2018 Annual Report for Norwegian Cruiseline Holdings - 29

Such actions by the holders of our indebtedness could cause cross defaults under our other indebtedness, and there is no assurance that we
would have sufficient current assets to repay such indebtedness in full. If we were unable to repay those amounts, the holders of our secured
indebtedness could proceed against the collateral granted to them to secure that indebtedness, which includes a significant portion of our
assets including many of our ships. Any such action would have an adverse impact on our business, financial condition and results of
operations.
The impact of volatility and disruptions in the global credit and financial markets may adversely affect our ability to borrow and could
increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts
and new ship progress payment guarantees.
There can be no assurance that we will be able to borrow additional money on terms as favorable as our current debt, on commercially
acceptable terms, or at all. Economic downturns, including failures of financial institutions and any related liquidity crisis, can disrupt the
capital and credit markets. Such disruptions could cause counterparties under our credit facilities, derivatives, contingent obligations,
insurance contracts and new ship progress payment guarantees to be unable to perform their obligations or to breach their obligations to us
under our contracts with them, which could include failures of financial institutions to fund required borrowings under our loan agreements
and to pay us amounts that may become due under our derivative contracts and other agreements. Also, we may be limited in obtaining funds
to pay amounts due to our counterparties under our derivative contracts and to pay amounts that may become due under other agreements. If
we were to elect to replace any counterparty for their failure to perform their obligations under such instruments, we would likely incur
significant costs to replace the counterparty. Any failure to replace any counterparties under these circumstances may result in additional
costs to us or an ineffective instrument.
Certain of our debt agreements use LIBOR as a reference rate for interest rate calculations. In July 2017, the U.K.'s Financial Conduct
Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. The U.S. Federal Reserve has begun
publishing a Secured Overnight Funding Rate, which is intended to replace U.S. dollar LIBOR. Plans for alternative reference rates for other
currencies have also been announced. At this time, we cannot predict how markets will respond to these proposed alternative rates or the
effect of any changes to LIBOR or the discontinuation of LIBOR. If LIBOR is no longer available or if our lenders have increased costs due
to changes in LIBOR, we may experience potential increases in interest rates on our variable rate debt, which could adversely impact our
results of operations.
Our inability to recruit or retain qualified personnel or the loss of key personnel may materially adversely affect our business, financial
condition and results of operations.
Our success is dependent upon our personnel and our ability to recruit and retain high quality employees. We must continue to recruit, retain
and motivate management and other employees in order to maintain our current business and support our projected growth. We need to hire
and train a considerable number of qualified crew members to staff the ships that will be joining our fleet in the coming years. This may
require significant efforts on the part of our management team, and our inability to hire a sufficient number of qualified crew members would
adversely affect our business.
Our executive officers and other members of senior management have substantial experience and expertise in our business and have made
significant contributions to our growth and success. The unexpected loss of services of one or more of these individuals could materially
adversely affect us.
Delays in our shipbuilding program and ship repairs, maintenance and refurbishments could adversely affect our results of operations
and financial condition.
The new construction, refurbishment, repair and maintenance of our ships are complex processes and involve risks similar to those
encountered in other large and sophisticated equipment construction, refurbishment and repair projects. Our ships are subject to the risk of
mechanical failure or accident, which we have occasionally experienced and have had to repair. For example, in the past we have had to
delay or cancel cruises due to mechanical issues on our ships. There can be no assurance that we will not experience similar events in the
future. If there is a mechanical failure or accident in the future, we may be unable to procure spare parts when needed or make repairs
without incurring material expense or suspension of service, especially if a problem affects certain specialized maritime equipment, such as
the radar, a pod propulsion unit, the electrical/power management system, the steering gear or the gyro system.
In addition, availability, work stoppages, insolvency or financial problems in the shipyards' construction, refurbishment or repair of our
ships, or other "force majeure" events that are beyond our control and the control of shipyards or subcontractors, could also delay or prevent
the newbuild delivery, refurbishment and repair and maintenance of our ships. Any termination or breach of contract following such an event
may result in, among other things, the forfeiture of prior deposits or payments made by us, potential claims and impairment of losses. A
significant delay in the delivery of a new ship, or a significant performance deficiency or mechanical failure of a new ship could also have an
adverse effect on our business. The consolidation of the control of certain European cruise shipyards could result in higher prices for the
construction of new ships and refurbishments and could limit the availability of qualified shipyards to construct new ships. Also, the lack of
qualified shipyard repair facilities could result in the inability to repair and maintain our ships on a timely basis. These potential events and
the associated losses, to the extent that they are not adequately covered by contractual remedies or insurance, could adversely affect our
results of operations and financial condition.

2018 Annual Report for Norwegian Cruiseline Holdings

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