Executive Summary

Q4 2020 reflected continued zero/near-zero revenue operations with U.S. GAAP net loss of $2.22B and adjusted net loss of $1.86B; cash burn averaged $500M/month, better than plan due to CapEx timing .
Liquidity strengthened: year-end cash was $9.5B after raising $4.5B in late-Q4 (ATMs: $2.5B; unsecured notes: $2.0B); cumulative capital raised since March reached $19B .
Demand indicators improved: H2 2021 bookings within historical range and H1 2022 ahead of 2019; ~60% of Q4 bookings for FY2021 were new bookings (not FCC rebookings) .
Near-term guidance: Q1 2021 cash burn expected to rise to ~$600M/month due to restart expenditures and shifted CapEx; company expects net loss in Q1 and FY2021 and cannot provide an earnings forecast .

What Went Well and What Went Wrong

What Went Well

Bookings momentum and quality: “Cumulative advanced bookings for the first half of 2022 are ahead of 2019,” achieved with minimal advertising; comparable pricing down ~1% ex-FCCs with bundled packages expected to lift onboard revenue .
Liquidity actions: $9.5B year-end cash and $4.5B raised in late Q4; early conversion of $1.5B converts and optimized capital structure; “liquidity in place to sustain throughout 2021, even in a zero-revenue environment” .
Fleet optimization: accelerated removal of 19 less efficient ships (15 exited), reducing base cost by ~2% per ALBD and fuel ~1% per ALBD, improving future margins; only one delivery in FY2021 vs five originally .

What Went Wrong

Continued operational pause: company unable to predict full-fleet resumption; expects net losses in Q1 and FY2021 and cannot provide earnings forecast .
Elevated interest burden: interest expense on existing debt ~~$130M/month (~~$1.6B annualized), limiting near-term earnings power until operations ramp and refinancing proceeds .
Cyber/security exposure: IT security incident affecting two brands disclosed, with preliminary view that impact is not material; still a risk factor highlighted .

Financial Results

Loss and Liquidity Overview (oldest → newest)

Metric	Q2 2020	Q3 2020	Q4 2020
GAAP Net Loss ($USD Billions)	$(4.374)	$(2.858)	$(2.222)
Adjusted Net Loss ($USD Billions)	$(2.382)	$(1.699)	$(1.862)
Diluted EPS ($USD)	$(6.07)	— (not disclosed in 8-K)	— (not disclosed in 8-K)
Adjusted EPS ($USD)	$(3.30)	— (not disclosed in 8-K)	— (not disclosed in 8-K)
Cash & Equivalents ($USD Billions)	$7.6	$8.2	$9.5
Monthly Cash Burn ($USD Millions)	~$650 (2H20 estimate)	In line with expectation (no specific $)	$500
Customer Deposits ($USD Billions)	$2.9	$2.4	$2.2

Notes: EPS not disclosed in Q3/Q4 preliminary 8-Ks; company furnished net loss and adjusted net loss. Q4 cash burn improved due to CapEx timing .

Revenue (reported)

Metric	Q2 2020	Q3 2020	Q4 2020
Total Revenues ($USD Billions)	$0.7	— (not disclosed in 8-K)	— (not disclosed in 8-K)

Balance Sheet/Capitalization Highlights

Metric	Q2 2020	Q3 2020	Q4 2020
Debt ($USD Billions)	—	—	$27.0 at 11/30/20; +~$1.5 in Dec draws (Mardi Gras, Firenze)

KPIs

KPI	Q2 2020	Q3 2020	Q4 2020
H2 2021 cumulative bookings	Higher end of historical range	Higher end of historical range	Within historical range
H1 2022 cumulative bookings vs 2019	—	—	Ahead of 2019
Share of Q4 FY2021 bookings that are new	—	—	~60% new bookings
FCCs as share of customer deposits	—	—	~45% of deposits unapplied FCCs
Ships exited (of planned 19)	—	18 planned	15 exited
Share count (EOY)	—	—	1.087B; 1.14B if remaining converts convert

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Monthly Avg Cash Burn ($USD Millions)	2H 2020	~$650	Q4 actual $500	Improved vs plan
Monthly Avg Cash Burn ($USD Millions)	Q1 2021	—	~$600 (includes restart costs; shifted CapEx/dry dock)	New guidance (higher vs Q4 actual)
Earnings Outlook	Q1 2021; FY2021	—	Expect net loss; unable to provide earnings forecast	New disclosure
Debt Maturities ($USD Billions)	FY2021	—	Q1: $0.5; Q2: $0.4; Q3: $0.7; Q4: $0.3	Schedule provided
Interest Expense Run-Rate	FY2021	—	~~$130M/month (~~$1.6B/year)	New disclosure
Depreciation	FY2021	—	~$2.2B (prelim)	New disclosure

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2020)	Previous Mentions (Q3 2020)	Current Period (Q4 2020)	Trend
Bookings and Pricing	H2 2021 bookings at higher end; revenues $0.7B amid pause	H2 2021 bookings at higher end; Costa restart	H2 2021 bookings within historical range; H1 2022 ahead of 2019; pricing down ~1% ex-FCCs; bundles to lift onboard revenue	Improving forward demand; quality intact
Liquidity/Capital Raises	$7.6B liquidity; $6.6B offerings; $3.0B revolver drawn	$8.2B cash; further liquidity expected	$9.5B cash; $4.5B raised late-Q4; total $19B since March	Strengthening balance sheet
Fleet Optimization	Accelerating ship disposals (initial 6)	18 ships to exit (~12% capacity), 3% of 2019 OI	19 ships planned (15 exited); ~2% ALBD cost, ~1% fuel benefits; moderated deliveries	Structural cost/margin tailwind
Regulatory/CDC	Preparing enhanced protocols; consultations ongoing	Conditional Sailing Order framework evaluation underway	Active CDC dialogue; test cruise timing awaits technical guidance	Process-driven; timing uncertain
Restart Costs/Protocols	Cash burn ~650M guidance; phased restart plan	Costa/AIDA ramps; protocols modeled on national guidelines	Restart costs modest (crew return, provisioning); a few hundred thousand euros/month per ship seen in Europe; U.S. protocols pending CDC specifics	Manageable per-ship protocol costs; U.S. TBD
Cyber/IT	—	—	Addressing IT security incident; not expected material	Risk noted; contained

Management Commentary

CEO (Arnold Donald): “With the aggressive actions we have taken, managing the balance sheet and reducing capacity, we are well positioned to capitalize on pent up demand and to emerge a leaner, more efficient company” .
CFO (David Bernstein) on bookings/pricing: cumulative advanced bookings for H2 2021 within historical range; H1 2022 ahead of strong 2019; pricing down ~1% ex-FCCs; bundles make comparison “more favorable than indicated” and will benefit onboard/other revenue .
CFO on liquidity/cash burn: Q4 cash burn ~$500M/month (better than $530M expected) due to CapEx timing; Q1 cash burn ~ $600M including restart expenses and more dry dock days; year-end cash $9.5B .
CFO on capital structure: ~$19B raised since the pause; ability to issue more debt if needed; will optimize liabilities and refinance at lower rates where possible .
CEO on CDC/test cruises: awaiting further technical guidance; “we want the freedom to operate,” with global footprint providing flexibility .

Key quotes:

“We ended the year with $9.5 billion in cash and have the liquidity in place to sustain ourselves throughout 2021, even in a zero-revenue environment” .
Interest expense: “about $130 million a month or… $1.6 billion for the year” .
Share count: “outstanding… at the end of 2020 was 1.087 billion… conversion of the remaining converts… 1.14 billion” .

Q&A Highlights

Liquidity vs ramp timing: Management retains optionality to raise debt depending on restart timing uncertainty; aim to refinance and opportunistically enhance liquidity .
Vaccines and policy: Monitoring global guidance; distribution/logistics still evolving; policies to be set prudently with authorities .
Restart costs: Crew return/testing/provisioning; per-ship protocol costs a few hundred thousand euros/month in Europe; U.S. costs depend on pending CDC specifics .
Pricing/bundles: Bundled offerings allocated to onboard/other revenue; headline pricing down ~1% ex-FCCs but apples-to-oranges; expect onboard revenue uplift .
Structural efficiencies: Ship exits reduce base costs (~2% per ALBD) and fuel (~1% per ALBD); shore-side efficiencies ongoing .
Debt, capex and deliveries: Debt $27B at 11/30/20; +~$1.5B in December export credit draws; no cancellation clauses in newbuild contracts; 2022 capacity ~+5.6% vs 2019 in ALBDs with net low growth due to exits .

Estimates Context

S&P Global consensus estimates for Q4 2020 EPS and revenue were unavailable at the time of analysis due to data access limits. As such, we cannot quantify beats/misses versus Wall Street consensus for Q4 2020 at this time.
We will update beats/misses when S&P Global data becomes available.

Key Takeaways for Investors

Demand resilience remains intact: H1 2022 bookings ahead of 2019 despite minimal marketing; mix of new-to-brand (~45%) and new bookings (~60% of FY2021 Q4 bookings) supports recovery trajectory .
Liquidity runway is robust: $9.5B cash at year-end; ability and intent to optimize/refinance liabilities; near-term interest burden ~$1.6B annually until operations ramp/refinance progresses .
Structural margin upside post-resumption: Fleet exits and newer deliveries reduce cost base and fuel intensity; shore-side efficiency initiatives should enhance EBITDA margins as revenues normalize .
Near-term cash burn uptick a function of restart prep, not weaker fundamentals: Q1 burn guide ~$600M vs Q4 $500M reflects CapEx timing and dry docks; monitor restart cadence and CDC’s technical guidance .
Balance sheet watch items: Debt maturities staggered through FY2021; continued capital markets access provides flexibility; interest and depreciation disclosures frame P&L headwinds near term .
Trading lens: Stock likely reactive to regulatory milestones (CDC guidance/test cruise timing) and visible U.S./international restart dates; booking updates and liquidity actions are catalysts for sentiment .

Appendix: Additional Q4 2020 Disclosures

Debt maturity schedule FY2021: Q1 $0.5B; Q2 $0.4B; Q3 $0.7B; Q4 $0.3B (ex revolver; $3.0B drawn, maturing through March 2021) .
Bookings/book position detail: ~45% of affected guests took enhanced FCCs; ~55% refunds; deposits declined modestly to $2.2B (from $2.4B) .
Health & safety protocols: Advisors engaged; Costa earned RINA Biosafety Trust Certification; protocols updated per evolving science; U.S. resumption based on CDC framework .

Citations:
All figures and statements are sourced from CCL’s Q4 2020 8-K/business update and Q4 2020 earnings call transcript: , and Q&A transcript -. Prior quarter trends from Q3 and Q2 2020 8-Ks: .

CARNIVAL CORP (CCL)·Q4 2020 Earnings Summary