Moody's Investors Service confirmed the A2 senior ratings of Carnival Corporation, but changed the rating outlook to negative reflecting the uncertain economic and industry conditions that the company faces in the wake of the attacks on the U.S. on September 11. While Carnival's financial flexibility is strong, its ratings could come under pressure if significant and sustained consumer reluctance to take cruises results in a substantial drop in yield and cash flow from operations. Moody's notes that Carnival currently maintains a large cash balance of $1.2 billion at 8/31/01. This cash balance together with future earnings should enable the company to finance its shipbuilding program without having to increase debt levels.