Carnival Corp.

Overview Key strengths Key risks Forward bookings provide some visibility around customer demand and future revenue. Still high leverage due to COVID-19-pandemic-related debt and gradual recovery in operations. Uses excess cash flow to repay debt, reducing leverage and interest and improving maturity profile. A weaker economy could lead to lower ticket prices, slowing deleveraging, especially if fuel and other costs remain high. Can target multiple price points and customer segments. Chance of future operating disruptions due to regulatory and health and safety risks. Potential for market growth given that cruises remain an underpenetrated form of leisure travel globally. High capital expenditures (capex) for new ships, and their delivery magnifies the effects of adverse events and economic downturns. Carnival raised its

...Carnival's 2023 booked position provides sufficient revenue visibility to support significant improvement in credit measures this year. Carnival raised its full-year, constant-currency net revenue per passenger cruise day (PCD) guidance by 250 basis points on its recent second- quarter earnings call. The company made this adjustment based on its strong pricing and a continued acceleration in bookings. Carnival's cumulative advanced booked position for the remainder of 2023 is at higher ticket prices in constant currency compared with 2019 (despite the loss of St. Petersburg as a marquee destination and normalized for future cruise credits) and a booked occupancy position near the high end of the historical range. Furthermore, booking volumes continued to accelerate compared with 2019. This continued into the second quarter of 2023 and beyond the typical winter wave season. Wave season is the time period early in the year during which cruise operators typically see significant booking activity...

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