NCLHNorwegian Cruise Line Holdings

We note your disclosure that among other non-GAAP financial measures, you use Adjusted Net Revenue and Adjusted Net Yield to analyze your performance. Please revise to include a statement disclosing the reasons why management believes that presentation of these two non-GAAP financial measures provides useful information to investors regarding your financial condition and results of operations.

As noted on page 43 of our 2014 Form 10-K, we have one item reconciling Net Revenue and Net Yield to Adjusted Net Revenue and Net Yield. As described in footnote 1 to the reconciliation table included on page 43 of our 2014 Form 10-K, this item relates to deferred revenue fair value adjustments made pursuant to business combination accounting rules associated with our Acquisition of Prestige.

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We believe that adjusting this amount provides greater transparency to investors on our core results of operations.

We disclosed the following paragraph on page 21 in the MD&A of our Form 10-Q for the quarter ended June 30, 2015 that we filed with the Commission on August 7, 2015 and we will include such disclosure in all future filings as well:

“In addition, Adjusted Net Revenue and Adjusted Net Yield, which excludes certain business combination accounting entries, are non-GAAP financial measures that we believe are useful as supplemental measures in evaluating the performance of our operating business and provide greater transparency into our results of operations. Adjusted Net Income and Adjusted EPS are non-GAAP financial measures that exclude certain charges and are used to supplement GAAP net income and EPS. We use Adjusted Net Income and Adjusted EPS as key performance measures of our earnings performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparison to our historical performance. The charges excluded in the presentation of these non-GAAP financial measures may vary from period to period; accordingly, our presentation of Adjusted Net Revenue, Adjusted Net Yield,

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We note your disclosure on page 47 that your debt agreements impose restrictions on your subsidiaries’ ability to pay distributions to you which in turn affects your ability to pay dividends to your shareholders. In that regard, please tell us if the restrictions or the affected restricted net assets of the consolidated subsidiaries exceed 25 percent of consolidated net assets as of December 31, 2014.

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If so, please revise to include the condensed financial information of the parent company in Schedule I as set forth in Rule 5-04 of Regulation S-X.

We performed the calculation of the restrictions and the affected restricted net assets of the consolidated subsidiary as of December 31, 2014 and it did not exceed 25 percent of consolidated net assets; therefore, we did not provide Schedule I as set forth in Rule 5-04 of Regulation S-X, as it was not required. Read in the reply ↗

You disclose on page F-9 that although each of your brands (Oceania, Regent and Norwegian) are considered separate operating segments, you have concluded they have similar economic characteristics, including similar margins and similar products and services, and therefore you have aggregated them into one reportable segment.

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We note the two newly acquired cruise line brands serve the “upper-premium” and “luxury” segments of the industry while the legacy Norwegian brand serves the “contemporary” customer segment. You also state during the 2014 fourth quarter earnings call that they have different appeals to different classes of customers or markets. Please explain to us why you believe the three brands have similar economic characteristics, meeting the criteria in ASC 280-10-50-11, and compare and contrast for us your operating segments relative to the areas listed in ASC 280-10-50-11a to e. Regarding any differences among your operating segments, please tell us why you determined that disaggregation was not warranted.

As background and in response to the Staff’s comment, we draw attention to the following disclosures that are included on page 8 and 9 of our 2014 Form 10-K as it relates to our legacy

Norwegian brand and our two newly acquired cruise line brands, Oceania and Regent:

“We believe the complementary fleets of Norwegian and

Prestige provide a diversified portfolio of cruise products that represent all significant segments of the cruise industry.

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The

Norwegian brand caters to the contemporary and premium segments with modern, state-of-the-art ships, amenities, onboard experiences and our “Freestyle Cruising” offering. Oceania caters to the upper premium segment, while Regent caters to the luxury segment of the cruise industry. These complementary product offerings, along with the strengths and skill sets of personnel from each of the brands, provide numerous opportunities for cross-selling and cross-brand collaboration.”

“Diverse Selection of Premium Itineraries. The combination of Norwegian and Prestige further diversifies our already broad range of premium itineraries. Norwegian’s existing mix of destinations is more consistent with the brands in the premium segment, and these itineraries typically attract higher Net Yields than Caribbean and Mexico sailings.”

It should be noted that, in the disclosures above, we make reference to “premium segments,” which we intend to refer broadly to all premium segments, including the upper premium product offered by Prestige.

ASC 280-10-50-11 permits aggregation of two or more operating segments into a single reportable segment if:

(I) the segments have similar economic characteristics;

(II) the segments are similar in all of the following areas:

a. the nature of the products and services b. the nature of the production process c. the type or class of customer for their products and services d. the methods used to distribute their products or provide their services e. if applicable, the nature of the regulatory environment, for example, banking, insurance, or public utilities; and

(III) aggregation is consistent with the objective and basic principles of ASC 280-10.

We have considered the requirements of ASC 280 as follows:

With respect to requirement (I) above, based on our evaluation on a future performance perspective, we believe our three brands have similar economic characteristics.

In determining similar economic characteristics,

ASC 280 refers to similar "long-term average gross margins." We believe additional economic factors can or should be used to determine whether two or more operating segments have similar economic characteristics if such measures are more relevant to the business and the industry. For example, key performance indicators or other measures used in the industry or by the chief operating decision maker may be more relevant than gross margins.

The Company and our competitors do not present gross margin information in their financial reporting results. We believe that analyzing operating income, Adjusted EBITDA and EBITDA data as a percentage of net revenues and excluding marketing, general and administrative costs substantially equates to gross margin information. We believe these two performance indicators, Adjusted EBITDA and operating income, which are similar for each of our brands, provide us with the best insight into the financial performance of each operating segment.

With respect to (II) above, we further analyze the qualitative factors below:

a) The nature of the products and services:

The nature of the products sold and services delivered by all brands is essentially the same, and any differences are ultimately due to how the services are packaged. Our brands do differentiate themselves from each other for marketing purposes and have different interior designs and décor of public areas and cabins, which may also reflect the perceived character and history of each brand. The quality of the product offerings is differentiated, even within ships of the same brand. For example, on some of the ships, the Norwegian brand offers the Haven which offers suite accommodations as well as studio accommodations for solo travelers. However, the core vessel architecture, deck layouts and technical specifications are similar across brands. The brands are in the same business of providing cruise vacations, for which ticket prices are either all inclusive and/or include cabin accommodations, meals, entertainment and onboard facilities and activities. The brands offer guests a common set of products and services, whether all inclusive or separately charged, from which we generate onboard revenue, the most significant sources of which are beverage sales, casino operations, gift shop purchases, spa services, photo services and other similar items. All the brands also have a peak season during the summer months.

b) The nature of the production processes:

The nature of the production processes required to generate cruises is the same across all of our brands. Our ships are managed and operated in a similar manner. There are no specific brand maintenance requirements. Maintenance and other operational requirements vary by ship due to the age, size, and class of ship. All our brands have ships of varying age, size and class.

Back-office processes are centrally shared in various departments including accounting, financial reporting, legal, human resources, treasury/cash management and information technology. Moreover, senior management of various departments such as passenger services, destination and port operations, and shipboard operations is held accountable for their respective operating areas, which encompass all brands.

c) The type or class of customer for their products and services:

Our customers are typically consumers who desire to take a vacation to a variety of different destinations, with a convenience and value proposition that is very attractive when compared to alternative land-based vacations. The largest percentage of guests for all our brands comes from the North American and Western European markets. The breadth of cruise experiences we are able to offer on our modern cruise ships means that an individual voyage will appeal to a range of customers. The various options and price points across all our brands and ships allow for our guests to consider multiple brands and ships before choosing a cruise vacation. For example, a guest can select an ocean view stateroom on one brand at a similar price point to a balcony stateroom on another brand. Furthermore, our brands sail overlapping itineraries and visit many of the same ports. The overlap occurs primarily because there are a finite number of global ports accessible to cruise ships which provide commercially attractive destinations during the Northern and Southern hemispheres’ cruising seasons.

We identify our brands as either contemporary, upper premium or luxury; however, these are very broad classifications. The cruise industry generally labels brands as contemporary, premium and luxury, which are typically based on the duration of the cruise, size of the ship and related prices. The Norwegian brand is identified by contemporary and premium and we believe that premium includes upper premium which is how we identify the

Oceania brand.

The brands offer similar amenities. Guests are generally able to enjoy the full scope of activities offered on our ships. The vast majority of our ships in all our brands are designed to appeal to a variety of guest desires and price points through suite, balcony, ocean view and interior staterooms and by offering a wide array of amenities including swimming pools, sun decks, spa facilities, gaming facilities, lounges, bars, a wide variety of dining options, retail shopping, and shore excursions at each port of call.

d) The methods used to distribute their products or provide their services:

Our sales across all our brands are primarily achieved through travel agents and through direct channels to our guests. Our brands use various media channels including print, television and co-operative advertising with travel agents and direct marketing through mailings and the Internet to attract both first-time and experienced cruisers.

e) If applicable, the nature of the regulatory environment, for example, banking, insurance, or public utilities:

All of our cruise ships are subject to the same international, national, state and local laws, regulations and treaties in force in the jurisdictions in which they operate.

Each ship also belongs to a national ship registry, which imposes similar regulations and periodic inspection requirements. Moreover, the International Maritime Organization establishes requirements for all the Company’s ships covering the safety design and operation of ships and marine pollution conventions.

Finally, with respect to the requirement in (III) above, given the brand similarities we believe that aggregating our operating segments as a single reportable segment is consistent with the objective and basic principles of ASC 280-10, which is to provide users of financial statements with sufficient information about an entity’s financial performance to make more informed judgments about the financial condition of the enterprise as a whole.

We will continue to monitor the appropriateness of aggregating our operating segments into one reportable segment. If the facts and circumstances change, we will re-evaluate our segment reporting disclosures.

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We note you have goodwill and intangible assets included in one line item on the face of your balance sheet. As goodwill and intangible assets, net each exceed five percent of total assets, please revise to separately present these amounts on your balance sheet. Refer to Rule 5-02(15) of Regulation S-X.

In our Form 10-Q for the quarter ended June 30, 2015 that we filed with the Commission on August 7, 2015, we revised our December 31, 2014 consolidated balance sheet to present goodwill and intangible assets separately as presented below. We will continue to separately present goodwill and intangible assets in our future

Form 10-Q and Form 10-K filings.

December 31,

2014

Assets

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Please revise to disclose the components of income (loss) before income tax expense (benefit) as either foreign or domestic. See Rule 4-08(h) of Regulation S-X.

In footnote 11, Income Taxes, on page F-25 of the Consolidated

Financial Statements included in our 2014 Form 10-K, we stated the following: “We are incorporated in Bermuda. Under current

Bermuda law, we are not subject to tax on income or capital gains.” Following this paragraph, in future filings, we will disclose that all of our net income before income tax benefit (expense) is from foreign operations.

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As requested in the Comment Letter, we hereby acknowledge that the Company is responsible for the adequacy

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and accuracy of the disclosure in the filing; Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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We note your response to our prior comment 1 and related disclosure included in the June 30, 2015 Quarterly Report on Form 10-Q (the “June 2015 Form 10-Q”) regarding the presentation of Adjusted Net Revenue and Adjusted Net Yield.

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As you have also included the non-GAAP financial measure of Gross Yield in the June 2015 Form 10-Q, please include an additional statement as to why management believes this measure provides useful information to investors regarding your financial condition and results of operations.

Gross Yield is defined as total revenue per Capacity Day.

As used in this definition, neither total revenue nor Capacity Day is a non-GAAP financial measure. Total revenue is the

Company’s total revenue calculated in accordance with GAAP and Capacity Day is a non-financial performance metric that we define as available Berths multiplied by the number of cruise days for the period, which we use to assess the Company’s operating performance.

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Item 10(e)(4) of Regulation S-K provides that a ratio calculated using exclusively 1) a financial measure calculated in accordance with GAAP and 2) an operating metric that is not a non-GAAP financial measure is not a non-GAAP financial measure.

Accordingly, we believe that Gross Yield is not a non-GAAP financial measure. In future filings, we will omit the reference to Gross Yield that was added to the first paragraph under “Non-GAAP Financial Measures” on page 21 of the June 2015

Form 10-Q.

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We note from your response to our prior comment 3 that, you believe your three brands have similar economic characteristics based on a future performance perspective. However, we believe that the guidance ASC 280 indicates that past, present and future performance should be considered.

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In this regard, for each brand, please provide us with your applicable historical and projected revenues, operating margin, Adjusted EBITDA margin, and any other measure of segment profitability, including your most recent fiscal 2015 interim periods.

Prior to Norwegian’s acquisition of Prestige on November

19, 2014, the historical data for each of Norwegian and Prestige (which includes Oceania and Regent) supports the presentation of Norwegian as one reportable segment and Prestige as one reportable segment. We believe, however, that the economic characteristics of our three operating segments should only be considered post-acquisition based on the integration of the acquired brands and our realization of synergies from the acquisition.

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After the acquisition, there were only limited operating results for the year and quarter ended December 31, 2014 as a combined company since the acquisition took place so late in the year; accordingly, we performed our analysis looking at both the historical and future economic characteristics of the operating segments.

In assessing the revenue and operating performance of each operating segment, the chief decision maker receives and reviews various types of information that includes both financial GAAP metrics and non-GAAP metrics. The metrics that are used by the chief decision maker that more closely represent operating margins are: 1) adjusted operating income to Net Revenue (adjusted operating income is also known as “contribution after operating costs” and is defined as total revenue less

NCLH-002 total cruise operating expense) and 2) Adjusted EBITDA (as calculated on page 46 of the 2014 Form 10-K) to Net Revenue. To assess economic similarities both metrics are further adjusted to exclude

Dry-dock expense and Adjusted EBITDA is adjusted for advertising expenses. We exclude Dry-dock and advertising expenses because they are generally expensed as incurred and may result in significant period to period fluctuations as a result of timing. Therefore, excluding Dry-dock and advertising expenses provides a more meaningful comparison. We believe that these adjustments, when performed across the operating segments, is compatible with the objective and basic principles of ASC 280-10 as the remaining margins represent the comparable results of our ongoing operations by operating segment.

In reviewing these measures of profitability, our actual results for the first six months of 2015 reflected that on a historical basis the Norwegian and Oceania operating segments had relatively similar margins. We believe that due to significant continuing integration activities and identification of future synergies, the economics of all operating segments will converge. The following is a comparison of each of our operating segments’ metrics discussed above to the Company’s consolidated reported results for the first and second quarters of 2015 and first half of

2015.

Metric

Q1 2015

Q2 2015

1H 2015

Net Revenue (in $ thousands)

NCLH Consolidated

707,710

825,110

1,532,820

Norwegian

[*]

Oceania

Regent

Contribution after operating costs (excluding Dry-dock expense) to Net Revenue

[*] %

Difference NCLH Consolidated vs. Norwegian

Difference NCLH Consolidated vs. Oceania

Difference NCLH Consolidated vs. Regent

Adjusted EBITDA (excluding Dry-dock and advertising expense) to Net Revenue

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As of December 31, 2014 and at each interim period, we prepared three-year forecasts for the consolidated Company and for each operating segment. The selected metrics in each of these forecasts showed convergence of these measures among the operating segments. The following is a comparison of each of our operating segments’ metrics discussed above to the Company’s consolidated projections that were calculated for the June 30, 2015 segment analysis.

2015

2016

2017

We perform a segment reporting analysis on a quarterly basis to monitor quantitative and qualitative factors to assess whether the current and forward looking data is trending in the manner we expect. We believe a temporary dissimilarity in economic characteristics would not preclude aggregation if the long-term similarities due to integration and synergies are still projected to occur.

Based on the quantitative factors discussed above and qualitative factors discussed below, management believes it is appropriate to aggregate the operating segments into one reportable segment as based on our projections over the passage of time the economic results will converge. Further we believe changes in the economic environment do not have a disproportionate effect on the operations of our operating segments, rather they are similarly impacted.

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In regards to the qualitative considerations, your response indicates that the nature of products and services, and the customer type of class are similar for all three brands. You responded that the references to “premium” segments (on page 8 and 9 of the 2014 Form 10-K) are intended broadly for all segments, including Prestige’s upper premium product, but it appears that you differentiate your brands as either

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“premium,” “upper-premium” or “luxury” apparently based on the duration of the cruise, size of the ship and the related prices and services. For example, the Regent brand operates in the luxury segment, Oceania in the upper premium and the Norwegian brand straddles the contemporary and premium segment. You identified the three operating segments based on brands, and as indicated during your 2014 fourth quarter earnings call, each targets a different market along with a different class of customer. Paragraph 68 in the Basis for Conclusions related to ASC 280, provides insight into how to assess similarity of products and services. It states that “[a]n enterprise with a relatively narrow product line may not consider two products to be similar, while an enterprise with a broad product line may consider those same two products to be similar.” It appears your qualitative analysis may have been performed at too broad a level. Specifically, your analysis is based upon all your brands operate in the same line of business providing cruise vacations and your offerings provide guests with array of cruise experiences. However, it appears that the Regent and Oceana brands are more premium in nature than the Norwegian brand, with a disparity in target market, quality of product offerings, and customer income profiles among the brands. Please help us further understand your basis for aggregating these segments into a single reportable segment and whether your assessment continues to be appropriate in light of the factors noted above. As part of your response, please explain to us in more detail the qualitative similarities of the products and services, the type or class of customers and the methods used to distribute the products and services offered among the Norwegian, Oceania, and Regent brands. Please also tell us why you organized the operating segments to reflect three distinct brands with separate sales and marketing teams, as well as reservation centers in light of your assertion of their similarity.

In order to assess the similarity of the characteristics of our operating segments, we considered Paragraph 68 in the Basis for Conclusions related to ASC 280 and noted that it provides insight into how to assess similarity of products and services. It states that “[a]n enterprise with a relatively narrow product line may not consider two products to be similar, while an enterprise with a broad product line may consider those same two products to be similar.” It also states “For example, a highly diversified enterprise may consider all consumer products to be similar if it has other

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businesses such as financial services and road construction. However, an enterprise that sells only consumer products might consider razor blades to be different from toasters.” This example in the Basis for Conclusions does not differentiate products with similar utilization such as a razor blade from a more expensive or advanced razor blade or a toaster from a toaster oven. Because cruise brands are similar in utilization, as they provide cruise vacations, we believe our operating segments can be properly aggregated into a single reportable segment.

The cruise industry as a whole refers to “classes” such as “contemporary,” “premium” or “luxury” which the industry bases on the duration of the cruise, size of the ship and the related prices and services. This is a marketing concept shared by our competitors, and its purpose is not to exclude or categorize customers but to engage a variety of consumers. The industry’s customers are typically consumers who desire to take a vacation to a variety of different destinations, with a convenience and value proposition that is very attractive when compared to alternative land-based vacations. Our operating segments sail overlapping itineraries and visit many of the same ports. The overlap occurs primarily because there are a finite number of global ports accessible to cruise ships which provide commercially attractive destinations during the Northern and Southern hemispheres’ cruising seasons. Each cruise basically includes the same services. These services include providing voyages to various destinations with shore excursions, various dining experiences, spa services, retail shopping and casinos. The breadth of experiences we are able to offer on our modern cruise ships means that an individual voyage will appeal to a wide range of customers. Our operating segments typically compete with one another for guests due to the varying experiences our guest can have on any one of our ships. The largest percentage of guests for all our operating segments comes from the North American and Western European markets. The various options and price points across all of our operating segments and ships allow for our guests to consider each brand and various ships before choosing a cruise vacation. For example, a guest can select an ocean view stateroom on one brand at a similar price point to a balcony stateroom on another brand. Further, the guest can choose an all-inclusive cruise, which means that food, beverages, shore-excursions, and the air flight to and from the originating port are included in the price of the ticket, which naturally leads to the ticket being priced higher or a guest can purchase a lower priced ticket, but will have to purchase certain food options, beverages, shore-excursions, and the flight on an a la carte basis. Ultimately, both guests experience a comparable cruise

NCLH-005 vacation through the all-inclusive or a la carte models that we offer.

During our 2014 fourth quarter earnings call, we commented that each brand “targets a different market along with a different class of customer.”

This statement was intended to reinforce that concept that we offered something for everyone, and was not intended to suggest that each brand was exclusive to its service offerings or to its type of guests. It should be noted that approximately [*] of households on Norwegian’s and Prestige’s customer lists have cruised both with Norwegian and Prestige. We expect this number to increase as mailing lists are now shared between the operating segments and our marketing strategy evolves to appeal to a broader customer base. For example, Norwegian offers the Haven on some of its ships, which offers suite accommodations as well as studio accommodations for solo travelers. A guest seeking a “luxury” experience can book a suite on Norwegian in the privacy and exclusivity of the Haven and likewise can choose a similar experience on the Oceania and Regent ships, which give guests a sense of privacy due to fewer guest cabins. Norwegian has also recently announced new itinerary offerings, which incorporate ports previously visited by Prestige ships. This expanded range of offerings is another example of the exchanging of best practices between operating segments. In this case, we are weaving in more exotic ports to drive revenues. This has proven successful with Prestige and we are introducing this strategy of diversity of itineraries into the Norwegian deployment strategy. We have also introduced other cross-brand initiatives such as offering elements of inclusive pricing for Norwegian guests.

Our brands do differentiate themselves from each other for marketing purposes; however, one of our most critical cross-brand initiatives is the implementation of certain elements of Prestige’s market strategy into Norwegian’s practices. We began this initiative by first placing all pricing under one executive vice president of revenue management, and we are leveraging Prestige’s marketing approach into the overall revenue strategy for Norwegian.

Despite the individual marketing of the brands, the distribution channels for our cruise services are the same and there is an ongoing integration of service providers and consolidation of certain advertising initiatives. All sales are achieved through travel agents, our direct booking sales forces, or through the internet. These distribution sources are available to all three operating segments and the Company has taken certain steps to centralize certain of these activities. Recently, we appointed an executive vice president of international business development who leads the global strategy for all three operating segments.

Our sales and marketing organizational structure consists of two presidents, one executive vice president of international development and one executive vice president of revenue management /chief revenue officer. These four individuals report to the chief executive officer. All the back office operations, including finance, purchasing, treasury, internal audit, information technology, vessel operations, and new build projects are centralized and the managers are responsible for their respective operating areas at the consolidated level, not at the individual brand level. This organizational structure is dedicated to creating a culture of collaboration, knowledge sharing and teamwork to not only maximize cost and revenue synergies, but also to share best practices in order to enhance the guest experience and cruise operations throughout the three operating segments. We have designed the combined organization to take the best from each brand and extend those concepts and ideas across the organization, which in turn elevates the entire Company. This is a recent acquisition; however, we expect our integration efforts with the Company’s new organizational structure to result in further convergence. This organizational structure is headed by the chief executive officer who is the chief decision maker and has the exclusive authority in the allocation of resources, as the goal is to achieve the highest return on investment for the Company as a whole and for shareholders. Our main responsibility to our shareholders is to deliver earnings and returns that are best in class in the industry, and as such, the metrics for the chief decision maker’s incentive compensation are based on consolidated metrics. None of the metrics are based upon the results of the individual operating segments and the board of directors also does not review results of the Company by operating segment in assessing performance, but rather considers performance on a consolidated basis.

While we have consolidated our management and facilities for certain sales activities, we will continue to have separate sales teams. Our domestic brand specific sales teams report to the two presidents while our international sales teams report to the executive vice president of international development. These brand specific sales teams are important to our business as the structure provides the most efficient and effective customer service and reservation process. The sales teams are

NCLH-006 tasked with communicating an in-depth knowledge of class of ship, our onboard offerings as well as specific itineraries and pricing on the various ships. While the onboard offerings are fairly consistent, the itineraries and pricing are dynamic; therefore, the sales teams must be prepared to adequately answer customer questions regarding their cruises. Requiring a sales team to service all three brands would be inefficient and most likely would result in the dissemination of inaccurate information, which could ultimately impact overall profitability.

As such, we believe that this is the best operating structure for our sales teams. It should be noted that although the structure of our sales teams supports our efforts in the competitive market-place, the sales and marketing structure does not dictate the management approach and/or the organizational structure which determines the allocation of resources.

Based on our analysis, we do not believe our operating segments engage in disparate business activities nor do we believe changes in the economic environment have a disproportionate effect on the operations of our operating segments. We believe that aggregating our operating segments as a single reportable segment is consistent with the objective and basic principles of ASC 280-10, which is to provide users of financial statements with sufficient information about an entity’s financial performance to make more informed judgments about the financial condition of the enterprise as a whole.

We will continue to monitor the appropriateness of aggregating our operating segments into one reportable segment. If the facts and circumstances change, we will re-evaluate our segment reporting disclosures.

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As requested in the Comment Letter, we hereby acknowledge that the Company is responsible for the adequacy and accuracy of the disclosure in the filing; Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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Please provide us with an organizational chart which includes all individuals that report directly to the CEO (CODM). Please include a description of the roles of these individuals and discuss why you have organized the business as three operating segments. As part of your response, please tell us why your three operating segments are based on brand versus geographical region. Please refer to ASC 280-10-50-6.

As noted in ASC 280-10-50-1, an operating segment is a business activity for which discrete financial information is available that is regularly reviewed by the CODM. The CODM receives financial information, consolidated and by brand, that is used to review the performance of the Company’s actual results, including by brand against the budget and prior year results, and to make decisions about resource allocation (see Appendix 4).

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For revenue performance, this data is reviewed with Andrew Stuart, the President and COO of Norwegian, Jason Montague, President and COO of

Oceania and Regent and Howard Sherman, EVP of Revenue Management. Cruise operating expenses are reviewed with Robin Lindsay, the

EVP of Vessel Operations. These four individuals represent our segment managers.

While the CODM also receives certain revenue information (including forward looking data regarding the booking status of future cruises) by ship and geographical region, this information does not include a measure of profitability. As the geographical and ship based information provided to the CODM is focused solely on revenue information, these are not considered operating segments.

The Company’s organizational chart has been included as

Appendix 1. A description of the roles of individuals that report directly to our CEO is as follows:

· President and COO, Norwegian Cruise Line - Leads sales, marketing and public relations for Norwegian, including inbound and outbound call centers (segment manager).

· President and COO, Oceania Cruises and Regent Seven Seas Cruises -

Leads sales, marketing and public relations for Oceania and Regent, including inbound and outbound call centers (segment manager).

· Vice Chairman, Oceania Cruises and Regent Seven Seas Cruises - Provides guidance to business leaders supporting sales, marketing and international business development for Norwegian, Oceania and Regent.

· EVP and Chief Financial Officer - Responsible for accounting, finance, treasury, strategic planning, investor relations, legal, information technology and corporate human resources globally for Norwegian,

Oceania and

NCLH-002

Regent.

· EVP, Revenue Management - Responsible for revenue management, air operations, charter sales and marketing analytics for Norwegian, Oceania and Regent (segment manager).

· EVP, Supply Chain & Logistics Management - Oversees purchasing and logistics functions for Norwegian, Oceania and Regent. Also supports construction management needs of corporate offices, which accommodate Norwegian, Oceania and Regent personnel.

· EVP, International Business Development - Leads international sales and marketing teams internationally for Norwegian, Oceania and Regent, including offices in Brazil, United Kingdom, Germany, Australia,

Hong Kong and China.

· EVP, Vessel Operations - Responsible for hotel and marine operations, itinerary planning, destination services, onboard revenue, newbuilds, out island operations, vessel refurbishment and fleet personnel of Norwegian, Oceania and Regent vessels (segment manager).

· SVP, Destination & Strategic Development - Responsible for development of destination partnerships and real estate ventures for Norwegian, Oceania and Regent.

· Executive Assistant & Sr. Director Corporate Operations –

Executive assistant to the CEO and responsible for the management of our corporate facilities, which accommodate Norwegian, Oceania and Regent personnel.

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Please provide us with the financial and non-financial information that is provided to the CEO on a regular or recurring basis in order to make decisions regarding the allocation of resources and assessment of performance.

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Please tell us if your organizational structure has profitability centers at other than the consolidated level and tell us who oversees the daily management function and who reviews the segment or other disaggregated operating results on a regular basis.

On a daily basis, the CEO receives a report summarizing net ticket revenue, passenger occupancy and net per diem information for future bookings by operating segment, which is included as

Appendix 2. Net ticket revenue is defined as passenger ticket revenue less commission, transportation and other, Occupancy Percentage is defined as the ratio of Passenger Cruise Days to Capacity Days and net per diem is defined as net ticket revenue divided by

Passenger Cruise Days.

On a weekly basis, the CEO receives a report summarizing future bookings by revenue, load factor and per diem information

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for each operating segment, ship, and geographical region, which is included as Appendix 3. The current revenue is comprised of cruise and air revenues less air costs and certain other shore excursion and hotel costs for future bookings. Load factor has the same meaning as Occupancy Percentage defined above and the current load factor in Appendix 3 represents the bookings on future cruises as of a given week. Current per diem is current revenue divided by Passenger

Cruise Days.

On a monthly basis, the CEO receives financial results on a consolidated basis and by brand, which is included in Appendix 4. This information includes revenue and our measures of operating performance by brand. This financial information is considered our CODM package.

On a quarterly basis, the CEO receives a “Heat Map,” which shows Occupancy Percentages and net per diem for

NCLH-003 historical and future bookings by operating segment and geographical region, which is included as Appendix 5.

We do not have any other profitability centers other than the consolidated level.

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Please tell us how your budgets are prepared, including who approves the budgets at each step of the process and what involvement your CODM has in developing the budgets and making resource allocation decisions within the budgets.

General guidelines for revenue and expense budgeting are created by the Financial Planning and Analysis (“FP&A”) team, approved by senior management including the CODM and are provided to each operational area in the Company along with a timeline. These guidelines are steered overall with NCLH growth as the primary objective.

Revenue budgets are prepared by the EVP of Revenue Management and are driven by itineraries and pricing. Operating expenses are budgeted by the respective department head responsible for managing those costs and are based on the relevant driver.

Rest of the answer

For example, itinerary is the driver for port expenses and fuel, but crew payroll and maintenance are based on the ship characteristics. Advertising and depreciation costs are budgeted by brand, while salaries and administrative expenses are budgeted at the corporate level.

Once the budget is submitted, the FP&A team analyzes each budget and prepares the consolidated budget which is then provided along with the department budgets for final approval to the

CODM. If further changes to the budget are required, each department will resubmit the budget in line with the CODM’s direction. After all budgets have been reviewed and approved, the budget is then submitted to the Board of Directors for approval.

Upon approval by the Board of Directors, a communication is sent to each department that the budget has been approved.

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Describe to us the basis of compensation for each of the individuals that reports directly to the CODM.

Our compensation program is designed to encourage our management team to achieve our short-term and long-term business objectives and increase long-term shareholder value by linking management’s compensation to NCLH’s performance on a consolidated level.

Each of the CEO’s direct reports is eligible to receive the following types of compensation: (i) base salary commensurate with expertise, experience, tenure and scope of responsibility,

(ii) annual incentive cash bonus and (iii) equity awards.

Rest of the answer

The Company also provides medical benefits, 401(k) retirement benefits, and certain perquisites, including car allowances, and, for one of the CEO’s direct reports, legacy non-qualified deferred compensation plans.

The Company’s Compensation Committee sets annual incentive cash bonus targets for management which are based on NCLH achieving certain consolidated Adjusted EPS and return on invested capital targets. Following the determination of NCLH’s consolidated audited results for the year, incentive cash bonuses for that year are paid to management, which includes all of the CEO’s direct reports, if the consolidated targets have been met.

The Company’s Compensation Committee also annually determines the type and number of equity awards that will be granted to management, which includes all of the CEO’s direct reports.

The grants are based on position-level within the Company rather than individual contributions; so for example, all Executive Vice

Presidents will receive the same award.

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We note from your response that there are a number of households on Norwegian’s and Prestige’s customer lists that have cruised both with Norwegian and Prestige. Please provide us with the percentage of historic NCL customers that have sailed on Regent or Oceania and also the number of historic Regent and Oceania customers that have also sailed on NCL.

Our crossover numbers are based upon research performed prior to the Acquisition of Prestige and will grow significantly with the sharing of customer databases. The number of households on our customer lists that have sailed on both Prestige and Norwegian is [*]. Given there are [*] households on the Prestige customer list and [*] on the Norwegian customer list, the [*] households that have sailed on both Prestige and Norwegian represents approximately [*]% and [*]% of the households on the customer lists of Prestige and Norwegian, respectively. Read in the reply ↗

For each of your brands, please tell us the average age and income demographics of your customers, on a quarterly basis if possible. Please explain significant quarterly variances in revenue and/or age, if any. Also, with respect to “the Haven” on the Norwegian brand, please provide to us insight into the significance of that offering to the Norwegian segment’s revenues and profits.

We do not request income data when creating a reservation. Some information has been provided by Norwegian guests voluntarily through a guest satisfaction survey; however, the accuracy of the data cannot be ensured and there is no data for comparison from our Prestige guests. As such, we are not including any average income data.

Rest of the answer

The following table is a comparison by quarter of the average age of double occupancy guests by operating segment.

Double occupancy is used in determining average ages as we offer promotions whereby third and fourth guests may sail for free or for a significantly reduced rate. This drives the occupancy level of our ships but does not drive significant incremental revenues and is also why we review revenue on a yield basis rather than a passenger day basis. It is a more relevant metric to our performance against expectations.

(in years)

Norwegian

Oceania

Regent

Fourth quarter of 2014

[*]

First quarter of 2015

Second quarter of 2015

Third quarter of 2015

Our business is seasonal based on the demand for cruises. Historically, the seasonality of the North American cruise industry generally results in the greatest demand for cruises during the Northern

Hemisphere’s summer months, which includes a greater number of children onboard. This leads to lower average ages during the second and third quarters across all three operating segments.

We do not maintain financial data for the Haven at a profit level. This would require that certain expenses be allocated for a profit to be calculated and we currently do not perform such calculations. As such, only revenue information is being provided for The Haven. The Haven staterooms are significant to the Norwegian brand as these luxury suites demand a [*]% higher per diem, on average, than a non-Haven stateroom. On average, The Haven historically represents [*]% of the net ticket revenues on those ships that include The Haven and [*]% of Norwegian’s total net ticket revenue calculated since the beginning of 2013. The aggregate net ticket revenue of all Norwegian suites, which includes The Haven and the largest accommodations at sea, represents [*]% of Norwegian’s total net ticket revenue for the same period. The annual net ticket revenues earned from The Haven and the aggregate berths in The Haven approximate that of an individual Oceania or Regent ship.

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As the Form 10-K indicates that Regent and Oceania have extended lengths of cruises, please tell us if these two brands would have longer operating cycles or seasons than that of the Norwegian brand, which has shorter lengths of cruises. Also, please tell us the average length of a cruise (in days) for each of the three brands.

Although the brands have differing lengths of cruises, the operating seasons of our three operating segments are the same. As noted in the response above to question 6, the seasonality of the North

American cruise industry generally results in the greatest demand for cruises during the summer months. This is primarily related to the weather conditions around the globe. Certain itineraries (for example, Alaska and the Baltic region) have short seasons influenced by the cold or icy conditions during the winter months as well as rougher waters.

Rest of the answer

These conditions create the need to reposition the ships to more temperate climates, such as the Caribbean, during the winter.

The following is a comparison of the weighted average length of cruise (in days) by operating segment.

(in days)

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We note that there is some crossover with respect to the destinations that each of the lines sail to. However, we also note that the more exotic locations are primarily served by Oceania and Regent while the majority of Norwegian operates closer to the United States in areas such as the Caribbean, Bahamas and Bermuda.

Rest of the question

Please tell us the consideration given to differences in geographic destinations of Norwegian, Oceania and Regent as part of the qualitative factors supporting aggregation.

Our three operating segments currently offer cruises to over

520 ports around the world and have planned over [*] calls to these ports. Of these ports, [*] ports are visited by all three operating segments and another [*] ports are visited by both Norwegian and either Oceania or Regent. The calls to these shared ports make up approximately [*]% of our over [*] total port calls. Approximately [*]% of ports are only visited once and make up less than

[*]% of our calls.

Rest of the answer

As the ports where cross over is seen constitute a significant majority of our business, we considered this to be supportive of the aggregation of the operating segments.

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NCLH-006

As requested in the Comment Letter, we hereby acknowledge that the Company is responsible for the adequacy and accuracy of the disclosure in the filing; Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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We note your disclosure in Note 2 on page F-10 that your passenger ticket revenue is primarily attributed to guests who make reservations in North America and this revenue, as a percent of your consolidated total, was 80.1%, 79.9% and 80.5% for the years ended December 31, 2014, 2013 and 2012, respectively. We also note that substantially all of your long-lived assets are located outside of the U.S.

Rest of the question

and consist primarily of your ships. Please note that ASC 280-10-50-41 requires revenue and long-lived assets for the country of domicile to be separately disclosed, along with the revenue and long-lived assets attributable to all foreign countries in total, and any individual foreign countries, if material. Please revise to disclose the amount of revenue and long-lived assets located in your country of domicile and in total for all foreign countries. If material, disclose revenue and long-lived assets in an individual foreign country separately. Please revise in future filings beginning with your December 31, 2015 Annual Report on Form 10-K.

We have revised our disclosure in our 2015 Annual Report on

Form 10-K filed with the Commission on February 29, 2016 in Note 2 on page F-10 and in “Item 1. —Business—Segment

Reporting” as follows:

“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.

Rest of the answer

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.”

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Further, please tell us how you comply with the disclosures required under ASC 280-1050-40. In this regard, we note that your cruises offer a number of different destinations, and in prior responses and in telephone conversations with the Staff, you have indicated destinations are the single most important factor in your customers’ cruising decision.

Rest of the question

Please tell us your consideration of providing revenue by each destination or group of similar destinations for purposes of meeting the requirements of ASC 280-1050-40 and the objectives discussed in ASC 280-10-10-1. In your response, please tell us your consideration of factors such as health risks, security concerns, and weather threats (i.e. hurricane season), as described in your risk factors, in determining the similarity of your destinations (region).

, please tell us your consideration of factors such as health risks, security concerns, and weather threats (i.e.

hurricane season), as described in your risk factors, in determining the similarity of your destinations (region).

Response:

We believe that destinations are an important factor in our customers’ cruising decision. In considering the requirements of ASC 280-10-50-40 which requires disclosures about a reporting entity’s products and services we believe the product and service (the cruise experience) is similar, it is only the destination that is different.

Rest of the answer

However given the objectives of ASC 280-10-10-1, we believe our disclosure would be enhanced if we provided disclosure of revenues by destination grouped by similar regions. This may provide a better understanding of our performance and will provide information that could be important to the investor about the entity as a whole.

As this is an annual requirement, in addition to the disclosure which we included in our 2015 Annual Report on Form 10-K as presented above, we will disclose in our 2016 Annual Report on Form

10-K within Note 2 “Summary of Significant Accounting Policies” and in “Item 1.—Business—Segment

Reporting” the following table:

Revenues by destination were as follows (in thousands):

December 31,

2016

2015

2014

North America

$

Europe

Asia-Pacific

Other

(For the knowledge of the Staff, the regions comprise the following:

North America includes the U.S., Caribbean, Canada and Mexico. Europe includes the Baltics and the Mediterranean. Asia-Pacific includes Australia, New Zealand, Northern and Southern Asia and Hawaii. Other includes all other international territories.)

You have asked us to discuss our consideration of risks in determining these regions. Risks such as health risks, security concerns, and weather threats (i.e. hurricane season), may affect any region and therefore, are not specific to a region, nor do they determine the similarities of our regions. Below we discuss the risks in more detail to provide a further understanding of how these are shared risks:

· Generally, the risk of a virus or other illness is not specific to any region or itinerary and would most probably be contained to one ship for a short duration. For example, the chikungunya virus was identified in over 60 countries in Asia, Africa, Europe and the Americas;

however, this virus did not impact any of our itineraries or ships.

· The threat of political unrest may affect certain ports, but it generally does not impact an entire region. For example, most recently, we changed all itineraries that touched

Turkish ports due to political unrest to alternate destinations in Greece and Italy.

While the Turkish ports were altered, the remaining cruise ports of the itinerary were provided, therefore, even in political unrest it is usually not region-wide but only port-specific alterations.

· Adverse weather conditions not only affect North America (hurricanes and Nor’easters) and occasionally Europe, but also Australia and Asia (typhoons). Our itinerary for a particular ship may be interrupted to avoid such adverse weather (we may miss a port or divert a cruise ship to avoid the weather) but the impact is ship specific for a short duration.

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As requested in the Comment Letter, we hereby acknowledge that the Company is responsible for the adequacy and accuracy of the disclosure in the filing; Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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