Carnival Corporation (CLL), a cruise ship operator, burnt $1.5 billion in cash in the quarter ending February 28, 2021, down from $2.4 billion in the same quarter the prior year. Carnival shares rose 2.5% as of this writing on the news.

In its Q1 2021 10-Q, Carnival revealed none of its ships are operating with guests onboard and that it expects to continue losing money for the duration of the year. However, the company is assuming a gradual return to normalized operations and the company believes the bulk of its customer deposits will be realized in the next twelve months:

“Total customer deposits as of February 28, 2021 and November 30, 2020 were $2.2 billion, the majority of which are FCCs (future cancelled cruises). As of February 28, 2021, the current portion of customer deposits was $1.8 billion. This amount includes deposits related to cancelled cruises prior to the election of a cash refund by guests.”

The company has $11.5 billion in cash and $6.5 billion in financing to pay for ship deliveries through 2024. Looking ahead three years suggests optimism though investors might temper their enthusiasm as the filing’s footnotes reveal Carnival’s debt covenants have been relaxed, indicating lenders have little choice but to be lenient:

“Under the terms of these export credit facilities, we are required to comply with the Interest Coverage Covenant and the Debt to Capital Covenant, among others. We entered into supplemental agreements to waive compliance with the Interest Coverage Covenant and the Debt to Capital Covenant for our unfunded export credit facilities through August 31, 2022 or November 30, 2022, as applicable.”

Carnival will once again be required to comply with its debt covenants on the next testing date which is either November 30, 2022 or February 28, 2023. At that time, Carnival will have to maintain an Interest Coverage Covenant of not less than 3.0 to 1.0, and ensure that its Debt to Capital Covenant does not exceed 65% at the end of each fiscal quarter. Later in the filing, Carnival says it expects to obtain additional amendments on its debt facilities.

The real risk for Carnival shareholders with regard to further dilution— the share count has already increased 35%— is a delay in the resumption of service, which the company disclosed is a distinct possibility:

“In October 2020, the CDC announced a framework for a phased resumption of cruise ship passenger operations in U.S. waters that is currently uncertain and will require further evaluation as we seek to resume operations. Implementing these requirements may result in an increase in costs and take time before the resumption of our guest cruise operations.”