2017 Annual Report for Norwegian Cruiseline Holdings - 35

Summary of Significant 2017 Events
In October 2017, we (a) repriced and increased the then existing $750 million revolving credit facility with a new $875 million revolving
credit facility (the "New Revolving Loan Facility"), (b) repriced the approximately $1,412 million principal amount outstanding under the
existing senior secured term A facility (the "New Term A Loan Facility"), and (c) added a new $375 million term B loan facility due 2021.
Also, we completed the redemption of all of our then 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. No Notes remained outstanding after the redemption.
In April 2017, Norwegian Joy was delivered.
In February 2017, we announced Project Leonardo, under which we plan to introduce an additional four ships with expected delivery dates
through 2025. We have an option to introduce two additional ships for delivery in 2026 and 2027, subject to certain conditions. These four
Project Leonardo 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 $960.4 million based on the exchange rate as of December 31, 2017. We have
obtained export credit financing for 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.
Executive Overview
Total revenue increased 10.7% to $5.4 billion for the year ended December 31, 2017 compared to $4.9 billion for the year ended
December 31, 2016. Gross Yield increased 4.4%. Net Revenue for the year ended December 31, 2017 increased 11.2% to $4.2 billion from
$3.8 billion in the same period in 2016 with an improvement in Net Yield of 4.9% and an increase in Capacity Days of 6.0%.
For the year ended December 31, 2017, we had net income and diluted EPS of $759.9 million and $3.31, respectively. For the year ended
December 31, 2016, we had net income and diluted EPS of $633.1 million and $2.78, respectively. Operating income increased 13.3% to $1.0
billion for the year ended December 31, 2017 from $925.5 million for the year ended December 31, 2016.
We had Adjusted Net Income and Adjusted EPS of $907.7 million and $3.96, respectively, for the year ended December 31, 2017, which
includes $147.8 million of adjustments primarily consisting of expenses related to non-cash compensation, amortization of intangible assets,
write-offs of fees related to extinguishment of debt and refinancing of certain credit facilities and certain other adjustments compared to
Adjusted Net Income and Adjusted EPS of $776.3 million and $3.41, respectively, for the year ended December 31, 2016. A 14.7%
improvement in Adjusted EBITDA was achieved for the same period, primarily due to the increase in net income and EBITDA. We refer you
to our "Results of Operations" below for a calculation of Net Revenue, Net Yield, Adjusted Net Income, Adjusted EPS and Adjusted
EBITDA.
Results of Operations
We reported total revenue, total cruise operating expense, operating income and net income as follows (in thousands, except per share data):

Total revenue
Total cruise operating expense
Operating income
Net income
EPS:
Basic
Diluted

$
$
$
$
$
$

Year Ended December 31,
2017
2016
2015
5,396,175 $ 4,874,340 $ 4,345,048
3,063,644 $ 2,850,225 $ 2,655,449
1,048,819 $ 925,464 $ 702,486
759,872 $ 633,085 $ 427,137
3.33
3.31

$
$

2.79
2.78

$
$

1.89
1.86

Table of Contents for the Digital Edition of 2017 Annual Report for Norwegian Cruiseline Holdings