Norwegian Cruise Line Holdings NCLH

The U.S. and various state and foreign government and regulatory agencies have enacted or are considering new environmental regulations and policies aimed at restricting or taxing emissions, including those of greenhouse gases, requiring the use of low-sulfur fuels, requiring the use of shore power while in port, increasing fuel efficiency requirements, reducing the threat of invasive species in ballast water, and improving sewage and greywater-handling capabilities. For example, in 2021, the IMO adopted two requirements that went into effect in 2023, the Carbon Intensity Indicator (the “CII”) and Energy Efficiency Ship Index (the “EEXI”), which each regulate carbon emissions for ships. The CII is an operational metric designed to measure how efficiently a ship transports goods or passengers by looking at carbon dioxide emissions per nautical mile. Ships are given an annual rating from A to E with a C or better required for compliance. For ships that receive a D rating for three consecutive years, or an E rating for one year, a corrective action plan will need to be developed and approved. Beginning in 2023, ships are now required to reduce carbon intensity by 5% from a 2019 baseline, with 2% incremental improvements each year thereafter until 2030. The EEXI is a design re-certification requirement that updates energy efficiency requirements for existing ships and regulates carbon dioxide emissions related to installed engine power, transport capacity and ship speed. The maritime shipping sector has been included in the E.U.’s Emissions Trading System since the beginning of 2024. Under the directive ships over 5,000 Gross Tons that transport passengers or cargo to or from E.U. member state or EEA ports are required to purchase and surrender emissions allowances equivalent to emissions for all or a half of a covered voyage, depending on whether the voyage was between two E.U. or EEA ports or an E.U. or EEA and a non-E.U. or EEA port. The requirements are being phased in from 2024 to 2026. Beginning in 2024, covered entities are were required to procure and surrender allowances equivalent to 40% of their carbon emissions, with the amount increasing to 70% of carbon emissions in 2025 and 100% of GHG emissions in 2026. The IMO has also implemented and considered additional requirements for the shipping industry that promote the reduction of GHG emissions.

Advertising Costs Advertising costs are expensed as incurred. Expenses related to advertising costs totaled $513.7 million, $512.7 million and $577.8 million for the years ended December 31, 2024, 2023 and 2022, 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, 2025 2024 2023 2022 ──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Net income (loss) $ 423,246 $ 910,257 $ 166,178 $ (2,269,909) Effect of dilutive securities - exchangeable notes 13,923 63,308 - - Net income (loss) and assumed conversion of exchangeable notes - Diluted EPS $ 437,169 $ 973,565 $ 166,178 $ (2,269,909) Basic weighted-average shares outstanding 448,542,442 435,278,605 424,424,962 419,773,195 Dilutive effect of share awards 3,788,033 4,039,709 2,975,887 - Dilutive effect of exchangeable notes 25,411,836 75,712,234 - - Diluted weighted-average shares outstanding 477,742,311 515,030,548 427,400,849 419,773,195 Basic EPS $ 0.94 $ 2.09 $ 0.39 $ (5.41) Diluted EPS $ 0.92 $ 1.89 $ 0.39 $ (5.41) Each exchangeable note (see Note 9 - “Long-Term Debt”) is individually evaluated for its dilutive or anti-dilutive impact on EPS as determined under the if-converted method. Only the interest expense and weighted average shares for exchangeable notes that are dilutive are included in the effect of dilutive securities above. securities. During the year ended December 31, 2025, the 2025 Exchangeable Notes and 2027 2.5% Exchangeable Notes have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive. During the year ended December 31, 2023 and 2022 all the exchangeable notes have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive. For the 2030 0.875% Exchangeable Notes and 2030 0.750% Exchangeable Notes, we are required to settle the principal amount in cash and have the option to settle the conversion spread in cash or shares. If the conversion value of the 2030 0.875% Exchangeable Notes and 2030 0.750% Exchangeable Notes does not exceed their conversion price for a reporting period, then the shares underlying the notes will not be reflected in the Company’s calculation of diluted EPS. Share awards are evaluated for a dilutive or anti-dilutive impact on EPS using the treasury stock method. For the years ended December 31, 2024, 2023 2025, 2024 and 2022, 2023, a total of 19.7 million, 5.1 million, 87.6 million and 92.6 87.6 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 Property and equipment are recorded at cost. We determine the weighted average useful lives of our ships based primarily on our estimates of the costs and useful lives of the ships’ major component systems on the date of acquisition, such as cabins, main diesels, main electric, superstructure and hull, and their related proportional weighting to the ship as a whole. Ship improvement costs that we believe add value to our ships are capitalized to the ship and depreciated over the shorter of the improvements’ estimated useful lives or the remaining useful life 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. The useful lives of components of new ships and ship improvements are estimated based on the economic lives of the new components. In addition, to determine the useful lives of the major components of new ships and ship improvements, we consider the historical useful lives of similar assets, manufacturer recommended lives, planned maintenance programs and anticipated changes in technological conditions.

(1) Includes principal as well as estimated interest payments with Term Secured Overnight Financing Rate (“SOFR”) held constant as of December 31, 2024. Includes exchangeable notes which can be settled in NCLH ordinary shares. Excludes In January 2025, the impact of any future possible refinancings and undrawn export-credit backed facilities. Subsequent to December 31, 2024, we completed various financing transactions, including the repayment full amount of outstanding borrowings under the Breakaway one loan, Breakaway two loan, Marina newbuild loan and Riviera newbuild loan, plus any accrued and unpaid interest thereon using thereon, was repaid with funds drawn from our the Revolving Loan Facility Facility, and the related collateral was also released. NCLC redeemed also issued $1.8 billion aggregate principal amount of 6.750% senior unsecured notes due 2032. The net proceeds, together with cash on hand, were used to redeem $600.0 million aggregate principal amount of 8.375% senior secured notes due 2028 and $1.2 billion aggregate principal amount of 5.875% senior unsecured notes due 2026, together with any accrued and unpaid interest thereon thereon, and to pay any related transaction premiums, fees and expenses. Concurrently, the Revolving Loan Facility was increased from $1.2 billion to $1.7 billion with the net proceeds of $1.8 billion aggregate principal amount of 6.750% senior unsecured notes due 2032, together with cash on hand. See Note 9 – “Long-Term Debt” for further information. maturity date extended to 2030.