2016 Annual Report for Norwegian Cruiseline Holdings - 38

EBITDA and Adjusted EBITDA were calculated as follows (in thousands):
2016

Net income attributable to Norwegian Cruise Line Holdings Ltd.
Interest expense, net
Income tax expense (benefit)
Depreciation and amortization expense
EBITDA
Net income attributable to non-controlling interest
Other expense, net (1)
Non-cash deferred compensation (2)
Non-cash share-based compensation (3)
Secondary Equity Offerings' expenses (4)
Severance payments and other fees (5)
Management NCL Corporation Units exchange expenses (6)
Acquisition of Prestige expenses (7)
Deferred revenue (8)
Contingent consideration adjustment (9)
Contract renegotiation and termination expenses (10)
Other (11)
Adjusted EBITDA

$

$

633,085
276,859
7,218
432,495
1,349,657
-
8,302
3,167
66,414
-
8,223
-
6,395
1,057
-
1,000
217
1,444,432

Year Ended December 31,
2015

$

$

427,137 $
221,909
6,772
432,114
1,087,932
-
46,668
10,154
42,211
2,226
17,580
624
27,170
32,431
(43,400)
3,319
-
1,226,915 $

2014

338,352
151,754
(2,267)
273,147
760,986
4,249
10,853
7,693
20,627
2,075
-
-
57,513
10,052
-
-
3,804
877,852

(1)
(2)

Primarily consists of gains and losses, net for derivative contracts and forward currency exchanges.
Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and
related expense.
(3) Non-cash share-based compensation expense related to equity awards, which are included in marketing, general and administrative expense
and payroll and related expense.
(4) Expenses related to the Secondary Equity Offerings, which are included in marketing, general and administrative expense.
(5) Severance payments and other expenses related to restructuring costs and other severance arrangements, which are included in marketing,
general and administrative expense.
(6) Expenses related to the exchange of Management NCL Corporation Units for ordinary shares, which are included in marketing, general and
administrative expense.
(7) Expenses related to the Acquisition of Prestige, which are included in marketing, general and administrative expense.
(8) Deferred revenue fair value adjustments related to the Acquisition of Prestige that were made pursuant to business combination accounting
rules, which are primarily included in passenger ticket revenue.
(9) Contingent consideration fair value adjustment related to the Acquisition of Prestige, which is included in marketing, general and
administrative expense.
(10) Contract renegotiation and termination expenses, net related to the Acquisition of Prestige, which are included in other cruise operating
expense and marketing, general and administrative expense.
(11) The year ended December 31, 2016 includes legal expenses related to the extinguishment of senior unsecured notes and the year ended
December 31, 2014 includes expenses primarily related to the tax restructuring and costs related to the settlement of a 2007 breach of contract
claim, which are included in marketing, general and administrative expense.
Year Ended December 31, 2016 ("2016") Compared to Year Ended December 31, 2015 ("2015")
Revenue
Total revenue increased 12.2% to $4.9 billion in 2016 compared to $4.3 billion in 2015 primarily due to an increase in Capacity Days and improved
pricing. Gross Yield increased 0.7%. Net Revenue in 2016 increased 13.8% to $3.8 billion from $3.3 billion in 2015 due to an increase in Capacity Days
of 11.4% and an increase in Net Yield of 2.1%. The increase in Capacity Days was primarily due to the delivery of Norwegian Escape in October 2015,
Sirena joining our fleet in April 2016 and the delivery of Seven Seas Explorer in June 2016. The increase in Net Yield was primarily due to improved
pricing. Adjusted Net Revenue includes a deferred revenue fair value adjustment of $32.4 million in 2015 related to the Acquisition of Prestige. On a
Constant Currency basis, Net Yield and Adjusted Net Yield increased 2.8% and 1.8%, respectively, in 2016 compared to 2015.
Expense
Gross Cruise Cost increased 9.5% in 2016 compared to 2015 due to an increase in total cruise operating expense and marketing, general and
administrative expenses. Total cruise operating expense increased 7.3% in 2016 compared to 2015 primarily due to the increase in Capacity Days as
discussed above and an increase in marketing, general and administrative expenses. Total other operating expense increased 11.3% in 2016 compared to
2015 primarily due to an increase in marketing, general and administrative expenses which included an increase in marketing expenses of $38.3 million
and share-based compensation of $16.4 million. The increase was also due to income of $43.4 million related to a contingent consideration adjustment
on the Acquisition of Prestige in 2015 which did not occur in 2016. Depreciation and amortization expense was relatively unchanged as the increase due
to the addition of Norwegian Escape and ship improvement projects in 2016 was offset by the recognition in 2015 of an incremental $51.6 million of
amortization of intangible assets due to the Acquisition of Prestige. On a Capacity Day basis, Net Cruise Cost decreased slightly on an actual and a
Constant Currency basis, due to a decrease in fuel expense partially offset by the increases in expenses discussed above. The average fuel price

38
Table of Contents for the Digital Edition of 2016 Annual Report for Norwegian Cruiseline Holdings
