Norwegian Cruise Line Holdings Ltd.

Good morning and welcome to the Norwegian Cruise Line holding second quarter 2021 earnings conference call. My name is Rache 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 then zero on your touch tone telephone. As a reminder to all participants this conference is being recorded. I would now like to turn the conference over to your host, Ms. Andrea DiMarco, Senior Vice President of Investor Relations, Corporate Communications, and ESG. Ms. DiMarco, please proceed.

Thank you, Rache, and good morning, everyone. Thank you for joining us for our second quarter 2021 earnings call. I'm joined today by Frank Del Rio, President and Chief Executive Officer of Norwegian Cruise Line Holdings, and Mark Kempe, Executive Vice President and Chief Financial Officer. We would also like to welcome a special guest joining us today, Dr. Scott Gottlieb, former commissioner of the U.S. Food and Drug Administration, chairman of our company's Sail Safe Global Health and Wellness Council, and author of the soon-to-be-released book, Uncontrolled Spread. Frank will begin the call with opening commentary, after which Mark will follow to discuss our financial results 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.nclhltd.com forward slash investors. 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 begin, I'd like to cover just a few items. Our press release with second quarter 2021 results was issued this morning and is available on our investor relations website. This call includes forward-looking statements that involve risks and uncertainties that could cause our 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. As always, I hope that all of you joining us today, as well as your loved ones, remain healthy and safe. Before I get into my prepared remarks, and if you haven't already heard the good news, I would like to congratulate Andrea on her new appointment to Chief Sales and Marketing Officer of our luxury brand, Region 7 Seas Cruises. After more than 30 earnings calls with our company, we will all miss her, but wish her the very best of luck in her new role. Jessica John, who many of you have already met, will assume the role of Vice President of Investor Relations, Corporate Communications, and ESG, beginning September 1st. Congratulations, Andrea and Jessica. I am pleased to say that we are taking this morning's call from Seattle, Washington, as we prepare for a very exciting day tomorrow, the relaunch of our first ship from the United States in over 16 months. And as Andrea mentioned, we also have a very special guest with us today, former FDA Commissioner, Dr. Scott Godley. After over a year of working together remotely to reach this long-awaited milestone, it is truly a pleasure to finally meet Dr. Gottlieb and the other public health experts on our Sail Safe Global Health and Wellness Council in person, and for the first time today, as we kick off our great cruise comeback. Today we will focus our commentary on the progress we have made on our return to cruising, our comprehensive plan for the phase resumption of operations for our entire 28-ship fleet, and the record-setting strength we continue to experience in consumer demand, which has translated into a record load and record pricing for calendar year 2022 and beyond. As you can see on slide four, our return to service plan is centered around three key phases. First, we developed our multi-layered sales safe health and safety strategy, including mandatory FDA, WHO, or EMA authorized vaccinations for all guests and crew at its cornerstone. In addition, we test all guests at the terminal prior to embarkation and all crew undergo weekly routine testing. Next, we have now announced voyage resumption plans for all 28 ships in our fleet. And lastly, we are intently focused on the flawless execution of the phase relaunch of our fleet, which we expect to complete by April 1st, 2022. Against a still ever-changing COVID backdrop, we remain vigilant and ready to adapt as needed, keeping a close watch on port availability, travel restrictions, and any changes to the global public health environment which could affect our planned operations. Overall, we are encouraged to see some relaxation of travel restrictions and opening of borders in recent weeks, particularly for vaccinated travelers. Just a few weeks ago, Canada moved up its plans to allow the return of cruise ships in November, four months earlier than previously announced. Many countries in the EU are now allowing travelers from the US, and in the past few weeks, both Canada and the UK announced entry to vaccinated travelers without quarantine. Travel restrictions and port closures do remain in place in other parts of the world. but we are ready to execute on our cruise resumption strategy and have backup plans ready to go, which we can implement and adapt to as needed. Slide 5 details our voyage resumption plans by brand and by vessel. After 500 days, the time has finally come, and I could not be more pleased to say that our great cruise comeback officially commenced last week with Norwegian Jade operating Greek Isle Voyages out of Athens. The relaunch went off without a hitch. and demonstrated that strict vaccination requirements, comprehensive pre-boarding testing, and a suite of other robust protocols are working as designed to help mitigate the introduction and transmission of COVID-19 aboard our vessels. A special thank you goes out to the officers and crew of Norwegian Jade, who even after 16 months of not operating, seamlessly adapted our new protocols and delivered the same exceptional service and world-class cruise experience that our guests expect from our company. As an indication of this top-notch service delivery, our onboard revenue on this first cruise significantly exceeded our target, which was focused on 2019 actual results by over 50%. All of our incredible team members around the world worked tirelessly to prepare for this critical moment, and I am truly grateful for the privilege to work day in and day out alongside such a dedicated, passionate, and talented team. I also want to express our sincere thanks to our loyal guests, valued travel partners, and all of our stakeholders for their patience and support during these challenging times as we ramp up our return to cruise plans. Norwegian Jade's successful relaunch is just the first of many to come, including our much anticipated return to cruising in the United States. Tomorrow, Norwegian Encore, the line's newest and most innovative ship, will make her West Coast debut with a seven-night sailing to Alaska from Seattle. We are looking forward to once again bringing guests to explore the last frontier, one of the most popular destinations with our guests, and providing some much needed economic relief to the communities, families, and small businesses throughout coastal Alaska who have been devastated by the loss of cruise tourism revenue during this prolonged suspension. The next step in our relaunch plan is our return to Miami, the cruise capital of the world. I'd like to address our request for a preliminary injunction that we filed last month, which will allow us to confirm guest vaccination status for sailings departing from the state of Florida that is being heard in a Miami federal court today. Combating this virus is an unprecedented historic challenge that requires everyone, including governments at the local, state, and federal levels, plus private enterprise and society at large, to do their part. I have a tremendous empathy for our elected officials, business leaders, friends and families, neighbors who are all doing the best they can under enormously difficult circumstances to beat back this virus. Having had the pleasure to work in the cruise industry for nearly 30 years, I am confident that in the current global health environment, and especially with the rise of the Delta variant, having a fully vaccinated and tested population on board our vessels is the best path best path to keeping our guests, our dedicated crew members, and the peoples of the communities we visit safe from COVID. In order to do that, we must be able to confirm vaccination status of our guests at every port we sail from, including those in the state of Florida. We owe it to all our stakeholders to do everything possible to make sure we deliver on this critical mission. We hope that the federal courts will agree with our vision and our missions. When we say the health and safety of our guests, crew, and communities we visit is a number one priority, we mean it. It is not a slogan nor a tagline. The legal actions we have taken in Florida reflect our deep commitment to resume sailing in accordance with our robust, science-backed, sail safe health and safety protocols outlined on slide six. Our policy of 100% vaccinations coupled with pre-boarding testing of guests and routine testing of crew is in place without issue and there are nearly 500 ports we sail to and from around the world, except Florida ports. Nothing takes priority over health and safety, and we have gone to great length and expense to pursue this commitment to our guests, crew, and all stakeholders. Again, this commitment is not a slogan nor a tagline. Health and safety is far and away the most important principle that guides how our company operates at all levels, and this fundamental philosophy has never been more important than right now. We want to use every tool available to us that science and medicine have developed to prepare our ships to return to service, and vaccines are our most powerful tool. Given that we have Dr. Gottlieb here today, who is not only a world-renowned expert, but is also the chairman of our Sail Safe Global Health and Wellness Council, I'd like to give him the floor for his thoughts on our health and safety program. Dr. Gottlieb?