SEC Form 6-K filed by Viking Holdings Ltd

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2024

Commission File Number: 001-42039

 

 

Viking Holdings Ltd

(Translation of registrant’s name into English)

 

 

94 Pitts Bay Road

Pembroke, Bermuda HM 08

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒   Form 40-F ☐

 

 

 

TABLE OF CONTENTS

 

		Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			3
Interim condensed consolidated statement of operations			3
Interim condensed consolidated statement of comprehensive income (loss)			4
Interim condensed consolidated statement of financial position			5
Interim condensed consolidated statement of changes in equity			6
Interim condensed consolidated statement of cash flows			7
Notes to the interim condensed consolidated financial statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			37
Item 3. Quantitative and Qualitative Disclosures about Market Risk			53
PART II - OTHER INFORMATION
Item 1. Legal Proceedings			54
Item 1A. Risk Factors			54
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			54
Item 3. Defaults Upon Senior Securities			54
Item 5. Other Information			54
Item 6. Exhibits			54
Signatures			55

This report on Form 6-K shall be incorporated by reference into any registration statement filed by Viking Holdings Ltd (“VHL” or the “Company”) with the Securities and Exchange Commission (the “SEC”) that by its terms automatically incorporates the Company’s filings and submissions with the SEC under Sections 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934.

 

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VIKING HOLDINGS LTD

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in USD and thousands, except per share data, unaudited)

 

				Three Months Ended March 31,
		Notes		2024				2023
Revenue
Cruise and land				$	665,284			$	583,877
Onboard and other					52,871				45,117
Total revenue		4			718,155				628,994
Cruise operating expenses
Commissions and transportation costs					(137,408	)			(138,523	)
Direct costs of cruise, land and onboard					(85,427	)			(74,755	)
Vessel operating					(281,090	)			(263,209	)
Total cruise operating expenses					(503,925	)			(476,487	)
Other operating expenses
Selling and administration					(219,818	)			(205,670	)
Depreciation and amortization		8			(64,911	)			(62,699	)
Total other operating expenses					(284,729	)			(268,369	)
Operating loss					(70,499	)			(115,862	)
Non-operating income (expense)
Interest income					18,469				8,804
Interest expense					(117,489	)			(123,593	)
Currency gain (loss)					8,798				(3,441	)
Private Placement derivative (loss) gain		13			(306,646	)			39,159
Other financial loss					(24,955	)			(16,566	)
Loss before income taxes					(492,322	)			(211,499	)
Income tax expense					(1,606	)			(2,868	)
Net loss				$	(493,928	)		$	(214,367	)
Net loss attributable to Viking Holdings Ltd				$	(494,224	)		$	(214,228	)
Net income (loss) attributable to non-controlling interests				$	296			$	(139	)
Weighted-average ordinary and special shares outstanding (in thousands)
Basic		15			221,936				221,936
Diluted		15			221,936				406,203
Net loss per share attributable to ordinary and special shares
Basic		15		$	(1.21	)		$	(0.52	)
Diluted		15		$	(1.21	)		$	(0.56	)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

3

VIKING HOLDINGS LTD

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS)

(in USD and thousands, unaudited)

 

				Three Months Ended March 31,
		Notes		2024				2023
Net loss				$	(493,928	)		$	(214,367	)
Other comprehensive income (loss)
Other comprehensive income (loss) to be reclassified to net income (loss) in subsequent periods:
Exchange differences on translation of foreign operations					2,664				241
Net change in cash flow hedges		18			(13,267	)			1,701
Net other comprehensive (loss) income to be reclassified to net income (loss) in subsequent periods					(10,603	)			1,942
Other comprehensive (loss) income, net of tax					(10,603	)			1,942
Total comprehensive loss				$	(504,531	)		$	(212,425	)
Total comprehensive loss attributable to Viking Holdings Ltd				$	(504,819	)		$	(212,289	)
Total comprehensive income (loss) attributable to non-controlling interests				$	288			$	(136	)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

4

VIKING HOLDINGS LTD

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in USD and thousands, unaudited)

 

		Notes				March 31, 2024				December 31, 2023
										(audited)
Assets
Non-current assets
Property, plant and equipment and intangible assets			8			$	5,717,855			$	5,684,315
Right-of-use assets							264,559				268,834
Investments in associated companies							9,780				10,473
Deferred tax assets							52,145				42,853
Other non-current assets							136,826				136,855
Total non-current assets							6,181,165				6,143,330
Current assets
Cash and cash equivalents			5				1,673,594				1,513,713
Accounts and other receivables			6				352,108				344,754
Inventories							54,173				54,602
Prepaid expenses and other current assets			7				513,718				427,202
Current receivables due from related parties			20				7,893				12,316
Total current assets							2,601,486				2,352,587
Total assets						$	8,782,651			$	8,495,917
Shareholders’ equity and liabilities
Shareholders’ equity						$	(5,842,786	)		$	(5,349,879	)
Non-current liabilities
Long-term portion of bank loans and financial liabilities			10				1,666,795				1,757,372
Secured Notes			10				1,016,108				1,015,657
Unsecured Notes			10				2,271,557				2,270,246
Private Placement liability			13				1,397,101				1,394,552
Private Placement derivative			13				2,947,405				2,640,759
Long-term portion of lease liabilities							221,248				227,956
Deferred tax liabilities							3,627				4,082
Other non-current liabilities			11				201,338				171,281
Total non-current liabilities							9,725,179				9,481,905
Current liabilities
Accounts payables							187,772				244,581
Short-term portion of bank loans and financial liabilities			10				259,823				253,020
Short-term portion of lease liabilities							24,433				24,670
Deferred revenue			4				4,068,117				3,486,579
Accrued expenses and other current liabilities			9				360,113				355,041
Total current liabilities							4,900,258				4,363,891
Total shareholders’ equity and liabilities						$	8,782,651			$	8,495,917

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

5

VIKING HOLDINGS LTD

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in USD and thousands, unaudited)

 

				Attributable to the equity holders of the parent
		Notes		Share capital				Share premium				Other paid-in equity				Translation adjustment				Pension measurement adjustment				Cash flow hedge				Retained losses				Non- controlling interests				Total shareholders’ equity
Balance at January 1, 2023				$	2,253			$	(44,565	)		$	133,620			$	(3,736	)		$	2,667			$	7,589			$	(3,594,507	)		$	3,262			$	(3,493,417	)
Net loss					—				—				—				—				—				—				(214,228	)			(139	)			(214,367	)
Other comprehensive income		18			—				—				—				238				—				1,701				—				3				1,942
Total comprehensive loss					—				—				—				238				—				1,701				(214,228	)			(136	)			(212,425	)
Stock based compensation		14			—				—				6,793				—				—				—				—				—				6,793
Income tax impact due to stock based compensation		14			—				—				(178	)			—				—				—				—				—				(178	)
Balance at March 31, 2023				$	2,253			$	(44,565	)		$	140,235			$	(3,498	)		$	2,667			$	9,290			$	(3,808,735	)		$	3,126			$	(3,699,227	)
Balance at January 1, 2024				$	2,253			$	(44,565	)		$	178,492			$	4,203			$	(83	)		$	9,315			$	(5,503,218	)		$	3,724			$	(5,349,879	)
Net loss					—				—				—				—				—				—				(494,224	)			296				(493,928	)
Other comprehensive loss		18			—				—				—				2,672				—				(13,267	)			—				(8	)			(10,603	)
Total comprehensive loss					—				—				—				2,672				—				(13,267	)			(494,224	)			288				(504,531	)
Dividend distribution by subsidiary		12			—				—				—				—				—				—				(113	)			(607	)			(720	)
Stock based compensation		14			—				—				3,518				—				—				—				—				—				3,518
Income tax impact due to stock based compensation		14			—				—				8,826				—				—				—				—				—				8,826
Balance at March 31, 2024				$	2,253			$	(44,565	)		$	190,836			$	6,875			$	(83	)		$	(3,952	)		$	(5,997,555	)		$	3,405			$	(5,842,786	)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

6

VIKING HOLDINGS LTD

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in USD and thousands, unaudited)

 

				Three Months Ended March 31,
		Notes		2024				2023
Cash flows from operating activities
Net loss				$	(493,928	)		$	(214,367	)
Adjustments to reconcile net loss to net cash flows
Depreciation and amortization		8			64,911				62,699
Amortization of debt transaction costs					9,075				9,248
Private Placement derivative loss (gain)		13			306,646				(39,159	)
Foreign currency (gain) loss on loans		10			(15,579	)			5,648
Non-cash financial loss					23,054				12,492
Stock based compensation expense		14			3,518				6,793
Interest income					(18,469	)			(8,804	)
Interest expense					108,414				114,345
Dividend income					(421	)			(918	)
Changes in working capital:
Increase in deferred revenue		4			581,538				453,229
Changes in other liabilities and assets					(120,292	)			(194,240	)
Decrease (increase) in inventories					429				(5,960	)
Changes in deferred tax assets and liabilities					(921	)			(1,472	)
Changes in other non-current assets and other non-current liabilities					12,255				16,080
Changes in related party receivables and payables					4,423				10,841
Income taxes paid					(1,622	)			(1,334	)
Net cash flow from operating activities					463,031				225,121
Cash flows from investing activities
Investments in property, plant and equipment and intangible assets		8			(95,413	)			(125,741	)
Capital contribution to associated company		20			(4,000	)			(5,000	)
Prepayment for vessel charter					(604	)			—
Dividends received					421				918
Interest received					18,064				8,804
Net cash flow used in investing activities					(81,532	)			(121,019	)
Cash flows from financing activities
Repayment of borrowings		10			(72,959	)			(86,538	)
Dividend distribution by subsidiary		12			(720	)			—
Principal payments for lease liabilities					(6,280	)			(6,916	)
Interest payments for lease liabilities					(5,368	)			(5,974	)
Interest paid					(133,920	)			(99,260	)
Net cash flow used in financing activities					(219,247	)			(198,688	)
Change in cash and cash equivalents					162,252				(94,586	)
Effect of exchange rate changes on cash and cash equivalents					(2,371	)			1,744
Net increase (decrease) in cash and cash equivalents				$	159,881			$	(92,842	)
Cash and cash equivalents
Cash and cash equivalents at January 1		5		$	1,513,713			$	1,253,140
Cash and cash equivalents at March 31		5			1,673,594				1,160,298
Net increase (decrease) in cash and cash equivalents				$	159,881			$	(92,842	)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

7

VIKING HOLDINGS LTD

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(unaudited)

 

1.	CORPORATE INFORMATION

Viking Holdings Ltd (“VHL” or the “Company”) is a Bermuda company, incorporated on July 21, 2010, whose registered address is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The Company is registered in Bermuda as an exempted company and, pursuant to Section 14(3) of the Companies Act 1981, has perpetual succession. The Company’s majority shareholder is Viking Capital Limited (“VCAP”), which is registered in the Cayman Islands as an exempted company.

The principal business activity of the Company and its subsidiaries (the “Group”) is to engage in passenger shipping and other forms of passenger transport and as a tour entrepreneur for passengers and related activities in tourism.

The interim condensed consolidated financial statements of the Group (“interim financial statements”) for the three months ended March 31, 2024 were authorized for issuance by the Company’s Board of Directors on May 29, 2024.

 

2.	BASIS OF PREPARATION AND ACCOUNTING POLICIES

Basis of preparation

The interim financial statements are prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). The interim financial statements are prepared based on the same accounting policies used in the Group’s annual consolidated financial statements as of and for the year ended December 31, 2023 (the “annual consolidated financial statements”).

The interim financial statements are unaudited and do not include all the information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group’s audited consolidated financial statements and notes included in its final prospectus, dated April 30, 2024, filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on May 2, 2024 (the “Prospectus”) in connection with the Company’s initial public offering (the “IPO”).

The interim financial statements have been prepared on a historical cost basis, except for forward foreign currency contracts, financial assets and liabilities at fair value through profit or loss, the warrant liability and the Private Placement derivative, which are carried at fair value and are re-measured through the interim condensed consolidated statements of operations and the interim condensed consolidated statements of other comprehensive income (loss).

Except as otherwise noted, all amounts in the interim financial statements are presented in United States (“U.S.”) Dollars (“USD” or “$”) and all values are rounded to the nearest thousand ($000). The interim condensed consolidated statements of cash flows are prepared using the indirect method. The interim financial statements are based on the assumption of going concern.

On April 11, 2024, a 26-for-1 share split of the Company’s authorized and issued ordinary shares, special shares, preference shares, non-voting ordinary shares and Series C Preference Shares was effected by way of an increase in capital and bonus issue of 25 shares on each one outstanding share (the “26-for-1 share split”). Contractual agreements which settle in shares, including warrants and share-based payment arrangements, include anti-dilution provisions which provide for the automatic adjustment in the event of share splits. The Company has given retrospective effect to the 26-for-1 share split on all share and per-share amounts, including for such contractual arrangements that settle in shares, for all periods presented, including in Notes 12, 14 and 15.

 

8

Initial Public Offering

On May 3, 2024, the Company closed the IPO of its ordinary shares. The Company issued 11,000,000 ordinary shares, at a public offering price of $24.00 per share. The Company received net proceeds of approximately $245.5 million after deducting underwriting discounts and commissions of $13.2 million and estimated other offering expenses of $5.3 million. In addition, certain existing shareholders sold ordinary shares in the IPO. Immediately prior to the consummation of the IPO, all outstanding preference shares and Series C Preference Shares converted to ordinary shares on a one-for-one basis (the “Conversion Event”). Additionally, all outstanding options for non-voting ordinary shares and all outstanding restricted share units (“RSUs”) for non-voting ordinary shares converted to options for ordinary shares and RSUs for ordinary shares, respectively, on a one-for-one basis. All authorized Series C Preference Shares, preference shares and non-voting ordinary shares were also redesignated into authorized ordinary shares. Additionally, in connection with the IPO, the Company adopted updated bye-laws (“Post IPO Bye Laws”). Following the IPO and in accordance with the Post IPO Bye Laws, the Company has two classes of authorized share capital: ordinary shares and special shares. Each ordinary share is entitled to one vote per share, and each special share is entitled to 10 votes per share.

All RSUs granted by the Company are subject to a liquidity vesting condition and some RSUs are also subject to a service condition. Upon the consummation of the IPO, the liquidity condition was satisfied, resulting in the vesting of 16,251,664 outstanding RSUs.

As the IPO closed subsequent to March 31, 2024, the impact of the IPO, including the issuance of shares, receipt of proceeds and impact of the Conversion Event, are not reflected in the interim financial statements as of and for the three months ended March 31, 2024.

See Note 21 for additional information.

New and amended standards and interpretations

The Group intends to adopt relevant new and amended accounting standards and interpretations when they become effective. New or amended standards and interpretations effective January 1, 2024 had no or an immaterial impact on the interim financial statements. The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.

In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”) which replaces IAS 1, Presentation of Financial Statements. IFRS 18 requires an entity to classify all income and expenses within its statement of operations into one of five categories: operating, investing, financing, income taxes and discontinued operations. The first three categories are new. These categories are complemented by the requirement to present subtotals and totals for “operating profit or loss,” “profit or loss before financing and income taxes” and “profit or loss.” IFRS 18 and the amendments to other standards are effective for reporting periods beginning on or after January 1, 2027, but earlier application is permitted. The Group is currently evaluating the impact of this amendment.

Other than as described above, there are no standards, interpretations, or amendments issued but not yet effective, that are expected to have a material impact on the Group’s interim financial statements.

 

3.	SEASONALITY OF OPERATIONS

The Group’s results are seasonal because while the ocean, expedition and Mississippi products operate year-round, the primary cruising season for the river product is from April to October, although some of the river cruises run longer seasons. Additionally, the Group’s highest occupancy occurs during the Northern Hemisphere’s summer months. The Group recognizes cruise-related revenue over the duration of the cruise and expenses its marketing and employee costs when the related costs are incurred. As a result, the majority of the Group’s revenue and profits have historically been earned in the second and third quarters of each year, while the first and fourth quarters of each year have been closer to break even or a loss, as the Group’s selling and administration expenses are consistent throughout the year. Though the growth of the Group’s fleet of year-round products will continue to reduce the seasonality in future periods, the Group expects the seasonality trend of its revenue and profits to continue.

 

9

4.	REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of revenue

The table below disaggregates total revenue by reportable segment (see Note 16) for the three months ended March 31, 2024 and 2023:

 

		Three Months Ended March 31,
		2024				2023
(in USD and thousands)
Ocean		$	447,680			$	397,632
River			165,431				130,286
Other			105,044				101,076
Total revenue		$	718,155			$	628,994

Total revenue for the three months ended March 31, 2024 increased by $89.2 million to $718.2 million from $629.0 million for the same period in 2023. The increase was primarily due to higher occupancy and the operation of additional ships delivered subsequent to the first quarter of 2023, including the Viking Saturn and Viking Aton, which were delivered in April 2023 and August 2023, respectively, and an earlier season start for certain river vessels in Europe beginning in January.

Regional economic trends affect the Group’s revenue and cash flows. The table below disaggregates percentage of passengers by source market, which is the passenger’s home country or region, for the three months ended March 31, 2024 and 2023:

 

		Three Months Ended March 31,
		2024				2023
North America			91.4	%			91.4	%
United Kingdom			4.8	%			4.9	%
Other			3.8	%			3.7	%
			100.0	%			100.0	%

The disaggregation by source market is similar across all reportable segments.

The Group’s vessels and ships primarily operate in Europe.

Deferred revenue (contract liability)

Since 2020, when the Group has cancelled sailings, guests have generally had the option to receive either (1) a refund in cash for 100% of monies paid to the Group or (2) a cruise voucher with a face value of up to 125% of monies paid (“Premium Cruise Voucher”). Premium Cruise Vouchers can generally be applied to a new booking for up to two years from the issuance date (or longer, if the expiration date is extended) and any unused Premium Cruise Vouchers are refunded for the original amount paid upon expiration. In addition, in the event of travel uncertainty, the Group may temporarily update its cancellation policies to give guests the option to cancel certain cruises closer to the date of departure and receive future cruise vouchers (“Risk Free Vouchers”), instead of incurring cancellation penalties. In response to the COVID-19 pandemic, the Group temporarily updated its cancellation policies for bookings made through June 30, 2022. Risk Free Vouchers can generally be applied to a new booking for two years from the issuance date and are not refundable for cash.

As of March 31, 2024 and December 31, 2023, deferred revenue was $4,068.1 million and $3,486.6 million, respectively. Of the $4,068.1 million deferred revenue balance as of March 31, 2024, $130.7 million related to Risk Free Vouchers and $18.7 million related to Premium Cruise Vouchers.

 

10

5.	CASH AND CASH EQUIVALENTS

A summary of the Group’s cash and cash equivalents as of March 31, 2024 and December 31, 2023 is outlined below:

 

		March 31, 2024				December 31, 2023
(in USD and thousands)
Cash at bank and in hand		$	1,545,675			$	1,481,370
Credit card receivables			127,919				32,343
Total		$	1,673,594			$	1,513,713

As of March 31, 2024 and December 31, 2023, cash at bank and in hand included $156.5 million and $148.2 million, respectively, subject to restrictions on use arising from contracts with third parties.

 

6.	ACCOUNTS AND OTHER RECEIVABLES

A summary of the Group’s accounts and other receivables as of March 31, 2024 and December 31, 2023 is outlined below:

 

		March 31, 2024				December 31, 2023
(in USD and thousands)
Credit card receivables		$	224,312			$	207,374
Accounts receivable			61,535				49,988
Yard receivables			29,503				19,932
Indirect tax receivables			24,281				41,982
Other			12,477				25,478
Total		$	352,108			$	344,754

Credit card receivables that are not classified as cash and cash equivalents are included in accounts and other receivables. Credit card receivables represent amounts subject to a priority claim from credit card processors.

Accounts receivable includes vendor receivables, insurance receivables, airline receivables and passenger receivables.

 

7.	PREPAID EXPENSES AND OTHER CURRENT ASSETS

A summary of the Group’s prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023 is outlined below:

 

		March 31, 2024				December 31, 2023
(in USD and thousands)
Air		$	276,594			$	161,992
Commissions			53,266				39,766
Operating, product and administration costs			48,709				57,181
Credit card fees			40,059				32,531
Restricted cash			39,326				75,786
Cash deposits			20,476				20,498
Debt transaction costs			15,670				12,332
Advertising			12,814				10,470
Other			6,804				16,646
Total		$	513,718			$	427,202

Air increased as of March 31, 2024, compared to December 31, 2023, primarily due to the timing of air ticket purchases and seasonality of the Group’s operations.

 

11

Restricted cash relates to deposits required by certain credit card processors. The deposits, which decreased as of March 31, 2024, compared to December 31, 2023, are based on various factors as determined by the credit card processors.

 

8.	PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

Movements in property, plant and equipment and intangible assets during the three months ended March 31, 2024 are outlined below:

 

(in USD and thousands)		River Vessels & Equipment				Ocean and Expedition Ships & Equipment				River Vessels under Construction				Ocean Ships under Construction				Office Equipment				Land & Buildings				Other Fixed Assets				Intangible Assets, including Goodwill				Total
Cost as of January 1, 2024		$	2,621,214			$	4,001,330			$	111,919			$	298,057			$	21,486			$	21,786			$	53,308			$	171,145			$	7,300,245
Additions			14,330				985				44,147				27,554				382				1,463				72				6,480				95,413
Disposals			(3,456	)			—				—				—				(208	)			(56	)			—				(21,111	)			(24,831	)
Reclassified from right-of use-assets			—				95				—				—				—				—				—				—				95
Effect of currency translation			(1,591	)			—				(16	)			—				(66	)			(402	)			(32	)			(103	)			(2,210	)
Cost as of March 31, 2024		$	2,630,497			$	4,002,410			$	156,050			$	325,611			$	21,594			$	22,791			$	53,348			$	156,411			$	7,368,712
Accumulated depreciation, amortization and impairment as of January 1, 2024		$	(983,491	)		$	(463,098	)		$	—			$	—			$	(15,482	)		$	(8,546	)		$	(36,293	)		$	(109,020	)		$	(1,615,930	)
Depreciation and amortization			(22,065	)			(29,552	)			—				—				(803	)			(185	)			(468	)			(4,563	)			(57,636	)
Depreciation and amortization of disposals			540				—				—				—				206				—				—				21,105				21,851
Reclassified from right-of use-assets			—				(95	)			—				—				—				—				—				—				(95	)
Effect of currency translation			609				—				—				—				48				188				14				94				953
Accumulated depreciation, amortization and impairment as of March 31, 2024		$	(1,004,407	)		$	(492,745	)		$	—			$	—			$	(16,031	)		$	(8,543	)		$	(36,747	)		$	(92,384	)		$	(1,650,857	)
Net book value
As of January 1, 2024		$	1,637,723			$	3,538,232			$	111,919			$	298,057			$	6,004			$	13,240			$	17,015			$	62,125			$	5,684,315
As of March 31, 2024		$	1,626,090			$	3,509,665			$	156,050			$	325,611			$	5,563			$	14,248			$	16,601			$	64,027			$	5,717,855

River vessels

River vessels and equipment and river vessels under construction include amounts attributable to the Group’s river fleet, including vessels improvements and equipment for the Viking Mississippi. In 2012, the Group launched the Longship (“Longship”) series of vessels. As of March 31, 2024, the Group’s river fleet consisted of 81 river vessels, of which 58 are Longships, 10 are small classes based on the Longship design, 11 are other river vessels and two are river vessel charters, including the Viking Mississippi.

During the three months ended March 31, 2024, additions to river vessels and equipment included $14.3 million in improvements to river vessels.

During the three months ended March 31, 2024, there were $44.1 million in additions to river vessels under construction, of which $21.3 million related to progress payments for eight Longships and two Longships-Seine under construction scheduled for delivery in 2025 and 2026, $13.9 million related to Egypt river vessels under construction scheduled for delivery between 2024 and 2026 and $8.9 million related to a Longship-Douro scheduled for delivery in 2025.

Ocean and expedition ships

In 2015, the Group took delivery of its first ocean ship and as of March 31, 2024, the Group had a fleet of nine ocean ships. In 2021, the Group took delivery of its first expedition ship, which is designed for sailings in the polar regions and the Great Lakes of North America. As of March 31, 2024, the Group had a fleet of two expedition ships.

During the three months ended March 31, 2024, the Group capitalized $27.6 million in ocean ships under construction primarily related to ocean shipyard progress payments of $24.6 million for Ship XIV and $3.0 million in other costs.

 

12

The Group did not identify any impairment indicators related to property, plant and equipment and intangible assets as of March 31, 2024 and December 31, 2023. The Group’s conclusions regarding the valuation of its property, plant and equipment and intangible assets may change in future periods if factors or circumstances cause the Group to revise its assumptions in future periods, including related to inflation and rising interest rates. The Group’s future cash flows may be impacted by climate related risks, including environmental changes or more stringent environmental regulations. Such changes may impact accounting estimates in future periods, which incorporate forecasted financial performance.

 

9.	ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

A summary of the Group’s accrued expenses and other current liabilities as of March 31, 2024 and December 31, 2023 is outlined below:

 

		March 31, 2024				December 31, 2023
(in USD and thousands)
Interest payable		$	66,405			$	97,387
Operating costs			49,560				55,880
Payroll and employee costs			41,758				25,830
Marketing expenses			34,684				30,681
Overhead costs			33,665				23,368
Product and commission costs			24,696				34,124
Air costs			20,708				11,787
Indirect taxes payable			16,204				18,250
Other			72,433				57,734
Total		$	360,113			$	355,041

The changes in accrued expenses and other current liabilities are based on the timing of accruals for goods and services and payments.

 

13

10.	LOANS AND FINANCIAL LIABILITIES

A summary of the Group’s loans and financial liabilities recorded at amortized cost as of March 31, 2024 and December 31, 2023 is outlined below:

Loans and financial liabilities

 

				March 31, 2024				December 31, 2023
Loans and Financial Liabilities		Vessels and Ships Financed and Mortgaged		(in USD and thousands)
€54.2 million loan, variable base rate plus 2.4%, due 2025		Viking Baldur, Viking Magni		$	20,615			$	21,740
€236.1 million loan, variable at SOFR plus CAS and 2.0%, due through 2024		Viking Hermod, Viking Buri, Viking Heimdal, Viking Delling, Viking Lif			12,619				12,619
€20.3 million loan, variable base rate plus 2.4%, due 2026		Viking Kvasir			13,913				14,414
€288.9 million loan, variable at SOFR plus CAS and 2.0%, due through 2025		Viking Hlin, Viking Kara, Viking Mani, Viking Eir, Viking Lofn, Viking Vidar, Viking Skirnir, Viking Modi, Viking Gefjon, Viking Ve, Viking Mimir, Viking Vili			26,108				35,368
€225.8 million loan, fixed at 4.73% or variable at SOFR plus CAS and 2.0%, due through 2027		Viking Alruna, Viking Egil, Viking Kadlin, Viking Rolf, Viking Tialfi, Viking Vilhjalm, Viking Herja, Viking Hild, Viking Sigrun, Viking Einar			58,833				83,017
$53.5 million loan, fixed at 5.12%, due 2025		Viking Idi refinancing, Viking Astrild, Viking Beyla			17,394				18,398
$40.0 million loan, fixed at 5.43%, due 2027		Viking Hemming, Viking Osfrid and Viking Torgil refinancing			18,750				20,000
$102.0 million loan, fixed at 5.22% - 5.26%, due 2028		Viking Vali, Viking Tir, Viking Ullur, Viking Sigyn			60,803				63,531
$15.1 million loan, variable base rate plus 2.35%, due 2029		Viking Helgrim			10,617				11,029
€153.2 million loan, variable at SOFR plus CAS and 1.30% - 1.40%, due through 2029		Viking Hervor, Viking Gersemi, Viking Kari, Viking Radgrid, Viking Skaga, Viking Fjorgyn			114,445				129,222
€53.6 million loan, variable at SOFR plus CAS and 1.30% - 1.40%, due through 2029		Viking Gymir, Viking Egdir			45,622				50,109
$291.2 million financial liability, due 2030		Viking Orion			220,423				223,896
$290.2 million financial liability, due 2031		Viking Jupiter			231,471				234,840
$255.7 million financial liability, variable at SOFR plus CAS and 3.0%, due 2033		Viking Octantis			226,949				230,145
$299.5 million financial liability, due 2034		Viking Mars			280,460				283,312
€316.6 million loan, fixed at 1.81%, due 2034		Viking Neptune			313,298				320,367
€316.6 million loan, fixed at 1.87%, due 2035		Viking Saturn			327,539				334,930
€6.2 million loan, fixed at 0.3%, due 2026					3,359				3,777
20.0 million CHF loan, fixed at 1.5% - 2.0%, due 2027					14,808				15,847
Gross bank loans and financial liabilities				$	2,018,026			$	2,106,561
Less: Unamortized loan and financial liability fees					(91,408	)			(96,169	)
Total bank loans and financial liabilities				$	1,926,618			$	2,010,392
Less: Short-term portion of bank loans and financial liabilities					(259,823	)			(253,020	)
Long-term portion of bank loans and financial liabilities				$	1,666,795			$	1,757,372

 

14

River vessel financing

Hermes Financing

Euler Hermes Aktiengesellschaft (“Hermes”) manages the official export credit guarantee scheme on behalf and for the account of the German Federal Government. Subsidiaries of the Group have loan agreements with lender groups for which Hermes has provided guarantees equal to 95% of the loan amounts (the “Hermes Financing”). The Hermes Financing includes the €236.1 million loan, the €288.9 million loan, the €225.8 million loan, the €153.2 million loan and the €53.6 million loan. All loans that are part of the Hermes Financing are denominated in euros (“EUR” or “€”) at drawdown dates and are converted to USD based on the prevailing exchange rates two days before drawdown and have a term of eight and a half years from the drawdown dates with semi-annual payments. The Group selected fixed or variable rate financing for each of the drawdowns. Viking River Cruises Ltd (“VRC”), a subsidiary of the Group, has also issued a corporate guarantee for the obligations related to these loans. The variable rate is based on Term Secured Overnight Financing Rate (“SOFR”) plus the Credit Adjustment Spread (“CAS”) and a margin. The Hermes Financing contains customary insurance and loan to value requirements and negative covenants subject to a number of important exceptions and qualifications, including, without limitation, covenants restricting indebtedness, liens, investments, mergers, affiliate transactions, asset sales, prepayment of indebtedness, dividends and other distributions.

In 2020 and 2021, the Group amended the Hermes Financing to defer principal payments due from April 2020 to March 2022 (the “deferral period”). Under the amended terms of the agreements, at each date within the deferral period that a principal payment was due, the Group made the principal payments with drawdowns of new tranches on the existing loans (“deferred tranches”). The deferred tranches have variable interest rates and are to be repaid semi-annually over a three to five year term beginning after the end of the deferral period, or can be repaid earlier. In connection with the amendments to these loan agreements, Viking Cruises Ltd (“VCL”), a wholly owned subsidiary of the Company, became an additional guarantor of the loans while the deferred tranches are outstanding.

The Hermes Financing also has financial maintenance covenants that require VRC, as guarantor, and Viking River Cruises AG (“VRC AG”), as borrower, to maintain at all times following the first drawdown, an aggregate amount of consolidated free liquidity, which includes cash and cash equivalents, marketable securities and receivables from credit card processors, equal to or greater than $75.0 million. As of March 31, 2024, VRC and VRC AG were in compliance with these financial maintenance covenants.

€54.2 Million Loan

In January 2013, the Group entered into a loan agreement for €54.2 million to finance the Viking Baldur and Viking Magni and to refinance the Viking Legend. The €54.2 million loan was converted to USD based on the prevailing exchange rates two days prior to the dates of drawdown and has a term of 10 years from drawdown dates with monthly payments and a balloon payment due upon maturity of the loan. The loan has variable rate financing. The loan also includes customary insurance requirements. VRC issued a corporate guarantee for this arrangement.

In 2020 and 2021, the Group deferred principal payments for the €54.2 million loan for principal payments due from April 2020 through March 2022 and extended the maturity date of the loan by a total of 25 months.

In November 2023, in connection with the planned sale of the Viking Legend at the end of its charter, the Group repaid $8.1 million of the €54.2 million loan, which reduced the portion of the loan associated with the Viking Legend to zero. In January 2024, the Group completed the sale of the Viking Legend.

€20.3 Million Loan

In April 2014, the Group entered into a loan agreement for €20.3 million to finance the Viking Kvasir. The €20.3 million loan was converted to USD based on the prevailing exchange rates two days prior to the date of drawdown, and has a term of 10 years from the drawdown date with monthly payments and a balloon payment due upon maturity of the loan. The loan has variable rate financing. The loan also includes customary insurance requirements. VRC issued a corporate guarantee for this arrangement.

In 2020 and 2021, the Group deferred principal payments for the €20.3 million loan for principal payments due from April 2020 through March 2022 and extended the maturity date of the loan by a total of two years.

$53.5 Million Loan

In March 2015, the Group entered into a loan agreement for $53.5 million to finance the Viking Astrild and the Viking Beyla and to refinance the Viking Idi. The $53.5 million loan has a term of 10 years from drawdown dates with quarterly installments and a balloon payment due upon maturity of the loan. The loan has fixed rate financing. The loan also includes customary insurance requirements. VRC issued a corporate guarantee for this arrangement.

 

15

$40.0 Million Loan

In December 2017, the Group entered into a loan agreement for $40.0 million to refinance three vessels operating in Portugal, the Viking Hemming, Viking Osfrid and Viking Torgil. The $40.0 million loan has a term of eight years from drawdown date with quarterly payments. The loan has fixed rate financing. The loan also includes customary insurance requirements. VCL issued a corporate guarantee for this arrangement.

In 2020 and 2021, the Group amended the $40.0 million loan to defer principal payments due from June 2020 through March 2022 and extended the maturity date of the loan by a total of two years.

$102.0 Million Loan

In December 2017, the Group entered into a loan agreement for $102.0 million to finance the Viking Vali, Viking Tir, Viking Sigyn and Viking Ullur. The $102.0 million loan has a term of eight and half years from drawdown date with monthly payments. The loan has fixed rate financing. The loan also includes customary insurance requirements. VRC issued a corporate guarantee for this arrangement.

In 2020, the Group amended the $102.0 million loan to defer principal payments due from June 2020 through May 2021. The amendment also increased the interest rate by 0.25% for June 2020 through December 2022, which increased the fixed interest rates to a range of 5.47% to 5.51%. In 2021, the Group amended the $102.0 million loan to defer principal payments due from June 2021 through May 2022. As a result of the deferrals in 2020 and 2021, the maturity date of the loan was extended by a total of one year and the remaining monthly principal payment amounts increased.

$15.1 Million Loan

In April 2019, the Group entered into a loan agreement for $15.1 million to refinance the Viking Helgrim. The $15.1 million loan has a term of 10 years from the drawdown date with monthly payments. The loan has variable rate financing. The loan also includes customary insurance requirements. VRC issued a corporate guarantee for this arrangement.

In 2020 and 2021, the Group deferred principal payments for the $15.1 million loan for principal payments due from May 2020 through March 2022, which increased all remaining monthly principal payment amounts. These deferrals did not extend the maturity date of the loan.

Other loans

€6.2 Million Loan

In July 2020, the Group entered into a loan agreement for €6.2 million and drew down the full amount, of which 90% is guaranteed by the French government. The loan has a fixed interest rate and is denominated in EUR. In March 2021, the Group selected a five year repayment term, with quarterly payments from the selection date.

20.0 Million CHF Loan

In the third quarter of 2020, the Group obtained a credit facility for 20.0 million Swiss Francs (“CHF”), of which 85% is guaranteed by the Swiss government, due December 2024, denominated in CHF with semi-annual payments beginning in 2021. In 2021, the Group amended the credit facility, which extended the due date to 2027 and reduced the amount of each semi-annual payment beginning in the first quarter of 2022. The credit facility contains customary requirements including, without limitation, covenants restricting indebtedness.

Ocean and Expedition Ship Financing

Charter Financing

The Group previously entered into charter agreements to finance the Viking Orion, Viking Jupiter, Viking Octantis and Viking Mars. The charter agreements are accounted for as financial liabilities. The charter rates for the Viking Orion, Viking Jupiter and Viking Mars are designated as fixed rate charters. The charter rate for the Viking Octantis is designated as a variable rate charter, which is based on SOFR plus the CAS and a margin. The charter periods are 144 months beginning from the delivery date of each ship and include a purchase obligation at the end of the charter term, with an option to purchase the ship beginning on the third anniversary of the charter commencement date. VCL issued a corporate guarantee for these arrangements. The Group took delivery of the Viking Orion in June 2018, Viking Jupiter in February 2019, Viking Octantis in December 2021 and Viking Mars in May 2022.

 

16

SACE Financing

SACE SpA (“SACE”), which manages the official export credit guarantee scheme on behalf and for account of the Italian Government, provides an insurance policy to the lenders covering 100% of the principal and interest of a facility amount. Eight subsidiaries of the Group each have a loan agreement for which SACE has provided an insurance policy to the lenders covering 100% of the principal and interest of the facility amount (the “SACE Financing”). Each loan will be drawn down upon delivery of the related ocean ship. All loans that are part of the SACE Financing are for up to 80% of the newbuild’s contract price, including certain change orders, plus 100% of the Export Credit Agency premium (the “Facility”). The interest rate for each of these loans is fixed and the loans have a term of 12 years from the drawdown date with semi-annual payments, the first of which is due six months after the drawdown at delivery. VCL and Viking Ocean Cruises II Ltd (“VOC II”), a subsidiary of the Group, have jointly and severally guaranteed each of these loans. As of March 31, 2024, the outstanding SACE Financing includes the €316.6 million Neptune loan and the €316.6 million Saturn loan. For the €316.6 million Neptune and the €316.6 million Saturn loans, the Group exercised the euro option. Unless the euro option is exercised for the Viking Vesta, the SACE supported loan is denominated in USD and the total amount of the loan is determined based on the Facility converted to USD within 12 business days prior to the intended dates of drawdown. For the Viking Vela, Ship XIII, Ship XIV, Ship XV and Ship XVI, the SACE Financing will be available for drawdown in USD.

The Group took delivery of the Viking Neptune and Viking Saturn in November 2022 and April 2023, respectively.

As the principal amount of both the €316.6 million Neptune and the €316.6 million Saturn loans are outstanding in euros, the loan balances at each period end are translated to USD. For the three months ended March 31, 2024, the translation resulted in a total currency gain of $14.5 million and a decrease to the loan balances of $14.5 million for both the €316.6 million Neptune and the €316.6 million Saturn loans. For the three months ended March 31, 2023, the translation resulted in a currency loss of $5.4 million and an increase to the loan balance of $5.4 million for the €316.6 million Neptune loan. The impact of the currency translation of these loans were included in currency gain (loss) in the interim condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023.

Ocean cruise financial liability deposit

The Viking Orion charter agreement requires the Group to maintain a minimum of $6.5 million in a financial liability deposit throughout the charter period, which is included in cash and cash equivalents on the interim condensed consolidated statements of financial position.

Undrawn borrowing facilities

As of March 31, 2024, the Group had the SACE Financing for the Viking Vela, Viking Vesta, Ship XIII, Ship XIV, Ship XV and Ship XVI. The Group has also entered into two loan agreements for €167.5 million each to finance the eight Longships and two Longships-Seine scheduled for delivery in 2025 and 2026. These loan agreements will be drawn down on the delivery of each ship or vessel. See Note 17.

 

17

Secured Notes

 

				March 31, 2024				December 31, 2023
Notes		Collateral		(in USD and thousands)
$675.0 million Secured Notes, fixed 5.000% due 2028		Viking Star, Viking Sea and Viking Sky		$	675,000			$	675,000
$350.0 million Secured Notes, fixed 5.625% due 2029		Viking Venus			350,000				350,000
Gross Secured Notes				$	1,025,000			$	1,025,000
Less: Secured Notes fees and discounts					(8,892	)			(9,343	)
Total Secured Notes				$	1,016,108			$	1,015,657

$675.0 Million 2028 Secured Notes

In February 2018, VOC Escrow Ltd, a wholly owned subsidiary that was subsequently merged into Viking Ocean Cruises Ltd, issued $675.0 million in principal amount of its 5.000% Senior Secured Notes due 2028 (the “2028 Secured Notes”) with semi-annual interest payments. The 2028 Secured Notes are guaranteed on a senior unsecured basis by VCL and on a senior secured basis by Viking Ocean Cruises Ship I Ltd, Viking Ocean Cruises Ship II Ltd and Viking Sea Ltd. The 2028 Secured Notes are secured on a first priority basis by mortgages granted by Viking Ocean Cruises Ship I Ltd, Viking Ocean Cruises Ship II Ltd and Viking Sea Ltd over the Viking Star, Viking Sky and Viking Sea, respectively, and certain of their other ship related assets.

$350.0 Million 2029 Secured Notes

In February 2021, Viking Ocean Cruises Ship VII Ltd (“Ship VII”), a wholly owned subsidiary, issued $350.0 million in principal amount of its 5.625% Senior Secured Notes due 2029 (the “2029 Secured Notes” and collectively with the 2028 Secured Notes, the “Secured Notes”) with semi-annual interest payments. The net proceeds from the 2029 Secured Notes were used to pay the remaining contract price for the Viking Venus. The 2029 Secured Notes are secured on a first priority basis by a mortgage granted by Ship VII over the Viking Venus and certain of its other ship related assets. The 2029 Secured Notes are guaranteed on a senior unsecured basis by VCL.

The indentures governing the Secured Notes contain customary negative covenants applicable to VCL and its restricted subsidiaries, subject to a number of important exceptions and qualifications, including, without limitation, covenants restricting indebtedness, liens, investments, mergers, affiliate transactions, asset sales, prepayment of indebtedness and dividends and other distributions. In addition, the indentures governing the Secured Notes contain a cross-default provision whereby the failure by VCL or any of its restricted subsidiaries to make principal payments under other borrowing arrangements or the occurrence of certain events affecting those other borrowing arrangements could trigger an obligation to repay the Secured Notes. Pursuant to the indentures governing the Secured Notes, the issuers or the guarantors also entered into security documents containing customary insurance requirements.

The Secured Notes do not contain any financial maintenance covenants.

 

18

Unsecured Notes

 

				March 31, 2024				December 31, 2023
Notes		Purpose		(in USD and thousands)
$250.0 million VCL Notes, fixed 6.250% due 2025		General corporate purposes, including without limitation working capital, capital expenditures, repayment of outstanding indebtedness and the acquisition of river vessels or ocean ships		$	250,000			$	250,000
$825.0 million VCL Notes, fixed 5.875% due 2027		To fund the tender offer and redemption of the 2022 VCL Notes and general corporate purposes			825,000				825,000
$500.0 million VCL Notes, fixed 7.000% due 2029		General corporate purposes			500,000				500,000
$720.0 million VCL Notes, fixed 9.125% due 2031		To fund the redemption of the 13.000% Senior Secured Notes due 2025			720,000				720,000
Gross Unsecured Notes				$	2,295,000			$	2,295,000
Less: Unsecured Notes fees and discounts, net of premiums					(23,443	)			(24,754	)
Total Unsecured Notes				$	2,271,557			$	2,270,246

$250.0 Million 2025 VCL Notes

In May 2015, VCL issued $250.0 million in principal of the 6.250% Senior Notes due 2025 (the “2025 VCL Notes”) with semi-annual interest payments. Certain of the Group’s subsidiaries jointly and severally guarantee the 2025 VCL Notes on a senior basis.

$825.0 Million 2027 VCL Notes

In September 2017, VCL issued $550.0 million in principal of the 5.875% Senior Notes due 2027 (the “2027 VCL Notes”) with semi-annual interest payments. In February 2018, VCL issued $275.0 million in principal amount of additional 2027 VCL Notes. The 2027 VCL Notes are guaranteed by the same subsidiaries that guarantee the 2025 VCL Notes.

$500.0 Million 2029 VCL Notes

In 2021, VCL issued $500.0 million in principal amount of its 7.000% Senior Notes due 2029 (the “2029 VCL Notes”) with semi-annual interest payments. The 2029 VCL Notes are guaranteed by the same subsidiaries that guarantee the 2025 VCL Notes and the 2027 VCL Notes, except for Viking Catering AG.

$720.0 Million 2031 VCL Notes

In June 2023, VCL issued $720.0 million in principal amount of its 9.125% Senior Notes due 2031 (the “2031 VCL Notes” and, together with the 2025 VCL Notes, the 2027 VCL Notes and the 2029 VCL Notes, the “Unsecured Notes”) with semi-annual interest payments. The 2031 VCL Notes are guaranteed by the same subsidiaries that guarantee the 2025 VCL Notes and the 2027 VCL Notes, except for Viking Catering AG and Passenger Fleet LLC.

The indentures governing the Unsecured Notes contain customary negative covenants applicable to VCL and its restricted subsidiaries, subject to a number of important exceptions and qualifications, including, without limitation, covenants restricting indebtedness, liens, investments, mergers, affiliate transactions, asset sales, prepayment of indebtedness and dividends and other distributions. In addition, the indentures governing the Unsecured Notes contain a cross-default provision whereby the failure by VCL or any of its restricted subsidiaries to make principal payments under other borrowing arrangements or the occurrence of certain events affecting those other borrowing arrangements could trigger an obligation to repay the Unsecured Notes.

 

19

The Unsecured Notes do not contain any financial maintenance covenants.

The indentures governing the Secured Notes and Unsecured Notes include covenants that generally restrict the amount of funds that can be transferred from VCL and its restricted subsidiaries to the Company to a basket, which is calculated based on a cumulative earnings metric. As of March 31, 2024 and December 31, 2023, essentially all of the net assets of the subsidiaries of the Company, but excluding the Company itself, were restricted.

 

11.	OTHER NON-CURRENT LIABILITIES

A summary of the Group’s other non-current liabilities as of March 31, 2024 and December 31, 2023 is outlined below:

 

		March 31, 2024				December 31, 2023
(in USD and thousands)
Warrant liability		$	157,980			$	134,270
Travel protection payable			39,687				31,701
Other			3,671				5,310
Total		$	201,338			$	171,281

In February 2021, the Company issued two warrants for 8,733,400 ordinary shares to VCAP, with each warrant being for 4,366,700 ordinary shares and tied to either TPG VII Valhalla Holdings, L.P. (“TPG”) and CPP Investment Board PMI-3 Inc. (“CPP Investments”) equity in the Company. The vesting period of the warrants commenced on the date of issuance and ends on the later of five years from the date of issuance or upon the sale of all of TPG’s or CPP Investments’ equity in the Company. The number of warrants that vest is based on either the proceeds to TPG or CPP Investments upon a sale of their equity in the Company or the trading price of the Company’s ordinary shares starting 180 days after the IPO. The number of warrants that vest depends on the proceeds or trading price, as applicable, per ordinary share, with 0% vesting at $15.38 or lower price per ordinary share and 100% vesting at $23.08 or higher price per ordinary share, and linear vesting between $15.38 and $23.08 per ordinary share. The warrants have an exercise price of $0.01.

The warrants are accounted for as a financial liability because the terms require the Company to potentially issue a variable number of ordinary shares in the future. The warrant liability is carried at fair value with changes in value recognized through other financial income (loss) in the interim condensed consolidated statements of operations. The fair value of the warrant liability increased from December 31, 2023 to March 31, 2024 as a result of the increase in the fair value per ordinary share, which increased due to the increase in the fair value of equity. For the three months ended March 31, 2024 and 2023, the Company recognized a loss of $23.7 million and a gain of $4.1 million, respectively, on the remeasurement of the warrant liability.

Travel protection payable relates to the non-current portion of amounts payable to the insurance company that underwrites certain parts of the Group’s travel protection.

 

20

12.	SHARE CAPITAL

The rights and preferences of each class of share capital prior to the IPO are described in the Group’s annual consolidated financial statements as of and for the year ended December 31, 2023. Share and per share amounts for all share classes have been revised to give effect to the 26-for-1 share split for all periods presented, including the number of ordinary shares issuable upon the exercise of warrants. See Note 2.

As of March 31, 2024 and December 31, 2023, the authorized, issued, and outstanding share capital was as follows:

 

		As of March 31, 2024																As of December 31, 2023
(in thousands, except per share amounts)		Shares Authorized				Shares Issued				Shares Outstanding				Liquidation Preference Per Share				Shares Authorized				Shares Issued				Shares Outstanding				Liquidation Preference Per Share
Non-Voting Ordinary Shares			78,000				—				—			$	—				78,000				—				—			$	—
Ordinary Shares			1,040,000				94,165				94,165			$	—				1,040,000				94,165				94,165			$	—
Special Shares			156,000				127,771				127,771			$	—				156,000				127,771				127,771			$	—
Preference Shares			26,000				3,319				3,319			$	0.38				26,000				3,319				3,319			$	0.38
Series C Preference Shares			185,120				184,267				184,267			$	7.69				185,120				184,267				184,267			$	7.69

As described in Note 2, in connection with the IPO, all outstanding preference shares and Series C Preference Shares converted into ordinary shares on a one-for-one basis. All authorized Series C Preference Shares, preference shares and non-voting ordinary shares were also redesignated into authorized ordinary shares. Under the Post IPO Bye Laws, the Company has two classes of authorized share capital: ordinary shares and special shares.

Dividend Activity

Prior to the IPO, in preference to the holders of the ordinary shares, non-voting ordinary shares, special shares and preference shares, the Series C Preference Shares were entitled to receive dividends at a rate per annum of (i) 6.00% of the liquidation preference of the Series C Preference Shares (“Series C Liquidation Preference”) if paid in cash or (ii) 8.00% of the Series C Liquidation Preference if paid by accretion to the Series C Liquidation Preference (“Series C PIK”) (“Series C Preferential Dividend”).

For the three months ended March 31, 2024 and 2023, the Company recognized $21.3 million for each period, in interest expense related to the Series C Preferential Dividend. The Company did not pay any amounts related to the Series C Preferential Dividend during the three months ended March 31, 2024 and 2023.

For the three months ended March 31, 2024 and 2023, no dividends were declared or paid related to ordinary shares, special shares and preference shares. For the three months ended March 31, 2024 and 2023, the Group declared and paid $0.7 million and nil, respectively, in dividends to non-controlling interests.

Unpaid Preferential Dividends which had not been declared were $0.9 million as of both March 31, 2024 and December 31, 2023.

See Note 21 for events taking place subsequent to March 31, 2024.

 

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13.	PRIVATE PLACEMENT

In February 2021, the Company issued Series C Preference Shares to TPG and CPP Investments (“Series C Private Placement”). The Series C Private Placement is accounted for as a financial liability as certain conversion features under the Company’s bye laws in effect prior to the IPO were not within the control of the Company and could have been cash settled. The equity conversion features have been bifurcated from the liability as an embedded derivative (the “Series C Private Placement derivative”), which is carried at fair value, with changes in value recognized through Private Placement derivative (loss) gain in the interim condensed consolidated statements of operations.

A summary of the Group’s Private Placement liability as of March 31, 2024 and December 31, 2023 is outlined below:

 

		March 31, 2024				December 31, 2023
Financial Liability		(in USD and thousands)
Series C Private Placement		$	1,417,440			$	1,417,440
Less: Financial liability costs			(20,339	)			(22,888	)
Total Private Placement liability		$	1,397,101			$	1,394,552

Private Placement derivative

As of March 31, 2024 and December 31, 2023, the fair value of the Series C Private Placement derivative was $2,947.4 million and $2,640.8 million, respectively. The fair value of the Series C Private Placement derivative increased primarily due to an increase in the fair value of equity. The fair value of equity increased primarily as a result of changes in the forward EUR/USD curve reflecting forecasted strengthening of the U.S. dollar. For the three months ended March 31, 2024 and 2023, the Company recognized Private Placement derivative loss of $306.6 million and gain of $39.2 million, respectively, related to the remeasurement of the Series C Private Placement derivative.

As described in Note 2, in connection with the IPO, all outstanding Series C Preference Shares converted to ordinary shares on a one-for-one basis. As a result of the conversion, the Private Placement liability and Private Placement derivative were derecognized immediately prior to the consummation of the IPO. See Note 21.

 

14.	STOCK BASED COMPENSATION

Prior to the IPO, the Group maintained the Viking Holdings Ltd 2018 Equity Incentive Plan (the “Pre-IPO Equity Plan”). Grants from the Pre-IPO Equity Plan entitled the recipient to stock based awards whose underlying shares were non-voting ordinary shares of the Company. As described in Note 2, in connection with the IPO, all outstanding options for non-voting ordinary shares and all outstanding RSUs for non-voting ordinary shares converted to options for ordinary shares and RSUs for ordinary shares, respectively, on a one-for-one basis.

Additionally, share and per share amounts for all outstanding stock options and RSUs have been revised to give effect to the 26-for-1 share split for all periods presented. See Note 2.

Under the Pre-IPO Equity Plan, the Plan Administrator, which is the Board of Directors or a committee established by the Board of Directors, has the authority to determine the terms and conditions applicable to each stock based award, such as timing of grants, recipients, size of grants, vesting conditions, vesting schedule and strike price for stock options. Vested stock options can be exercised upon approval of the Company’s Plan Administrator, termination of service or death. Under the Pre-IPO Equity Plan, option holders can pay the strike price for options through cash or check, or through cashless exercise, upon approval of the Company’s Plan Administrator.

As of March 31, 2024, the Company was authorized to issue up to 46,800,000 Non-Voting Ordinary Shares for stock based awards under the Pre-IPO Equity Plan. As of March 31, 2024, 6,034,730 Non-Voting Ordinary shares remained available for future grant.

The Plan Administrator can suspend or terminate the Pre-IPO Equity Plan at any time. Suspension or termination of the Pre-IPO Equity Plan does not impair rights and obligations under any stock award granted while the Pre-IPO Equity Plan was in effect except with the written consent of the affected participant. Certain stock based awards have vesting provisions in the event of both a change in control occurs and the employee continues to provide service.

 

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For the three months ended March 31, 2024 and 2023, the Group recognized stock based compensation expense of $3.5 million and $6.8 million, respectively, all of which relates to RSUs. Other paid-in equity also includes certain tax effects related to the stock based awards.

The terms of the Group’s stock based awards are described in the Group’s annual consolidated financial statements as of and for the year ended December 31, 2023.

Restricted Stock Units

For the three months ended March 31, 2024, RSU activity was as follows:

 

		Number of RSUs				Weighted Average  Grant-date  Fair Value				Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2024			18,870,930			$	7.18				4.3
Forfeited during the year			(11,076	)			10.77
Outstanding at March 31, 2024			18,859,854			$	7.18				4.1

As of March 31, 2024, 10,011,664 of the RSUs outstanding were subject only to the liquidity condition for vesting, as any applicable service conditions had been met. An additional 6,240,000 of the RSUs have accelerated vesting upon the satisfaction of the liquidity condition, if the grant recipients remain employed by the Group. In connection with the IPO, these 16,251,664 RSUs fully vested and were settled as part of the RSU Net Settlement.

Stock options

For the three months ended March 31, 2024, stock option activity was as follows:

 

		Number of Options		Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2024		2,949,830		$	15.57				3.2
Outstanding at March 31, 2024		2,949,830		$	15.57	(1)			2.9
Vested at March 31, 2024 (2)		2,949,830		$	15.57

 

(1)	Stock options outstanding include a range of exercise prices from $12.50 to $19.13.

(2)	Vested stock options are exercisable upon the approval of the Plan Administrator.

See Note 21 for events taking place subsequent to March 31, 2024 related to the Company’s equity plans.

 

15.	NET LOSS PER SHARE

The rights, including dividend rights, of the ordinary shares and special shares are substantially identical, other than voting rights.

Basic net loss per share (“Basic EPS”) is computed by dividing net loss attributable to ordinary shares and special shares by the weighted-average number of ordinary shares and special shares outstanding during each period. Net loss attributable to ordinary shares and special shares is determined in accordance with their rights to income and losses in accordance with the bye laws in effect prior to the IPO, as described in the Group’s annual consolidated financial statements. Share and per share amounts have been revised to give effect to the 26-for-1 share split for all periods presented. See Note 2.

 

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To compute diluted net loss per share (“Diluted EPS”), the Group adjusts the numerator and the denominator of Basic EPS. The Group adjusts net loss attributable to ordinary shares and special shares for the changes in net loss that would result from the conversion of dilutive potential ordinary shares to ordinary shares, including changes in how the net loss would be allocated to ordinary shares and special shares if dilutive potential ordinary shares converted to ordinary shares. The Group adjusts the weighted-average number of ordinary shares and special shares outstanding during each period by the weighted average number of ordinary shares that would be issued upon the conversion of dilutive potential ordinary shares to ordinary shares.

For the three months ended March 31, 2024 and 2023, potential ordinary shares include preference shares, Series C Preference Shares and the warrants.

Stock based awards issued from the Pre-IPO Equity Plan are not potential ordinary shares because the underlying shares of the stock based awards are non-voting ordinary shares. While non-voting ordinary shares are considered a class of ordinary shares, because non-voting ordinary shares are not entitled to dividends, they are allocated no earnings or losses when calculating Basic EPS and Diluted EPS. As a result, Basic EPS and Diluted EPS for non-voting ordinary shares are zero in all periods.

The computation of Basic EPS and Diluted EPS is as follows:

 

(in USD and thousands, except per share data)		Three Months Ended March 31,
		2024				2023
Basic EPS
Numerator
Net loss attributable to Viking Holdings Ltd		$	(494,224	)		$	(214,228	)
Net loss allocated to shares other than ordinary shares and special shares			(226,380	)			(98,124	)
Net loss allocated to ordinary shares and special shares		$	(267,844	)		$	(116,104	)
Denominator
Weighted average ordinary shares and special shares			221,936				221,936
Basic EPS		$	(1.21	)		$	(0.52	)
(in USD and thousands, except per share data)		Three Months Ended March 31,
		2024				2023
Diluted EPS
Numerator
Net loss allocated to ordinary shares and special shares - Basic		$	(267,844	)		$	(116,104	)
Dilutive adjustments			—				(15,516	)
Reallocation of income (loss)			—				(96,271	)
Net loss allocated to ordinary shares and special shares - Diluted		$	(267,844	)		$	(227,891	)
Denominator
Weighted average ordinary shares and special shares - Basic			221,936				221,936
Dilutive effect of conversion of Series C Preference Shares to ordinary shares			—				184,267
Weighted average ordinary shares and special shares - Diluted			221,936				406,203
Diluted EPS		$	(1.21	)		$	(0.56	)

For the three months ended March 31, 2024 and 2023, weighted average number of potential ordinary shares that were not included in the Diluted EPS calculations because they would be anti-dilutive were as follows:

 

		Three Months Ended March 31,
(in thousands)		2024				2023
Series C Preference Shares			184,267				—

The potential ordinary shares related to the conversion of preference shares are issuable upon specified contingent events. As the specified contingent events had not occurred as of March 31, 2024 or 2023, these contingently issuable shares were not included in the calculation of Diluted EPS for the three months ended March 31, 2024 and 2023. As described in Note 2, in connection with the IPO, all outstanding preference shares converted to ordinary shares on a one-for-one basis.

 

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The warrants vest and become exercisable into ordinary shares upon contingent events. As the specified contingent events have not occurred, these contingently issuable shares are not included in the calculation of Diluted EPS for the three months ended March 31, 2024 and 2023.

 

16.

SEGMENTS

Operating segments are defined as components of an entity for which separate financial information is available and is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Group’s CODM, the Chairman of the Board of Directors and Chief Executive Officer, evaluates the Group’s results in a number of ways, but the primary basis for allocating resources and assessing performance is based on product.

The Group defines its products based on the type of cruise offering and language of the cruise service. The River segment provides river cruises outside the United States to English-speaking passengers. The Ocean segment provides ocean cruises to English-speaking passengers. Other includes operating segments that are not individually reportable, consisting of expedition cruises for English-speaking passengers (“Expedition”), Mississippi River cruises for English-speaking passengers, Viking China, which includes cruises for Mandarin-speaking passengers provided by the Group and the results of the China JV Investment (see Note 20), and also includes corporate activities. The Group typically designates the language of the cruise service by vessel for each cruise season, such that in any individual season, the vessel provides service in a single language for the entire season. In cases where a vessel changes its language service during the season, each individual sailing is designated for a specific language, such that any single cruise is provided in a single language. See Note 4 for disaggregation of percentage of passengers by source market.

The Group’s reportable segments are River and Ocean. As described in Note 3, the primary cruising season for the river product is from April to October, although some of the river cruises run longer seasons. As a result, the seasonality of the Group’s river business impacts the concentration of revenue and operating income for its segments for the three months ended March 31, 2024 and 2023.

Operating loss is the primary profitability metric the CODM uses to assess performance and allocate resources. Expenses attributable to multiple segments are allocated based on measures that are determined to relate most closely to the expenses, which are generally relative revenues, relative passengers booked, or relative passengers sailed for a particular period.

Longship river vessels can be utilized in either River and Viking China, and may change between these products in different years. Ocean and expedition ships and ocean and expedition ships under construction include ships for both Ocean and Expedition. See Note 8. River vessel charters are recognized as right-of-use assets.

The Group typically finances its vessels and ships with loans or financial liabilities that are secured by the related vessels and ships. See Note 10.

 

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Set forth below are results for the Group’s segments for the three months ended March 31, 2024 and 2023:

 

		Three Months Ended March 31, 2024
(in USD and thousands)		River				Ocean				Other				Total
Total revenue		$	165,431			$	447,680			$	105,044			$	718,155
Total cruise operating expenses			(162,251	)			(267,409	)			(74,265	)			(503,925	)
Other operating expenses
Selling and administration			(109,936	)			(73,644	)			(36,238	)			(219,818	)
Depreciation and amortization			(25,791	)			(27,327	)			(11,793	)			(64,911	)
Total other operating expenses			(135,727	)			(100,971	)			(48,031	)			(284,729	)
Operating (loss) income		$	(132,547	)		$	79,300			$	(17,252	)		$	(70,499	)

 

		Three Months Ended March 31, 2023
(in USD and thousands)		River				Ocean				Other				Total
Total revenue		$	130,286			$	397,632			$	101,076			$	628,994
Total cruise operating expenses			(147,518	)			(259,271	)			(69,698	)			(476,487	)
Other operating expenses
Selling and administration			(112,560	)			(68,736	)			(24,374	)			(205,670	)
Depreciation and amortization			(27,857	)			(25,212	)			(9,630	)			(62,699	)
Total other operating expenses			(140,417	)			(93,948	)			(34,004	)			(268,369	)
Operating (loss) income		$	(157,649	)		$	44,413			$	(2,626	)		$	(115,862	)

 

17.	COMMITMENTS AND CONTINGENCIES

Viking newbuilding program

River Newbuilds

The Group is in the process of building six river vessels that will operate in Egypt, the Viking Hathor, Viking Sobek and four additional vessels, and has entered into raw materials agreements for these vessels. The Group expects these vessels to be delivered between 2024 and 2026.

In 2023, the Group entered into shipbuilding contracts for the river vessels outlined below, assuming a euro to USD exchange rate of 1.10. In January 2024, the Group amended these contracts, which reduced the purchase price of each vessel by €1.5 million ($1.7 million, assuming a euro to USD exchange rate of 1.10), changed the timing and amount of the installment payments to the shipyard and accelerated the delivery dates for certain vessels.

In January 2024, the Group also entered into a shipbuilding contract for a Longship-Douro vessel modified for the Douro River for delivery in 2025 for $24.8 million, assuming a euro to USD exchange rate of 1.10.

The Group has obtained financing for all ships, other than the Longship-Douro vessel, as described below.

 

River Vessels		Number of Vessels		Aggregate Price (in USD and thousands)				Delivery Date
Longships		4		$	162,800			2025
Longships-Seine		2			77,606			2025
Longship-Douro		1			24,750			2025
Longships		4			162,800			2026
Total		11		$	427,956

In August 2023, the Group entered into two loan agreements for €167.5 million each to finance the eight Longships and two Longships-Seine river vessels scheduled for delivery in 2025 and 2026. Hermes has provided guarantees equal to 95% of the loan amounts. The loans are denominated in USD and the applicable exchange rate will be based on the prevailing exchange rate two business days prior to the date of drawdown. These loans have a term of 102 months from the date of drawdown and the Group may select fixed or variable rate financing prior to each drawdown. VRC and VCL issued corporate guarantees for these loans.

 

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