill and other indefinite-lived assets, principally tradenames, are reviewed for impairment on an annual basis or earlier if there is an event or change in circumstances that would indicate that the carrying value of these assets could not be fully recovered. We use the Step 0 Test which allows us to first assess qualitative factors to determine whether it is more likely than not (i.e., more than 50%) that the fair value of a reporting unit is less than its carrying value. In order to make this evaluation, we consider the following circumstances as well as others:

102 APPENDIX I FINANCIAL INFORMATION OF NCLH

• Changes in cost factors that have a negative effect on earnings and cash flows;

• Overall financial performance (for both actual and expected performance);

• Entity and reporting unit specific events such as changes in management, key personnel, strategy, or customers; litigation; or a change in the composition or carrying amount of net assets; and

• Share price (in both absolute terms and relative to peers).

Revenue and Expense Recognition

Revenue and expenses include port fees and taxes. The amounts included on a gross basis are $242.1 million, $212.3 million and $172.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Foreign Currency

The majority of our transactions are settled in U.S. dollars. We translate assets and liabilities of our foreign subsidiaries at exchange rates in effect at the balance sheet date. Gains or losses resulting from transactions denominated in other currencies are recognized in our consolidated statements of operations within other income (expense) and such gains were approximately $11.0 million, $6.0 million and $0.4 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Derivative Instruments and Hedging Activity

A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability may be designated as a cash flow hedge. Changes in fair value of derivative instruments that are designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) until the underlying hedged transactions are recognized in earnings. To the extent that an instrument is not effective as a hedge, gains and losses are recognized in other income (expense) in our consolidated statements of operations. Realized gains and losses related to our effective fuel hedges are recognized in fuel expense. For presentation in our consolidated statements of cash flows, we have elected to classify the cash flows from our cash flow hedges in the same category as the cash flows from the items being hedged.

103 APPENDIX I FINANCIAL INFORMATION OF NCLH

Concentrations of Credit Risk

We monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. Credit risk, including but not limited to counterparty non-performance under derivative instruments, our revolving credit facility and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions and insurance companies that we have well-established relationships with and that have credit risks acceptable to us or the credit risk is spread out among a large number of creditors. We do not anticipate non-performance by any of our significant counterparties.

Insurance

We use a combination of insurance and self-insurance for a number of risks including claims related to crew and guests, hull and machinery, war risk, workers’ compensation, property damage and general liability. Liabilities associated with certain of these risks, including crew and passenger claims, are estimated actuarially based upon known facts, historical trends and a reasonable estimate of future expenses. While we believe these accruals are adequate, the ultimate losses incurred may differ from those recorded.

Income Taxes

Share-Based Compensation

We recognize expense for our share-based compensation awards using a fair-value-based method. Share-based compensation expense is recognized over the requisite service period for awards that are based on service period and not contingent upon any future performance. We refer you to Note 10 – “Employee Benefits and Share Option Plans.”

Segment Reporting

We have concluded that our business has a single reportable segment. Each brand, Oceania Cruises, Regent and Norwegian, constitutes a business for which discrete financial information is available and management regularly reviews the operating results and, therefore, each brand is considered an operating segment. Our operating segments have similar economic and qualitative characteristics, including similar margins and similar products and services; therefore, we aggregate all of the operating segments into one reportable segment.

Although we sell cruises on an international basis, our passenger ticket revenue is primarily attributed to U.S.-sourced guests who make reservations in the U.S. Revenue attributable to U.S.-sourced guests was 75%, 73% and 74% for the years ended December 31, 2015, 2014 and 2013, respectively. No other individual country’s revenues exceeded 10% in any of our last three years. Substantially all of our long-lived assets are located outside of the U.S. and consist primarily of our ships. We have 16 ships with Bahamas registry with a carrying value of $7.2 billion and $6.4 billion as of December 31, 2015 and 2014, respectively. We have five ships with Marshall Island registry with a carrying value of $1.4 billion as of December 31, 2015 and 2014. We also have one ship with U.S. registry with a carrying value of $0.3 billion as of December 31, 2015 and 2014 and one ship with Bermuda registry with a carrying value of $0.08 billion as of December 31, 2015 and 2014.

Recently Issued Accounting Policies

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015- 11 to simplify the measurement of inventory for all entities. This applies to all inventory that is measured using either the first-in, first-out or average cost method. The guidance requires an entity to measure inventory at the lower of cost or net realizable value. The guidance must be applied prospectively and will be effective for our interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of an interim or annual reporting period. We are currently evaluating the impact of the adoption of this newly issued guidance to our consolidated financial statements.

104 APPENDIX I FINANCIAL INFORMATION OF NCLH

An entity can elect to adopt the amendments either prospectively or retrospectively. We are currently evaluating the impact, if any, of the adoption of this newly issued guidance to our consolidated financial statements.

In May 2014, FASB issued ASU No. 2014-09 which requires entities to recognize revenue through the application of a five-step model, including identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligation and recognition of revenue as the entity satisfies the performance obligations. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. In August 2015, the FASB issued ASU No. 2015-14 deferring the effective date for one year. We can elect to adopt the provisions of ASU No. 2014-09 for annual periods beginning after December 15, 2017 including interim periods within that reporting period or we can elect to early adopt the guidance as of the original effective date. We are currently evaluating the impact of the adoption of this newly issued guidance to our consolidated financial statements.

3. Goodwill and Intangible Assets

Goodwill and tradenames are not subject to amortization, therefore, as of December 31, 2015 and 2014 the carrying values were $1.4 billion and $0.8 billion, respectively. We revised the classification of goodwill and intangible assets to separately present goodwill and tradenames. Other intangible assets consisting of customer relationships and backlog are presented within other long-term assets. The revision was not deemed material to the Consolidated Balance Sheet.

December 31, 2015 Weighted- Gross Average Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years)

Customer relationship $ 120,000 $ (15,527) $ 104,473 6.0 Backlog 70,000 (70,000) – 1.0 Licenses 3,368 (208) 3,160 5.6

Total intangible assets subject to amortization $ 193,368 $ (85,735) $ 107,633

License (Indefinite-lived) $ 4,427 $ – $ –

December 31, 2014 Weighted- Gross Average Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years)

Customer relationship $ 120,000 $ (4,556) $ 115,444 6.0 Backlog 70,000 (7,972) 62,028 1.0

Total intangible assets subject to amortization $ 190,000 $ (12,528) $ 177,472

License (Indefinite-lived) $ 4,427 $ – $ –

105 APPENDIX I FINANCIAL INFORMATION OF NCLH

The aggregate amortization expense is as follows (in thousands):

Year Ended December 31, 2015 2014

Amortization expense $ 73,207 $ 12,528

The following table sets forth the Company’s estimated aggregate amortization expense for each of the five years below (in thousands):

Amortization Year ended December 31, Expense

2016 $ 21,659 2017 31,177 2018 26,058 2019 18,489 2020 9,906

4. The Acquisition of Prestige

On September 2, 2014, NCLH entered into an agreement with funds affiliated with Apollo and other owners to acquire 100% of the equity of Prestige.

The Acquisition of Prestige and the principal factors that contribute to the recognition of goodwill are enhancements of our financial profile by creating a company with increased economies of scale, greater operating leverage and synergies. These synergies include revenue enhancements and opportunities for savings in various areas. The Acquisition of Prestige also creates a company with greater cash flow generation, accelerating the ability to delever our balance sheet.

On November 19, 2014, we completed the Acquisition of Prestige. Consideration consisted of $1.1 billion in cash and non-cash considerations of 19,969,889 NCLH ordinary shares valued at $834.1 million based on the closing market price of NCLH’s shares as of November 18, 2014 and contingent consideration valued at $43.4 million. In addition, we assumed debt of $1.6 billion from Prestige. The contingent consideration arrangement subjected NCLH to an additional cash payment of up to $50 million upon achievement of certain 2015 revenue milestones. The contingent consideration was valued using various projected 2015 revenue scenarios weighted by the likelihood of each scenario occurring. The probability weighted payout was then discounted at an appropriate discount rate commensurate for the risk of meeting the probabilistic cash flows. For more on the contingent consideration valuation, we refer you to “Valuation of Contingent Consideration” below.

Based on this fair valuation, the purchase price is allocated as follows (in thousands):

106 APPENDIX I FINANCIAL INFORMATION OF NCLH

Consideration Allocated:

Total consideration allocated, net of $295.8 million of cash acquired $ 1,704,228

Goodwill and intangible assets acquired include the following (in thousands):

Goodwill $ 985,126 Tradenames (indefinite lived) 610,000 Backlog (1 year amortization period) 70,000 Customer relationships (6 year amortization period) 120,000

Pro forma Financial Information (unaudited)

The following unaudited pro forma financial information presents the combined results of operations of NCLH and Prestige as if the Acquisition of Prestige had occurred on January 1, 2013. The pro forma results presented below for 2014 and 2013 combine the historical results of NCLH and Prestige for 2014 and 2013. The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations or financial condition that would have been reported had the Acquisition of Prestige been completed as of January 1, 2013 and should not be taken as indicative of our future consolidated results of operations or financial condition.

The unaudited pro forma financial information was as follows (in thousands, except per share data):

Year Ended December 31, 2014 2013

Total revenue $ 4,310,079 $ 3,704,692 Net income (loss) attributable to Norwegian Cruise Line Holdings Ltd. 497,020 (683) Earnings per share: Basic $ 2.21 $ – Dilutive $ 2.19 $ –

Valuation of Contingent Consideration

The contingent consideration is valued using various projected 2015 net revenue scenarios weighted by the likelihood of each scenario occurring. The probability-weighted payout is then discounted at an appropriate discount rate commensurate for the risk of meeting the probabilistic cash flows. As the fair value is measured based upon significant inputs that are unobservable in the market, it was classified as Level 3 in the fair value hierarchy. Level 3 consists of significant unobservable inputs we believe market participants would use in pricing the asset or liability based on the best information available. The significant unobservable

107 APPENDIX I FINANCIAL INFORMATION OF NCLH

inputs used in the fair value measurement of the Company’s contingent consideration are the estimated annual net revenue and the probabilities associated with attaining the threshold and target net revenue as defined by the Merger Agreement. A significant increase in the estimated net revenue or an increase in the probability associated with reaching the target would result in a significantly higher fair value measurement. The maximum fair value would not be able to exceed $50 million, while an amount of net revenue less than 98% of target would result in no payout. For the year ended December 31, 2015, the fair value of the contingent consideration was reduced to zero based upon updates to the probability-weighted assessment of various projected revenue scenarios. The net revenue target was not met, and accordingly, we recognized a $43.4 million fair value adjustment during the year ended December 31, 2015, which was included in marketing, general and administrative expense.

The following table summarizes the change in fair value of the contingent consideration liability (in thousands):

Contingent Consideration Liability

Balance as of December 31, 2014 $ 43,400 Fair value adjustment (Level 3) (43,400)

Balance as of December 31, 2015 $ –

5. Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) for the year ended December 31, 2015 was as follows (in thousands):

Accumulated Change Change Other Related to Related to Comprehensive Cash Flow Shipboard Income (Loss) Hedges Retirement Plan

Accumulated other comprehensive income (loss) at beginning of period $ (242,642) $ (234,188) $ (8,454) Current period other comprehensive loss before reclassifications (262,227) (262,852) 625 Amounts reclassified 92,219 91,742(1) 477(2)

Accumulated other comprehensive income (loss) at end of period $ (412,650) $ (405,298)(3) $ (7,352)

(1) We refer you to Note 9 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

(3) Of the existing amounts related to derivatives designated as cash flow hedges, approximately $135.2 million of loss is expected to be reclassified into earnings in the next 12 months.

108 APPENDIX I FINANCIAL INFORMATION OF NCLH

Accumulated other comprehensive income (loss) for the year ended December 31, 2014 was as follows (in thousands):

Accumulated Change Change Other Related to Related to Comprehensive Cash Flow Shipboard Income (Loss) Hedges Retirement Plan

Accumulated other comprehensive income (loss) at beginning of period $ (16,690) $ (10,532) $ (6,158) Current period other comprehensive loss before reclassifications (239,597) (236,925) (2,672) Amounts reclassified 13,645 13,269(1) 376(2)

Accumulated other comprehensive income (loss) at end of period $ (242,642) $ (234,188) $ (8,454)

(1) We refer you to Note 9 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

Accumulated other comprehensive income (loss) for the year ended December 31, 2013 was as follows (in thousands):

Accumulated Change Change Other Related to Related to Comprehensive Cash Flow Shipboard Income (Loss) Hedges Retirement Plan

Accumulated other comprehensive income (loss) at beginning of period $ (17,619) $ (7,872) $ (9,747) Current period other comprehensive income before reclassifications 6,104 3,177 2,927 Amounts reclassified (5,175) (5,837)(1) 662(2)

Accumulated other comprehensive income (loss) at end of period $ (16,690) $ (10,532) $ (6,158)

(1) We refer you to Note 9 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense.

109 APPENDIX I FINANCIAL INFORMATION OF NCLH

6. Property and Equipment, Net

Property and equipment consisted of the following (in thousands):

December 31, 2015 2014

Ships $ 10,765,525 $ 9,706,093 Ships under construction 300,575 290,381 Land 1,009 1,009 Other 434,881 351,377

11,501,990 10,348,860 Less: accumulated depreciation and amortization (2,043,185) (1,725,087)

Property and Equipment, Net $ 9,458,805 $ 8,623,773

The increase in Ships was primarily due to the addition of Norwegian Escape. Depreciation and amortization expense for the years ended December 31, 2015, 2014 and 2013 was $432.1 million, $273.1 million and $215.6 million, respectively. Repairs and maintenance expenses including Dry-dock expenses were $124.8 million, $69.9 million and $67.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Ships under construction include progress payments to the shipyard, planning and design fees, loan interest and commitment fees and other associated costs. Interest costs associated with the construction of ships that were capitalized during the construction period amounted to $31.9 million, $22.0 million and $26.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.

7. Long-Term Debt

Long-term debt consisted of the following:

Interest Rate December 31, Maturities Balance December 31, 2015 2014 Through 2015 2014 (in thousands)

$600.0 million 4.625% senior unsecured notes 4.625% –% 2020 $ 590,037 $ – €662.9 million Norwegian Epic term loan (1) 2.43% 2.02% 2022 460,870 524,006 $625.0 million senior secured revolving credit facility 2.78% 2.16% 2018 75,000 200,000 $350.0 million senior secured term loan facility 4.00% 4.00% 2021 338,353 340,474 $1,375.0 million term loan facility 2.85% 2.17% 2018 1,185,720 1,301,210 €308.1 million Pride of Hawai’i loan (1) 1.27% 1.18% 2018 89,867 123,638 $300.0 million 5.00% senior unsecured notes (2) – 5.00% 2018 – 294,746 $334.1 million Norwegian Jewel term loan 1.28% 1.18% 2017 53,534 78,545 €258.0 million Pride of America Hermes loan (1) 1.64% 1.19% 2017 37,778 61,313 €529.8 million Breakaway one loan (1) 1.92% 1.84% 2025 522,859 576,266 €529.8 million Breakaway two loan (1) 4.50% 4.50% 2026 592,531 647,258 €590.5 million Breakaway three loan (1) 2.98% 2.98% 2027 711,187 121,278 €590.5 million Breakaway four loan (1) 2.98% 2.98% 2029 108,964 35,057 €126 million Norwegian Jewel term loan (1) 1.27% 1.18% 2017 28,649 56,382 €126 million Norwegian Jade term loan (1) 1.27% 1.18% 2017 29,149 56,991 €666 million Seahawk 1 term loan (1) 3.92% 3.92% 2030 40,845 40,845 €666 million Seahawk 2 term loan (1) 3.92% 3.92% 2031 40,845 40,845 $680 million 5.25% senior unsecured notes 5.25% 5.25% 2019 670,059 667,559 Sirena loan 2.75% 2.75% 2019 53,229 82,000

110 APPENDIX I FINANCIAL INFORMATION OF NCLH

Interest Rate December 31, Maturities Balance December 31, 2015 2014 Through 2015 2014 (in thousands)

Marina newbuild loan (3) 1.01% 0.88% 2023 335,135 379,868 Riviera newbuild loan (4) 1.08% 0.87% 2024 382,173 427,184 Capital lease and license obligations 1.62%-12.56% 1.62%-12.935% 2022 50,753 24,558

Total debt 6,397,537 6,080,023 Less: current portion of long-term debt (629,840) (576,947)

Total long-term debt $ 5,767,697 $ 5,503,076

(1) Currently U.S. dollar-denominated.

(2) Net of unamortized original issue discount of $1.1 million as of December 31, 2014.

(3) Includes premium of $0.3 million and $0.4 million as of December 31, 2015 and 2014, respectively.

(4) Includes premium of $0.4 million and $0.5 million as of December 31, 2015 and 2014, respectively.

In October 2015, we took delivery of Norwegian Escape. To finance the payment due upon delivery, we drew $577.2 million of our €590.5 million Breakaway three loan due 2027. The loan bears interest at 2.98%.

In November 2015, we issued the $600.0 million 4.625% senior unsecured notes due 2020 and redeemed our $300.0 million 5.00% senior unsecured notes due 2018.

In December 2015, we adopted ASU No. 2015-03 which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. We also adopted ASU No. 2015-15 which allows an entity to defer and present debt issuance costs related to a line of credit arrangement as an asset. These deferred costs are amortized over the life of the loan agreement. We applied this guidance on a retrospective basis.

The following is a reconciliation of changes to our long-term debt due to the adoption of ASU No. 2015-03 (in thousands):

December 31, 2015 2014

Long-term debt balance prior to the adoption of ASU No. 2015-03 $ 6,502,834 $ 6,184,104 Less: changes due to the adoption of the ASU No. 2015-03 105,297 104,081

Long-term debt balance $ 6,397,537 $ 6,080,023

In December 2015, we amended and increased our €666 million Seahawk 1 term loan and our €666 million Seahawk 2 term loan to €710.8 million and €706.8 million, respectively.

Interest expense, net for the year ended December 31, 2015 was $222.1 million which included $36.6 million of amortization and a $12.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2014 was $151.8 million which included $32.3 million of amortization and $15.4 million of expenses related to financing transactions in connection with the Acquisition of Prestige. For the year ended December 31, 2013, interest expense, net was $282.6 million which included amortization of $64.9 million (including a $37.3 million write-off of deferred financing fees).

Our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio, maintain certain other ratios and restrict our ability to pay dividends. Our ships and substantially all other property and equipment are pledged as collateral for substantially all of our debt. We believe we were in compliance with these covenants as of December 31, 2015.

111 APPENDIX I FINANCIAL INFORMATION OF NCLH

The following are scheduled principal repayments on long-term debt including capital lease obligations as of December 31, 2015 for each of the next five years (in thousands):

Year Amount

2016 $ 629,840 2017 591,270 2018 1,383,186 2019 1,051,847 2020 963,797 Thereafter 1,882,894

Total $ 6,502,834

We had an accrued interest liability of $34.2 million and $32.8 million as of December 31, 2015 and 2014, respectively.

8. Related Party Disclosures

Transactions with Genting HK, the Apollo Holders and the TPG Viking Funds

As of December 31, 2015, the ownership percentages of NCLH’s ordinary shares were as follows:

Number of Percentage Shareholder Shares Ownership

Genting HK (1) 25,398,307 11.1% Apollo Holders (2) 36,103,782 15.8% TPG Viking Funds (3) 5,329,834 2.4%

(1) Genting HK owns our ordinary shares indirectly through Star NCLC Holdings Ltd., a Bermuda wholly-owned subsidiary.

(2) The Apollo Holders include AAA Guarantor – Co-Invest VI (B), L.P., AIF VI NCL (AIV), L.P., AIF VI NCL (AIV II), L.P., AIF VI NCL (AIV III), L.P., AIF VI NCL (AIV IV), L.P., Apollo Overseas Partners (Delaware) VI, L.P., Apollo Overseas Partners (Delaware 892) VI, L.P., Apollo Overseas Partners VI, L.P., Apollo Overseas Partners (Germany) VI, L.P., AAA Guarantor – Co-Invest VII, L.P., AIF VI Euro Holdings, L.P., AIF VII Euro Holdings, L.P., Apollo Alternative Assets, L.P., Apollo Management VI, L.P. and Apollo Management VII, L.P.

In June 2012, we exercised our option with Genting HK to purchase Norwegian Sky. The purchase price was $259.3 million, which consisted of a $50.0 million cash payment and a $209.3 million payable to Genting HK, $79.7 million of such amount was paid to Genting HK within fourteen days of the consummation of the IPO, together with accrued interest thereon, and the remaining balance is to be repaid over seven equal semi-annual payments the first of which was due and paid in June 2013 and has a weighted-average interest rate of 1.52% through maturity. The fair value of the payable was $205.5 million based on discounting the future payments at an imputed interest rate of 2.26% per annum, which was commensurate with the Company’s borrowing rate for similar assets. The payable is collateralized by a mortgage and an interest in all earnings, proceeds of insurance and certain other interests related to the ship and is included in the balance sheet caption “Due to Affiliate” on our consolidated balance sheets. We have paid $240.8 million to Genting HK in connection with the Norwegian Sky Purchase Agreement through December 31, 2015.

112 APPENDIX I FINANCIAL INFORMATION OF NCLH

9. Fair Value Measurements and Derivatives

Fair Value Hierarchy

Level 1 Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement dates.

Level 2 Significant other observable inputs that are used by market participants in pricing the asset or liability based on market data obtained from independent sources.

Level 3 Significant unobservable inputs we believe market participants would use in pricing the asset or liability based on the best information available.

Derivatives

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We attempt to minimize these risks through a combination of our normal operating and financing activities and through the use of derivatives. We assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the cash flow of our hedged forecasted transactions. We use regression analysis for this hedge relationship and high effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the fair values of the derivative and the hedged forecasted transaction. Cash flows from the derivatives are classified in the same category as the cash flows from the underlying hedged transaction. The determination of ineffectiveness is based on the amount of dollar offset between the cumulative change in fair value of the derivative and the cumulative change in fair value of the hedged transaction at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge, or if the hedged forecasted transaction is no longer probable of occurring, then the amount recognized in accumulated other comprehensive income (loss) is released to earnings. In addition, the ineffective portion of our highly effective hedges is recognized in earnings immediately and reported in other income (expense) in our consolidated statements of operations. There are no amounts excluded from the assessment of hedge effectiveness and there are no credit-risk-related contingent features in our derivative agreements.

We monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. Credit risk, including but not limited to counterparty non-performance under derivatives and our revolving credit facility, is not considered significant, as we primarily conduct business with large, well-established financial institutions that we have established relationships with and that have credit risks acceptable to us or the credit risk is spread out among a large number of creditors. We do not anticipate non-performance by any of our significant counterparties.

113 APPENDIX I FINANCIAL INFORMATION OF NCLH

The following table sets forth our derivatives measured at fair value and discloses the balance sheet location (in thousands):

Asset Liability December 31, December 31, December 31, December 31, Balance Sheet location 2015 2014 2015 2014

Fuel swaps designated as Accrued expenses and other $ – $ – $ 128,740 $ 111,304 hedging instruments liabilities Other long-term liabilities – 190 132,494 77,250

Foreign currency forward Other long-term assets 3,446 – 1,370 – contracts designated as Accrued expenses and other – – 8,737 29,498 hedging instruments liabilities Other long-term liabilities 551 – 24,181 118

Foreign currency collar not Accrued expenses and other – – 42,993 – designated as a hedging liabilities instrument Other long-term liabilities – – – 16,744

Interest rate swaps designated Accrued expenses and other – – 4,079 5,736 as hedging instruments liabilities Other long-term liabilities – – 3,395 3,104

Interest rate swap not Accrued expenses and other – – – 3,823 designated as a hedging liabilities instrument

Our derivative contracts include rights of offset with our counterparties when right of offset exists. We have elected to net certain assets and liabilities within counterparties. We are not required to post cash collateral related to our derivative instruments.

The following table discloses the gross and net amounts recognized within assets and liabilities (in thousands):

Gross Gross Gross Amounts Total Net Amounts Not December 31, 2015 Amounts Offset Amounts Offset Net Amounts

Assets $ 3,446 $ (1,370) $ 2,076 $ (2,043) $ 33 Liabilities 344,619 (551) 344,068 (336,645) 7,423

Gross Gross Gross Amounts Total Net Amounts Not December 31, 2014 Amounts Offset Amounts Offset Net Amounts

Liabilities $ 247,577 $ (190) $ 247,387 $ (59,023) $ 188,364

114 APPENDIX I FINANCIAL INFORMATION OF NCLH

Fuel Swaps

As of December 31, 2015, we had fuel swaps maturing through December 31, 2019 which are used to mitigate the financial impact of volatility in fuel prices pertaining to approximately 1.6 million metric tons of our projected fuel purchases.

The effects on the consolidated financial statements of the fuel swaps which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Gain (loss) recognized in other comprehensive income (loss) – effective portion $ (173,513) $ (198,595) $ 8,532 Loss recognized in other income (expense) – ineffective portion (16,011) (5,753) (345) Amount reclassified from accumulated other comprehensive income (loss) into fuel expense 75,808 8,388 (6,250)

During 2015 certain fuel swaps matured that were previously designated as cash flow hedges and were dedesignated due to a change in our expected future fuel purchases mix.

The effects on the consolidated financial statements of the fuel swaps which were dedesignated and recognized into earnings were as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Amount reclassified from accumulated other comprehensive income (loss) into other income (expense) $ 10,000 $ – $ – Loss recognized in other income (expense) (4,727) – –

Fuel Collars and Options

We had fuel collars and fuel options maturing through December 2014 which were used to mitigate the financial impact of volatility in fuel prices of our fuel purchases. The effects on the consolidated financial statements of the fuel collars which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Loss recognized in other comprehensive income (loss) – effective portion $ – $ (1,024) $ (1,152) Loss recognized in other income (expense) – ineffective portion – (292) (26) Amount reclassified from accumulated other comprehensive income (loss) into fuel expense 248 1,888 1,547

The effects on the consolidated financial statements of the fuel options which were not designated as hedging instruments were as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Gain (loss) recognized in other income (expense) $ – $ (864) $ 1,340

115 APPENDIX I FINANCIAL INFORMATION OF NCLH

Foreign Currency Options

We had foreign currency options that matured through January 2014, which consisted of call options with deferred premiums. These options were used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. If the spot rate at the date the ships were delivered was less than the strike price under these option contracts, we would have paid the deferred premium and would not exercise the foreign currency options. The effects on the consolidated financial statements of the foreign currency options which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Loss recognized in other comprehensive income (loss) – effective portion $ – $ (1,157) $ (3,304) Loss recognized in other income (expense) – ineffective portion – (241) (97) Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense 1,320 1,269 470

Foreign Currency Forward Contracts

As of December 31, 2015, we had foreign currency forward contracts which are used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts and forecasted Dry-dock payments denominated in euros. The notional amount of our foreign currency forward contracts was €1.1 billion, or $1.2 billion based on the euro/U.S. dollar exchange rate as of December 31, 2015.

The effects on the consolidated financial statements of the foreign currency forward contracts which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Loss recognized in other comprehensive income (loss) – effective portion $ (84,187) $ (30,686) $ (2,983) Gain (loss) recognized in other income (expense) – ineffective portion (343) (7) 67 Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense 116 (243) (84)

The effects on the consolidated financial statements of the foreign currency forward contracts which were not designated as hedging instruments were as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Gain recognized in other income (expense) $ 684 $ – $ 20

Foreign Currency Collar

We had a foreign currency collar that matured in January 2014, which was used to mitigate the volatility of foreign currency exchange rates related to our ship construction contracts denominated in euros. The effects on the consolidated financial statements of the foreign currency collar which was designated as a cash flow hedge was as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Gain (loss) recognized in other comprehensive income (loss) – effective portion $ – $ (1,588) $ 4,350 Amount reclassified from accumulated comprehensive income (loss) into depreciation and amortization expense (364) (333) –

116 APPENDIX I FINANCIAL INFORMATION OF NCLH

As of December 31, 2015, we had a foreign currency collar used to mitigate the volatility of foreign currency exchange rates related to our ship construction contracts denominated in euros. The notional amount of our foreign currency collar was €274.4 million, or $298.1 million based on the euro/U.S. dollar exchange rate as of December 31, 2015. The effects on the consolidated financial statements of the foreign currency collar which was not designated as a hedging instrument was as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Loss recognized in other income (expense) $ (26,249) $ (6,980) $ –

Interest Rate Swaps

As of December 31, 2015, we had interest rate swap agreements to hedge our exposure to interest rate movements and to manage our interest expense. The notional amount of outstanding debt associated with the interest rate swap agreements was $715.9 million.

The effects on the consolidated financial statements of the interest rates swaps which were designated as cash flow hedges were as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Loss recognized in other comprehensive income (loss) – effective portion $ (5,152) $ (5,386) $ (3,196) Loss recognized in other income (expense) – ineffective portion (23) – – Amount reclassified from other comprehensive income (loss) into interest expense, net 4,614 2,385 189

The effects on the consolidated financial statements of the interest rates swap contract which was not designated as a hedging instrument was as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Loss recognized in other income (expense) $ (2) $ (3) $ –

Other

The carrying amounts reported in the consolidated balance sheets of all other financial assets and liabilities approximate fair value.

Long-Term Debt

As of December 31, 2015 and 2014, the fair value of our long-term debt, including the current portion, was $6,495.5 million and $6,229.1 million, respectively, which was $6.6 million lower and $45.0 million higher, respectively, than the carrying values. The difference between the fair value and carrying value of our long-term debt is due to our fixed and variable rate debt obligations carrying interest rates that are above or below market rates at the measurement dates. The fair value of our long-term debt was calculated based on estimated rates for the same or similar instruments with similar terms and remaining maturities resulting in Level 2 inputs in the fair value hierarchy. Market risk associated with our long-term variable rate debt is the potential increase in interest expense from an increase in interest rates. The calculation of the fair value of our long-term debt is considered a Level 2 input.

Non-recurring Measurements of Non-financial Assets

117 APPENDIX I FINANCIAL INFORMATION OF NCLH

We believe our estimates and judgments with respect to our long-lived assets, principally ships, and goodwill and other indefinite-lived intangible assets are reasonable. Nonetheless, if there was a material change in assumptions used in the determination of such fair values or if there is a material change in the conditions or circumstances that influence such assets, we could be required to record an impairment charge. We estimate fair value based on the best information available making whatever estimates, judgments and projections considered necessary. For our Step I Test, the estimation of fair value measured by discounting expected future cash flows at discount rates commensurate with the risk involved are considered Level 3 inputs. As of December 31, 2015, our annual review supports the carrying value of these assets. As of December 31, 2014, goodwill increased $985.1 million and intangible assets increased $800.0 million due to the Acquisition of Prestige (we refer you to Note 4 – “The Acquisition of Prestige”).

10. Employee Benefits and Share Option Plans

Management NCL Corporation Units

The termination of employment may result in forfeiture of any non-vested TBUs and all PBUs. TBUs that were vested can be either continued by the Company or cancelled and paid to the employee. Cancellation could take place any time after termination but not before two years after the grant date.

As a result of the secondary offering during August 2015, the last hurdle amount specified in the profits sharing agreement was reached and as such all outstanding PBUs vested.

118 APPENDIX I FINANCIAL INFORMATION OF NCLH

Share Option Awards

In January 2013, the Company adopted a 2013 performance incentive plan which provides for the issuance of up to 15,035,106 of NCLH’s share options and ordinary shares, with no more than 5,000,000 shares being granted to one individual in any calendar year. Share options are generally granted with an exercise price equal to the closing market price of NCLH shares at the date of grant. The vesting period is typically set at 3, 4 or 5 years with a contractual life ranging from 7 to 10 years. Forfeited awards are added back to the approved reserve.

In July 2015, we granted 3.5 million share option awards to our employees at an exercise price of $56.19 with a contractual term of ten years. The share options vest equally over three years.

In August 2015, we granted 0.7 million share option awards to our employees at an exercise price of $59.43 with a contractual term of ten years. The share options vest equally over three years. In addition, on August 4, 2015, we entered into an amendment to the employment agreement with our President and Chief Executive Officer pursuant to which we awarded 625,000 time-based share option awards, 416,667 performance-based share option awards and 208,333 market-based share option awards at an exercise price of $59.43 and contractual term of ten years. The time-based share option awards vest 50% on June 30, 2017 and 50% on June 30, 2019. The performance-based and market-based share option awards vest upon the achievement of certain performance and market-related metrics during the term of the employment agreement.

The performance-based awards are subject to performance conditions such that the number of awards that ultimately vest depends on the Adjusted EPS and adjusted return on invested capital (“Adjusted ROIC”) achieved by the Company during the performance period compared to targets established at the award date. Because the terms of the performance-based awards provide discretion to make certain adjustments to the performance calculation, the service inception date of these awards precedes the grant date. Accordingly, the Company recognizes compensation expense beginning on the service inception date and remeasures the fair value of the awards until a grant date is established. The estimate of the awards’ fair value will be fixed in the period in which the grant date occurs, and cumulative compensation expense will be adjusted based on the fair value at the grant date.

2015 2014 2013

Dividend yield –% –% –% Expected share price volatility 32.32%-45.33% 48.30%-49.90% 50.40%-54.80% Risk-free interest rate 1.34%-1.92% 1.80%-2.02% 0.8%-1.82% Expected term 6.00-6.50 years 6.25 years 5.00-6.25 years

As a grant date is not established for the performance-based awards, their fair value is estimated on the last date of the reporting period using the Black-Scholes option-pricing model. The estimated fair value of the share options is amortized over the requisite service period using the straight-line vesting method. The assumptions used within the option-pricing model for the performance-based awards for which share-based compensation was recognized during 2015 are as follows:

2015

Dividend yield 0% Expected share price volatility 29.31%-29.86% Risk-free interest rate 1.76% Expected term 4.88-5.38 years

119 APPENDIX I FINANCIAL INFORMATION OF NCLH

The fair value of the market-based share option awards is estimated using a Monte-Carlo model which values financial instruments whose value is dependent on share price by sampling random paths for share price. The key inputs for the simulation include current share price, risk free rate, and share price volatility. For each simulated path, the model checks if the simulated share price reaches the vesting threshold during the performance period. For each path that reaches the vesting threshold, the payoff upon vesting is calculated. The fair value of the equity grant is determined by averaging the expected payoff across all simulated paths and discounting the average to the valuation date.

The below table summarizes the key inputs used in the Monte-Carlo simulation:

2015

Dividend yield 0% Expected share price volatility 30.00% Risk-free interest rate 1.34% Expected term Mid-point from vesting to assumed options expiration

The following is a summary of share option activity under our share option plan for the year ended December 31, 2015 (excludes the impact of 416,667 performance based awards as no grant date has been established):

Outstanding as of January 1, 2015 6,079,881 1,457,314 – $ 29.92 $ 19.00 $ – 7.61 $ 142,831 Granted 5,130,000 – 208,333 56.64 – 59.43 – – Exercised (2,144,702) (546,951) – 27.39 19.00 – – – Forfeited and cancelled (1,363,108) (477,611) – 37.49 19.00 – – –

Outstanding as of December 31, 2015 7,702,071 432,752 208,333 $ 47.35 $ 19.00 $ 59.43 8.59 $ 104,864

Vested and expected to vest as of December 31, 2015 7,351,098 432,752 208,333 $ 47.22 $ 19.00 $ 59.43 8.47 $ 101,824

Exercisable as of December 31, 2015 808,794 432,752 – $ 29.23 $ 19.00 $ – 5.84 $ 40,890

The weighted-average grant-date fair value of time-based options granted during the years 2015, 2014 and 2013 was $20.90, $16.86 and $6.38 respectively. The weighted-average reporting period date fair value of performance-based options for which share-based compensation was recognized during 2015 was $17.07. The weighted-average grant-date fair value of market-based options granted during the year 2015 was $12.37. The total intrinsic value of share options exercised during the year 2015, 2014 and 2013 was $68.0 million, $4.5 million and $1.4 million and total cash received by the Company from exercises was $69.1 million, $6.1 million and $2.0 million, respectively. As of December 31, 2015, there was approximately $106.1 million, $0, and $2.0 million of total unrecognized compensation cost net of estimate forfeitures, related to time-based, performance-based with an established grant date, and market-based options, respectively, granted under our share-based incentive plans which is expected to be recognized over a weighted-average period of 2.57 years, 0 years, and 1.95 years, respectively.

120 APPENDIX I FINANCIAL INFORMATION OF NCLH

Restricted Ordinary Share Awards

The following is a summary of restricted share activity of NCLH shares for the year ended December 31, 2015:

Weighted- Number of Weighted- Number of Average Performance- Average Time-Based Grant Date Based Grant Date Awards Fair Value Awards Fair Value

Non-vested as of January 1, 2015 196,644 $ 3.43 1,208,608 $ 3.37 Granted 6,881 50.23 – – Vested (83,958) 6.68 (620,739) 3.92 Forfeited or expired (75,914) 2.68 (587,869) 2.79

Non-vested and expected to vest as of December 31, 2015 43,653 $ 5.87 – $ –

As of December 31, 2015, there was $0.2 million of total unrecognized compensation cost related to non-vested restricted ordinary share awards. The cost is expected to be recognized over a weighted-average period of 1.2 years. Restricted shares, with the exception of those related to the Management Exchange Agreement, which maintain their original vesting conditions of time and performance, vest in substantially equal quarterly installments over 1 or 2 years or in annual installments over 4 years. The total fair value of shares vested during the year ended December 31, 2015 was $40.9 million.

Restricted Share Units (“RSUs”)

On August 4, 2015, we entered into an amendment to the employment agreement with our President and Chief Executive Officer pursuant to which we awarded 150,000 time-based RSUs, 100,000 performance-based RSUs and 50,000 market-based RSUs.

The time-based RSUs vest equally on June 30, 2016, 2017, 2018 and 2019, respectively. The performance-based and market-based RSUs vest upon the achievement of certain performance and market-related metrics during the term of the employment agreement.

The fair value of the time-based and performance-based RSUs is equal to the closing market price of NCLH shares at the date of grant.

The performance-based RSUs are subject to performance conditions such that the number of awards that ultimately vest depends on the Adjusted EPS and Adjusted ROIC achieved by the Company during the performance period compared to targets established at the award date. Because the terms of the performance-based awards provide discretion to make certain adjustments to the performance calculation, the service inception date of these awards precedes the grant date. Accordingly, the Company recognizes share-based compensation expense beginning on the service inception date and remeasures the fair value of the awards until a grant date occurs. The estimate of the awards’ fair value will be fixed in the period in which the grant date occurs, and cumulative share-based compensation expense will be adjusted based on the fair value at the grant date.

The fair value of the market-based RSUs is estimated using a Monte-Carlo model which values financial instruments whose value is dependent on share price by sampling random paths for share price. The key inputs for the simulation include current share price, risk free rate, and share price volatility.

For each simulated path, the model checks if the simulated share price reaches the vesting threshold during the performance period. For each path that reaches the vesting threshold, the payoff upon vesting is calculated. The fair value of the equity grant is determined by averaging the expected payoff across all simulated paths and discounting the average to the valuation date.

The below table summarizes the key inputs used in the Monte-Carlo simulation:

2015

Dividend yield 0% Expected share price volatility 30.00% Risk-free interest rate 1.34% Expected term Mid-point from vesting to assumed awards expiration

121 APPENDIX I FINANCIAL INFORMATION OF NCLH

The following is a summary of the RSUs activity for the year ended December 31, 2015 (excludes the impact of 100,000 performance-based RSUs as no grant date was established):

Weighted- Weighted- Number of Average Number of Average Time-Based Grant Date Market-Based Grant Date Awards Fair Value Awards Fair Value

Non-vested as of January 1, 2015 150,000 $ 59.43 50,000 $ 59.43 Granted Vested – – – – Forfeited or expired – – – –

Non-vested and expected to vest as of December 31, 2015 150,000 $ 59.43 50,000 $ 59.43

As of December 31, 2015, there was $7.9 million and $1.1 million of total unrecognized compensation cost related to non-vested time-based and market-based RSUs, respectively. The cost is expected to be recognized over a weighted-average period of 3.50 years and 1.54 years, respectively, for the time-based and market-based RSUs.

The share-based compensation expense for the years ended December 31, 2015, 2014 and 2013 was $41.8 million, $20.6 million, which includes $6.0 million of non-recurring charges associated with the Management Exchange Agreement and $23.1 million, which includes $18.5 million of non- recurring charges associated with the Corporate Reorganization, respectively, and was recorded in marketing general and administrative expense.

Employee Benefit Plans

Certain employees are employed pursuant to agreements that provide for severance payments. Severance is generally only payable upon an involuntary termination of the employment by us without cause or a termination by the employee for good reason. Severance generally includes a cash payment based on the employee’s base salary (and in some cases, bonus), and our payment of the employee’s continued medical benefits for the applicable severance period.

We maintain a 401(k) Plan for our shoreside employees, including our executive officers. Participants may contribute up to 100% of eligible compensation each pay period, subject to certain limitations. We make matching contributions equal to 100% of the first 3% and 50% of amounts greater than 3% to and including 10% of each participant’s contributions subject to certain limitations. In addition, we may make discretionary supplemental contributions to the Plan, which shall be allocated to each eligible participant on a pro-rata basis based on the compensation of the participant to the total compensation of all participants. Our matching contributions are vested according to a five-year schedule. The 401(k) Plan is subject to the provisions of ERISA and is intended to be qualified under section 401(a) of the U.S. Internal Revenue Code (the “Code”).

Our contributions are reduced by contributions forfeited by those employees who leave the 401(k) Plan prior to vesting fully in the contributions. Forfeited contributions of $0.4 million, $0.1 million and $0.1 million were utilized in the years ended December 31, 2015, 2014 and 2013, respectively.

122 APPENDIX I FINANCIAL INFORMATION OF NCLH

We maintained a Supplemental Executive Retirement Plan (“SERP”), which is a legacy unfunded defined contribution plan for certain executives who were employed by the Company in an executive capacity prior to 2008. The SERP was frozen to future participation following that date. The SERP provided for Company contributions on behalf of the participants to compensate them for the benefits that are limited under the 401(k) Plan. We credited participants under the SERP for amounts that would have been contributed by us to the Company’s previous Defined Contribution Retirement Plan and the former 401(k) Plan without regard to any limitations imposed by the Code. Participants did not make any elective contributions under this plan. As of December 31, 2015 and 2014, the aggregate balance of participants’ deferred compensation accounts under the SERP Plan was $0.5 million and $0.4 million, respectively. We have discontinued this plan following the 2015 contributions and will pay the deferred contributions to participants in early 2017 following the expiration of the required twelve month period.

We recorded expenses related to the above 401(k) Plan and SERP of $5.3 million, $3.7 million and $3.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Effective January 2009, we implemented the Shipboard Retirement Plan which computes benefits based on years of service, subject to eligibility requirements of the Shipboard Retirement Plan. The Shipboard Retirement Plan is unfunded with no plan assets. The current portion of the projected benefit obligation of $1.1 million and $0.9 million was included in accrued expenses and other liabilities as of December 31, 2015 and 2014, respectively and $20.0 million and $18.8 million was included in other long-term liabilities in our consolidated balance sheet as of December 31, 2015 and 2014, respectively. The amounts related to the Shipboard Retirement Plan were as follows (in thousands):

As of or for the Year Ended December 31, 2015 2014 2013

Pension expense: Service cost $ 1,793 $ 1,393 $ 1,498 Interest cost 738 728 603 Amortization of prior service cost 378 378 378 Amortization of actuarial loss 99 – 90

Total pension expense $ 3,008 $ 2,499 $ 2,569

Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 19,730 $ 15,570 $ 16,221 Service cost 1,793 1,393 1,498 Interest cost 738 728 603 Actuarial gain (loss) (625) 2,689 (2,070) Direct benefit payments (558) (650) (682)

Projected benefit obligation at end of year $ 21,078 $ 19,730 $ 15,570

Amounts recognized in the consolidated balance sheets: Projected benefit obligation $ 21,078 $ 19,730 $ 15,570

123 APPENDIX I FINANCIAL INFORMATION OF NCLH

As of or for the Year Ended December 31, 2015 2014 2013

Amounts recognized in accumulated other comprehensive income (loss): Prior service cost $ (5,293) $ (5,671) $ (6,049) Accumulated actuarial loss (3,126) (3,849) (1,160)

Accumulated other comprehensive income (loss) $ (8,419) $ (9,520) $ (7,209)

The discount rates used in the net periodic benefit cost calculation for the years ended December 31, 2015, 2014 and 2013 were 3.8%, 4.8% and 3.8%, respectively, and the actuarial loss is amortized over 18.95 years. The discount rate is used to measure and recognize obligations, including adjustments to other comprehensive income (loss), and to determine expense during the periods. It is determined by using bond indices which reflect yields on a broad maturity and industry universe of high-quality corporate bonds.

The pension benefits expected to be paid in each of the next five years and in aggregate for the five years thereafter are as follows (in thousands):

Year Amount

2016 $ 1,128 2017 1,079 2018 1,092 2019 1,170 2020 1,211 Next five years 7,750

Employee Stock Purchase Plan (“ESPP”)

In April 2014, the Company’s shareholders approved the ESPP. The purpose of the ESPP is to provide eligible employees with an opportunity to purchase NCLH’s ordinary shares at a favorable price and upon favorable terms in consideration of the participating employees’ continued services. A maximum of 2,000,000 of the Company’s ordinary shares may be purchased under the ESPP. To be eligible to participate in an offering period, on the Grant Date of that period, an individual must be customarily employed by the Company or a participating subsidiary for more than twenty hours per week and for more than five months per calendar year. Participation in the ESPP is also subject to certain limitations. The ESPP is considered to be compensatory based on: a) the 15% purchase price discount and b) the look-back purchase price feature. Since the plan is compensatory, compensation expense must be recorded in the consolidated statements of operations on a straight-line basis over the six-month withholding period. For the years ended December 31, 2015, 2014 and 2013, the compensation expense was $0.4 million, $90 thousand and $0 respectively. As of December 31, 2015 and 2014, we had a $1.1 million and $0.3 million liability, respectively, for payroll withholdings received.

Other Employee Matters

On January 8, 2015, Kevin M. Sheehan resigned as President and Chief Executive Officer of the Company, together with all of his positions and offices with the Company and its subsidiaries or affiliates, effective immediately. In connection with Mr. Sheehan’s resignation from the Company, Mr. Sheehan and the Company entered into a Separation Agreement and Release (the “Separation Agreement”). The Separation Agreement sets forth the terms of Mr. Sheehan’s resignation from the Company, including, among other things, a general release of claims in favor of the Company and certain non-competition, non-solicitation, confidentiality and cooperation undertakings. The Separation Agreement also provides that Mr. Sheehan will receive (i) all of his accrued and unpaid base salary (and accrued and unpaid vacation time) through January 8, 2015 (the “Effective Date”), (ii) his previously approved bonus payment for fiscal year 2014 of $1,627,500, (iii) a one-time cash separation payment in an amount equal to his base salary and target bonus and (iv) vesting of a portion of his outstanding unvested equity-based awards as of the Effective Date, and all remaining unvested equity-based awards shall immediately terminate, expire and be forfeited as of the Effective Date. This resulted in a total severance expense of $13.4 million of which $8.2 million was due to the acceleration of the equity-based awards which was recorded in marketing, general and administrative expense in January 2015.

Frank J. Del Rio was appointed President and Chief Executive Officer of the Company as of January 8, 2015.

124 APPENDIX I FINANCIAL INFORMATION OF NCLH

11. Income Taxes

The components of net income before income taxes consist of the following (in thousands):

Year Ended December 31, 2015 2014 2013

Bermuda $ – $ – $ – Foreign – Other 433,909 340,334 114,688

Net income before income taxes 433,909 340,334 114,688

The components of the provision for income taxes consisted of the following (in thousands):

Year Ended December 31, 2015 2014 2013

Current: Bermuda $ – $ – $ – United States (4,621) 9,162 (8,098) Foreign – Other (882) (3,278) (860)

Total current: (5,503) 5,884 (8,958)

Deferred: Bermuda – – – United States (1,269) (3,617) (2,844) Foreign – Other – – –

Total deferred: (1,269) (3,617) (2,844)

Income tax benefit (expense) $ (6,772) $ 2,267 $ (11,802)

Our reconciliation of income tax benefit (expense) computed by applying our Bermuda statutory rate and reported income tax expense was as follows (in thousands):

Year Ended December 31, 2015 2014 2013

Tax at Bermuda statutory rate $ – $ – $ – Foreign income taxes at different rates (7,864) (2,813) (14,020)

Benefit from global tax platform (1) – – 6,074 Tax contingencies (283) (275) (1,394) Return to provision adjustments 1,370 14,444 – Benefit (expense) from change in tax status 5 1,462 (2,462) Valuation allowance – (10,551) –

Income tax benefit (expense) $ (6,772) $ 2,267 $ (11,802)

125 APPENDIX I FINANCIAL INFORMATION OF NCLH

(1) During 2013, we implemented a restructuring plan to provide a global tax platform for international expansion. As part of the plan, the Company became a tax resident of the U.K. As such, it qualifies for relief from U.S. Branch Profits taxes under the U.S.-U.K. Tax Treaty. In addition, the restructuring resulted in additional interest and depreciation which reduced the Company’s overall income tax expense.

Deferred tax assets and liabilities were as follows:

As of December 31, 2015 2014

Deferred tax assets: Loss carryforwards $ 85,939 $ 77,031 Shares in foreign subsidiary – 17,808 Other 1,460 1,121 Valuation allowance (61,437) (81,704)

Total net deferred assets 25,962 14,256

Deferred tax liabilities: Property and equipment (33,862) (20,888)

Total deferred tax liabilities (33,862) (20,888)

Net deferred tax liability $ (7,900) $ (6,632)

We have U.S. net operating loss carryforwards of $197.0 million and $158.6 million, for the years ended December 31, 2015 and 2014, respectively, which begin to expire in 2023. We have U.S. state jurisdiction net operating loss carryforwards of $10.7 million and $24.5 million for the years ended December 31, 2015 and 2014, respectively, which expire in the years 2025 through 2035. In 2014, based on the weight of available evidence, we recorded a valuation allowance of $10.6 million with respect to the U.S. deferred tax assets of one of our U.S. subsidiaries.

Included above are deferred tax assets associated with our operations in Norway for which we have provided a full valuation allowance. We have Norway net operating loss carryforwards of $35.1 million and $58.8 million for the years ended December 31, 2015 and 2014, respectively, which can be carried forward indefinitely.

On November 19, 2014, we acquired the stock of Prestige. Included above are deferred tax assets associated with Prestige, including net operating loss carryforwards of $126.9 million and 104.3 million for the years ended December 31, 2015 and 2014, respectively, which begin to expire in 2023, and state net operating loss carryforwards of nil and $0.1 million for the years ended December 31, 2015 and 2014, respectively. In prior years, we recorded a valuation allowance of $36.5 million with respect to the Prestige deferred tax assets based on the weight of available evidence. Section 382 of the Code (“Section 382”) may limit the amount of taxable income that can be offset by the Prestige NOL carryforwards.

As a result of the Corporate Reorganization in 2013, we obtained certain U.S. net operating losses of our shareholders. These loss carryforwards were subject to Section 382 which may limit the amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership). We do not expect the Section 382 limitation to materially impact the deferred tax asset as it relates to the NOL.

126 APPENDIX I FINANCIAL INFORMATION OF NCLH

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):

As of December 31, 2015 2014

Unrecognized tax benefits, beginning of the year $ 11,174 $ 10,894 Gross increases in tax positions from prior periods – – Gross decreases in tax positions from prior periods – – Gross increases in tax positions from current periods – 280 Settlement of tax positions – – Lapse of statute of limitations – –

Unrecognized tax benefits, end of year $ 11,174 $ 11,174

If the $11.2 million unrecognized tax benefits at December 31, 2015 were recognized, our effective tax rate would be affected. We believe that there will not be a significant increase or decrease to the tax positions within 12 months of the reporting date. We recognize interest and penalties related to unrecognized tax benefits in income tax expense.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and foreign jurisdictions. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by authorities for years prior to 2011, except for years in which NOLs generated prior to 2011 are utilized.

We derive our income from the international operation of ships. We are engaged in a trade or business in the U.S. and receive income from sources within the U.S. Under Section 883, certain foreign corporations are exempt from U. S. federal income or branch profits tax on U.S.-source income derived from or incidental to the international operation of ships. Applicable U.S. treasury regulations provide that a foreign corporation will qualify for the benefits of Section 883 if, in relevant part: (i) the foreign country in which the corporation is organized grants an equivalent exemption for income from the operation of ships of sufficiently broad scope to corporations organized in the U.S., and (ii) the foreign corporation has one or more classes of stock that are “primarily and regularly traded on an established securities market” in the U.S. or another qualifying country. We believe that we quality for the benefits of Section 883 because we are incorporated in qualifying countries and our ordinary shares are primarily and regularly traded on an established securities market in the U.S.

12. Commitments and Contingencies

Operating Leases

Total expense under non-cancelable operating lease commitments, primarily for offices, motor vehicles and office equipment was $12.6 million, $9.2 million and $9.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, minimum annual rentals for non-cancelable leases with initial or remaining terms in excess of one year were as follows (in thousands):

Year Amount

2016 $ 12,448 2017 13,606 2018 13,662 2019 13,660 2020 14,490 Thereafter 88,814

Total minimum annual rentals $ 156,680

Rental payments applicable to such operating leases are recognized on a straight-line basis over the term of the lease.

127 APPENDIX I FINANCIAL INFORMATION OF NCLH

Ship Construction Contracts

We have orders with Meyer Werft for three Breakaway Plus Class Ships for delivery in the spring of 2017, spring of 2018 and fall of 2019. These ships will be the largest in our fleet, reaching approximately 164,600 Gross Tons and approximately 4,100 to 4,350 Berths each and will be similar in design and innovation to our Breakaway Class Ships. The combined contract price of these three ships is approximately €2.5 billion, or $2.7 billion based on the euro/U.S. dollar exchange rate as of December 31, 2015. We have export credit financing in place that provides financing for 80% of their contract prices. We also have a contract with Fincantieri shipyard to build a cruise ship to be named Seven Seas Explorer. The original contract price of this ship is approximately €343.0 million, or approximately $372.6 million, based on the euro/U.S. dollar exchange rate as of December 31, 2015. We have export credit financing in place that provides financing for 80% of the ship’s contract price. Seven Seas Explorer is expected to be delivered in the summer of 2016.

As of December 31, 2015, minimum annual payments for non-cancelable ship construction contracts with initial or remaining terms in excess of one year were as follows (in thousands):

Year Amount

2016 $ 536,815 2017 806,681 2018 890,447 2019 758,114 2020 – Thereafter –

Total minimum annual payments $ 2,992,057

Port Facility Commitments

As of December 31, 2015, future commitments to pay for usage of certain port facilities were as follows (in thousands):

Year Amount

2016 $ 33,217 2017 29,141 2018 20,403 2019 20,858 2020 21,326 Thereafter 60,889

Total port facility future commitments $ 185,834

The FMC requires evidence of financial responsibility for those offering transportation on passenger ships operating out of U.S. ports to indemnify passengers in the event of non-performance of the transportation. Accordingly, each of our three brands are required to maintain a $30.0 million third- party performance guarantee in respect of liabilities for non-performance of transportation and other obligations to passengers. The guarantee requirements are subject to additional consumer price index-based adjustments. Also, each of our brands has a legal requirement to maintain a security guarantee based on cruise business originated from the U.K. and, accordingly, has established separate bonds with the Association of British Travel Agents currently valued at approximately British Pound Sterling 6.5 million in the aggregate. We also are required to establish financial responsibility by other jurisdictions to meet liability in the event of non-performance of our obligations to passengers from those jurisdictions.

128 APPENDIX I FINANCIAL INFORMATION OF NCLH

Litigation

In 2015, the Alaska Department of Environmental Conservation issued Notices of Violations to major cruise lines that operated in the state of Alaska, including NCLH, for alleged violations of the Alaska Marine Vessel Visible Emission Standards that occurred over the last several years. We are cooperating with the Alaska Department of Environmental Conservation and conducting our own internal investigation into these matters. However, we do not believe the ultimate outcome will have a material impact on our financial condition, results of operations or cash flows.

In the normal course of our business, various claims and lawsuits have been filed or are pending against us. Most of these claims and lawsuits are covered by insurance and, accordingly, the maximum amount of our liability is typically limited to our deductible amount. Nonetheless, the ultimate outcome of these claims and lawsuits that are not covered by insurance cannot be determined at this time. We have evaluated our overall exposure with respect to all of our threatened and pending litigation and, to the extent required, we have accrued amounts for all estimable probable losses associated with our deemed exposure. We are currently unable to estimate any other potential contingent losses beyond those accrued, as discovery is not complete nor is adequate information available to estimate such range of loss or potential recovery. We intend to vigorously defend our legal position on all claims and, to the extent necessary, seek recovery.

13. Restructuring Costs

Due to the Acquisition of Prestige, a number of employee positions were consolidated. As of December 31, 2015, we had an accrual balance of $4.1 million for restructuring costs for severance and other employee-related costs. The expense of $15.0 million for the year ended December 31, 2015 is included in marketing general and administrative expense.

The following table summarizes changes in the accrual for restructuring costs (in thousands):

Restructuring costs

Accrued expense balance as of December 31, 2014 $ (7,956) Amounts paid 18,815 Additional accrued expense (15,003)

Accrued expense balance as of December 31, 2015 $ (4,144)

14. Concentration Risk

We contract with a single vendor to provide many of our hotel and restaurant services including both food and labor costs. We incurred expenses of $122.4 million and $22.5 million for the years ended December 31, 2015 and 2014, respectively, which are recorded in payroll and related and food expenses in our consolidated statements of income.

15. Supplemental Cash Flow Information

For the years ended December 31, 2015, 2014 and 2013 we paid interest and related fees of $218.3 million, $233.5 million and $316.9 million, respectively. For the year ended December 31, 2014, we had a non-cash investing and financing activity related to a seller financed capital expenditure of $82.0 million. For the year ended December 31, 2015 and 2013 we had non-cash investing activities in connection with capital leases of $31.1 million and $15.5 million, respectively. For the years ended December 31, 2015, 2014 and 2013 we paid income taxes of $10.3 million, $9.8 million and $1.1 million, respectively. For the year ended December 31, 2015 and 2014 we had non-cash investing activities for capital expenditures of $41.1 million and $13.0 million, respectively. For the year ended December 31, 2013, we had a non-cash financing activity of $10.0 million in connection with the modification of certain fully-vested Management NCL Corporation Units from liability to equity award status. Upon the IPO this liability award was fully vested at the time of the settlement and was reclassified to equity in the balance sheet resulting in a non-cash financing activity. We refer you to Note – 4 “The Acquisition of Prestige” for non-cash transactions in conjunction with the Acquisition of Prestige.

129 APPENDIX I FINANCIAL INFORMATION OF NCLH

16. Revisions to the Consolidated Statement of Cash Flows

During the three months ended September 30, 2015, we determined that for the three months ended March 31, 2015 and six months ended June 30, 2015, cash payments related to property and equipment were reported as a decrease in cash flows from operating activities related to the change in accrued expenses and other liabilities and prepaid and other assets when it should have been reported as a decrease in cash flows from investing activities related to additions to property and equipment. The Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and six months ended June 30, 2015 will be revised in future Form 10-Q filings, to increase cash from operating activities related to the change in accrued expenses and other liabilities and prepaid and other assets and increase investing cash outflow from additions to property and equipment by $14.6 million and 18.5 million, respectively. We have determined that the revision is not material to our consolidated financial statements individually and in the aggregate.

During the three months ended June 30, 2015, we determined that for the year ended December 31, 2014, non-cash transactions related to the financing of one of our ships was reported as cash used for additions to property and equipment and cash provided by proceeds from long-term debt. The Consolidated Statement of Cash Flows, for the year ended December 31, 2014, has been revised in this annual report on Form 10-K by decreasing cash used for additions to property and equipment and cash provided by proceeds from long-term debt by $82.0 million. We have determined that the revision is not material to our consolidated financial statements.

17. Subsequent Event

In the first quarter of 2016, we executed a purchase and sale agreement for our interest in certain land-based operations in Hawaii. The amount of the transaction is considered immaterial to our consolidated financial statements.

18. Quarterly Selected Financial Data (Unaudited) (in thousands, except per share data)

First Quarter Second Quarter Third Quarter Fourth Quarter 2015 2014 2015 2014 2015 2014 2015 2014

Total revenue $ 938,182 $ 664,028 $ 1,085,433 $ 765,927 $ 1,284,910 $ 907,017 $ 1,036,523 $ 788,909 Operating income 60,349 73,089 217,383 148,588 306,832 234,822 117,922 46,442 Net income (loss) attributable to Norwegian Cruise Line Holdings Ltd. (21,456) 51,267 158,494 111,616 251,787 201,078 38,312 (25,609) Earnings (loss) per share: Basic $ (0.10) $ 0.25 $ 0.70 $ 0.54 $ 1.11 $ 0.99 $ 0.17 $ (0.12) Diluted $ (0.10) $ 0.24 $ 0.69 $ 0.54 $ 1.09 $ 0.97 $ 0.17 $ (0.12)

130 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The unaudited pro forma financial information of the Group (the “Unaudited Pro Forma Financial Information”) presented below is prepared to illustrate (a) the financial position of the Group as at 31 December 2017 as if the Future Disposal of the NCLH Shares held by the Group had been completed on 31 December 2017; and (b) the results and cash flows of the Group for the year ended 31 December 2017 as if the Future Disposal had been completed on 1 January 2017. This Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and because of its hypothetical nature, it does not purport the true picture of the financial position of the Group as at 31 December 2017 or at any future date had the Future Disposal been completed on 31 December 2017 or the results and cash flows of the Group for the year ended 31 December 2017 or for any future period had the Future Disposal been completed on 1 January 2017.

The Unaudited Pro Forma Financial Information is prepared based on the audited consolidated statement of financial position of the Group as at 31 December 2017, the audited consolidated statement of comprehensive income and audited consolidated statement of cash flows of the Group for the year ended 31 December 2017, as set out in the published annual report of the Group for the year ended 31 December 2017, after giving effect to the pro forma adjustments described in the accompanying notes and is prepared in accordance with Rule 4.29 and 14.68(2)(a)(ii) of the Listing Rules.

131 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

Adjusted Audited Unaudited Pro Consolidated Forma Statement of Consolidated Financial Statement of Position of the Financial Group as at Position of the 31 December Group as at 31 2017 Pro Forma Adjustments December 2017 US$’000 US$’000 US$’000 US$’000 Note 1 Note 2 Note 5

ASSETS NON-CURRENT ASSETS Property, plant and equipment 4,256,589 4,256,589 Land use rights 3,813 3,813 Intangible assets 84,062 84,062 Interests in joint ventures 3,555 3,555 Interests in associates 535,410 535,410 Deferred tax assets 4,025 4,025 Available-for-sale investments 9,610 9,610 Other assets and receivables 21,058 21,058

4,918,122 4,918,122

CURRENT ASSETS Completed properties for sale 47,211 47,211 Inventories 37,389 37,389 Trade receivables 66,937 66,937 Prepaid expenses and other receivables 113,145 113,145 Available-for-sale investments 686,835 (167,647) 519,188 Amounts due from related companies 852 852 Restricted cash 126,851 126,851 Cash and cash equivalents 1,147,702 138,085 (500) 1,285,287

2,226,922 (29,562) (500) 2,196,860

TOTAL ASSETS 7,145,044 (29,562) (500) 7,114,982

132 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

EQUITY Capital and reserves attributable to the equity owners of the Company Share capital 848,249 848,249 Reserves: Share premium 41,634 41,634 Contributed surplus 936,823 936,823 Additional paid-in capital 110,987 110,987 Foreign currency translation adjustments (20,057) (20,057) Available-for-sale investments reserve 138,285 (33,750) 104,535 Retained earnings 2,487,403 4,188 (500) 2,491,091

4,543,324 (29,562) (500) 4,513,262 Non-controlling interests 35,967 35,967

TOTAL EQUITY 4,579,291 (29,562) (500) 4,549,229

LIABILITIES NON-CURRENT LIABILITIES Loans and borrowings 1,590,805 1,590,805 Deferred tax liabilities 21,751 21,751 Provisions, accruals and other liabilities 818 818 Retirement benefit obligations 9,109 9,109 Advance ticket sales 17,903 17,903

1,640,386 1,640,386

133 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

CURRENT LIABILITIES Trade payables 101,012 101,012 Current income tax liabilities 13,017 13,017 Provisions, accruals and other liabilities 320,303 320,303 Current portion of loans and borrowings 297,354 297,354 Amounts due to related companies 522 522 Advance ticket sales 193,159 193,159

925,367 925,367

TOTAL LIABILITIES 2,565,753 2,565,753

TOTAL EQUITY AND LIABILITIES 7,145,044 (29,562) (500) 7,114,982

NET CURRENT ASSETS 1,301,555 (29,562) (500) 1,271,493

TOTAL ASSETS LESS CURRENT LIABILITIES 6,219,677 (29,562) (500) 6,189,615

134 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2017

Adjusted Unaudited Audited Pro Forma Consolidated Consolidated Statement of Statement of Comprehensive Comprehensive Income of the Income of the Group for the Group for the year ended year ended 31 December 31 December 2017 Pro Forma Adjustments 2017 US$’000 US$’000 US$’000 US$’000 US$’000 Note 1 Note 3 Note 4 Note 5

Revenue 1,190,415 1,190,415

Operating expenses Operating expenses excluding depreciation and amortisation (1,066,227) (1,066,227) Depreciation and amortisation (175,510) (175,510)

(1,241,737) (1,241,737) Selling, general and administrative expenses Selling, general and administrative expenses excluding depreciation and amortisation (285,190) (285,190) Depreciation and amortisation (14,995) (14,995)

(300,185) (300,185)

(1,541,922) (1,541,922)

(351,507) (351,507) Share of profit of joint ventures 1,048 1,048 Share of profit of associates 225 225 Other expenses, net (849) (849) Other gains, net 166,050 4,188 (500) 169,738 Finance income 7,098 7,098 Finance costs (49,373) (49,373)

124,199 4,188 (500) 127,887

135 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Loss before taxation (227,308) 4,188 (500) (223,620) Taxation (16,972) (16,972)

Loss for the year (244,280) 4,188 (500) (240,592)

Other comprehensive income/(loss):

Items that have been or may be reclassified to consolidated statement of comprehensive income: Foreign currency translation differences 64,331 64,331 Fair value gain on derivative financial instruments 46,139 46,139 Fair value gain on available-for-sale investments 292,455 (33,750) 258,705 Share of other comprehensive income of an associate 385 385 Release of reserves upon disposal of available-for-sale investments (204,994) (204,994)

198,316 (33,750) 164,566

Item that will not be reclassified subsequently to consolidated statement of comprehensive income:

Actuarial gain on retirement benefit plans 548 548

Other comprehensive income for the year 198,864 (33,750) 165,114

Total comprehensive loss for the year (45,416) (33,750) 4,188 (500) (75,478)

136 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2017

Adjusted Unaudited Audited Pro Forma Consolidated Consolidated Statement of Statement of Cash Flows of Cash Flows of the Group for the Group for the year ended the year ended 31 December 31 December 2017 Pro Forma Adjustments 2017 US$’000 US$’000 US$’000 US$’000 Note 1 Note 5 Note 6

OPERATING ACTIVITIES Cash used in operations (59,327) (59,327) Interest paid (43,894) (43,894) Payment of loan arrangement fees (34,457) (34,457) Interest received 10,694 10,694 Income tax paid (10,129) (10,129)

Net cash outflow from operating activities (137,113) (137,113)

INVESTING ACTIVITIES Acquisitions of subsidiaries and business, net of cash acquired 993 993 Purchase of property, plant and equipment (1,236,568) (1,236,568) Purchase of intangible assets (90) (90) Acquisition of additional equity interest in an associate (781) (781) Capital contribution to a joint venture (1,585) (1,585) Proceeds from disposal of available-for-sale investments 862,678 (500) 138,085 1,000,263 Dividends received 7,716 7,716

Net cash outflow from investing activities (367,637) (500) 138,085 (230,052)

137 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

FINANCING ACTIVITIES Proceeds from loans and borrowings 1,292,345 1,292,345 Repayments of loans and borrowings (537,950) (537,950) Dividends paid (169,650) (169,650)

Net cash inflow from financing activities 584,745 584,745

Effect of exchange rate changes on cash and cash equivalents 27,433 27,433 Net increase in cash and cash equivalents 107,428 (500) 138,085 245,013

Cash and cash equivalents at beginning of year 1,040,274 1,040,274

Cash and cash equivalents at end of year 1,147,702 (500) 138,085 1,285,287

138 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Notes to the unaudited pro forma financial information of the Group

1. The amounts are extracted from the audited consolidated statement of financial position of the Group as at 31 December 2017, the audited consolidated statement of comprehensive income and audited consolidated statement of cash flows of the Group for the year ended 31 December 2017, as set out in the published annual report of the Company for the year ended 31 December 2017.

2. The adjustment represents the disposal of 3,148,307 NCLH Shares held by the Group as at 31 December 2017 at the minimum selling price of US$43.86 per NCLH Share. The estimated gain on disposal of approximately US$4,188,000 resulting from the Future Disposal, which is derived from the (i) gross sales proceeds of approximately US$138,085,000 based on the minimum selling price of US$43.86 per NCLH Share; and (ii) the carrying amount of 3,148,307 NCLH Shares classified as available-for-sale investments of approximately US$167,647,000 with actual closing price of US$53.25 per NCLH Share and the reclassification of corresponding available-for-sale investments reserve of approximately US$33,750,000 to the consolidated statement of comprehensive income. It is assumed that the net sale proceeds of approximately US$138,085,000 were all settled in cash as at 31 December 2017.

Due to the adoption of Hong Kong Financial Reporting Standards 9 “Financial Instruments” (effective from 1 January 2018) (“HKFRS 9”), the Group has reclassified the investment in NCLH from available-for-sale investments to financial assets at fair value through profit or loss and all the related cumulative fair value gains had been transferred from available-for-sale investments reserve to retained earnings on 1 January 2018. Taking into consideration of the aforementioned cumulative fair value gains of approximately US$33,750,000 transferred to retained earnings on 1 January 2018, the estimated loss on the Future Disposal would be approximately US$29,562,000.

Details of how the Directors determine the minimum selling price of US$43.86 per NCLH Share are set out in the section headed “Disposal Mandate” in the “Letter from the Board” of this circular. There is no certainty that the selling price will be higher than the minimum selling price of US$43.86 per NCLH Share. Any change in the selling price of the NCLH Shares will affect the net sale proceeds and therefore the gain or loss on disposal which will be recognised in the consolidated statement of comprehensive income.

3. The adjustment represents the reversal of fair value gains on available-for-sale investments of approximately US$33,750,000 for the 3,148,307 NCLH Shares in relation to the Future Disposal which have been recognised for the year ended 31 December 2017.

4. The adjustment represents the disposal of 3,148,307 NCLH Shares held by the Group at the minimum selling price of US$43.86 per NCLH Share on 1 January 2017. The estimated gain on disposal of approximately US$4,188,000 resulting from the Future Disposal, which is derived from (i) the gross sales proceeds of approximately US$138,085,000 based on the minimum selling price of US$43.86 per NCLH Share; and (ii) the carrying amount of 3,148,307 NCLH Shares classified as available-for-sale investments of approximately US$133,897,000 with cost of US$42.53 per NCLH Share.

5. The adjustment represents payment of estimated transaction costs of approximately US$500,000 in connection with the Future Disposal.

139 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

6. The adjustment represents the disposal of 3,148,307 NCLH Shares held by the Group at the minimum selling price of US$43.86 per NCLH Share on 1 January 2017. The estimated consideration is derived from the gross sales proceeds of approximately US$138,085,000 based on the minimum selling price of US$43.86 per NCLH Share. It is assumed that the net sale proceeds of approximately US$138,085,000 were all settled in cash as at 1 January 2017.

7. Apart from the above, no other adjustments have been made to reflect any trading results or other transactions of the Group entered into subsequent to 31 December 2017 for the purpose of preparation of the Unaudited Pro Forma Financial Information, including that part of the Previous Disposals happened after 31 December 2017. Details of the Previous Disposals are set out in the section headed “The Previous Disposals” in the “Letter from the Board” of this circular.

140 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The following is the text of a report received from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

To the Directors of Genting Hong Kong Limited

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Genting Hong Kong Limited (the “Company”) and its subsidiaries (collectively the “Group”) by the directors of the Company (the “Directors”) for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma statement of financial position as at 31 December 2017, the unaudited pro forma statement of comprehensive income for the year ended 31 December 2017, the unaudited pro forma statement of cash flows for the year ended 31 December 2017, and related notes (the “Unaudited Pro Forma Financial Information”) as set out on pages 131 to 140 of the Company’s circular dated 25 May 2018, in connection with the future disposal of ordinary shares of Norwegian Cruise Line Holdings Ltd. (the “Transaction”) by the Company through Star NCLC Holdings Ltd. The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described on pages 131 to 140.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the Transaction on the Group’s financial position as at 31 December 2017 and the Group’s financial performance and cash flows for the year ended 31 December 2017 as if the Transaction had taken place at 31 December 2017 and 1 January 2017 respectively. As part of this process, information about the Group’s financial position, financial performance and cash flows has been extracted by the Directors from the Group’s consolidated financial statements for the year ended 31 December 2017, on which an audit report has been published.

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

141 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, issued by the HKICPA. This standard requires that the reporting accountant plans and performs procedures to obtain reasonable assurance about whether the Directors have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of unaudited pro forma financial information included in a circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the entity as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Transaction at 31 December 2017 or 1 January 2017 would have been as presented.

A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

• The related pro forma adjustments give appropriate effect to those criteria; and

• The unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

142 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the company, the event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors on the basis stated;

(b) such basis is consistent with the accounting policies of the Group; and

(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

PricewaterhouseCoopers Certified Public Accountants Hong Kong, 25 May 2018

143 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

I. FINANCIAL INFORMATION

Financial information of the Group for each of the three years ended 31 December 2015, 2016 and 2017 is disclosed in the following documents which have been published on the website of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.gentinghk.com) respectively:

1. annual report of the Group for the year ended 31 December 2017 (pages 100 to 181) (http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0426/LTN201804261559.pdf)

2. annual report of the Group for the year ended 31 December 2016 (pages 95 to 178) (http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0426/LTN201704261550.pdf)

3. annual report of the Group for the year ended 31 December 2015 (pages 94 to 176) (http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0426/LTN20160426988.pdf)

II. STATEMENT OF INDEBTEDNESS

As at the close of business on 31 March 2018, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had aggregate outstanding borrowings of approximately US$1,808.8 million which comprised (i) the outstanding balances of approximately US$1,805.4 million under secured term loans; and (ii) secured entrustment loans of approximately US$3.4 million. The secured term loans are secured by legal charges over assets with a carrying amount of approximately US$3.0 billion as at 31 March 2018. The secured term loans are also guaranteed by companies within the Group. The US$3.4 million entrustment loans are secured by equivalent amount of cash deposits.

The Group had provided guarantees to certain banks in respect of mortgage loan facilities granted by such banks to certain purchasers of residential property units developed by the Group. Pursuant to the terms of the guarantees, upon default in mortgage payments by these purchasers, the Group will be responsible to repay the outstanding mortgage principals together with any accrued interests and penalties owed by the default purchasers to the banks and the Group is entitled to retain the legal title and take over the possession of the related properties. The guarantees will be gradually discharged along with the settlement of the mortgage loans granted by the banks to the purchasers. Such guarantees will also be discharged upon the earlier of (i) the issuance of the real estate ownership certificates of the relevant residential property units to the purchasers; and (ii) the full repayment of the mortgage loans by the purchasers. As at the close of business on 31 March 2018, the guarantees provided by the Group are approximately US$29.3 million.

Save as aforesaid or as otherwise disclosed herein and apart from intra-group liabilities, the Group did not have any loan capital or debt securities issued or to be issued, outstanding bank overdrafts and liabilities under acceptances or other similar indebtedness, debentures, mortgages, charges or loans or acceptance credits, finance leases or hire purchase commitments or guarantees or material contingent liabilities as of 31 March 2018.

144 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

III. WORKING CAPITAL

Taking into account the available credit facilities, the internal resources available to the Group and the net proceeds from the Future Disposal and in the absence of unforeseeable circumstances, the Directors are of the opinion that the Group has available sufficient working capital for its present requirements for at least the next 12 months from the date of this circular.

IV. MATERIAL ADVERSE CHANGE

As at the Latest Practical Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2017, being the date to which the latest published audited accounts of the Company have been made up.

V. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

Genting Cruise Lines, a new division of the Group comprising of the three cruise brands, Dream Cruises – “Asia’s Global Cruise Line”, Star Cruises – “The Most Popular Cruise Line in Asia”, and Crystal Cruises – “The World’s Most Awarded Luxury Cruise Line”, will continue to expand our business and provide global itineraries for our passengers.

With the rapid growth of cruise passengers in the Asian region, the Group commissioned two new 150,000 gross ton cruise ships in 2013 for delivery in November 2016 and November 2017. In order to differentiate the new, billion-dollar ships from the older tonnage in the market, Dream Cruises was established with the first ship “Genting Dream” positioned in the Pearl River Delta of China with dual homeports in Guangzhou and Hong Kong. With the launch of “World Dream” in November 2017 in Guangzhou and Hong Kong, “Genting Dream” was re-positioned to Singapore for homeporting. Both ships operate a variety of itineraries including 2-night weekend getaway cruises and 2, 3 and 5-night weekday cruises to destinations in the region. The World Dream visits the Okinawa Islands in Japan during the summer season and Manila and Boracay in the Philippines and Ho Chi Minh City and Nha Trang in Vietnam during the winter season. The Genting Dream visits Bali and Surabaya in Indonesia, Kuala Lumpur and Penang in Malaysia and Phuket in Thailand. Both ships are profitable and continue to improve with refined itineraries, more channels of distribution, increased market penetration and more efficiency in operations.

Dream Cruises has been very well received in the Asian market, being the first authentic Asian designed ship drawing on the 25 years’ experiences of the Group. Genting Dream was rated “Star Performer Top Ten” by the highly-revered “Berlitz Cruising and Cruise Guide 2018”. This acknowledgement comes on the heels of other awards for Dream Cruises such as the Global Times’s “Most Popular Cruise Brand Among Chinese Families” award, “Best New Cruise Ship” at the TTG China Travel Awards 2018, Travel Weekly Asia Reader’s Choice Awards 2017 “Best New Ship” award for the Genting Dream, “Best Cruise Line – Entertainment” award for Dream Cruises, Dream Cruises’ Garden Penthouse listed on “The Ocean’s Most Luxurious Rooms’ by CNN Travel, “Top 5 mid and large class cruise lines” by Conde Nast Traveller the Gold List 2018 and many other awards.

145 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

Asia is the world’s largest and fastest growing outbound market, in particular Chinese outbound tourists. About a billion people in Asia will reach middle-class status by 2030 and they have the disposable income to travel and cruise. In addition to boarding from nearby homeports, Asians who are traveling to other regions such as Australia/New Zealand, Europe and the Americas will increasingly consider cruising as the more comfortable and convenient alternative to a land vacation. As compared with other nations such as the United States, United Kingdom, Germany and Italy who have multiple global cruise brands, Dream Cruises’ mission is to become “Asia’s Global Cruise Line”, offering not only cruises in Asia but in other global regions such as Australia, Europe and the United States. These global itineraries mean advanced bookings and payments as passengers have to book flights to travel to those destinations.

With a global fleet in mind, the Company designed, from the ground up, the 204,000 gross ton “Global Class” ships with features preferred by the Asian source markets. Whilst the ships are similar in size to the latest generation of ships of other cruise lines, the “Global Class” ships will incorporate Asia’s early adoption of artificial intelligence and biometrics such as facial recognition and voice activation, robotics, and other digital advancements. The “Global Class” ships will also feature the world’s first Cineplex and theme park with roller coaster, Asian and Western spa facilities, multiple authentic Asian dining experiences, including fast-casual food alternatives, and affordable shopping facilities in addition to luxury retail boutiques.

The “Global Class” ships are designed with spacious standard staterooms, which are larger than other cruise lines and can accommodate 2, 3 or 4 passengers with a king size bed and king size sofa bed. Split (two) bathrooms are convenient as two persons can be using them at the same time. For Asians who usually travel with families, the ability to offer free fares for the third and fourth passengers in the same cabin during the low season will be a great competitive advantage and the ability to price full fares for four passengers during the peak season will significantly improve yields. In order to cater for the peak season, sufficient lifeboats are provided for a peak capacity of 9,500 passengers. 8 sets of escalators will connect public areas for efficient traffic flow.

After three years of design, the steel cutting ceremony for the first of two Global Class ships occurred on 8 March 2018 at the Group’s wholly owned shipyard, MV Werften, and these ships are to be delivered in late 2020 and 2021 respectively. These two Global Class ships are currently planned to be positioned in Shanghai and Tianjin during the summer season and in Australia, New Zealand, California and the ASEAN region during the winter season. With four new large ships and world itineraries, Dream Cruises will become the “Asia’s Global Cruise Line” with the youngest cruise fleet in the world.

Star Cruises will position SuperStar Virgo mainly in Shanghai and Manila, with shorter deployment in Taiwan, Dalian, Tianjin and Qindao. SuperStar Aquarius will continue her deployment in Keelung. SuperStar Gemini will spend the majority of her time in Xiamen and in Keelung during the winter season. These ships offer cruises to Naha, Miyakojima, Ishigaki and ports in the main island of Kyushu. Star Cruises was voted “Asia’s Leading Cruise Line 2017” at the 24th Annual World Travel Awards Asia & Australasia Gala Ceremony in June 2017. In addition, Star Cruises received ‘Best Itinerary’ from Shanghai Cruise Tourism Festival for SuperStar Virgo’s 7-night cruises to Osaka and Tokyo with additional port of calls at Mount Fuji and Kagoshima in September 2017. The Company is starting the design of a new class of ships for Star Cruises to replace the current fleet in the coming years.

146 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

Crystal Cruises’ two ocean cruise ships are being extensively renovated to allow for open dining seating, a must have feature in luxury cruise ships. Open seating was achieved by an increase in the number of suites, which lowers passenger capacity and adding new culinary venues. Crystal Symphony was renovated in October 2017 with great reviews and Crystal Serenity will be renovated in November 2018. Crystal River Cruises is comprised of five all-suite river ships including the completely reimagined Crystal Mozart (July 2016), and four new build sister ships: Crystal Bach (August 2017), Crystal Mahler (September 2017), Crystal Debussy (April 2018), and Crystal Ravel (May 2018). Crystal Yacht Expedition Cruises offers boutique yachting aboard the reimagined all-suite Crystal Esprit (December 2015), and polar expedition cruising on the purpose-built PC6 Crystal Endeavor, the world’s premier luxury polar class expedition yacht (debuting 2020). Crystal AirCruises’ fully customized Boeing 777- 200LR jet, Crystal Skye (August 2017), is available for private charter on customized global itineraries and two special AirCruises to Sydney and Tahiti during the last New Year holiday and an African safari during China’s “Golden Week”. Further, a new class of ocean ships are being designed for Crystal’s ocean fleet to provide more itineraries for guests and reach increasing economies of scale.

Crystal Cruises remains “The World’s Most Awarded Luxury Cruise Line,” continuing to earn top accolades from consumer and travel industry experts from around the world. In 2017, Travel + Leisure awarded Crystal River Cruises “World’s Best River Cruise Line,” and Crystal Yacht Expedition Cruises “World’s Best Small-Ship Ocean Cruise.” In her debut year, Crystal Mozart was voted the “Best New River Ship” by Cruise Critic. In 2018, Crystal Cruises was awarded “Top 3 small class cruise lines” by Conde Nast Traveller the Gold List 2018.

Due to long delivery dates for cruise ships with orders up to 2026, MV Werften, a group of three shipyards in Germany continues to support Genting Cruise Lines with new building efforts. Two “Rhine Class” river ships were delivered in 2017 and two more in 2018. The first “Endeavor Class” expedition yacht for Crystal Cruises will be delivered in late 2019 and the first of two 204,000 gross ton “Global Class” ships for Dream Cruises will be delivered in late 2020.

Zouk continues to solidify its regional expansion as a premium lifestyle and nightlife brand for millennials via its various entities such as F&B outlets, nightclubs and festivals. Zouk has continued to hold annual dance music festival ZoukOut in December, which last attracted 41,000 millennials over 2 days. The 2017 edition was live-streamed to China and reached 1.8 million youth, with more ambitious plans to focus on experiential elements for the festival in 2018. Zouk’s latest social gaming lounge concept Red Tail has seen phenomenal success since its inception in December of last year and Zouk Genting in Genting Highlands Resort will open in the fourth quarter in 2018.

New, exciting projects in Zouk’s pipeline include opening a hip seafood concept by 2018 and franchising the Zouk Club model in various other countries. Zouk is committed to its goal of being an industry leader in the global nightlife and lifestyle scene, all whilst introducing millennials to the new Zouk entities and existing Genting group entities. Zouk Singapore clinched#3 in the DJ Mag Top 100 Clubs in The World poll, the best so far in its last 27 years of existence. The DJ Mag poll is the world’s preeminent industry benchmark in the dance music scene.

147 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

Resorts World Manila (“RWM”), the Philippines’ pioneer integrated entertainment and tourism destination, marked its eighth year in operation with significant milestones, continuous expansion, and many world-class entertainment offerings. In 2017, an enclosed air-conditioned pedestrian bridge directly connecting Ninoy Aquino International Airport Terminal 3 to Newport City and the RWM complex was officially opened. Dubbed Runway Manila, the bridge, with moving walkways, allows the average person to walk the distance between the airport and Newport City in just a few minutes.

Phase 3 of RWM’s expansion will continue to be fast-tracked in 2018 with international chain InterContinental Hotels Group (“IHG”) having opened its first and only Holiday Inn Express location in the country, replacing RWM’s value for money Remington Hotel. Completion of the Sheraton Manila Hotel, Hilton Manila, and Hotel Okura Manila is targeted for the fourth quarter, effectively making RWM a six-hotel integrated resort. The new lodgings will also include additional gaming areas, more retail space, and six basement parking decks. The Sheraton Manila Hotel will offer 391 new hotel rooms and Hotel Okura Manila an additional 190 rooms, while Hilton Manila will house 355 rooms. Upon completion of all three, RWM’s room count will increase to 2,390 – the biggest among all the integrated resorts in the Philippines. The Westside City Resorts World, a 31-hectare property situated in Philippine Amusement and Gaming Corporation’s (“PAGCOR”) Entertainment City, is planned for 2021 with about 1,000 hotel rooms operated under selected international hotel brands.

VI. FORWARD-LOOKING STATEMENTS

This circular contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on the current beliefs, assumptions, expectations, estimates and projections of the Company about the industry and markets in which the Group is operating or will operate in the future. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the Group, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include general economic, political and business conditions, changes in cruise industry competition, weather, force majeure events and/or other factors. Reliance should not be placed on these forward-looking statements, which merely reflect the view of the Company as of the date of this circular only. The Company is under no obligation to revise or update publicly these forward-looking statements or any part thereof to reflect events or circumstances resulting from any new information, future events or otherwise on which any such statement was based.

148 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

VII. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL POSITION OF THE GROUP

The Group is principally engaged in the business of cruise and cruise related operations, shipyard operations and leisure, entertainment and hospitality activities. Set out below is the management and discussion and analysis on the Group.

(i) For the Year ended 31 December 2017

Liquidity, financial resources and capital commitments

As at 31 December 2017, cash and cash equivalents amounted to US$1,147.7 million. Majority of the Group’s cash and cash equivalents were held in US$, EUR, Chinese Renminbi, HK$ and S$. The Group’s liquidity as at 31 December 2017 was US$1,784.2 million, comprising cash and cash equivalents and undrawn credit facilities.

Total loans and borrowings as at 31 December 2017 was US$1,888.2 million, which were mainly denominated in US$. Approximately 39% of the Group’s loans and borrowings was raised at fixed rates and 61% was raised at floating rates. As at 31 December 2017, loans and borrowings of US$297.4 million was repayable within one year.

The capital structure of the Group attributable to equity owners of the Company, comprising issued capital, reserves and retained earnings as disclosed in the statement of changes in equity in the 2017 annual report of the Company. The capital structure of the Group remained unchanged throughout the year ended 31 December 2017.

As at 31 December 2017, the Group had capital commitments in respect of the acquisition of property, plant and equipment not provided for in the financial statements amounting to US$837.4 million.

Significant investments of the Group and segmental information

Revenue from cruise and cruise-related activities increased 11.9% to US$1,016.0 million in 2017 compared with US$908.1 million in 2016. Net revenue in 2017 increased 14.0% to US$786.0 million from US$689.7 million in 2016 due to an increase in capacity days of 33.7%. The increase in capacity days was primarily due to the inclusion of full year operation of Genting Dream and Crystal Mozart as well as the launch of World Dream, Crystal Bach and Crystal Mahler during 2017.

Revenue from shipyard operations and non-cruise activities from external customers increased 60.6% to US$174.4 million in 2017 compared with US$108.6 million in 2016 primarily contributed by revenue from its shipyard activities and from sales of residential property units in Mainland China.

149 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

The Group held an approximately 44.9% effective interest in the common shares of Travellers International Hotel Group, Inc. (“Travellers”) as at 31 December 2017. Its share of Travellers’ loss for the year ended 31 December 2017 amounted to approximately US$0.1 million.

Travellers’ phase 3 of RWM’s expansion will continue to be fast-tracked in 2018 with international chain IHG having opened its first and only Holiday Inn Express location in the country, replacing RWM’s value for money Remington Hotel. Completion of the Sheraton Manila Hotel, Hilton Manila, and Hotel Okura Manila is targeted for the fourth quarter, effectively making RWM a six-hotel integrated resort. The new lodgings will also include additional gaming areas, more retail space, and six basement parking decks. The Sheraton Manila Hotel will offer 391 new hotel rooms and Hotel Okura Manila an additional 190 rooms, while Hilton Manila will house 355 rooms. Upon completion of all three, RWM’s room count will increase to 2,390 – the biggest among all the integrated resorts in the Philippines. The Westside City Resorts World, a 31-hectare property situated in PAGCOR Entertainment City, is planned for 2021 with about 1,000 hotel rooms operated under selected international hotel brands.

Material acquisitions and disposals of subsidiaries and associated companies

The Group has not been involved in any material acquisitions or disposals of subsidiaries and associated companies during the year.

Employees and remuneration policies

As at 31 December 2017, the Group had approximately 16,127 employees, consisting of approximately 11,755 (or 73%) shipbased officers and crew as well as approximately 4,372 (or 27%) staff employed in the various world-wide offices of the Group. The Group provides competitive salaries, benefits and incentives including provident fund schemes and medical insurance schemes for its staff. In addition, the Group had adopted a Post-listing Employee Share Option Scheme under which options may be granted to eligible employees of the Group entitling them to subscribe for shares in the share capital of the Company. Upon expiry of the said scheme on 29 November 2010, no further options may be granted thereunder while the outstanding options remain exercisable subject to the terms and conditions of the respective grants and the provisions of the scheme.

For year ended 31 December 2017, there is no significant change in the remuneration policies, bonus, share option scheme and training schemes for the Group.

Charges of group assets

As at 31 December 2017, the outstanding borrowings of the Group are secured by legal charges over assets including fixed and floating charges of US$2.9 billion.

150 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

Future plans for material investments or capital assets

Steel cutting ceremony for the first of two Global Class ships occurred on 8 March 2018 at the Group-owned MV Werften and these ships are to be delivered in late 2020 and 2021. These two Global Class ships are currently planned to be positioned in Shanghai and Tianjin during the summer months and in Australia, New Zealand, California and the ASEAN region during the winter months. With four new large ships and world itineraries, Dream Cruises will be “Asia’s Global Cruise Line” with the youngest cruise fleet in the world.

The first Crystal expedition yacht, the Crystal Endeavor, will be launched in late 2019 for cruises commencing 2020. Steel cutting for the first of the Endeavor Class occurred on 15 January 2018.

Gearing ratio

The gearing ratio of the Group as at 31 December 2017 was at 16.2%. The gearing ratio is defined as net debt divided by total equity. Net debt of approximately US$740.5 million is calculated as total borrowings (including “current and non-current borrowings” as shown in the consolidated statement of financial position) less cash and cash equivalents. The total equity of the Group is approximately US$4,579.3 million.

Exposure to fluctuations in exchange rates and related hedges

The Group adopts a prudent treasury policy with all financing and treasury activities being managed and controlled at its corporate head office. The Group manages its foreign exchange exposure primarily through forward rate agreements. It is also the Group’s policy that hedging will not be performed in excess of actual requirement.

The Group is exposed to foreign currency exchange rate fluctuations on the US$ value of the Group’s foreign currency denominated forecasted transactions. The Group’s principal net foreign currency exposure mainly relates to the EUR, HK$, Chinese Renminbi, S$ and RM. To manage this exposure, the Group takes advantage of any natural offsets of the Group’s foreign currency revenues and expenses and from time to time when appropriate, to enter into foreign currency forward contracts and/or option contracts for a portion of the remaining exposure relating to these forecasted transactions.

Contingent liabilities

151 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

of the mortgage loans granted by the banks to the purchasers. Such guarantees will also be discharged upon the earlier of (i) the issuance of the real estate ownership certificates of the relevant residential property units to the purchasers; and (ii) the full repayment of the mortgage loans by the purchasers. As at 31 December 2017, these guarantees provided by the Group are approximately US$26.3 million.

(ii) For the Year ended 31 December 2016

Liquidity, financial resources and capital commitments

As at 31 December 2016, cash and cash equivalents amounted to US$1,040.3 million. Majority of the Group’s cash and cash equivalents were held in US$, S$, HK$, EUR, Chinese Renminbi and RM. The Group’s liquidity as at 31 December 2016 was US$1,269.7 million, comprising cash and cash equivalents and undrawn credit facilities.

Total loans and borrowings as at 31 December 2016 was US$1,172.2 million, which were mainly denominated in US$. Approximately 1% of the Group’s loans and borrowings was raised at fixed rates and 99% was raised at floating rates as at 31 December 2016, loans and borrowings of US$135.2 million was repayable within one year.

The capital structure of the Group attributable to equity owners of the Company, comprising issued capital, reserves and retained earnings as disclosed in the statement of changes in equity in the 2016 annual report of the Company. The capital structure of the Group remained unchanged throughout the year ended 31 December 2016.

As at 31 December 2016, the Group had capital commitments in respect of the acquisition of property, plant and equipment not provided for in the financial statements amounting to US$837.9 million.

Significant investments of the Group and segmental information

Revenue from cruise and cruise-related activities increased 39.1% to US$908.1 million in 2016 compared with US$652.8 million in 2015. Net revenue in 2016 increased 38.8% to US$689.7 million from US$496.8 million in 2015 due to an increase in capacity days of 18.7% and 17.0% improvement in net yield. The increase in capacity days and net yield was primarily due to the inclusion of full year contribution from Crystal Cruises in 2016, as compared with its post-acquisition contribution since 15 May 2015 in the previous year, and the launch of Dream Cruises’ Genting Dream in late October 2016.

Revenue from shipyard operations and non-cruise activities from external customers increased 192.5% to US$108.6 million in 2016 compared with US$37.1 million in 2015 primarily contributed by revenue from yard repairs and conversion activities as a result of the acquisition of shipyards in Germany.

The Group held an approximately 44.9% effective interest in the common shares of Travellers as at 31 December 2016. Its share of Travellers’ profit for the year ended 31 December 2016 amounted to US$32.7 million.

152 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

Travellers marked its seventh year in operation with continuous development, milestones, and recognitions. The expansion plans remained on track with the Marriott West Wing, the extension of Marriott Hotel Manila, operational since the fourth quarter of 2016, increasing RWM’s total room count to over 1,450 and making it the largest hotel owner amongst the integrated resorts in the country. Other developments, which will introduce three new hotels – Hilton Manila Hotel, Sheraton Hotel Manila, and a new Maxims Hotel – are scheduled to be operational in 2018. This will also include an additional gaming area, new retail spaces and six basement parking decks. A significant milestone is the ongoing construction of an enclosed pedestrian bridge directly connecting Ninoy Aquino International Airport Terminal 3 to Newport City and the RWM complex, due to open in the first half of 2017. Once completed, the bridge, dubbed Runway Manila, will allow the average person to walk the distance between the airport and Newport City in just three minutes.

Material acquisitions and disposals of subsidiaries and associated companies

In April 2016, the Group has completed acquisition of the assets for the construction of cruise ships and real estate properties of three shipyards in Germany located respectively in Wismar, Warnemünde and Stralsund (i.e. MV Werften), from an independent third party for an aggregate consideration of approximately US$260.6 million.

Except for the above, the Group has not been involved in any material acquisitions or disposals of subsidiaries and associated companies during the year.

Employees and remuneration policies

As at 31 December 2016, the Group had approximately 13,123 employees, consisting of approximately 9,260 (or 71%) shipbased officers and crew as well as approximately 3,863 (or 29%) staff employed in the various world-wide offices of the Group. The Group provides competitive salaries, benefits and incentives including provident fund schemes and medical insurance schemes for its staff. In addition, the Group had adopted a Post-listing Employees Share Option Scheme under which options may be granted to eligible employees of the Group entitling them to subscribe for shares in the share capital of the Company. Upon expiry of the said scheme on 29 November 2010, no further options may be granted thereunder while the outstanding options remain exercisable subject to the terms and conditions of the respective grants and the provisions of the scheme.

For year ended 31 December 2016, there is no significant change in the remuneration policies, bonus, share option scheme and training schemes for the Group.

Charges of group assets

As at 31 December 2016, the outstanding borrowings of the Group were secured by legal charges including fixed and floating charges over assets with a carrying amount of approximately US$2.0 billion.

153 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

Future plans for material investments or capital assets

On 9 January 2017, Crystal River Cruises celebrated the steel cutting for Crystal Debussy and Crystal Ravel at MV Werften and they will sail in 2018. The two additional Rhine Class luxury river ships are scheduled for delivery in 2017. The first Crystal expedition yacht, the Crystal Endeavor, will be launched in late 2019.

Two Global Class ships are planned to be delivered starting 2020.

Gearing ratio

The gearing ratio of the Group as at 31 December 2016 was at 2.7%. The gearing ratio is defined as net debt divided by total equity. Net debt of approximately US$131.9 million is calculated as total borrowings (including “current and non-current borrowings” as shown in the consolidated statement of financial position) less cash and cash equivalents. The total equity of the Group is approximately US$4,823.2 million.

Exposure to fluctuations in exchange rates and related hedges

The Group is exposed to foreign currency exchange rate fluctuations on the US$ value of the Group’s foreign currency denominated forecasted transactions. The Group’s principal net foreign currency exposure mainly relates to the S$, HK$, EUR, Chinese Renminbi and RM to manage this exposure, the Group takes advantage of any natural offsets of the Group’s foreign currency revenues and expenses and from time to time when appropriate, to enter into foreign currency forward contracts and/or option contracts for a portion of the remaining exposure relating to these forecasted transactions.

Contingent liabilities

As at 31 December 2016, the Group did not have any material contingent liabilities.

(iii) For the Year ended 31 December 2015

Liquidity, financial resources and capital commitments

As at 31 December 2015, cash and cash equivalents amounted to US$1,778.7 million. Majority of the Group’s cash and cash equivalents were held in US$, S$, HK$, AUD and RM. The Group’s liquidity as at 31 December 2015 was US$2,008.5 million, comprising cash and cash equivalents and undrawn credit facilities.

154 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

Total loans and borrowings as at 31 December 2015 was US$531.3 million, which were denominated in US$. Approximately 2% of the Group’s loans and borrowings was raised at fixed rates and 98% was raised at floating rates. As at 31 December 2015, loans and borrowings of US$87.2 million was repayable within one year.

The capital structure of the Group attributable to equity owners of the Company, comprising issued capital, reserves and retained earnings as disclosed in the statement of changes in equity in the 2015 annual report of the Company. The capital structure of the Group remained unchanged throughout the year ended 31 December 2015.

As at 31 December 2015, the Group had capital commitments in respect of the acquisition of property, plant and equipment not provided for in the financial statements amounting to US$1,527.7 million.

Significant investments of the Group and segmental information

Revenue from cruise and cruise-related activities increased 23.0% to US$652.8 million in 2015 compared with US$530.7 million in 2014. Net revenue in 2015 increased 18.1% to US$496.8 million from US$420.8 million in 2014 due to an increase in capacity days of 14.1% and 3.5% improvement in net yield. The increase in capacity days was primarily due to the addition of capacity days from the Crystal Cruises fleet. The improvement in net yield was due primarily to the addition of Crystal Cruises’ brand to the fleet offset by softer gaming industry and economic conditions in the region. Revenue from non-cruise activities decreased 7.4% to US$37.1 million in 2015 compared with US$40.1 million in 2014 primarily due to lower income from aviation, travel agent and the international marketing activities in relation to our Manila operations.

The Group held an approximately 44.9% effective interest in the common shares of Travellers as at 31 December 2015. Its share of Travellers’ profit for the year ended 31 December 2015 amounted to US$33.9 million.

Travellers continues to focus on its expansion plans with the launch of the Marriott Grand Ballroom on 9 April 2015. The Ballroom boasts the largest, most versatile luxury space within the City of Manila and has taken centre stage as the preferred venue for conventions and social affairs inclusive of internationally acclaimed performers making full use of the impressive high-tech column free ballrooms. To further complement the Marriott Grand Ballroom, Travellers embarked on the extension of the Marriott Hotel Manila. The hotel will be increased from its current 342 rooms to 570 rooms with the addition of a new West wing. The Marriott West Wing will be completed and in operation by August 2016. Travellers has further undertaken extensive expansion with the development of three new hotels – The Hilton, Sheraton and new Maxims Hotel – and will bring an additional 945 five star rooms to the truly integrated resorts offering. All three hotels are earmarked for completion by the end of 2017. The new Phase 3 development will further house expanded gaming and retail facilities. Travellers, through its position fronting the Ninoy Aquino International Airport International airport and as true integrated resorts operations, continues to attract both the domestic and international guests through its vast offerings within an easily accessible location.

155 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

Material acquisitions and disposals of subsidiaries and associated companies

In March 2015, the Group entered into an underwriting agreement to sell 6.25 million ordinary shares in NCLH at an offering price of US$50.76 per share. As a result of the share disposal, a gain of approximately US$212.5 million to the Group was recorded and the percentage of ordinary shares in NCLH beneficially owned by the Group decreased from approximately 24.9% to approximately 22.1%.

In May 2015, the Group entered into an underwriting agreement to sell 10.0 million ordinary shares in NCLH at an offering price of US$54.66 per share. As a result of the share disposal, a gain of approximately US$387.1 million to the Group was recorded and the percentage of ordinary shares in NCLH beneficially owned by the Group decreased from approximately 22.0% to approximately 17.7%.

In May 2015, the Group acquired the entire interest in Crystal Cruises, which is a global luxury cruise line operator, for a consideration of US$426.9 million.

In October 2015, the Group disposed of all of its 50% interest in Magical Gains Holdings Limited, a joint venture of the Group for a consideration of approximately US$111.4 million. As a result of the disposal, a loss of approximately US$6.4 million to the Group was recorded.

In October 2015, the Group acquired the business of Zouk, a Singapore club brand, for a consideration of approximately US$8.0 million.

In November 2015, the Group acquired 50% and 70% of the equity interest in Lloyd Investitions- und Verwaltungs GmbH (“LIV”) and Lloyd Werft Bremerhaven AG (now known as Lloyd Werft Bremerhaven GmbH) (“LWB”) respectively for a consideration of approximately US$19.1 million. In accordance with an option agreement in relation to the acquisition, it allows either the Group to exercise a call option to acquire the remaining 50% equity interest in LIV and 30% equity interest in LWB (collectively “NCI”) or the owner of NCI to exercise a put option to dispose of the NCI to the Group at a fixed consideration. The Group has exercised the call option on 31 December 2015.

Except for the above, the Group has not been involved in any material acquisitions or disposals of subsidiaries and associated companies during the year.

Employees and remuneration policies

As at 31 December 2015, the Group had approximately 8,200 employees, consisting of approximately 5,987 (or 73%) shipbased officers and crew as well as approximately 2,213 (or 27%) staff employed in the various world-wide offices of the Group. The Group provides competitive salaries, benefits and incentives including provident fund schemes and medical insurance schemes for its staff. In addition, the Group had adopted a Post-listing Employees Share Option Scheme under which options may be granted to eligible employees

156 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

of the Group entitling them to subscribe for shares in the share capital of the Company. Upon expiry of the said scheme on 29 November 2010, no further options may be granted thereunder while the outstanding options remain exercisable subject to the terms and conditions of the respective grants and the provisions of the scheme.

For the year ended 31 December 2015, there was no significant change in the remuneration policies, bonus, share options scheme and training schemes for the Group.

Charges of group assets

As at 31 December 2015, the outstanding borrowings of the Group were secured by legal charges including fixed and floating charges over assets with a carrying amount of approximately US$1.2 billion.

Future plans for material investments or capital assets

Crystal Cruises initiated key investments in 2015 including Boeing Business Jet B777-200LR for the launch of Crystal Luxury Air in 2017. Additionally, Crystal Cruises purchased a lavishly outfitted Bombardier Global Express XRS jet for the new Crystal Charter Air brand, which debuted in spring 2016 featuring privately chartered service for corporate travel or groups. Crystal Cruises will offer Crystal River Cruises beginning in July 2016 with the launch of the Crystal Mozart, followed by four brand new cutting-edge river yachts in 2017.

Dream Cruises is a new cruise line – purposely conceived in and built for Asia. The Dream Cruises brand is dedicated to delivering luxury holiday experiences to the expanding Asian, and specifically Chinese, premium market. Our two Dream vessels under construction, Genting Dream and World Dream, will launch in 2016 and 2017, respectively.

Gearing ratio

The Group was in a net cash position of US$1,247.4 million as at 31 December 2015. The gearing ratio is defined as net debt divided by total equity, which was not applicable for the year ended 31 December 2015.

Exposure to fluctuations in exchange rates and related hedges

The Group adopts a prudent treasury policy with all financing and treasury activities being managed and controlled at its corporate head office. The Group manages its exposure primarily through fuel swap agreements. It is also the Group’s policy that hedging will not be performed in excess of actual requirement.

157 APPENDIX III ADDITIONAL INFORMATION OF THE GROUP

The Group is exposed to foreign currency exchange rate fluctuations on the US$ value of the Group’s foreign currency denominated forecasted transactions. The Group’s principal net foreign currency exposure mainly relates to the S$, AUD, RM and HK$. To manage this exposure, the Group takes advantage of any natural offsets of the Group’s foreign currency revenues and expenses and from time to time when appropriate, to enter into foreign currency forward contracts and/or option contracts for a portion of the remaining exposure relating to these forecasted transactions.

Contingent liabilities

As at 31 December 2015, the Group did not have any material contingent liabilities.

158 APPENDIX IV GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. INTERESTS OF DIRECTORS

As at the Latest Practicable Date, the interests and short positions of the Directors and the Chief Executive of the Company in the Shares, underlying Shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); (b) to be entered into the register pursuant to section 352 of the SFO; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code, or in accordance with information received by the Company, were as follows:

2.1 Interests in the issued Shares

Nature of interests/capacity in which such interests were held Founder/ Percentage of Interests of Beneficiary of issued Beneficial Interests of controlled discretionary voting Name of Director owner spouse corporation trusts Total Shares Number of issued Shares (Notes)

Tan Sri Lim Kok Thay 368,643,353 36,298,108 36,298,108 6,003,571,032 6,408,512,493 75.55 (1) (2) (3) and (4) (5)

Mr. Lim Keong Hui (6) – – – 6,003,571,032 6,003,571,032 70.78 (3) and (4)

Mr. Justin Tan Wah Joo 968,697 968,697 – – 968,697 0.01 (7) (7) (5)

159 APPENDIX IV GENERAL INFORMATION

Notes:

As at the Latest Practicable Date:

(1) Tan Sri Lim Kok Thay had a family interest in the same block of 36,298,108 Shares directly held by Goldsfine Investments Ltd. (“Goldsfine”) in which his wife, Puan Sri Wong Hon Yee had a corporate interest.

(2) Tan Sri Lim Kok Thay was also deemed to have a corporate interest in the same block of 36,298,108 Shares directly held by Goldsfine in which each of Tan Sri Lim Kok Thay and Puan Sri Wong Hon Yee held 50% equity interests.

(3) Tan Sri Lim Kok Thay as founder and a beneficiary of a discretionary trust (trustee of which is First Names Trust Company (Isle of Man) Limited) and Mr. Lim Keong Hui also as a beneficiary of the discretionary trust, had a deemed interest in the same block of 6,003,571,032 Shares.

(4) Out of the same block of 6,003,571,032 Shares held directly and indirectly by Golden Hope Limited (“Golden Hope”) as trustee of the Golden Hope Unit Trust (“GHUT”), 5,035,000,000 Shares were pledged Shares.

(5) There was no duplication in arriving at the total interest.

(6) Mr. Lim Keong Hui is a son of Tan Sri Lim Kok Thay.

(7) These shares were jointly held by Mr. Justin Tan Wah Joo and his wife.

(8) The Company had one class of issued Shares, each of which carried equal voting right.

(9) All the above interests represented long positions in the Shares and excluded those in the underlying Shares held through share options, convertible bonds or other equity derivatives, if any. Interests of the Director, Tan Sri Lim Kok Thay, set out in this subsection 2.1 shall be aggregated with his interests in the underlying Shares held through share options, convertible bonds or other equity derivatives of the Company set out in subsection 2.2 below in order to give the total interests of the Director in the Company pursuant to the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

2.2 Interests in the underlying Shares held through share options, convertible bonds or other equity derivatives

Share options were granted to a Director under the share option scheme adopted by the Company on 23 August 2000 (as effected on 30 November 2000 and amended on 22 May 2002) (the “Post-listing Employee Share Option Scheme”).

As at the Latest Practicable Date, the Director had personal interests in the following underlying shares held through share options granted under the Post-listing Employee Share Option Scheme:

Capacity in Number of Percentage of which such underlying issued voting interests Name of Director Shares Shares were held

Tan Sri Lim Kok Thay 7,000,000 0.083 Beneficial owner

Further details of share options granted to the Director under the Post-listing Employee Share Option Scheme are set out in the subsection 2.4 below.

160 APPENDIX IV GENERAL INFORMATION

These interests in share options represented long positions in the underlying Shares in respect of physically settled derivatives of the Company. Interests of the Director, Tan Sri Lim Kok Thay, set out in this subsection 2.2, shall be aggregated with his interests in the Shares set out in subsection 2.1 above in order to give the total interests of the Director in the Company pursuant to the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

2.3 Interests in the shares of associated corporations of the Company

Nature of interests/capacity in which such interests were held Founder/ Interests of Beneficiary of Percentage of Name of Beneficial Interests of controlled discretionary issued voting Name of associated corporation Director Owner spouse corporation trusts Total shares Number of ordinary/common shares (Notes)

Starlet Investments Pte. Ltd. Tan Sri Lim – 250,000 250,000 250,000 500,000 100 (“Starlet”) (1) Kok Thay (2) (3) (4) (15) and (16)

SC Alliance VIP World Philippines, Tan Sri Lim – 2,000 2,000 2,000 2,000 40 Inc. (“SC Alliance”) (5) Kok Thay (6) (7) (8) (15) and (16)

Star Cruises Hong Kong Management Tan Sri Lim – 5,000 5,000 5,000 5,000 100 Services Philippines, Inc. Kok Thay (10) (11) (12) (15) and (16) (“SCHKMS”) (9)

Travellers International Hotel Group, Mr. Lim Keong Hui 1,910,000 – – 9,203,350,000 9,205,260,000 35.74 Inc. (“Travellers”) (13) (14) (16)

Notes:

As at the Latest Practicable Date:

(1) Starlet had one class of issued shares, namely the ordinary shares, each of which carried equal voting right. Each of a subsidiary of the Company and International Resort Management Services Pte. Ltd. (“IRMS”) had a 50% interest in Starlet. IRMS was owned as to 80% by Tan Sri Lim Kok Thay and 20% by his spouse, Puan Sri Wong Hon Yee.

(2) As the spouse of Puan Sri Wong Hon Yee, Tan Sri Lim Kok Thay had a family interest in 250,000 ordinary shares of Starlet directly held by IRMS in which Puan Sri Wong Hon Yee had a 20% interest.

(3) Tan Sri Lim Kok Thay was deemed to have a corporate interest in 250,000 ordinary shares of Starlet directly held by IRMS.

(4) As founder and a beneficiary of a discretionary trust, Tan Sri Lim Kok Thay had a deemed interest in 250,000 ordinary shares of Starlet.

161 APPENDIX IV GENERAL INFORMATION

(5) SC Alliance had two classes of issued shares, namely 2,000 common shares and 3,000 series A preferred shares, each of which carried equal voting right. All the issued common shares in SC Alliance were held by Starlet.

(6) As the spouse of Puan Sri Wong Hon Yee, Tan Sri Lim Kok Thay had a family interest in 2,000 common shares of SC Alliance directly held by Starlet in which IRMS had a 50% interest, IRMS was in turn owned as to 20% by Puan Sri Wong Hon Yee.

(7) Tan Sri Lim Kok Thay was deemed to have a corporate interest in 2,000 common shares of SC Alliance directly held by Starlet in which IRMS had a 50% interest.

(8) As founder and a beneficiary of a discretionary trust, Tan Sri Lim Kok Thay had a deemed interest in 2,000 common shares of SC Alliance.

(9) SCHKMS had one class of issued shares, namely the common shares, each of which carried equal voting right. SCHKMS was owned as to (i) 60% by SC Alliance; and (ii) 40% by Starlet.

(10) As the spouse of Puan Sri Wong Hon Yee, Tan Sri Lim Kok Thay had a family interest in 5,000 common shares of SCHKMS directly and indirectly held by Starlet in which IRMS had a 50% interest, IRMS was in turn owned as to 20% by Puan Sri Wong Hon Yee.

(11) Tan Sri Lim Kok Thay was deemed to have a corporate interest in 5,000 common shares of SCHKMS comprising (i) 3,000 common shares directly held by SC Alliance; and (ii) 2,000 common shares directly held by Starlet.

(12) As founder and a beneficiary of a discretionary trust, Tan Sri Lim Kok Thay had a deemed interest in 5,000 common shares of SCHKMS.

(13) Travellers had two classes of issued shares, namely 15,755,874,850 common shares and 10,000,000,000 preferred B shares, each of which carried equal voting right. Following initial listing of the common shares of Travellers on the Main Board of The Philippine Stock Exchange, Inc. on 5 November 2013 and the exercise of the over-allotment option by the stabilising agent on 4 December 2013 to purchase 23,645,600 common shares, the Company’s effective interest in the common shares of Travellers had been diluted from 50% to 44.93%. The Company’s effective interest in the preferred B shares of Travellers remained unchanged at 50% following the listing.

(14) As a beneficiary of a discretionary trust, Mr. Lim Keong Hui had a deemed interest in 9,203,350,000 common shares of Travellers.

(15) There was no duplication in arriving at the total interest.

(16) These interests represented long positions in the shares of the relevant associated corporations of the Company.

(17) Tan Sri Lim Kok Thay held qualifying shares in certain associated corporations of the Company on trust for a subsidiary of the Company.

162 APPENDIX IV GENERAL INFORMATION

2.4 Share Options

Details of the Company’s Post-listing Employee Share Option Scheme are set out in the published annual report of the Company for the year ended 31 December 2017. The Post-listing Employee Share Option Scheme has expired on 29 November 2010 whereupon no further options can be granted under the scheme but the outstanding options remain exercisable subject to the terms and conditions of the respective grants and the provisions of the scheme. Details of the outstanding share options granted to the Director of the Company and the employees of the Group under the Post-listing Employee Share Option Scheme as at the Latest Practicable Date were as follows:

Post-listing Employee Share Option Scheme

Number of share options outstanding Exercise price at the Latest Date granted per Share Exercisable period Practicable Date

Tan Sri Lim Kok Thay (Director) 27/05/2008 HK$l.7800 28/05/2009 – 27/05/2018 7,000,000

7,000,000

All other employees 27/05/2008 HK$1.7800 28/05/2009 – 27/05/2018 2,475,000 16/11/2010 HK$3.7800 16/11/2011 – 15/11/2020 7,226,000

9,701,000

Grand Total 16,701,000

The share options under the Post-listing Employee Share Option Scheme granted on (i) 27 May 2008 vest in five tranches over a period of ten years from the date of offer and become exercisable annually in equal tranches of 20% of the amount granted commencing in each of the five years from 2009 to 2013; and (ii) 16 November 2010 vest in five tranches over a period of ten years from the date of offer and become exercisable annually in equal tranches of 20% of the amount granted commencing in each of the five years from 2011 to 2015. All the share options under the Post-listing Employee Share Option Scheme are subject to further terms and conditions set out in the relevant offer letters and provisions of the Post-listing Employee Share Option Scheme.

163 APPENDIX IV GENERAL INFORMATION

Save as disclosed above and in the section headed “Interests of Substantial Shareholders” below, as at the Latest Practicable Date, none of the Directors or the Chief Executive of the Company had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), as recorded in the register required to be kept under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code, or in accordance with information received by the Company.

3. INTERESTS OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as the Directors or the Chief Executive of the Company were aware or could ascertain after reasonable enquiry, the following persons, not being a Director or the Chief Executive of the Company, had interests or short positions in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or, who were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group or had any options in respect of such capital:

3.1 Interests in the issued Shares

Nature of interests/capacity in which such interests were held Interests of Percentage Beneficial Interests of controlled Beneficiary of issued Name of Shareholder (Notes) owner spouse corporation Trustee of trust Total Shares Number of issued Shares (Notes)

First Names Trust Company (Isle of – – 6,003,571,032 6,003,571,032 6,003,571,032 6,003,571,032 70.78 Man) Limited (as trustee of a (5) (7) (9) (13) discretionary trust) (1)

Cove Investments Limited (2) – – – – 6,003,571,032 6,003,571,032 70.78 (10)

Golden Hope – – 546,628,908 6,003,571,032 – 6,003,571,032 70.78 (as trustee of GHUT) (3) (6) (8) and (12) (13)

Joondalup Limited (4) 546,628,908 – – – – 546,628,908 6.44

Puan Sri Wong Hon Yee – 6,408,512,493 36,298,108 – – 6,408,512,493 75.55 (11(a)) (11(b)) (13)

164 APPENDIX IV GENERAL INFORMATION

Notes:

As at the Latest Practicable Date:

(1) First Names Trust Company (Isle of Man) Limited (“First Names”) was the trustee of a discretionary trust (the “Discretionary Trust”), the beneficiaries of which were Tan Sri Lim Kok Thay, Mr. Lim Keong Hui and certain other members of Tan Sri Lim Kok Thay’s family. First Names as trustee of the Discretionary Trust held 99.99% of the units in the GHUT, a private unit trust directly and 0.01% of the units in the GHUT indirectly through Cove (as defined below).

(2) Cove Investments Limited (“Cove”) was wholly-owned by First Names as trustee of the Discretionary Trust.

(3) Golden Hope was the trustee of the GHUT.

(4) Joondalup Limited (“Joondalup”) was wholly-owned by Golden Hope as trustee of the GHUT.

(5) First Names as trustee of the Discretionary Trust had a corporate interest in the same block of 6,003,571,032 Shares held directly and indirectly by Golden Hope as trustee of the GHUT (comprising 5,456,942,124 Shares held directly by Golden Hope as trustee of the GHUT and 546,628,908 Shares held indirectly through Joondalup).

(6) Golden Hope as trustee of the GHUT had a corporate interest in the same block of 546,628,908 Shares held directly by Joondalup.

(7) First Names in its capacity as trustee of the Discretionary Trust had a deemed interest in the same block of 6,003,571,032 Shares held directly and indirectly by Golden Hope as trustee of the GHUT (comprising 5,456,942,124 Shares held directly by Golden Hope as trustee of the GHUT and 546,628,908 Shares held indirectly through Joondalup).

(8) The interest in 6,003,571,032 Shares was held directly and indirectly by Golden Hope in its capacity as trustee of the GHUT (comprising 5,456,942,124 Shares held directly by Golden Hope as trustee of the GHUT and 546,628,908 Shares held indirectly through Joondalup).

(9) First Names as trustee of the Discretionary Trust was deemed to have interest in the same block of 6,003,571,032 Shares held directly and indirectly by Golden Hope as trustee of the GHUT in its capacity as beneficiary of the GHUT.

(10) Cove which held 0.01% of the units in the GHUT was deemed to have interest in the same block of 6,003,571,032 Shares held directly and indirectly by Golden Hope as trustee of the GHUT in its capacity as beneficiary of the GHUT.

(11) (a) Puan Sri Wong Hon Yee as the spouse of Tan Sri Lim Kok Thay, had a family interest in the same block of 6,408,512,493 Shares in which Tan Sri Lim Kok Thay had a deemed interest. These interests did not include the deemed interests of Puan Sri Wong Hon Yee in the underlying Shares of the Company through share options held personally by Tan Sri Lim Kok Thay and shall be aggregated with such interests set out in subsection 3.2 below to give the total interests of Puan Sri Wong Hon Yee pursuant to the SFO.

(b) Puan Sri Wong Hon Yee also had a corporate interest in 36,298,108 Shares held directly by Goldsfine by holding 50% of its equity interest.

(12) Out of the same block of 6,003,571,032 Shares held directly and indirectly by Golden Hope as trustee of the GHUT, 5,035,000,000 Shares were pledged Shares.

(13) There was no duplication in arriving at the total interest.

(14) The Company had one class of issued Shares, each of which carried equal voting right.

(15) All the above interests represented long positions in the Shares and excluded those in the underlying Shares held through share options, convertible bonds or other equity derivatives, if any.

165 APPENDIX IV GENERAL INFORMATION

3.2 Interests in the underlying Shares held through share options, convertible bonds or other equity derivatives

Percentage of Number of issued voting Nature of Name of shareholder underlying Shares Shares interests

Puan Sri Wong Hon Yee 7,000,000 (Note) 0.083 Interests of spouse

Note: As at the Latest Practicable Date, Puan Sri Wong Hon Yee as the spouse of Tan Sri Lim Kok Thay, was deemed to have a family interest in 7,000,000 underlying Shares by virtue of the share options granted to Tan Sri Lim Kok Thay under the Post-listing Employee Share Option Scheme. These interests represented long positions in the underlying Shares in respect of physically settled derivatives of the Company and shall be aggregated with her interests set out in subsection 3.1 above to give her total interests pursuant to the SFO.

3.3 Interests in other members of the Group

Number of shares held/ Amount of registered Holding Name of subsidiary Name of Shareholder capital held percentage

Macau Land Investment World Arena Corporation 15 ordinary shares 15% Corporation

Silverland Concept 10 ordinary shares 10% Corporation

Lloyd Offshore Bremerhaven Maritime Offshore Group EUR39,800 19.9% GmbH GmbH

Save as disclosed in this circular and so far as the Directors or the Chief Executive of the Company were aware, as at the Latest Practicable Date, there were no other persons who had interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group or had any option in respect of such capital.

Save as disclosed below, as at the Latest Practicable Date, no other Directors are directors or employees of substantial shareholders listed in the section headed “Interests of Substantial Shareholders” above:

Name of Director Title Company

Tan Sri Lim Kok Thay Director Cove Investments Limited Director Golden Hope Limited Director Joondalup Limited

166 APPENDIX IV GENERAL INFORMATION

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors entered, or proposed to enter, into any service contract with any member of the Group, excluding contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensation).

5. DIRECTORS’ INTERESTS IN ASSETS AND CONTRACTS OF THE GROUP

(1) On 1 December 2015, Crystal Cruises, LLC (an indirect wholly-owned subsidiary of the Company) as tenant entered into a lease agreement with Resorts World Omni LLC (an indirect wholly-owned subsidiary of Genting Malaysia Berhad (“GENM”, being an associate of Tan Sri Lim Kok Thay and Mr. Lim Keong Hui) as landlord in respect of a lease of an office premises at Miami, Florida, the United States of America for a period of two years commencing from 1 December 2015 to 30 November 2017 at the monthly basic rent of US$15,000. Upon expiry of the lease agreement, it has been renewed by operation of law on monthly basis at the same rent. The amount paid by the Group under the lease agreement amounted to approximately US$180,000 during the financial year ended 31 December 2017.

(2) On 4 May 2018, Star Cruise Pte Ltd (an indirect wholly-owned subsidiary of the Company) as licensee entered into an agreement with Resorts World Properties Pte. Ltd. (a wholly-owned subsidiary of Genting Singapore PLC which is an associate of Tan Sri Lim Kok Thay and Mr. Lim Keong Hui) as licensor whereby Resorts World Properties Pte. Ltd. agreed to grant a license to Star Cruise Pte Ltd for temporary use of certain premises at Singapore as storage for the period from 1 April 2018 to 31 May 2018 at a monthly fee of S$800.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors has any direct or indirect interests in any assets which have been acquired or disposed of by, or leased to, or which are proposed to be acquired or disposed of by, or leased to, any members of the Group since 31 December 2017, the date to which the latest published audited consolidated financial statements of the Group were made up.

None of the Directors is materially interested in any contract or arrangement entered into by any member of the Group subsisting as at the Latest Practicable Date which was significant in relation to the business of the Group.

6. Expert and Consent

The following is the qualification of the expert who has given its opinion or advice which is contained in this circular.

Name Qualification

PricewaterhouseCoopers Certified Public Accountants

167 APPENDIX IV GENERAL INFORMATION

As at the Latest Practicable Date, PricewaterhouseCoopers:

(a) did not have any shareholding, direct or indirect, in any member of the Group or any rights (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group;

(b) did not have any interest, direct or indirect, in any assets which had been acquired or disposed of by or leased to any members of the Group, or were proposed to be acquired or disposed of by or leased to any members of the Group since 31 December 2017, being the date up to which the latest published audited financial statements of the Group were made; and

(c) has given and has not withdrawn its written consent to the issue of this circular with the inclusion of to its letter and reference to its name in the form and context in which they are included.

7. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by members of the Group within the two years preceding the date of this circular and are or may be material:

(1) An agreement dated 9 January 2017 between MV Werften Wismar GmbH, an indirect wholly-owned subsidiary of the Company, and certain subsidiaries of ABB Ltd., for the sale and purchase of complete propulsion systems, electric power plants, automation and marine software systems for the construction of five vessels, at a total consideration of approximately EUR131 million.

(2) A sale agreement dated 13 July 2017 between (i) UBS AG, Australia Branch (wholly owned by UBS Group AG, a company incorporated in Switzerland) (“UBS AG”) and (ii) Cheer Century Limited (an indirect wholly-owned subsidiary of the Company) (“CCL”) under which CCL agreed to sell and UBS AG agreed to conduct and manage the sale of 46,400,000 ordinary shares held by CCL in The Star Entertainment Group Limited (formerly known as Echo Entertainment Group Limited, a company incorporated in Australia and listed on the market operated by ASX Limited) to third party purchasers, and to underwrite and guarantee the sale of any such shares which had not been purchased by third party purchasers for a total consideration of AUD 235,248,000. Completion of the sale agreement took place on 18 July 2017.

(3) An underwriting agreement dated 10 August 2017 between (i) Star NCLC and the other Selling Shareholders (as defined in the underwriting agreement) and (ii) Citigroup Global Markets Inc., Barclays Capital Inc. and Goldman Sachs & Co. LLC under which Star NCLC agreed to sell to Citigroup Global Markets Inc., Barclays Capital Inc. and Goldman Sachs & Co. LLC 7,500,000 NCLH Shares at the total consideration of (after deduction of the relevant expenses) approximately US$409.1 million.

168 APPENDIX IV GENERAL INFORMATION

(4) A lock-up agreement dated 10 August 2017 between (i) Star NCLC and (ii) Citigroup Global Markets Inc., Barclays Capital Inc. and Goldman Sachs & Co. LLC under which Star NCLC had undertaken not to, without the prior written consents of Citigroup Global Markets Inc., Barclays Capital Inc. and Goldman Sachs & Co. LLC, sell, offer or contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or file a registration statement with the SEC in respect of any NCLH Shares for a period of 30 days after 10 August 2017.

(5) An agreement dated 21 February 2017 (as varied by two variation agreements dated 6 October 2017 and 13 March 2018 respectively) between MV Werften Wismar GmbH, an indirect wholly-owned subsidiary of the Company, and the AXIKO Consortium (which consists of Axima Concept S.A. and Koja Oy), for the sale and purchase of turnkey heat, ventilation and air-conditioning systems for the construction of two vessels, at an aggregated consideration of approximately EUR131.2 million.

(6) An underwriting agreement dated 15 November 2017 between (i) Star NCLC and the other Selling Shareholder (as defined in the underwriting agreement) and (ii) Morgan Stanley & Co. LLC under which Star NCLC agreed to sell to Morgan Stanley & Co. LLC 5,000,000 NCLH Shares at the total consideration of (after deduction of the relevant expenses) approximately US$270.1 million.

(7) A lock-up agreement dated 15 November 2017 between (i) Star NCLC and (ii) Morgan Stanley & Co. LLC under which Star NCLC had undertaken not to, without the prior written consents of Morgan Stanley & Co. LLC, sell, offer or contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or file a registration statement with the SEC in respect of any NCLH Shares for a period of 30 days after 15 November 2017.

(8) An underwriting agreement dated 27 February 2018 between (i) Star NCLC and the other Selling Shareholder (as defined in the underwriting agreement) and (ii) Morgan Stanley & Co. LLC under which Star NCLC agreed to sell to Morgan Stanley & Co. LLC 9,750,000 NCLH Shares at the total consideration of (after deduction of the relevant expenses) approximately US$543.6 million.

(9) A lock-up agreement dated 27 February 2018 between (i) Star NCLC and (ii) Morgan Stanley & Co. LLC under which Star NCLC had undertaken not to, without the prior written consents of Morgan Stanley & Co. LLC, sell, offer or contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or file a registration statement with the SEC in respect of any NCLH Shares for a period of 30 days after 27 February 2018.

8. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, there is no litigation or claim of material importance pending or threatened against any member of the Group.

169 APPENDIX IV GENERAL INFORMATION

9. DIRECTOR’S INTERESTS IN COMPETING BUSINESS

Tan Sri Lim Kok Thay, the Chairman and Chief Executive Officer and a substantial shareholder of the Company, is the Chairman and Chief Executive, a substantial shareholder and a warrant holder of Genting Berhad (“GENT”) as well as the Chairman and Chief Executive, a substantial shareholder and a holder of the rights to participate in the performance shares of Genting Malaysia Berhad (“GENM”). GENT and GENM are listed on the Main Market of Bursa Malaysia Securities Berhad and both were substantial shareholders of the Company before the disposal by the respective subsidiaries of GENT and GENM of their respective equity interests in the Company to Golden Hope (as trustee of the GHUT) (a substantial shareholder of the Company) effective 21 October 2016, whereupon they ceased to have equity interests in the Company and are no longer substantial shareholders of the Company. Tan Sri Lim Kok Thay is also the Executive Chairman, a substantial shareholder and a holder of the rights to participate in the performance share scheme of Genting Singapore PLC (“GENS”), a company listed on the Main Board of the Singapore Exchange Securities Trading Limited.

Mr. Lim Keong Hui, an Executive Director, the Executive Director – Chairman’s Office and Chief Information Officer and a substantial shareholder of the Company, is also a Non-Independent Executive Director, the Executive Director – Chairman’s Office, the Chief Information Officer and a substantial shareholder of GENT, and a Non-Independent Executive Director, the Chief Information Officer, a substantial shareholder and a holder of the rights to participate in the performance shares of GENM. He is also a substantial shareholder of GENS.

GENM is involved in an integrated resort business at Genting Highlands and its principal activities cover leisure and hospitality services, which comprise gaming, hotels, food and beverage, theme parks, retail and entertainment attractions. The principal activities of GENM’s subsidiaries include operation of casinos, leisure and hospitality services, property investment and management, investments, tours and travel related services and provision of sales and marketing services. The principal activity of GENS is that of an investment holding company. The principal activities of GENS’s subsidiaries include the development and operation of integrated resort, operation of casinos, provision of sales and marketing support services to leisure and hospitality related businesses and investments. GENS owns Resorts World Sentosa in Singapore. As at the Latest Practicable Date, GENT held approximately 49.41% and 52.75% equity interests in GENM and GENS respectively.

The Group is principally engaged in the business of cruise and cruise-related operations, shipyard operations and leisure, entertainment and hospitality activities.

Tan Sri Lim Kok Thay and Mr. Lim Keong Hui are therefore considered as having interests in business (the “Deemed Competing Business”) apart from the Group’s business, which may compete indirectly with the Group’s business under Rule 8.10 of the Listing Rules. The Company’s management team is separate and independent from GENT, GENM and GENS. Coupled with the appointment of three Independent Non-executive Directors to the Board, the Group is capable of carrying on its business independent of and at arm’s length from the Deemed Competing Business.

170 APPENDIX IV GENERAL INFORMATION

10. MISCELLANEOUS

(a) The Company Secretary of the Company is Ms. Louisa Tam Suet Lin, an associate member of The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries. The assistant secretary is Estera Services (Bermuda) Limited.

(b) The registered office of the Company is situated at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.

(c) The corporate headquarters and principal place of business in Hong Kong of the Company is at Suite 1501, Ocean Centre, 5 Canton Road, Tsimshatsui, Kowloon, Hong Kong SAR.

(d) The Bermuda Principal Registrar of the Company is MUFG Fund Services (Bermuda) Limited located at The Belvedere Building, 69 Pitts Bay Road, Pembroke HM08, Bermuda.

(e) The Hong Kong Branch Registrar of the Company is Computershare Hong Kong Investor Services Limited located at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong SAR.

(f) The English text of this circular shall prevail over the Chinese text.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the corporate headquarters and principal place of business in Hong Kong of the Company up to and including the date of the SGM:

(a) the Memorandum of Continuance and Bye-laws of the Company;

(b) the annual reports of the Company for the years ended 31 December 2015, 31 December 2016 and 31 December 2017;

(d) the letter from PricewaterhouseCoopers reporting on unaudited pro-forma financial information on the Group, the text of which is set out in Appendix II;

(e) the letter of consent from PricewaterhouseCoopers referred to in paragraph 6 of this appendix;

(f) the circular of the Company dated 20 April 2018; and

(g) this circular.

171 NOTICE OF SPECIAL GENERAL MEETING

Genting Hong Kong Limited (Continued into Bermuda with limited liability) (Stock Code: 678)

NOTICE IS HEREBY GIVEN THAT a special general meeting (the “SGM”) of Genting Hong Kong Limited (the “Company”) will be held at Suite 1501, Ocean Centre, 5 Canton Road, Tsimshatsui, Kowloon, Hong Kong SAR on Friday, 15 June 2018 at 11:30 a.m. (or as soon as practicable immediately after the conclusion or adjournment of the annual general meeting of the Company convened to be held at 11:00 a.m. on the same day and at the same place) for the purpose of considering and, if thought fit, passing with or without modification, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“THAT:

(a) the disposal (the “Future Disposal”) by the Company and/or its subsidiaries the “Group”) of up to 3,148,307 shares (“Approved Sale Shares”) in the share capital of Norwegian Cruise Line Holdings Ltd. (“NCLH”), a company incorporated under the laws of Bermuda having its shares listed on the New York Stock Exchange under the symbol “NCLH” during the period of 12 months from the date of passing of this resolution (unless revoked or varied by ordinary resolution of the shareholders in general meeting of the Company) (the “Mandate Period”) on the following conditions:

(i) apart from disposal in the open market at market price on the New York Stock Exchange, the Company may also dispose of the Approved Sale Shares during the Mandate Period through secondary public offering(s) by way of a marketed underwritten offering or a block trade (“Secondary Public Offering(s)”) by entering into underwriting agreement(s) with reputable investment bank(s) as underwriter(s). The terms and conditions of such Secondary Public Offering(s) will be negotiated on an arms’ length basis;

(ii) (1) the selling price per Approved Sale Share that is to be sold through Secondary Public Offering(s) shall represent no more than 20% discount to the average closing price of the shares of NCLH (the “NCLH Shares”) as quoted on the New York Stock Exchange in the five (5) trading days immediately prior to the date of the relevant underwriting agreement; and

172 NOTICE OF SPECIAL GENERAL MEETING

(2) whether the disposal is made in the open market at market price or through Secondary Public Offering(s), the minimum selling price per Approved Sale Share shall not be less than US$43.86, be and are hereby approved.

(b) if and when there shall be any alteration to the nominal value of the NCLH Shares as a result of consolidation, subdivision or reclassification, or an issue of NCLH Shares to Star NCLC Holdings Ltd. (“Star NCLC”), a wholly-owned subsidiary of the Company, by way of capitalization of profits or reserves or by way of a scrip dividend of NCLH during the Mandate Period (“Capital Changes”), the number of Approved Sale Shares shall be adjusted accordingly and the minimum selling price per Approved Sale Shares shall be adjusted by multiplying US$43.86 by the total number of NCLH Shares in issue immediately before the Capital Changes and divided by the total number of NCLH Shares in issue immediately thereafter. If and when there shall be an issue of NCLH Shares to Star NCLC by way of a rights issue during the Mandate Period, the number of Approved Sale Shares shall be adjusted to include such new NCLH Shares issued to Star NCLC be and are hereby approved.

(c) the directors of the Company (the “Directors”) be and are hereby authorized and empowered to determine, decide, execute and implement with full discretion all matters relating to the Future Disposal from time to time during the Mandate Period, including but not limited to, the number of batches of disposals, the number of Approved Sale Shares to be sold in each disposal, the timing of each disposal, the manner of disposal (whether through Secondary Public Offering(s) or sales in the open market), the target purchasers, and the selling price (subject to the parameters set out above) and to do all such acts and things, including but not limited to, execution of all documents which the Directors deem necessary, appropriate or desirable to implement and give full effect to the Future Disposal and the transactions contemplated thereunder or in connection with the exercise of the Future Disposal.”

By Order of the Board Louisa Tam Suet Lin Company Secretary

Hong Kong, 25 May 2018

Notes:

1. A shareholder entitled to attend and vote at this meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A shareholder who is the holder of two or more shares may appoint more than one proxy to attend on the same occasion. A proxy need not be a shareholder of the Company.

2. The form of proxy in the case of an individual shall be signed by the appointor or his attorney and in the case of a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

3. Where there are joint registered holders of any share, any one of such persons may vote at any meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at any meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of the Company in respect of such share shall alone be entitled to vote in respect thereof.

4. If the form of proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit.

173 NOTICE OF SPECIAL GENERAL MEETING

5. If no name is inserted in the space for the name of your proxy on the form of proxy, the chairman of this meeting will act as your proxy.

6. The form of proxy, together with any power of attorney or other authority under which the form of proxy is signed or a notarially certified copy of that power or authority, shall be deposited at the Corporate Headquarters of the Company at Suite 1501, Ocean Centre, 5 Canton Road, Tsimshatsui, Kowloon, Hong Kong SAR, or at the office of the Company’s Hong Kong Branch Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong SAR, or at Genting Hong Kong Limited, c/o Genting Management and Consultancy Services Sdn Bhd at 24th Floor, Wisma Genting, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting and any adjournment thereof and in default the form of proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude shareholders from attending and voting in person at this meeting (or any adjourned meeting thereof) should they so wish.

7. Personal Information Collection Statement:

Your supply of Personal Data to the Company and/or the Company’s Registrars in Bermuda and Hong Kong in the form of proxy is on a voluntary basis. If you fail to provide sufficient information, we may not be able to process your appointment of proxy and instructions. “Personal Data” in this statement has the meaning defined under the Personal Data (Privacy) Ordinance, Chapter 486 of the Laws of Hong Kong (the “PDPO”), which may include but is not limited to the Personal Data you supplied to us in the form of proxy. Your Personal Data is collected for the purposes of processing and administration by the Company (or its Registrars in Bermuda and Hong Kong (as the case may be)) of proxies appointed for the SGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the SGM (including any adjournment thereof) (the “Purposes”). The Personal Data may be retained for such period as may be necessary for our verification and record purposes. If you have provided Personal Data of individuals other than yourself in the form of proxy, you confirm that you have informed and sought the requisite consent from those individuals to the collection, use and disclosure of their Personal Data for the stated purposes. The Company may disclose or transfer the Personal Data to its subsidiaries, its Registrars, its agent, its contractor, and/or third party service provider who provides administrative, computer and other services to the Company for use in connection with the Purposes and to such parties who are authorised by law to request the Personal Data or are otherwise relevant for the Purposes and need to receive the Personal Data. You have the right to request access to and/or correction of your Personal Data respectively in accordance with the provisions of the PDPO.

Notice of Book Close Period and Record Date for SGM

The Registers of Members of the Company (both the Principal Register in Bermuda and Hong Kong Branch Register) will be closed from 12 June 2018 to 15 June 2018, both days inclusive, during which period no transfer of shares will be registered. In order to qualify for attending and voting at the SGM, shareholders of the Company are reminded to ensure that all share transfer documents accompanied by the relevant share certificates must be lodged for registration with the Bermuda Principal Registrar, MUFG Fund Services (Bermuda) Limited c/o RBC Corporate Services Hong Kong Limited at 51/F., Central Plaza, 18 Harbour Road, Wanchai, Hong Kong SAR; or Hong Kong Branch Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong SAR, by no later than 4:30 p.m. on 11 June 2018.

174 ✂ MEETING or MEETING or being a shareholder/shareholders of Genting Hong Kong Limited (the “ Collection Statementsetout inNote7tothe noticeoftheMeeting. By submittingan instrumentappointingaproxy(ies), theshareholderacceptsandagrees tothetermsofPersonal Information 8. 7. 6. 5. 4. 3. 2. 1. NOTES: in thenoticeofMeeting. Please indicatewithan“X”intheappropriateboxprovidedabovehowyouwishyourvotetobecastonresolutionsspecified Number ofsharesheld Address IN BLOCKCAPITAL Full Name(s) Dated: indicated below.(*Deleteifinapplicable) Company convenedtobeheldat11:00a.m.onthesamedayandplace)anyadjournmentthereofvoteas 11:30 a.m.(orassoonpracticableimmediatelyaftertheconclusionoradjournmentofannualgeneralmeeting be held at Suite 1501, Ocean Centre, 5 Canton Road, Tsimshatsui, Kowloon, Hong Kong SAR on Friday, 15 June 2018 at as my/ourproxytoattendandvoteforme/usonbehalfattheSpecialGeneralMeetingofCompany(the“”) I/We the sharesinNorwegianCruiseLineHoldingsLtd. To grantadisposalmandatetothedirectorsofCompanyforfuture The fulltextofthe resolution appearsinthenoticeof Meeting. (or anyadjournedmeetingthereof)should theysowish. treated asvalid.Completionandreturn oftheformproxyshallnotprecludeshareholdersfromattendingandvoting inpersonattheMeeting less than48hoursbeforethetimeappointed forholdingtheMeetingandanyadjournmentthereofindefault formofproxyshallnotbe Genting ManagementandConsultancy ServicesSdnBhdat24thFloor,WismaGenting,JalanSultanIsmail,50250 Kuala Lumpur,Malaysianot Services Limited,at17MFloor,Hopewell Centre,183Queen’sRoadEast,Wanchai,HongKongSAR,oratGenting HongKongLimited,c/o Tsimshatsui, Kowloon, Hong Kong SAR, or at the office of the Company’s Hong Kong Branch Registrar, Computershare Hong Kong Investor of thatpowerorauthority,shallbedeposited attheCorporateHeadquartersofCompanySuite1501,Ocean Centre,5CantonRoad, The formofproxy,togetherwithanypowerattorneyorotherauthorityunder whichtheformofproxyissignedoranotariallycertifiedcopy proxy. who signsit.Ifnonameisinsertedinthespaceforofyourproxy on theformofproxy,ChairmanMeetingwillactasyour insert thenameandaddressofproxydesiredinspaceprovided.Anyalteration madetothisformofproxymustbeinitialedbytheperson If anyproxyotherthantheChairmanofMeetingispreferred,pleasestrike outthewords“theCHAIRMANOFTHEMEETINGor”and relate toallthesharesinsharecapitalofCompanyregisteredyourname(s). Please insert the number of shares of US$0.10 each registered in your name(s). If no number is inserted, this form of proxy will be deemed to If theformofproxyisreturnedwithoutanyindicationastohowshall vote,theproxywillvoteorabstainashethinksfit. vote inrespectthereof. that oneofthesaidpersonssopresentwhosenamestandsfirstonregister oftheCompanyinrespectsuchshareshallalonebeentitledto of suchshareasifheweresolelyentitledthereto;butmorethanone jointholdersbepresentatanymeetingpersonallyorbyproxy, Where therearejointregisteredholdersofanyshare,onesuchpersons mayvoteatanymeeting,eitherpersonallyorbyproxy,inrespect common sealorunderthehandofanofficerattorneydulyauthorised. The form of proxy in the caseof an individual shall besigned by the appointor or his attorney, and in the case of a corporation, either under its shareholder oftheCompany. shareholder whoistheholderoftwoormoresharesmayappointthanoneproxytoattendonsameoccasion.Aneednotbea A shareholderentitledtoattendandvoteattheMeetingisappointanotherpersonashisproxyinsteadofhim. ORDINARY RESOLUTION (Continued intoBermudawithlimitedliability) PERSONAL INFORMATION COLLECTIONSTATEMENT Genting HongKongLimited Signed: (Stock Code:678) (Note 8) Form ofProxy Company”) hereby appoint *the CHAIRMAN OF THE For Proxy Against

(Note 6)