Norwegian Air Shuttle ASA — Earnings Release 2021

Oct 28, 2021

Q32021

Norwegian Air Shuttle ASA

Third quarter 2021 financial report

• A strong uptick in demand and improving load factor
• Third quarter EBT of NOK 169 million
• A solid financial position with NOK 7.6 billion in cash & cash equivalents
• Equity ratio increased to 14 percent

Norwegian's third quarter results demonstrate strong financial position leading into winter trading period

Norwegian today reported its results for the third quarter of 2021. The figures show continued positive progress following the successful completion in May of the respective reconstruction processes. Passenger demand is returning across all our markets and forward bookings remain strong leading into our summer 2022 season. Profit before tax (EBT) showed a net profit of NOK 169 million compared to a loss of NOK 980 million in the same period in 2020. At the end of the third quarter of 2021, the total fleet comprised 51 aircraft. Continued cost control throughout the company combined with low cash burn has resulted in a strong financial position entering into the winter period with NOK 7.6 billion in cash and cash equivalents.

As travel restrictions across our European markets have continued to ease throughout the third quarter, demand has steadily increased. We have seen a return to more traditional booking patterns as passengers regain confidence to plan their travels with longer lead times into summer 2022. In line with the increased demand and ramp up of our operations, we have reopened crew bases in Stavanger, Bergen and Trondheim while recruiting for additional cabin crew at our Copenhagen base.

"The third quarter results clearly demonstrate that the actions taken across the organisation to safeguard the future of Norwegian by lowering debt and liabilities, while focusing on cost efficiencies, have succeeded. We are now in a strong financial position going into the traditionally more challenging winter months. We have seen a positive trend in forward bookings month on month and an increasing number of passengers are choosing to fly Norwegian across our European network," said Geir Karlsen, CEO of Norwegian.

During the third quarter, close to 2.5 million passengers travelled with Norwegian, compared with approximately one million during the same period last year. Production (ASK) increased by 130 percent and passenger traffic (RPK) increased by 177 percent compared with the third quarter in 2020. The load factor was 73.1 percent, an increase of 12.5 percentage points.

Punctuality, share of flights departing on schedule, was 91.0 percent in the third quarter of 2021, down by six percentage points from 97.4 percent in the same period last year.

Looking ahead to a successful 2022

As travel demand continues to grow in line with the easing of international restrictions we can now look ahead with renewed optimism. Our stringent focus on costs and expenditure places Norwegian in a far stronger position over the winter months than previous years. Booking curves continue to show a positive trend well into 2022 as an ever increasing number of passengers choose to fly with Norwegian. Our passengers appreciate our modern fuelefficient aircraft, welcoming service and extensive European network. We are especially pleased to be able to fully reopen our award-winning Norwegian Reward programme which is a much valued part of the passenger experience.

CONSOLIDATED FINANCIAL KEY FIGURES

Q 3	Q 3		YTD	YTD		Full Year 2020
						9,095.7
21.2	-1,263.1	N M	-1,630.2	-2,876.3	-43 %	-4,755.2
-305.0	-401.4	-24 %	-2,166.6	-868.4	149 %	-1,750.5
-295.5	-2,812.6	-89 %	-2,523.3	-7,888.0	-68 %	-23,768.4
						-20,763.7
						-22,133.0
168.7	-979.6	N M	1,758.6	-6,412.3	N M	-23,039.8
						-52.3 %
						-261.3 %
						-243.3 %
8.8 %	-76.1 %		69.8 %	-76.1 %		-253.3 %
						-166.6
						-13.4 %
						2,666.9
			641.5	48,523.3	-99 %	40,221.8
	2021 1,927.2 -621.6 168.7 1.1 % -15.3 % 8.8 %	2020 1,288.1 -1,950.9 -980.5 -98.1 % -218.4 % -76.1 %	Change 50 % -68 % N M	2021 2,517.9 -3,059.7 1,758.6 -64.7 % -100.2 % 69.8 % 2.7 13.6 % 7,635.4	2020 8,425.9 -5,880.1 -5,772.3 -34.1 % -93.6 % -68.5 % 305.2 14.3 % 3,402.3	Change -70 % -48 % N M -99 % -0.7 pp 124 %

norwegian.com

OPERATIONAL REVIEW

CONSOLIDATED TRAFFIC FIGURES AND RATIOS

CONSOLIDATED TRAFFIC FIGURES AND RATIOS
(unaudited ratios in NOK)	Q 3 2021	Q 3 2020	Change	YTD 2021	YTD 2020	Change	Full Year 2020
Yield	0.53	0.88	-39 %	0.57	0.46	24 %	0.47
Unit revenue	0.39	0.53	-27 %	0.39	0.35	11 %	0.36
Unit cost	0.65	1.90	-66 %	1.16	0.83	40 %	0.94
Unit cost excl fuel	0.51	1.80	-72 %	1.02	0.71	42 %	0.83
Ancillary revenue per passenger	157	207	-24 %	163	230	-29 %	223
ASK (million)	3,915	1,705	130 %	4,811	17,229	-72 %	18,168
RPK (million)	2,861	1,034	177 %	3,305	13,188	-75 %	13,680
Passengers (million)	2.46	0.99	149 %	3.05	6.30	-52 %	6.87
Load factor	73.1 %	60.6 %	12.5 pp	68.7 %	76.4 %	-7.7 pp	75.2 %
Average sector length (km)	1,057	881	20 %	934	1,489	-37 %	1,385
Fuel consumption (1,000 mt)	78	34	131 %	98	342	-71 %	362
CO2 per RPK	86	103	-17 %	94	82	15 %	83

Although passenger demand is returning across all markets, traffic figures are still affected by the COVID-19 pandemic and reduced operations. In the third quarter of 2021, 2.46 million passengers travelled with Norwegian, an increase compared with 0.99 million passengers in the same period last year. Production (ASK) increased by 130 percent and passenger traffic (RPK) increased by 177 percent compared with the third quarter in 2020. The load factor was 73.1 percent, an increase of 12.5 p.p. compared to the third quarter of 2020.

At the end of the third quarter of 2021, the total fleet comprised 51 aircraft. Up to 49 aircraft were operational during the third quarter of 2021 (on average 39 aircraft). The company utilized every operational aircraft on average 9.7 block hours per day, compared to 8.3 in the third quarter of 2020.

TRAFFIC DEVELOPMENT OPERATING PERFORMANCE

Punctuality, share of flights departing on schedule, was 91.0 percent in the third quarter of 2021, down by six percentage points from 97.4 percent in the third quarter of 2020.

Regularity, share of scheduled flights taking place, was 99.7 percent in the third quarter of 2021, compared to 99.6 percent in the same period in 2020.

FINANCIAL REVIEW

These interim financial statements for the third quarter of 2021 are still affected by the COVID-19 pandemic, however the trends are positive as demand is returning in all markets. In addition, certain effects from the successful exit of the financial restructuring process in the second quarter of 2021 impact the third quarter financial results.

For the third quarter of 2021, production (ASK) was increased by 130 percent compared to the same period last year.

EBITDAR excl other losses/(gains) was negative NOK 305 million in the third quarter of 2021, compared to negative NOK 401 million in the same period last year. Other losses/(gains) amounted to a net gain of NOK 326 million in the third quarter of 2021, compared to a net loss of NOK 862 million in the same period in 2020. In the third quarter of 2021, Other losses/(gains) primarily includes currency gains on working capital of NOK 326 million.

Operating profit (EBIT) for the third quarter of 2021 was negative by NOK 295 million compared with negative NOK 2,813 million in the same period last year. Operating Profit (EBIT) excluding other losses/(gains) was negative NOK 622 million in the third quarter of 2021 compared with negative NOK 1,951 million in the same period last year. Profit before tax (EBT) was NOK 169 million in the third quarter of 2021, compared with a loss of NOK 980 million in the same period in 2020.

FINANCIAL RESTRUCTURING IN 2021

In May 2021, the company successfully exited the examinership and reconstruction processes, and the basis for continuing as a going concern was secured.

In the first nine months of 2021, the restructuring improved equity by NOK 12,481 million, of which NOK 4,793 million is recognized in the income statement.

The total equity increase from the financial restructuring of NOK 12,481 million, consists mainly of the private placement and rights issue (net of transaction costs) which increased equity by NOK 3,998 million, whereas dividend claim and cash dividend reduced equity by NOK 439 million. The net effect for changes in aircraft, including reduced maintenance obligations, increased equity by NOK 1,652 million. Extinguishment of vendor debt and related receivables from the same vendors increased equity by NOK 4,091 million. Extinguishment of borrowings not related to aircraft financing or bonds, and issue of perpetual and retained claims bond (net of transaction costs) increased equity with NOK 2,742 million. Finally bonds increased equity net by NOK 427 million. Refer to note 9 for further details.

REVENUE

Total revenue in the third quarter of 2021 was NOK 1,927 million, compared with NOK 1,288 million in the same period last year, an increase of 50 percent. Unit revenue decreased by 27 percent following a yield decrease of 39 percent. Load factor increased by 12.5 percentage points to 73.1 percent and average sector length increased by 20 percent.

Passenger revenue was NOK 1,517 million in the third quarter of 2021, compared with NOK 905 million in the same period last year. Ancillary passenger revenue was NOK 388 million in the third quarter of 2021, compared with NOK 204 million in the same period last year, whereas ancillary revenue per passenger decreased by 24 percent from NOK 207 in the third quarter of 2020 to NOK 157 in the third quarter of 2021. Other revenue of NOK 22 million in the third quarter of 2021 primarily includes commissions and revenue from the loyalty program Norwegian Reward.

OPERATING EXPENSES

Total operating expenses excluding depreciation, amortization and aircraft lease decreased by 25 percent to NOK 1,906 million in the third quarter of 2021, compared with NOK 2,551 million in the same period last year. Adjusted for other losses/(gains) there was an increase of 32 percent, primarily driven by increased production. In the first nine months of 2021, personnel expenses are negatively impacted by non-recurring costs of approximately NOK 315 million mainly related to downsizing activities and severance pay. Other operating expenses are negatively affected by non- recurring costs of approximately NOK 229 million related to the financial restructuring in the first nine months.

Unit cost decreased by 66 percent from NOK 1.90 in the third quarter of 2020, to NOK 0.65 in the third quarter of 2021. Excluding fuel, the decrease was 72 percent ending at NOK 0.51 in the third quarter of 2021.

Other losses/(gains) include effects from losses or gains on translation of working capital in foreign currency and net losses or gains on sale of fixed assets. Other losses/(gains) in the third quarter of 2021 amounted to a net gain of NOK 326 million and include primarily currency translation gains on working capital. In the same period last year, other losses was NOK 862 million of which restructuring costs were NOK 1,085 million.

FINANCIAL ITEMS

Net financial items were positive by NOK 464 million in the third quarter of 2021 compared with a positive result of NOK 1,832 million in the same period last year. Interest expenses for the third quarter of 2021 include NOK 54 million in interest expense on lease liabilities recognized according to IFRS 16, compared to NOK 368 million in the same period last year.

Other financial income (expense) includes net currency losses of NOK 345 million in the third quarter of 2021, compared to net currency losses of NOK 196 million in the same period last year. Currency gains/losses are mainly related to the revaluation of borrowings denominated in currencies other than functional currencies of the companies in the group.

Financial restructuring carried out in 2021 had a positive effect on net financial items by NOK 968 million in the third quarter of 2021 and NOK 4,793 million year to date. In 2020, the corresponding numbers were NOK 2,546 million for the third quarter of 2020 and NOK 4,904 million year to date. Refer to Note 9 for further information.

FINANCIAL POSITION AND LIQUIDITY

Aircraft assets are accounted for in USD, creating a natural hedge against USD denominated financing when translated into NOK.

Net interest-bearing debt at the end of the third quarter of 2021 was NOK 642 million compared to NOK 40,222 million at the end of 2020. Included in net-interest bearing debt is the new zero coupon Retained claims bond of NOK 2,467 million and NOK 2 million related to the dividend claim. The majority of the dividend claim was converted to equity in the third quarter of 2021.

At the end of the third quarter of 2021 the equity ratio was positive 14 percent, compared to negative 13.4 percent at the end of 2020. The company significantly strengthened the financial position during the year by successfully exiting the examinership and completing the financial restructuring in May 2021. The total effect year to date on equity following the financial restructuring is NOK 12,481 million, including NOK 4,793 million recognized as Other financial income in the Income Statement.

Total non-current assets amounted to NOK 7,973 million at the end of the third quarter of 2021, compared to NOK 11,867 million at the end of 2020.

Tangible assets were NOK 5,827 million at the end of the third quarter of 2021, compared to NOK 9,553 million at the end of 2020. The decrease is primarily explained by disposal of aircraft as well as the effect from saleleaseback of aircraft.

Intangible assets amounted to NOK 2,054 million at the end of the third quarter half of 2021, compared to NOK 2,167 million at the end of 2020, primarily including deferred tax assets of NOK 1,870 million compared to NOK 1,966 million at the end of 2020.

Total current assets amounted to NOK 10,648 million at the end of the third quarter of 2021, compared to NOK 37,687 million at the end of 2020. During 2021, aircraft presented at the end of 2020 as Disposal group assets classified for sale of NOK 30,377 million, has been disposed.

Receivables were NOK 2,925 million at the end of the third quarter and the decrease from year end is primarily explained by cram down of receivables as part of the reconstruction process.

Cash and cash equivalents have increased by NOK 4,968 million from the end of 2020, ending at NOK 7,635 million at the end of the third quarter of 2021.

Total non-current liabilities were NOK 9,058 million at the end of the third quarter of 2021, an increase of NOK 6,378 million compared with the end of 2020. Per the end of 2020, most of the company's debt was reclassified to current liabilities due to breach of covenants.

Of the total amount of Non-current debt of NOK 7,692 million per end of the third quarter of 2021, NOK 2,467 million is related to the new zero coupon Retained claims bond. During the third quarter of 2021, the majority of the dividend claim from May 2021 was converted to equity.

The decrease in other non-current liabilities from NOK 2,494 million by the end of 2020 to NOK 1,365 million at the end of the third quarter of 2021 is primarily due to cram down of maintenance accrual as a result of the financial restructuring in May 2021.

Total current liabilities amounted to NOK 7,038 million at the end of the third quarter of 2021, a decrease of NOK 46,461 million compared to the end of 2020. Per end of 2020 most of the company's debt was reclassified from non-current to current due to the breach of covenants.

Air traffic settlement liabilities were NOK 1,557 million at the end of the third quarter of 2021 where the increase of NOK 1,155 million from the end of 2020 is due to increased bookings.

The decrease in current debt of NOK 11,351 million from year end 2020 is primarily due to reclassification of debt from current as presented per year end 2020, to noncurrent liabilities by the end of third quarter of 2021.

Other current liabilities were NOK 4,897 million at the end of the third quarter compared with NOK 10,394 million at the end of 2020. The decrease is primarily explained by cram down effects from the financial restructuring.

Equity at the end of the third quarter of 2021 was positive NOK 2,526 million compared to negative NOK 6,624 million at the end of 2020. In 2021 equity increased by NOK 12,481 million following the financial restructuring including cram down of debt and assets and the capital raise in May.

CASH FLOW

Cash and cash equivalents were NOK 7,635 million at the end of the third quarter of 2021, an increase of NOK 4,968 million compared with the end of 2020.

Cash flow from operating activities in the third quarter of 2021 amounted to positive NOK 443 million compared to negative NOK 1,291 million in the third quarter of 2020.

Cash flow from investing activities in the third quarter of 2021 was negative NOK 9 million, compared to negative NOK 78 million in the third quarter of 2020.

Cash flow from financing activities in the third quarter of 2021 was negative NOK 261 million compared to negative NOK 160 million in the third quarter of 2020.

RISK AND UNCERTAINTIES

COVID-19

The company is still impacted by the coronavirus disease (COVID-19) and the imposed travel restrictions.

This has, and is expected to continue to have, a significant impact on the company's financial condition and operations. The company's ability to return to normal operations is dependent upon, amongst other things, COVID-19, the development on travel restrictions and the demand for air travels. The COVID-19 situation is continuously changing and new laws and regulations that affects our operations may enter into force.

The company has mitigated the risks and uncertainties by implementing several measures aiming to minimize cash burn, secure funding and improve the financial position.

OTHER RISK FACTORS

Fuel price and currency fluctuations are risks that can have a significant impact on Norwegian's business and financial results. Sudden and significant changes in fuel price and foreign exchange rates could significantly affect fuel and other costs as well as debt and assets denominated in foreign currency.

In the event of industrial actions, operations may be disrupted, causing inconvenience for customers and affect financial performance.

For additional explanations regarding risks and uncertainties, please refer to the following sections in the company's Annual Report 2020: The Financial Risk and Risk Management section and the Going Concern section of the Board of Director's report, Note 2: Financial Risk and Note 27: Contingencies and Legal Claims. Note 11 in this interim report includes updates to contingencies and legal claims.

norwegian.com

OUTLOOK

Supported by the positive development in demand and strong booking curve, the company intends to continue the ramp-up plans in the fourth quarter, increasing the fleet to a peak of 50 short-haul aircraft in operation within the end of 2021 and ramp-up to around 70 shorthaul aircraft in 2022. Based on the current plans the company target a production of 29,000 million ASK for 2022.

As previously stated the company has flexibility by the power-by-the-hour lease arrangement that allows the company to only put capacity back in the market when this is supported by the overall demand.

The third quarter showed an encouraging forward sales momentum in all markets and this trend continues into the fourth quarter, with October expected to deliver a load factor of around 80 percent.

The continued increase in fuel prices is expected to partly offset the company's positive recovery from the pandemic.

Fornebu, 27 October 2021

Board of Directors Norwegian Air Shuttle ASA

CONDENSED INTERIM FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED INCOME STATEMENT
	Q 3	Q 3	YTD	YTD	Full Year
(unaudited in NOK million ) Note	2021	2020	2021	2020	2020
Passenger revenue	1,517.2	904.7	1,880.3	6,045.4	6,455.3
Ancillary passenger revenue	388.0	204.3	497.8	1,448.8	1,535.1
Other revenue	21.9	179.1	139.8	931.7	1,105.3
Total operating revenue	3 1,927.2	1,288.1	2,517.9	8,425.9	9,095.7
Personnel expenses	521.7	374.5	1,440.5	2,460.4	2,921.2
Aviation fuel	546.3	162.0	688.8	2,011.5	2,006.7
Airport and ATC charges	288.7	107.9	477.9	735.4	772.5
Handling charges	245.4	327.1	436.9	1,338.2	1,392.2
Technical maintenance expenses	188.6	497.7	578.9	1,162.3	1,791.8
Other operating expenses	441.5	220.4	1,061.6	1,586.6	1,961.9
Other losses/(gains)	-326.1	861.7	-536.4	2,007.8	3,004.7
Total operating expenses excl lease, depr. and amort.	1,906.0	2,551.2	4,148.1	11,302.2	13,850.9
Operating profit excl lease, depr. and amort. (EBITDAR)	21.2	-1,263.1	-1,630.2	-2,876.3	-4,755.2
Aircraft lease, depreciation and amortization	316.6	1,549.4	893.1	5,011.7	6,197.5
Impairment assets held for sale	0.0	0.0	0.0	0.0	12,815.7
Operating profit (EBIT)	-295.5	-2,812.6	-2,523.3	-7,888.0	-23,768.4
Interest income	0.0	19.8	0.1	92.7	68.2
Interest expense	141.1	652.6	558.8	2,155.3	2,690.7
Other financial income (expense) 9	605.3	2,464.9	4,840.6	4,186.1	4,265.7
Net financial items	464.2	1,832.1	4,281.9	2,123.5	1,643.2
Profit (loss) from associated companies	0.0	0.0	0.0	-7.8	-7.8
Profit (loss) before tax (EBT)	168.7	-980.5	1,758.6	-5,772.3	-22,133.0
Income tax expense (income)	0.0	-0.9	0.0	640.0	906.8
Net profit (loss)	168.7	-979.6	1,758.6	-6,412.3	-23,039.8
Net profit (loss) attributable to:
Owners of the parent company	168.7	-1,020.1	1,758.6	-6,423.4	-23,050.9
Non-controlling interests	0.0	40.5	0.0	11.1	11.1
Basic earnings per share (NOK)	0.2	-28.8	4.6	-366.2	-1,022.1
Diluted earnings per share (NOK)	0.1	-28.8	1.3	-366.2	-1,022.1
Number of shares at the end of the period	927,335,572	36,397,091	927,335,572	36,397,091	39,749,366
Average number of shares outstanding	799,923,909	35,443,352	386,291,054	17,541,293	22,552,180
Number of diluted shares at the end of the period	1,357,045,362		44,269,153 1,357,045,362	44,269,153	42,311,936

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
	Q 3	Q 3	YTD	YTD	Full Year
(unaudited in NOK million )	2021	2020	2021	2020	2020
Net profit (loss) for the period	168.7	-979.6	1,758.6	-6,412.3	-23,039.8
Actuarial gains and losses	0.0	0.0	0.0	0.0	-42.0
Exchange rate differences	27.8	-468.2	-303.1	126.0	-979.4
Fair value adjustments through OCI	0.0	0.0	0.0	0.0	0.0
Other	0.0	2.0	-4.7	7.5	7.5
Total comprehensive income for the period	196.6	-1,445.9	1,450.8	-6,278.8	-24,053.8
Total comprehensive income attributable to:
Owners of the company	196.6	-1,486.4	1,450.8	-6,295.4	-24,070.3
Non-controlling interests	0.0	40.5	0.0	16.6	16.6

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		30 SEP	30 SEP	31 DEC
(unaudited in NOK million )	Note	2021	2020	2020
ASSETS
Intangible assets		2,053.7	2,202.8	2,167.1
Tangible fixed assets	1,6	5,827.3	65,008.7	9,553.3
Fixed asset investments		91.7	1,079.8	146.7
Total non-current assets		7,972.7	68,291.3	11,867.1
Assets included in disposal group classified as held for sale	1	0.0	261.8	30,377.1
Inventory		88.3	131.2	64.1
Receivables		2,924.7	5,864.9	4,578.8
Cash and cash equivalents		7,635.4	3,402.3	2,666.9
Total current assets		10,648.4	9,660.2	37,686.9
TOTAL ASSETS		18,621.1	77,951.4	49,554.0
EQUITY AND LIABILITIES
Shareholder's equity	8,9	2,525.8	11,110.2	-6,623.9
Non-controlling interests		0.0	0.0	0.0
Total equity		2,525.8	11,110.2	-6,623.9
Non-current debt	7	7,692.3	46,242.3	185.7
Other non-current liabilities		1,365.3	4,513.8	2,493.8
Total non-current liabilities		9,057.6	50,756.0	2,679.4
Air traffic settlement liabilities		1,556.6	826.1	401.5
Current debt	7	584.6	5,683.4	11,935.3
Liabilities included in disposal group classified as held for sale	1,7	0.0	0.0	30,767.8
Other current liabilities		4,896.5	9,575.8	10,393.8
Total current liabilities		7,037.6	16,085.2	53,498.4
Total liabilities		16,095.3	66,841.3	56,177.9
TOTAL EQUITY AND LIABILITIES		18,621.1	77,951.4	49,554.0

CONSOLIDATED STATEMENT OF CASH FLOW

CONSOLIDATED STATEMENT OF CASH FLOW
	Q 3	Q 3	YTD	YTD	Full Year
(unaudited in NOK million )	2021	2020	2021	2020	2020
Profit before tax	168.7	-980.5	1,758.6	-5,772.3	-22,133.0
Paid taxes	0.0	0.0	0.0	-6.1	-6.6
Depreciation, amortization and impairment	270.1	1,531.1	839.3	4,827.2	19,030.9
Reconstruction effects	-968.1	0.0	-4,792.8	0.0	0.0
Changes in air traffic settlement liabilities	434.6	-1,843.1	1,155.1	-5,280.4	-5,705.0
Changes in receivables	-396.2	1,503.8	359.3	4,588.6	5,498.7
Other adjustments	933.4	-1,502.8	702.3	960.8	1,924.1
Net cash flows from operating activities	442.6	-1,291.4	21.8	-682.2	-1,390.9
Purchases, proceeds and prepayment of tangible assets	-7.3	-14.2	-7.3	2,760.2	2,760.2
Other investing activities	-1.9	-63.8	-7.0	-76.5	-98.1
Net cash flows from investing activities	-9.2	-78.0	-14.3	2,683.7	2,662.1
Loan proceeds	0.0	0.0	0.0	3,290.5	3,290.5
Principal repayments	-125.8	-158.2	-477.1	-4,821.7	-4,831.4
Financing costs paid	-7.0	-2.1	-12.3	-383.8	-415.0
Paid dividend to creditors	-128.6	0.0	-369.9	0.0	0.0
Proceeds from issuing new shares and perpetual bond	0.0	0.0	5,862.9	328.4	328.4
Net cash flows from financing activities	-261.4	-160.3	5,003.7	-1,586.6	-1,627.5
Foreign exchange effect on cash	-12.1	-43.3	-42.8	-108.3	-72.3
Net change in cash and cash equivalents	160.0	-1,573.1	4,968.5	306.7	-428.7
Cash and cash equivalents at beginning of period	7,475.4	4,975.4	2,666.9	3,095.6	3,095.6
Cash and cash equivalents at end of period	7,635.4	3,402.3	7,635.4	3,402.3	2,666.9

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	YTD	YTD	Full Year
(unaudited in NOK million )	2021	2020	2020
Equity - Beginning of period	-6,623.9	4,124.9	4,124.9
Total comprehensive income for the period	1,450.8	-6,278.8	-24,053.8
Share issue	4,071.7	11,498.8	12,522.3
Convertible dividend claim issue	1,773.6	0.0	0.0
Perpetual bonds issue	1,843.3	1,771.0	787.7
Transactions with non-controlling interests	0.0	-11.5	-11.5
Equity change on employee options	10.3	5.8	6.6
Equity - End of period	2,525.8	11,110.2	-6,623.9

Please refer to Note 9 for further details on the financial restructuring in May 2021.

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE 1 ACCOUNTING PRINCIPLES

The condensed consolidated interim financial statements comprise Norwegian Air Shuttle ASA and its subsidiaries (the company). Norwegian Air Shuttle ASA is a limited liability company incorporated in Norway. The consolidated financial statements of the company for the year ended 31 December 2020 are available at www.norwegian.com.

These unaudited condensed consolidated interim financial statements have been prepared in accordance with the rules and regulations of Oslo Stock Exchange and International Accounting Standard (IAS) 34 Interim Financial Reporting. They do not include all the information required for full annual consolidated financial statements and should be read in conjunction with the consolidated financial statements for the company for the year ended 31 December 2020.

The accounting policies applied by the company in these condensed consolidated financial statements are the same as those applied by the company in its consolidated financial statements for the year ended 31 December 2020.

JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of condensed consolidated interim financial statements in accordance with IFRS and applying the chosen accounting policies require management to make judgments, estimates and assumptions which affect the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical figures and various other factors which are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the company's accounting policies and the key sources of estimation uncertainty, were the same as those that applied to the consolidated financial statements for the period ended 31 December 2020.

The going concern basis of accounting is adopted in preparing these interim financial statements. Refer to the Risks and Uncertainties section of this Interim Report for further information.

IMPAIRMENT TEST

Assets impaired at the end of 2020 have been disposed during the first half of 2021. The company assess no present impairment indicators at the reporting date.

NOTE 2 RISK

SENSITIVITY ANALYSIS

(unaudited in NOK million)	Effect on income
1% decrease in jet fuel price	31
1% depreciation of NOK against USD	-22
1% depreciation of NOK against EURO	-6

The sensitivity analysis reflects the effect on operating costs in 2021 by changes in market prices and exchange rates. The effect on operating costs are annualized based on the current level of production, fuel prices and exchange rates.

NOTE 3 REVENUE

Passenger revenue comprises only ticket revenue, while ancillary passenger revenue is other passenger related revenue such as optional extras. Other revenue consist of revenue not directly related to passengers such as

third-party products and other income. Passenger related revenue per country is based on the starting point of customer journeys. Freight related revenue is based on the starting point of freight services.

OPERATING REVENUE BY COUNTRY

OPERATING REVENUE BY COUNTRY
(unaudited in NOK million )	Q 3 2021	Q 3 2020	Change	YTD 2021	YTD 2020	Change	Full Year 2020
Norway	847.1	814.1	4 %	1,330.7	2,890.0	-54 %	3,316.3
Denmark	248.5	87.6	184 %	283.6	505.0	-44 %	546.6
Spain	248.2	104.4	138 %	268.4	1,169.7	-77 %	1,218.2
Sweden	220.0	72.0	205 %	250.7	559.6	-55 %	603.3
France	61.2	24.8	147 %	63.3	251.0	-75 %	256.8
Finland	40.3	2.1	1826 %	41.8	219.6	-81 %	221.8
U K	17.6	12.7	39 %	18.0	709.0	-97 %	720.4
Germany	17.5	15.6	12 %	17.5	85.3	-80 %	86.8
U S	0.0	0.0		0.0	870.3	-100 %	870.3
Thailand	0.0	0.0		0.0	257.5	-100 %	264.4
Other	227.7	154.7	47 %	244.7	908.9	-73 %	990.8
Total operating revenue	1,927.2	1,288.1	50 %	2,517.9	8,425.9	-70 %	9,095.7
Total outside of Norway	1,080.0	473.9	128 %	1,187.2	5,535.9	-79 %	5,779.4

NOTE 4 SEGMENT INFORMATION

The Executive Management team reviews the company's internal reporting to assess performance and allocate resources. Executive Management has determined the operating segment on these reports.

Executive Management considers the business as one operational segment, which is low-cost air passenger travel. The company's operating profit arises from airlinerelated activities and the only revenue generating asset of the company is its aircraft fleet, which is employed flexibly across the entire operation and irrespective of geographic location.

Performance is measured by Executive Management based on the operating segment's earnings before interest, tax, aircraft lease, depreciation and amortization (EBITDAR). Other information is measured in a manner consistent with that in the financial statements.

NOTE 5 INFORMATION ON RELATED PARTIES

For detailed information on related party transactions, please refer to Note 26 in the Annual Report for 2020. There have been no significant transactions with related parties during 2021 apart from recurring agreements such as described in the 2020 Annual Report. All transactions with related parties are considered priced on an arm'slength basis.

NOTE 6 TANGIBLE FIXED ASSETS

30 SEP	30 SEP	31 DEC 2020
		0.0
1,046.3	27,044.1	6,129.6
4,196.6	31,962.0	2,791.4
5,242.9	59,006.1	8,921.0
389.8	436.7	415.7
194.5	294.5	216.6
584.4	731.2	632.3
5,827.3	65,008.7	9,553.3
4,391.2	32,257.4	3,008.0
	2021 0.0	2020 5,271.4

NOTE 7 BORROWINGS

	30 SEP	30 SEP	31 DEC
(unaudited in NOK million )	2021	2020	2020
Bond issue	3,168.5	1,572.3	0.0
Loan with state guarantee	0.0	2,989.0	0.0
Aircraft prepayment financing	0.0	307.3	0.0
Aircraft financing	664.1	17,657.2	0.0
Lease liabilities	3,725.7	23,383.5	185.7
Other non-current debt	134.0	333.0	0.0
Non-current debt	7,692.3	46,242.3	185.7
Bond issue	0.0	0.0	1,531.6
Loan with state guarantee	0.0	0.0	2,989.0
Aircraft prepayment financing	0.0	416.0	0.0
Aircraft financing	133.9	3,484.4	3,812.0
Lease liabilities	450.7	1,782.9	3,165.4
Disposal group aircraft financing	0.0	0.0	15,661.2
Disposal group lease liabilities	0.0	0.0	15,106.6
Other current debt	0.0	0.0	437.2
Current debt	584.6	5,683.4	42,703.1
Total borrowings	8,276.9	51,925.6	42,888.8

NOTE 8 SHAREHOLDER INFORMATION

20 largest shareholders at 30 September 2021

Shareholder	Country	Number of shares	Per cent
1 Geveran Trading Company, Ltd.	Cyprus	134,123,801	14.5 %
2 Sundt AS	Norway	124,003,198	13.4 %
3 DNB Asset Management AS	Norway	66,776,607	7.2 %
4 Folketrygdfondet	Norway	49,179,684	5.3 %
5 Davy Stockbrokers	Ireland	31,862,205	3.4 %
6 Handelsbanken Asset Management	Sweden	29,145,750	3.1 %
7 Nordnet Bank AB.	Norway	27,859,387	3.0 %
8 Keskinäinen eläkevakuutusyhtiö Varma	Finland	27,500,000	3.0 %
9 Ludvig Lorentzen AS	Norway	26,815,217	2.9 %
10 Centerbridge Partners, L.P.	United States	24,059,868	2.6 %
11 Avanza Bank AB	Sweden	23,097,067	2.5 %
12 Trinity Investments Designated Activity co	Ireland	20,896,113	2.3 %
13 Nordea Funds Oy	Finland	11,889,661	1.3 %
14 Citigroup Global Markets Inc	United States	10,272,054	1.1 %
15 Brumm AS	Norway	10,000,942	1.1 %
16 Swedbank AB	Sweden	9,885,219	1.1 %
17 KLP Forsikring	Norway	8,196,627	0.9 %
18 Astaris Capital Management LLP	United Kingdom	8,057,188	0.9 %
19 Contrarian Capital Management, LLC	United States	7,787,812	0.8 %
20 Arctic Fund Management AS	Norway	7,436,540	0.8 %
Top 20 shareholders		658,844,940	71.0 %
Other shareholders		268,490,632	29.0 %
Total number of shares		927,335,572	100.0 %

The company issued 887,586,206 new shares during the first nine months of 2021.

In the larger restructuring completed in May 2021, 658,945,686 shares were issued in connection with the rights issues and public offering of NOK 6,000 million.

In addition there have been several conversions of debt during 2021, where a total of NOK 2,953 million have been converted. The company have issued total 228,640,520 new shares in these conversions.

Further information on the financial restructuring is provided in Note 9.

Norwegian Air Shuttle ASA had a total of 927,335,572 shares outstanding at 30 September 2021. There were 78,093 shareholders at the end of the third quarter of 2021.

NOTE 9 FINANCIAL RESTRUCTURING

The company successfully completed the restructuring process in May 2021. In total, the restructuring improved equity by NOK 12,481 million, of which NOK 4,793 million are recognized in the income statement.

The impact to share and paid-in capital and the income (loss) following the financial restructuring in May 2021 are presented in the table below:

		Share and	Income	Total
(unaudited in NOK million )	Footnotes	paid in capital	(loss)	equity
Bonds	1	41.9	385.4	427.3
Trade and other payables and related receivables	2	0.0	4,091.0	4,091.0
Aircraft and related liabilities	3	0.0	1,651.9	1,651.9
Borrowings, Perpetual and Retained claims bond	4	1,843.3	866.8	2,710.1
Private placement/Rights issue	5	4,029.7	0.0	4,029.7
Dividend claim	6	1,773.6	-1,762.8	10.8
Cash dividend	6	0.0	-439.5	-439.5
TOTAL		7,688.5	4,792.8	12,481.3

• 1) Bonds: These amounts reflects the net effect of the extinguishment of unsecured Bond debt issued prior to 18 November 2020 (NAS07, NAS08 and the US convertible) and the issue of the new Bond NAS13. The effect is a net reduction in debt with a corresponding increase in equity through Income. The portion recognized as increase in Share and paid in capital reflects the conversion of zero-coupon perpetual bonds from debt to equity during the first half year in 2021.
• 2) Trade and other payables and related receivables: These amounts reflect the extinguishment of vendor debt and related receivables from the same vendors, from the period before 18 November 2020. The effect is a reduction in net debt and increase in other equity through Income.
• 3) Aircraft and related liabilities: This amount reflect the net effect of replacing old lease contracts with new for 31 aircraft, reduced maintenance obligations, sale-leaseback of 16 aircraft and redelivery of 83 aircraft included in disposal group at year end 2020. The net effect is a reduction in net liabilities with a corresponding increase in other equity through Income.
• 4) Borrowings, Perpetual and Retained Claim Bond: These amounts reflect extinguishment of the unsecured part of loan with state guarantee and other borrowings, the issue of the new Perpetual Bond classified as equity and the related Retained Claim Bond. The effect is a net reduction in outstanding debt with a corresponding increase in share and paid in capital with NOK 1,843 million and other equity through Income of NOK 867 million.
• 5) Private placement/Rights issue: This amount reflects the net proceeds from share issue in the private placement and the rights issue in May 2021.
• 6) Dividend claim: Reflects the issue of the Dividend Claim with conversion rights, followed by conversion of dividend claim to shares. The Dividend Claim was granted to unsecured creditors, that did not participate in the rights issue or new capital perpetual bond issue, as a 4% compensation for extinguished debt in addition to the Cash Dividend. The effect is an increase in debt with NOK 2 million, and increase in Share and paid in capital with NOK 1,774 million representing the value of the conversion element and a net corresponding effect on other equity of negative NOK 1,763 million that has to be assessed together with the effect related to Trade and other payables and related receivables.

Cash dividend: This amount reflects the cash dividend payable to unsecured creditors, that did not participate in the rights issue or new capital perpetual bond issue, as compensation for extinguished debt.

NOTE 10 QUARTERLY DATA

NOTE 10 QUARTERLY DATA
	Q 1	Q 2	Q 3	YTD
(unaudited in NOK million )	Note 2021	2021	2021	2021
Passenger revenue	127.1	236.0	1,517.2	1,880.3
Ancillary passenger revenue	43.9	65.9	388.0	497.8
Other revenue	84.3	33.6	21.9	139.8
Total operating revenue	3 255.3	335.5	1,927.2	2,517.9
Personnel expenses	307.8	611.0	521.7	1,440.5
Aviation fuel	63.8	78.6	546.3	688.8
Airport and ATC charges	115.0	74.3	288.7	477.9
Handling charges	103.3	88.2	245.4	436.9
Technical maintenance expenses	246.4	143.8	188.6	578.9
Other operating expenses	272.2	347.9	441.5	1,061.6
Other losses/(gains)	259.8	-470.1	-326.1	-536.4
Total operating expenses excl lease, depr. and amort.	1,368.3	873.8	1,906.0	4,148.1
Operating profit excl lease, depr. and amort. (EBITDAR)	-1,113.0	-538.3	21.2	-1,630.2
Aircraft lease, depreciation and amortization	348.8	227.7	316.6	893.1
Operating profit (EBIT)	-1,461.8	-766.0	-295.5	-2,523.3
Financial items
Interest income	0.0	0.0	0.0	0.1
Interest expense	335.1	82.6	141.1	558.8
Other financial income (expense)	607.9	3,627.5	605.3	4,840.6
Net financial items	272.8	3,544.9	464.2	4,281.9
Profit (loss) before tax (EBT)	-1,189.0	2,778.9	168.7	1,758.6
Income tax expense (income)	0.0	0.0	0.0	0.0
Net profit (loss)	-1,189.0	2,778.9	168.7	1,758.6

NOTE 11 CONTINGENCIES AND LEGAL CLAIMS

The Norwegian Tax Authorities have in March 2017 and June 2019 respectively reassessed the company's income pertaining to a EEC cross border restructuring that took place in 2013 and 2014. On 21 May 2021 the Oslo city court ruled in favour of the Tax authority's assessment. The ruling is appealed to the Appeals court. There is always a risk inherent in trying a case before the courts and if the appeal is not successful the group will incur some costs pertaining to the case in addition to paying the outstanding amount of tax payable. The outstanding amounts of tax payable have been extinguished due to the reconstruction process in Norway. Any outstanding amounts of tax payable have been accrued as a disputed dividend claim.

There are no other significant additions or changes to the information regarding contingencies or legal claims presented in Note 27 to the Annual Financial Statements for 2020.

NOTE 12 EVENTS AFTER THE REPORTING DATE

On 27 October, Norwegian announced that it has signed Letters of Intent (LOIs), subject to approvals and documentation, for the lease of up to thirteen Boeing 737- 800 NG aircraft at favorable terms. The aircraft are scheduled to begin delivery in the fourth quarter 2021 through first quarter of 2022 to deliver Norwegian's announced Summer 2022 flying program with flights to over 250 destinations. The lease terms are between five to eight years, depending on aircraft age. They include 'power-by-the-hour' (PBH) arrangements for both the IATA Winter Seasons 2021/22 and 2022/23.

There have been no other material events subsequent to the reporting period that might have a significant effect on the third quarter 2021 financial report.

DEFINITIONS

ALTERNATIVE PERFORMANCE MEASURES

Norwegian Air Shuttle's financial information is prepared in accordance with International Financial Reporting Standards (IFRS). In addition, the company presents alternative performance measures (APM). The APMs are regularly reviewed by management and their aim is to enhance stakeholders' understanding of the company's performance. APMs are calculated consistently over time and are based on financial data presented in accordance with IFRS and other operational data as described in the table below.

The definitions are consistent with those used in previous financial reports.

MEASURE	DESCRIPTION	REASON FOR INCLUDING
Operating profit (EBIT)	Earnings before net financial items, income tax expense (income) and share of profit (loss) from associated companies. Equivalent to operating profit in the consolidated income statement in the annual report	Enables comparability of profitability regardless of capital structure or tax situation
EBIT excl other losses/(gains)	Earnings before net financial items, income tax expense (income) and share of profit (loss) from associated companies, adjusted for other losses/(gains)-net	Enables comparability of profitability regardless of capital structure or tax situation, excluding effects for certain volatile operating expenses
EBIT margin	EBIT divided by total operating revenue	Enables comparability of profitability relative to operating revenue
EBITDAR	Earnings before net financial items, income tax expense (income), depreciation, amortization and impairment, restructuring, aircraft leasing expenses and share of profit (loss) from associated companies	A measure of operating performance that enables comparison between airlines as it is not affected by the method used to finance aircraft
EBITDAR excl other losses/(gains) / Underlying operating result before ownership costs	Earnings before net financial items, income tax expense (income), depreciation, amortization and impairment, restructuring, aircraft leasing expenses and share of profit (loss) from associated companies, adjusted for other losses/(gains)-net	A measure of operating performance that enables comparison between airlines as it is not affected by the method used to finance aircraft, excluding effects for certain volatile operating expenses
EBITDAR margin	EBITDAR divided by total operating revenue	Enables comparability of profitability relative to operating revenue
Profit (loss) before tax (EBT)	Earnings before income tax expense (income). Equivalent to profit (loss) before income tax expense (income) in the Consolidated Income Statement in the annual report	Enables comparability of profitability regardless of capital structure or tax situation
EBT excl other losses/(gains) and impairment	Earnings before income tax expense (income), adjusted for other gains/(losses) and impairment costs.	Enables comparability of profitability regardless of one-off impairment losses, excluding effects for certain volatile operating expenses
EBT margin	EBT divided by total operating revenue	Enables comparability of profitability relative to operating revenue
Net interest-bearing debt	Non-current debt plus current debt less cash and cash equivalents	Measurement of the ability to pay all debt with available cash and cash equivalents, if all debt matured on the day of the calculation. It is therefore a measure of the risk related to the company's capital structure
Other losses/(gains)	Gains and losses from foreign currency contracts, forward fuel contracts, adjustment of market value for total return swaps, translation of working capital in foreign currency, net gain or loss from sale of fixed assets and significant restructuring costs	Included as a specification to operating expenses to separate certain volatile effects from other operating expenses
Operating expenses excl leasing, depreciation and amortization	Total operating expenses not including aircraft lease expense, depreciation, amortization and impairment	A measure of operating expenses that enables comparison between airlines as it is not affected by the method used to finance aircraft
Operating expenses excl other losses /(gains), depreciation and lease	Total operating expenses not including other losses /(gains) depreciation, amortization, impairment and lease expenses	A measure of operating expenses that includes leasing but is not affected by other losses /(gains) depreciation, amortization, impairment and lease expenses, relevant to monitor the company's ability to reduce operating expenses during the COVID-19 pandemic and disregarding certain highly volatile and certain fixed costs

ALTERNATIVE PERFORMANCE MEASURES – RECONCILIATIONS

ALTERNATIVE PERFORMANCE MEASURES – RECONCILIATIONS
	Q 3	Q 3	YTD	YTD	Full Year
(unaudited in NOK million )	2021	2020	2021	2020	2020
Operating profit (EBIT) to EBIT excl other losses/(gains)
Operating profit (EBIT)	-295.5	-2,812.6	-2,523.3	-7,888.0	-23,768.4
- Other losses/(gains)*	-326.1	861.7	-536.4	2,007.8	3,004.7
EBIT excl other losses/(gains)	-621.6	-1,950.9	-3,059.7	-5,880.1	-20,763.7
EBITDAR to EBITDAR excl other losses/(gains) EBITDAR - Other losses/(gains)*	21.2 -326.1	-1,263.1 861.7	-1,630.2 -536.4	-2,876.3 2,007.8	-4,755.2 3,004.7
EBITDAR excl other losses/(gains)	-305.0	-401.4	-2,166.6	-868.4	-1,750.5
Net profit (EBT) to EBT excl other losses/(gains) and impairment
Profit (loss) before tax (EBT)	168.7	-980.5	1,758.6	-5,772.3	-22,133.0
- Impairment assets held for sale	0.0	0.0	0.0	0.0	12,815.7
- Other losses/(gains)*	-326.1	861.7	-536.4	2,007.8	3,004.7
EBT excl other losses/(gains) and impairment	-157.4	-118.8	1,222.2	-3,764.4	-6,312.6

*Other losses /(gains) is defined in table above and is a part of operating expenses, see consolidated income statement.

OTHER DEFINITIONS

ITEM	DESCRIPTION
Aircraft lease expenses	Lease and rental expenses on aircraft including both dry leases and wet leases
Ancillary revenue per passenger	Ancillary passenger revenue divided by number of passengers
ASK / Production	Available seat kilometers. Number of available passenger seats multiplied by flight distance Note that blocked mid-seats on domestic routes in Norway following virus containment measures do not count as available seats.
Average sector length	Total flown distance divided by number of flights
Book equity per share	Total equity divided by number of shares outstanding
CO2 per RPK	Amount of CO2 emissions divided by RPK
Constant currency	A currency exchange rate that excludes the impact of exchange rate fluctuations from comparable period, e.g. 2019 as comparable period
Equity ratio	Book equity divided by total assets
Fixed asset investment	Consists of the following non-current assets presented in the statement of financial position in the annual report: Investments in financial assets, investment in associate and other receivables
Fuel consumption	Aviation fuel consumed, presented in metric tons
Load factor	RPK divided by ASK. Describes the utilization of available seats
Passengers	Number of passengers, including no-show. Note that during the COVID-19 outbreak, no-show passengers are not included.
RPK	Revenue passenger kilometers. Number of sold seats multiplied by flight distance
Sold seats own channels	Sold seats own channels include bookings through internet, apps, direct API, agent portal, corporate portal, allotment, and group travels. It does not include bookings through GDS (Global Distribution Channels)
Unit cost	Total operating expenses, excluding impairment and other losses/(gains)-net, divided by ASK
Unit cost excl fuel	Total operating expenses, excluding impairment, other losses/(gains)-net and aviation fuel expenses, divided by ASK
Unit revenue	Passenger revenue divided by ASK
Yield	Passenger revenue divided by RPK. A measure of average fare per kilometer

NORWEGIAN AIR SHUTTLE ASA

Mailing address P.O. Box 113

Telephone +47 67 59 30 00 Internet norwegian.com

NO–1366 Lysaker Visiting address Oksenøyveien 3, Fornebu Organization number NO 965 920 358 MVA

BOARD OF DIRECTORS

Svein Harald Øygard Chair Sondre Gravir Director Ingrid Elvira Leisner Director Chris Browne Director Lars Rahbæk Boilesen Director

Geir Olav Øien Director, employee representative Eric Holm Director, employee representative Katrine Gundersen Director, employee representative

GROUP MANAGEMENT

Geir Karlsen Chief Executive Officer Geir Karlsen Chief Financial Officer Guro H. Poulsen EVP People Adrian Dunne EVP Operations

Magnus Thome Maursund EVP Network, Pricing & Optimisation Christoffer Sundby EVP Sales, Marketing & Cusomer Care Anne-Sissel Skånvik EVP Communications and Public Affairs Knut Olav Irgens Høeg EVP IT and Business services Tor-Arne Fosser EVP Product & Digital development

INVESTOR RELATIONS

Tore Østby investor.relations@norwegian.com norwegian.com/us/about/company/investor-relations/

FINANCIAL CALENDAR 2021

4 November Monthly traffic data for October 6 December Monthly traffic data for November

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