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ANNUAL REPORT 2016 Norwegian Cruise Line Holdings Ltd

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ANNUAL REPORT 2016 Norwegian Cruise Line Holdings Ltd ANNUAL REPORT 2016 Norwegian Cruise Line Holdings Ltd. (Nasdaq:NCLH) is a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. With a combined fleet of 24 ships with approximately 46,500 berths, these brands offer itineraries to more than 510 destinations worldwide. The Company will introduce eight additional ships through 2025, and has an option to introduce two additional ships for delivery in 2026 and 2027. Norwegian Cruise Line is an innovator in cruise travel with a 50-year history of breaking the boundaries of traditional cruising, most notably with the introduction of “Freestyle Cruising®,” which revolutionized the industry by giving guests more freedom and flexibility to design their ideal cruise vacation on their schedule. Today, Norwegian invites guests to enjoy a relaxed, resort style cruise vacation on some of the newest and most contemporary ships at sea with a wide variety of accommodation options, including The Haven by Norwegian®, a luxury enclave with suites, private pools and dining, concierge service and personal butlers. Oceania Cruises offers an unrivaled vacation experience renowned for the finest cuisine at sea and destination-rich itineraries that span the globe. Expertly crafted voyages aboard designer-inspired, intimate ships call on ports across Europe, Asia, Africa, Australia, New Zealand, the South Pacific and the Americas. Celebrating its 25th anniversary in 2017, Regent Seven Seas Cruises offers the industry’s most inclusive luxury experience aboard its all-suite fleet. A voyage with Regent Seven Seas Cruises includes round-trip air, highly personalized service, exquisite cuisine, fine wines and spirits, unlimited internet access, sightseeing excursions in every port, gratuities, ground transfers, a pre-cruise hotel package for guests staying in concierge- level suites and higher and beginning in summer 2017, business class air will be provided for all roundtrip air originating from the U.S. and Canada. DEAR FELLOW SHAREHOLDERS, The debut of the most luxurious cruise ship ever built, the expansion of an already award-winning fleet of midsize ships, the celebration of a golden anniversary, and the posting of record financial results. It was a year where all three of our brands experienced meaningful developments and reached significant milestones. Regent Seven Seas Cruises debuted Seven Seas Explorer to rave reviews from guests, travel partners, and media alike. Oceania Cruises expanded its fleet with the addition of Sirena, joining award-winning R-class sister ships Regatta, Insignia, and Nautica. We also celebrated a historic milestone, the 50th anniversary of the first sailing of Norwegian Cruise Line, which ushered in the era of modern cruising. In addition to these landmark events and achievements, the company posted solid financial results in the midst of a weaker than anticipated operating environment, particularly in the Mediterranean region, which was impacted by multiple extremist incidents throughout the year. Nevertheless, we achieved record revenues of $4.9 billion, and GAAP earnings per share increased 49% from the prior year to $2.78, with adjusted earnings per share1 increasing 18% from the prior year to $3.41. In 2017, we will continue to execute on our strategies to diversify sourcing, continue our disciplined fleet expansion program, and continue cost containment initiatives to drive maximum returns for our shareholders. These strategies include the continued expansion of our international footprint, highlighted by our entry into the Chinese source market with the launch of Norwegian Joy, which is designed specifically for Chinese guests. We will also begin preparations for the 2018 launch of our first purpose-built ship for Alaska, Norwegian Bliss. The ship will sail from a newly refurbished terminal in Seattle, thanks to a partnership between Norwegian Cruise Line and the Port of Seattle. These are just a few of our strategies and initiatives aimed at positioning us for continued growth and enhanced returns for our shareholders. HARVEST CAYE Guests will enjoy a 75-acre oasis featuring an expansive 15,000 square foot pool with a swim-up bar and cabanas for rent. 1Adjusted earnings per share is a non-GAAP financial measure. A reconciliation of the most directly comparable GAAP financial measure, and other associated disclosures are contained in the company’s 2016 Annual Report. REGENT SEVEN SEAS CRUISES INAUGURAL SEASON OF SEVEN SEAS EXPLORER. Last July we welcomed the world's most luxurious ship, Seven Seas Explorer to the fleet in Monaco, bringing a new level of all-inclusive luxury and elegance to the world’s greatest destinations. EXPLORER ATRIUM EXPLORER REGENT SUITE LIVING ROOM EXCEPTIONAL SERVICE OCEANIA CRUISES WELCOMES SIRENA Oceania Cruises debuted Sirena, the fourth of its award-winning R-Class ships in Barcelona last April. Prior to launching, she underwent a stem-to- stern refurbishment, which included all public spaces, accommodations and introduced Tuscan Steak, a brand-new specialty restaurant. JACQUES BISTRO RED GINGER SIRENA OWNER’S SUITE THE LAUNCH OF THE HIGHLY ANTICIPATED SEVEN SEAS EXPLORER Our newest ship, Seven Seas Explorer, was welcomed to the Regent Seven Seas Cruises fleet in June, and christened shortly thereafter in Monte Carlo, a city befitting the ship’s designation as the most luxurious cruise ship ever built. Her Serene Highness Princess Charlene of Monaco serves as the ship’s godmother, christening the vessel in a ceremony that included an exclusive private concert by world-renowned tenor, Andrea Bocelli. Seven Seas Explorer marks the first addition to the Regent Seven Seas Cruises fleet in 13 years, and the demand from guests for her inaugural sailings demonstrates her unique positioning in the marketplace. At 55,000 gross tons and carrying just 750 guests, the all-suite, all-balcony ship boasts one of the highest space ratios and lowest guest-to-crew ratios in the cruise industry, the largest private verandas in the cruise industry and a new category of luxury suite, the nearly 4,500-square-foot Regent Suite. In addition, the ship features extravagantly designed theaters and lounges, an unparalleled collection of spacious suites, five gourmet restaurants, and an unprecedented level of personalized service. Seven Seas Explorer has been extremely well received by guests, travel partners, and media, with her popularity extending beyond an incredibly strong inaugural year. Building on her runaway success, we have contracted for the construction of a second Explorer-class vessel to be delivered in early 2020. THE LAUNCH OF OCEANIA CRUISES’ SIRENA Oceania Cruises welcomed its newest ship, Sirena, to its fleet in April at an intimate christening ceremony in Barcelona with the ship’s godmother, Claudine Pépin, who presided over a vibrant Spanish-style gala. The 684-guest vessel follows the award-winning design of its R-class sister ships Regatta, Insignia, and Nautica, with amenities such as four gourmet restaurants, six elegant lounges and bars, as well as the renowned Canyon Ranch SpaClub. Before entering service, Sirena underwent a 35-day refurbishment of all public spaces and accommodations, bringing her up to Oceania Cruises’ exacting standard of elegance, and added several new amenities for guests to enjoy. Sirena is the first of our R-class vessels to incorporate features from the next generation of ships in the Oceania Cruises fleet. Among these additions are the popular Pan-Asian eatery Red Ginger, and the all-new Italian steakhouse concept, Tuscan Steak. She also features Jacques Bistro, the first dedicated offering on our R-class fleet from Oceania Cruises’ executive culinary director, the legendary chef Jacques Pépin, whose daughter is Claudine Pépin. NORWEGIAN CRUISE LINE CELEBRATES 50 YEARS On December 19, 1966, Norwegian Cruise Line, then known as Norwegian Caribbean Line, launched one small ship from the fledgling Port of Miami, carrying guests to destinations in the Caribbean. The M/S Sunward carried just 550 vacationers, and yet her maiden voyage revolutionized the way Americans, and later the world, would view a vacation at sea. Sailings on the M/S Sunward introduced guests to a new type of vacation, one where they unpacked once, embarked and disembarked a ship in the same city, and in between experienced a world very different from their own. Compared to today’s cruise industry, the accommodations were sparse, HARVEST CAYE the service was passable, and the food was better known for its quantity rather than its quality. Nevertheless, the unique experiences this new type of vacation delivered kept guests coming back for more. Over the past 50 years, Norwegian Cruise Line has never stopped innovating. Norwegian has been at the forefront of industry innovations and firsts: from developing the industry's first private island experience in 1977, to launching the first 2,000-plus passenger ship in the Caribbean, as well as pioneering service to Alaska from Seattle, and bringing back American-flagged cruising in Hawaii. But perhaps its biggest innovation, aside from pioneering the modern cruise vacation, was the introduction of NORWEGIAN CRUISE LINE CREW MEMBERS, Freestyle Cruising®. Norwegian took one of the last vestiges CIRCA 1974. of the old ocean liner experience, nightly assigned seating in a single venue, and introduced a dining offering more typical of a resort vacation. The line offered a variety of dining venues on every vessel, allowing guests to choose to dine when they want, where they want and with whomever they want. Today, our unique capability to deliver this product offering is unrivaled in the industry, making Norwegian the primary choice for guests looking for a less structured cruise vacation. Norwegian’s longevity and innovative spirit would not have been THE ONLY CRUISE LINE TO OFFER 7-DAY HAWAII CRUISES FROM HONOLULU. possible without the contributions of so many incredible people over the past five decades. The board of directors and I offer our sincerest appreciation to all our devoted guests, valued travel agent partners, loyal shareholders and, in particular, our dedicated shoreside employees and shipboard staff and crew.
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