Norwegian Cruise Line Holdings Ltd.

Good morning, and welcome to the Norwegian Cruise Line Holdings first quarter 2020 conference call. My name is Jonathan, and I will be your operator. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions for the session will follow at that time. If anyone should require assistance during the conference, please press star and then zero on your touchtone telephone. As a reminder to all participants, this conference call is being recorded. I would now like to turn the conference call over to your host, Ms. Andrea DeMarco, Senior Vice President of Investor Relations, Corporate Communications, and ESG. Ms. DeMarco, please proceed.

Thank you, Jonathan. And good morning, everyone, and thank you for joining us for our first quarter 2020 earnings call. In the past, we have hosted our earnings calls from various locations, including London, the New York Stock Exchange, and even on board our vessels. Never have we hosted a call with our entire team scattered in different locations. It's one of the many ways we're adapting to the new environment, so I ask that you bear with us as we find our sea legs on our first socially distanced earnings call. I'm therefore joined virtually today by Frank Del Rio, President and Chief Executive Officer of Norwegian Cruise Line Holdings, and Mark Kempa, Executive Vice President and Chief Financial Officer. Frank will begin the call with opening commentary, after which Mark will follow to discuss results for the quarter before handing the call back to Frank for closing remarks. We will then open the call for your questions. As a reminder, this conference call is being simultaneously webcast on the company's investor relations website at www.nclhltdinvestor.com. We will also make reference to a slide presentation during this call, which may also be found on our investor relations website. Both the conference call and presentation will be available for replay for 30 days following today's call. Before we discuss our results, I'd like to just cover a few items. Our press release is first quarter 2020 results was issued this morning and is available on our investor relations website. This call also includes forward-looking statements that may involve risks and uncertainties that could cause your actual results to differ materially from such statements. These statements should be considered in conjunction with the cautionary statement contained in our earnings release. Our comments may also reference non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and presentation. And with that, I'd like to turn the call over to Frank Del Rio. Frank.

Thank you, Andrea, and good morning, everyone. I hope everyone joining us today, along with your loved ones and colleagues, are safe and healthy. Every one of us is doing our part to combat this pandemic by sheltering in place and practicing social distancing. But no one is doing more for us than our first responders, frontline workers, and those providing essential services. Today, I'd like to extend our sincerest thanks on behalf of everyone at Norwegian Cruise Line Holdings for all they are doing for communities around the world. In the three months that have passed since we last spoke, the entire world's way of life has changed. The impact from COVID-19 global pandemic on our company and the broader travel industry have been swift and severe. In my weekly communications to our team members, I consistently stress two themes. First is to ensure that we are taking care of our guests, our crew, our travel partners, and each other. Second is what I consider key to overcoming this uniquely challenging time in our history, and that is to be nimble and to be ready to adapt to the fluid environment around us. And what the team at Norwegian has accomplished in the two short months since we suspended voyages is nothing short of extraordinary. In that time, we have laid up our entire fleet, repatriated over half of our 28,000 crew members, significantly pared back operating and capital expenditures, improved our debt maturity profile, and successfully completed a historic simultaneously executed quad tranche capital raise of $2.4 billion. These actions will enable us to weather the unlikely scenario of over 18 months in a zero-revenue environment and still have enough liquidity to relaunch operations when conditions allow. I couldn't be prouder of what our team has accomplished, and now they have risen to the occasion by continually adapting to the ever-changing environment. In its 53-year history, Norwegian has overcome a myriad of exogenous events, many during the tenure of this management team. And we haven't just persevered after these challenging events, we've proven our mettle, our resilience, and we've thrived. We have done so because of the mix of the unmatched value and unique experiences that only cruising provides, coupled with an exceptional management team one that has faced and overcome uncontrollable black swan events and a multitude of headwinds time and again. While much remains unknown regarding the severity and duration of the global economic downturn resulting from COVID-19, we do know from history that the excitement factor and value proposition that cruising provides will be, when the time is right, a compelling driver of reviving consumer demand. And as far as that value proposition goes, we believe that we have an unbeatable competitor advantage with three brands that offers the most value-packed proposition in the industry. To demonstrate that advantage, for the two months of sailings we operated in the first quarter of 2020, we generated higher net yield, revenue, and adjusted EBITDA than over the prior year. And this, despite numerous canceled sailings in Asia and the incremental customary costs Without corresponding revenue, it came from the launch of 7C Splendor. On slide four, we provide an update on our current book position. There continues to be demand for cruise vacations, particularly beginning in the fourth quarter of 2020 and accelerating through 2021, with the company's overall book position at this time and pricing for 2021 within historical ranges. These are two examples. one from the recent past and one pointing to the future, both of which demonstrate the underlying demand that cruising and cruising on our brand has had in the past and will also have in the future. As I mentioned earlier, the impacts of COVID-19 were swift and severe, and they require a response exponentially faster and larger than any in our recent history. I'll direct you to slide five of our presentation where we parse our company's response to the pandemic in three phases. In the first phase, which I will discuss in a moment, we addressed our immediate operational concerns. In the second, which Mark will cover in his commentary, we swiftly executed on a financial action plan to reduce cost and increase liquidity. Lastly, I'll come back to discuss where we find ourselves today, developing a roadmap to launch a new era of cruising across our three brands. Phase one began by quickly addressing concerns over COVID-19 when the virus was mainly impacting Asia, and we proactively canceled or modified 40 voyages in the region across our three brands. Despite the virus's initial impact predominantly affecting greater Asia, we began adapting and enhancing our embarkation and sanitation protocols worldwide, which you can see on slide six across our 28-chip fleet. As a leader in one of the most consumer-facing industries in the world, the health and safety of our guests and crew is always our top priority, and we are accustomed to implementing new procedures quickly and efficiently. As the pandemic progressed, we continued to adapt and increase the rigor and frequency of our protocols. When guests became hesitant to travel, we introduced relaxed cancellation policies to alleviate many of our guests' concerns by providing them peace of mind regarding their cruise vacation. Our most decisive action came on March 13th when we announced what we thought was a temporary 30-day suspension of voyages across all our brands. Never had our company halted sailings across an entire fleet and suspended them for an extended period of time. but it was necessary for us to play our part in combating the spread of COVID-19. With voyages suspended, our next challenge was safely disembarking our guests as soon as possible and securing safe harbor for our 28 vessels. The officers and crews across our fleet, along with our shoreside team, displayed an extraordinary amount of urgency, professionalism, and compassion in the face of this monumental task. Today, all vessels remain in safe harbor, and we continue to work with the CDC and other regulatory bodies to repatriate crew back to their home countries. Our guests impacted by the canceled sailings were offered value-added future cruise credits worth 125% of the cruise fare paid to compensate them for the disruption and disappointment of canceled vacations. This enhanced offer, which has proven to be popular, was provided to guests in lieu of cash refunds and can be used on future voyages all the way through the end of 2022. Lastly, our entire shortcut operation was moved to work remotely, an endeavor that involved shifting an entire global workforce to work virtually in a matter of days. I want to commend our IT and human resources team for flawlessly executing on this initiative in such a condensed timeframe. Concurrently, as you can see on slide seven, we swiftly developed and launched our financial action plan to prepare the company for a prolonged void suspension. Mark and his team were instrumental in spearheading this phase of our response, so I'd like to turn the call over to him now to discuss our action plan in more detail, provide a deeper dive into our liquidity position, and discuss our results for the quarter. Mark?