Filing under Rule 425 under
                                                      the Securities Act of 1933
                                               and deemed filed under Rule 14d-2
                                          of the Securities Exchange Act of 1934
                                                 Filing by: Carnival Corporation
                                      Subject Company: P&O Princess Cruises plc.
                                             SEC File No. of Princess: 001-15136


             NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO
                           AUSTRALIA, CANADA OR JAPAN

                                                                 30 January 2002

                        CARNIVAL CORPORATION ("CARNIVAL")
--------------------------------------------------------------------------------
                   REVISED PRE-CONDITIONAL OFFER TO BE MADE BY
                          MERRILL LYNCH AND UBS WARBURG
                  FOR P&O PRINCESS CRUISES PLC ("P&O PRINCESS")


SUMMARY

         o        Revised Offer of 0.2684 Carnival Shares per P&O Princess Share

         o        Currently worth 515 pence per P&O Princess Share - equivalent
                  to Carnival's proposal of 17 January 2002

         o        Values P&O Princess at approximately(pound)3.6 billion

         o        Revised Offer pre-conditional only on regulatory clearance

         o        Intention to provide a Partial Cash Alternative of 250 pence
                  per P&O Princess Share

         o        Superior value and deliverability

         o        Improves Carnival's original superior Offer

         o        34.5 per cent. premium to the current "look through" value of
                  P&O Princess under the "nil premium" Royal Caribbean Proposal

         o        62.4 per cent. premium to the price per P&O Princess Share
                  prior to the announcement of the Royal Caribbean Proposal


MICKY ARISON, THE CHAIRMAN AND CHIEF EXECUTIVE OF CARNIVAL, SAID:

"OUR REVISED OFFER IS SIGNIFICANTLY MORE VALUABLE THAN THE ROYAL CARIBBEAN
PROPOSAL. WE ALSO BELIEVE WE HAVE ADDRESSED SHAREHOLDERS' CONCERNS ABOUT THE
CONDITIONALITY AND DELIVERABILITY OF OUR ORIGINAL OFFER.

OUR REVISED OFFER IS CLEARLY SUPERIOR, CREDIBLE AND DELIVERABLE. RECENT
DEVELOPMENTS DEMONSTRATE THAT THE ROYAL CARIBBEAN PROPOSAL IS FAR FROM BEING "A
BIRD IN THE HAND" AND WE CONTINUE TO BELIEVE THAT ROYAL CARIBBEAN IS THE WRONG
PARTNER FOR P&O PRINCESS.

WE HAVE BEEN ADVISED THAT P&O PRINCESS SHAREHOLDERS CAN VOTE FOR AN ADJOURNMENT
WITHOUT GIVING ROYAL CARIBBEAN THE RIGHT TO WALK. WE THEREFORE URGE THE P&O
PRINCESS SHAREHOLDERS TO CONSIDER SERIOUSLY THEIR POSITION AND TO VOTE TO
ADJOURN THE EGM, OR, IF THE EGM IS NOT ADJOURNED, TO VOTE DOWN THE ROYAL
CARIBBEAN PROPOSAL."



REVISED OFFER

o    Further to its proposal to the P&O Princess Board, dated 17 January 2002,
     the board of Carnival today announces the terms of its Revised Offer to
     acquire the whole of the issued and to be issued share capital of P&O
     Princess. The Revised Offer enhances significantly Carnival's original
     Offer, which Carnival believes was already a superior proposal. A document
     describing the Revised Offer will be posted to P&O Princess Shareholders
     before the EGM convened for 14 February 2002.

o    The Revised Offer comprises 0.2684 Carnival Shares for each P&O Princess
     Share. Based on the New York Stock Exchange closing price of a Carnival
     Share of $27.05 on 29 January 2002, the last business day prior to the date
     of this announcement, and an exchange rate of $1:(pound)0.709, the Revised
     Offer values each P&O Princess Share at 515 pence and the entire existing
     share capital of P&O Princess at approximately (pound)3.6 billion.

o    The Revised Offer is equivalent in value to Carnival's proposal, dated 17
     January 2002, which consisted of 250 pence in cash and 0.1380 Carnival
     Shares per P&O Princess Share. The proposal was worth 500 pence on 17
     January 2002 and has increased to 515 pence mainly as a result of the rise
     in the Carnival Share price since that date.

o    Upon making the formal Revised Offer, Carnival will make available a
     Partial Cash Alternative of 250 pence for each P&O Princess Share,
     pre-conditional on financing being arranged on terms satisfactory to
     Carnival by no later than the date of posting of the Offer Document as set
     out in Appendix II.

o    Carnival has restructured its original superior Offer to provide
     significantly increased certainty to P&O Princess Shareholders (as
     explained further in paragraph 4 of the full text of this announcement).
     The making of the Revised Offer is pre-conditional on regulatory clearance
     only. If this Pre-condition is satisfied, Carnival will be obliged to post
     the Offer Document as explained in the next paragraph and in paragraph 9 of
     the full text of this announcement.

o    Carnival has also restructured its original Offer in order to avoid
     triggering the Joint Venture change of control "poison pills". The P&O
     Princess Board has stated that it is entitled to exit the Joint Venture
     through the commercial benchmark mechanism in January 2003. With the
     consent of the Panel, Carnival will be permitted to delay posting its Offer
     Document until such date that Carnival estimates will ensure that the last
     date on which the Revised Offer can become both unconditional as to
     acceptances and wholly unconditional will be as soon as possible after the
     satisfaction of Condition 7 (the termination of the Joint Venture
     Agreement). Carnival currently estimates that it will post its Offer
     Document in early December 2002. If the exit through the commercial
     benchmark mechanism is delayed, the last date for declaring the Revised
     Offer unconditional will only be extended with the consent of the Panel.
     SEC rules on the right to withdraw acceptances of an offer have the effect
     that, in accordance with normal Panel practice, the Revised Offer must
     become wholly unconditional at the same time as it becomes unconditional as
     to acceptances, otherwise it will lapse. Notwithstanding the level of
     acceptances received, Condition 1 (relating to acceptances) is subject to
     the satisfaction of Condition 7.

o    Carnival reaffirms that it is prepared to discuss alternative transaction
     structures with P&O Princess including, inter alia, a DLC or similar
     structure. Carnival has been advised however, that the DLC structure under
     the Royal Caribbean Proposal could be defective and, unless remedied, could
     result in a material US federal income tax liability. Carnival is not able
     to offer an alternative structure equivalent to the Royal Caribbean
     Proposal on a unilateral basis, but is prepared to work with P&O Princess
     in order to implement a tax efficient structure. Carnival envisages that
     the economic interest of P&O Princess under a DLC structure with Carnival
     would reflect the valuation of P&O Princess as set out in the Revised
     Offer.

o    The UK Secretary of State for Trade and Industry announced on 29 January
     2002 that the Royal Caribbean Proposal has been referred to the UK
     Competition Commission. The Competition Commission is due to make its
     report by 20 May 2002 although the ultimate decision of the Secretary of
     State will not be available until some time after. Both the Carnival and
     Royal Caribbean proposals are conditional on the result of antitrust
     reviews in Europe and the US and these reviews will still be outstanding on
     14 February 2002, the date of P&O Princess' EGM.

o    Carnival believes that the Revised Offer is highly attractive to P&O
     Princess Shareholders, and therefore strongly urges them to vote to adjourn
     the EGM until after the results of the antitrust reviews are known, or, in
     the event that the EGM is not adjourned, to vote against the Royal
     Caribbean Proposal.

BACKGROUND TO THE ANNOUNCEMENT OF THE REVISED OFFER

o    As P&O Princess Shareholders will be aware, Carnival has sought discussions
     with the P&O Princess Board on numerous occasions. The P&O Princess Board
     has repeatedly refused to engage in any dialogue, including following
     Carnival's revised proposal which was submitted before P&O Princess'
     artificial deadline of 18 January 2002.

o    Carnival has repeatedly requested clarification from the P&O Princess Board
     of certain key matters relating to the Joint Venture "poison pill"
     arrangements which Carnival believes are prejudicial to the interests of
     P&O Princess Shareholders. These matters are of great importance to both
     Carnival and P&O Princess Shareholders, yet the P&O Princess Board has
     merely obfuscated and tried to confuse the issue, without publicly
     providing satisfactory responses on these matters.

o    P&O Princess should clarify the considerable uncertainty regarding the exit
     and termination provisions of the Joint Venture Agreement. The P&O Princess
     Board has stated publicly that P&O Princess has the unilateral right to
     terminate the Joint Venture Agreement at no cost, on or after 1 January
     2003, if certain commercial benchmarks are not met. The P&O Princess Board,
     however, has not clarified publicly how this could be achieved in practice.

o    Nevertheless, Carnival has decided not to withdraw its proposal to acquire
     P&O Princess, but to proceed despite P&O Princess' refusal to clarify the
     basis on which it is unilaterally able to terminate the Joint Venture and
     absent confirmation of Royal Caribbean's position on the issue. Carnival is
     therefore taking its Revised Offer direct to P&O Princess Shareholders. In
     taking this action, Carnival believes that P&O Princess Shareholders will
     have the opportunity to consider a real, attractive and deliverable
     alternative to the "nil premium" Royal Caribbean Proposal.

ACTION AT THE EGM

o    Both the Royal Caribbean Proposal and Carnival's Revised Offer are awaiting
     regulatory approval on the same overall timetable. Neither the Royal
     Caribbean Proposal nor Carnival's Revised Offer can complete until the
     appropriate approvals have been obtained. Carnival strongly believes that
     P&O Princess Shareholders should not be forced to decide between the Royal
     Caribbean Proposal and Carnival's Revised Offer until the outcome of the
     regulatory reviews of both proposals is known.

o    By voting for the Royal Caribbean Proposal, P&O Princess Shareholders will
     lose the superior value provided by Carnival's Revised Offer. By voting to
     adjourn the EGM, P&O Princess Shareholders retain the option to decide
     between the Royal Caribbean Proposal and Carnival's Revised Offer, on their
     strategic and economic merits, once the regulatory outcome of both
     proposals is known.

o    P&O Princess Shareholders have not received information from their board as
     to their right as shareholders to adjourn the EGM. Carnival has been
     advised that an adjournment, if proposed and approved by P&O Princess
     Shareholders, does not entitle Royal Caribbean to abandon its proposal
     unless it is prepared to breach its agreement with P&O Princess. Such a
     breach would expose Royal Caribbean to paying damages for breach of
     contract, likely to be at least $62.5 million. If there is any doubt about
     the ability of P&O Princess Shareholders to adjourn the EGM without
     prejudicing the Royal Caribbean Proposal, P&O Princess should clarify this
     issue for its shareholders.

o    Carnival believes that the Revised Offer is highly attractive and
     deliverable to P&O Princess Shareholders, and therefore strongly urges them
     to vote to adjourn the EGM until after the results of the antitrust reviews
     are known, or, in the event that the EGM is not adjourned, to vote against
     the Royal Caribbean Proposal.

o    Carnival will be writing to P&O Princess Shareholders shortly in connection
     with its Revised Offer and will provide them with a new form of proxy and
     further information on what action they should take in relation to the EGM.

This summary should be read in conjunction with the full text of this
announcement.

ENQUIRIES:

CARNIVAL                                Telephone: +1 305 599 2600
Micky Arison
Howard Frank

MERRILL LYNCH                           Telephone: +44 20 7628 1000
Philip Yates
James Agnew
Stuart Faulkner

UBS WARBURG                             Telephone: +44 20 7567 8000
Tom Cooper
Alistair Defriez
Philip Ellick

FINANCIAL DYNAMICS                      Telephone: +44 20 7831 3113
Nic Bennett
Scott Fulton

The directors of Carnival accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Carnival (who have taken all reasonable care to ensure such is the case), the
information contained herein for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information except that the only responsibility accepted by them for the
information in this announcement relating to P&O Princess and Royal Caribbean
which has been compiled from published sources is to ensure that the information
has been correctly and fairly reproduced and presented.

Merrill Lynch International and UBS Warburg Ltd., a subsidiary of UBS AG, are
acting as joint financial advisors and joint corporate brokers exclusively to
Carnival and no-one else in connection with the Revised Offer and will not be
responsible to anyone other than Carnival for providing the protections afforded
to clients respectively of Merrill Lynch International and UBS Warburg Ltd. as
the case may be or for providing advice in relation to the Revised Offer.

SHAREHOLDER DISCLOSURE OBLIGATIONS

Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of P&O Princess or Carnival, owns or controls, or become the owner or
controller, directly or indirectly of one per cent. or more of any class of
securities of P&O Princess or Carnival is generally required under the
provisions of Rule 8 of the City Code to notify the London Stock Exchange and
the Panel of every dealing in such securities during the period from 16 December
2001, the date of the announcement of the original Offer, until the first
closing date of the Revised Offer or, if later, the date on which the Revised
Offer becomes, or is declared, unconditional as to acceptances or lapses.
Dealings by Carnival or P&O Princess or by their respective "associates" (within
the definitions set out in the City Code) in any class of securities of Carnival
or P&O Princess must also be disclosed. Please consult your financial advisor
immediately if you believe this rule may be applicable to you.

Disclosure should be made on an appropriate form before 12 noon (London time) on
the business day following the date of the dealing transaction. These
disclosures should be sent to the Company Announcements Office of the London
Stock Exchange (fax number: +44 20 7588 6057) and to the Panel (fax number: +44
20 7256 9386).

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the US Private Securities Litigation Reform Act of 1995.
Carnival has tried, wherever possible, to identify such statements by using
words such as "anticipate," "assume," "believe," "expect," "intend," "plan" and
words and terms of similar substance in connection with any discussion of future
operating or financial performance. These forward-looking statements, including
those which may impact the forecasting of Carnival's annual cost savings that
underlie estimates of synergies and one time costs to implement synergies, net
revenue yields, booking levels, price, occupancy or business prospects, involve
known and unknown risks, uncertainties and other factors, which may cause
Carnival's actual results, performances or achievements to be materially
different from any future results, performances or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions which may impact levels
of disposable income of consumers and the net revenue yields for Carnival's
cruise products; consumer demand for cruises and other vacation options; other
vacation industry competition; effects on consumer demand of armed conflicts,
political instability, terrorism, the availability of air service and adverse
media publicity; increases in cruise industry and vacation industry capacity;
continued availability of attractive port destinations; changes in tax laws and
regulations; Carnival's ability to implement its brand strategy, Carnival's
ability to implement its shipbuilding program and to continue to expand its
business outside the North American market; Carnival's ability to attract and
retain shipboard crew; changes in foreign currency rates, security expenses,
food, fuel, insurance and commodity prices and interest rates; delivery of new
ships on schedule and at the contracted prices; weather patterns; unscheduled
ship repairs and dry-docking; incidents involving cruise ships; impact of
pending or threatened litigation; and changes in laws and regulations applicable
to Carnival.

Carnival cautions the reader that these risks may not be exhaustive. Carnival
operates in a continually changing business environment, and new risks emerge
from time to time. Carnival cannot predict such risks nor can it assess the
impact, if any, of such risks on its business or the extent to which any risk,
or combination of risks may cause actual results to differ from those projected
in any forward-looking statements. Accordingly, forward-looking statements
should not be relied upon as a prediction of actual results. Carnival undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

CARNIVAL PLANS TO FILE A REGISTRATION STATEMENT ON FORM S-4 AND A STATEMENT ON
SCHEDULE TO WITH THE US SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH
COMMENCEMENT OF THE REVISED OFFER. THE FORM S-4 WILL CONTAIN A PROSPECTUS AND
OTHER DOCUMENTS RELATING TO THE REVISED OFFER. CARNIVAL PLANS TO MAIL THE
PROSPECTUS CONTAINED IN THE FORM S-4 TO SHAREHOLDERS OF P&O PRINCESS WHEN THE
FORM S-4 IS FILED WITH THE SEC. THE FORM S-4, THE PROSPECTUS AND THE SCHEDULE TO
WILL CONTAIN IMPORTANT INFORMATION ABOUT CARNIVAL, P&O PRINCESS, THE REVISED
OFFER AND RELATED MATTERS. INVESTORS AND STOCKHOLDERS SHOULD READ THE FORM S-4,
THE PROSPECTUS, THE SCHEDULE TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE REVISED OFFER CAREFULLY BEFORE THEY MAKE ANY DECISION WITH
RESPECT TO THE REVISED OFFER. THE FORM S-4, THE PROSPECTUS, THE SCHEDULE TO AND
ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE REVISED OFFER WILL
BE AVAILABLE WHEN FILED FREE OF CHARGE AT THE SEC'S WEB SITE, AT WWW.SEC.GOV. IN
ADDITION, THE PROSPECTUS AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE REVISED OFFER WILL BE MADE AVAILABLE TO INVESTORS FREE OF
CHARGE BY WRITING TO TIM GALLAGHER AT CARNIVAL CORPORATION, CARNIVAL PLACE, 3655
N.W. 87 AVENUE, MIAMI, FLORIDA, 33178-2428, US.

IN ADDITION TO THE FORM S-4, PROSPECTUS, THE SCHEDULE TO AND THE OTHER DOCUMENTS
FILED WITH THE SEC IN CONNECTION WITH THE REVISED OFFER, CARNIVAL IS OBLIGATED
TO FILE ANNUAL, QUARTERLY AND CURRENT REPORTS, PROXY STATEMENTS AND OTHER
INFORMATION WITH THE SEC. PERSONS MAY READ AND COPY ANY REPORTS, STATEMENTS AND
OTHER INFORMATION FILED WITH THE SEC AT THE SEC'S PUBLIC REFERENCE ROOM AT 450
FIFTH STREET, N.W., WASHINGTON, D.C. 20549. PLEASE CALL THE SEC AT
1-800-SEC-0330 FOR FURTHER INFORMATION ON THE PUBLIC REFERENCE ROOM. FILINGS
WITH THE SEC ALSO ARE AVAILABLE TO THE PUBLIC FROM COMMERCIAL DOCUMENT-RETRIEVAL
SERVICES AND AT THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.



             NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO
                           AUSTRALIA, CANADA OR JAPAN

                                                                 30 January 2002

                        CARNIVAL CORPORATION ("CARNIVAL")
--------------------------------------------------------------------------------
                   REVISED PRE-CONDITIONAL OFFER TO BE MADE BY
                          MERRILL LYNCH AND UBS WARBURG
                  FOR P&O PRINCESS CRUISES PLC ("P&O PRINCESS")

1.       INTRODUCTION

Further to its proposal to the P&O Princess Board of 17 January 2002, the board
of Carnival today announces the terms of a Revised Offer to acquire the whole of
the issued and to be issued share capital of P&O Princess.

A document describing the Revised Offer will be sent to P&O Princess
Shareholders in advance of the EGM convened for 14 February 2002.

2.       THE REVISED OFFER

The Revised Offer, the terms and conditions of which will be set out in the
Offer Document, will be made on the following basis:

         0.2684 Carnival Shares                 for each P&O Princess Share

and so in proportion for any other number of P&O Princess Shares held.

Upon making the formal Revised Offer, Carnival will make available a Partial
Cash Alternative of 250 pence for each P&O Princess Share, pre-conditional on
financing being arranged on terms satisfactory to Carnival by no later than the
date of posting the Offer Document as set out in Appendix II. A P&O Princess
Shareholder electing to receive the Partial Cash Alternative will also receive
such number of Carnival Shares so that the total value of the consideration for
each P&O Princess Share, on the date the terms of the Partial Cash Alternative
are fixed, equals the value of 0.2684 Carnival Shares. The terms of the Partial
Cash Alternative may be fixed at the time the formal Revised Offer is made or
such earlier date as Carnival may determine as described in paragraph 14 below.
There will also be an Additional Cash Election enabling P&O Princess
Shareholders to elect for extra cash to the extent that the Partial Cash
Alternative is not taken up in full by P&O Princess Shareholders. Accordingly,
P&O Princess Shareholders who accept the Revised Offer will be able to elect to
receive a combination of shares and cash. This structure allows P&O Princess
Shareholders to benefit fully from any upturn in the sector, whilst retaining
the option to receive the certainty of a cash element when the formal offer is
made.

To satisfy the Partial Cash Alternative, Carnival requires cash of approximately
$2.4 billion. Carnival currently has cash and existing undrawn debt facilities
of over $2.4 billion.

Based on the New York Stock Exchange closing price of a Carnival Share of $27.05
on 29 January 2002, the last business day prior to the date of this
announcement, and an exchange rate of $1:(pound)0.709, the Revised Offer values
each P&O Princess Share at 515 pence and the entire existing share capital of
P&O Princess at approximately (pound)3.6 billion.

The Revised Offer is equivalent in value to Carnival's proposal, dated 17
January 2002, which consisted of 250 pence in cash and 0.1380 Carnival Shares
per P&O Princess Share. The proposal was worth 500 pence on 17 January 2002 and
has increased to 515 pence mainly as a result of the rise in the Carnival Share
price since that date.

The Revised Offer represents:

         o        a premium of 62.4 per cent. to the closing middle market price
                  of 317 pence per P&O Princess Share on 19 November 2001, the
                  last business day prior to the announcement of the Royal
                  Caribbean Proposal;

         o        a premium of 29.0 per cent. to the closing middle market price
                  of 399 pence per P&O Princess Share on 29 January 2002, the
                  last business day prior to the date of this announcement; and

         o        a premium of 34.5 per cent. to the current "look through"
                  value of P&O Princess under the Royal Caribbean Proposal of
                  383 pence per P&O Princess Share on 29 January 2002, the last
                  business day prior to the date of this announcement.

Carnival has restructured its original Offer to provide significantly increased
certainty to P&O Princess Shareholders (as explained further in paragraph 4
below). The making of the Revised Offer is now subject only to the Pre-condition
set out in Appendix I, which relates only to regulatory clearance being
obtained. Carnival is entitled to waive this Pre-condition. If this
Pre-condition is satisfied, Carnival will be obliged to post the Offer Document
as explained in paragraph 9.

Carnival has also restructured its original Offer in order to avoid triggering
the Joint Venture change of control "poison pills". The P&O Princess Board has
stated that it is entitled to exit the Joint Venture through the commercial
benchmark mechanism in January 2003. With the consent of the Panel, Carnival
will be permitted to delay posting its Offer Document until such date that
Carnival estimates will ensure that the last date on which the Revised Offer can
become both unconditional as to acceptances and wholly unconditional will be as
soon as possible after the satisfaction of Condition 7 (the termination of the
Joint Venture Agreement). Carnival currently estimates that it will post its
Offer Document in early December 2002. If the exit through the commercial
benchmark mechanism is delayed, the last date for declaring the Revised Offer
unconditional will only be extended with the consent of the Panel. SEC rules on
the right to withdraw acceptances of an offer have the effect that, in
accordance with normal Panel practice, the Revised Offer must become wholly
unconditional at the same time as it becomes unconditional as to acceptances,
otherwise it will lapse. Notwithstanding the level of acceptances received,
Condition 1 (relating to acceptances) is subject to the satisfaction of
Condition 7.

The making of the Partial Cash Alternative is pre-conditional on financing being
arranged by no later than the posting of the Offer Document as set out in
Appendix II. The Conditions of the Revised Offer are set out in Appendix III.

P&O Princess Shares will be acquired by Carnival fully paid, or credited as
fully paid, and free from all liens, charges, equitable interests, encumbrances
and other interests and together with all rights attaching thereto on or after
the date of this announcement, including the right to receive and retain all
distributions declared, made or paid after the date of this announcement subject
to the exception described below.

P&O Princess Shareholders will be entitled to retain all P&O Princess dividends
paid or payable in respect of the period from the date of this announcement
until the Revised Offer becomes wholly unconditional. If, after this
announcement, any dividends in excess of 3 cents in each quarter per P&O
Princess Share are paid or become payable Carnival shall have the right, as an
alternative to lapsing the Revised Offer for non-fulfilment of the Conditions,
to reduce the consideration for each P&O Princess Share under the Revised Offer
by an amount equal to the excess.

The Revised Offer will extend to all existing issued P&O Princess Shares and to
any P&O Princess Shares which are unconditionally allotted or issued prior to
the date on which the Revised Offer closes (or such earlier date as Carnival
may, subject to the City Code, decide) including P&O Princess Shares issued
pursuant to the exercise of options under the P&O Princess Employee Share
Incentive Plans or otherwise. In conjunction with the Revised Offer for the P&O
Princess Shares, subject to obtaining exemptive relief from the SEC, an offer
will be made to holders of P&O Princess ADRs to tender the ADSs underlying such
P&O Princess ADRs.

Under New York Stock Exchange rules, the issue of the New Carnival Shares
requires Carnival shareholder approval. Such approval is a Condition of the
Revised Offer. Approval by shareholders with a majority of voting rights in
Carnival is required for the resolution to be passed. The Arison family and
certain related trusts have given proxies to vote shares representing 44 per
cent. of the voting rights in Carnival in favour of the resolution.

Carnival intends to offer to acquire the P&O Princess Preference Shares and the
P&O Princess Subscriber Shares for cash for the amounts paid up on those shares,
conditional on the Revised Offer becoming wholly unconditional.

Application will be made for the New Carnival Shares to be admitted to listing
on the New York Stock Exchange. Should Carnival perceive there to be sufficient
demand for such a facility, Carnival intends to seek a listing of the existing
Carnival Shares and the New Carnival Shares on the London Stock Exchange.
Carnival will confirm whether it will seek such listing at the time of posting
the Offer Document.

The New Carnival Shares will rank pari passu with the Carnival Shares in issue
at the date the Revised Offer becomes wholly unconditional, save that they shall
rank for dividends with effect from and including the first complete financial
quarter of Carnival following such date.

Carnival reaffirms that it is prepared to discuss alternative transaction
structures with P&O Princess including, inter alia, a DLC or similar structure.
Carnival has been advised however, that the DLC structure under the Royal
Caribbean Proposal could be defective and, unless remedied, could result in a
material US federal income tax liability. Carnival is not able to offer an
alternative structure equivalent to the Royal Caribbean Proposal on a unilateral
basis, but is prepared to work with P&O Princess in order to implement a tax
efficient structure. Carnival envisages that the economic interest of P&O
Princess under a DLC structure with Carnival would reflect the valuation of P&O
Princess as set out in the Revised Offer.

Further details on settlement, listing and dealings will be included in the
Offer Document and Form of Acceptance which will be sent to the P&O Princess
Shareholders in the period following the satisfaction of the regulatory
Pre-condition as described in this paragraph 2 and in paragraph 9 below.

3.       BACKGROUND TO THE ANNOUNCEMENT OF THE REVISED OFFER

On 24 September 2001, only eight weeks prior to the announcement of the Royal
Caribbean Proposal, Carnival contacted P&O Princess proposing a combination but
received no response. On 20 November 2001, the Royal Caribbean Proposal was
announced. Carnival was astonished not to have had an opportunity to discuss its
approach with P&O Princess and still cannot understand why, if the Royal
Caribbean Proposal is so attractive, the P&O Princess Board needed the
protection of such unprecedented "poison pills".

Having considered its options following the announcement of the Royal Caribbean
Proposal, Carnival submitted a detailed proposal regarding an offer for P&O
Princess to the P&O Princess Board on 13 December 2001. The P&O Princess Board
rejected Carnival's proposal on 16 December 2001, stating its belief that the
offer was not as favourable financially to the P&O Princess Shareholders and
would face greater execution risk than the Royal Caribbean Proposal. Carnival
therefore immediately announced its original Offer in order to alert P&O
Princess Shareholders to Carnival's strong interest in P&O Princess.

Carnival has repeatedly requested clarification from the P&O Princess Board of
certain key matters relating to the Joint Venture "poison pill" arrangements
which Carnival believes are prejudicial to the interests of P&O Princess
Shareholders. These matters are of great importance to both Carnival and P&O
Princess Shareholders, yet the P&O Princess Board has merely obfuscated and
tried to confuse the issue, without publicly providing satisfactory responses on
these matters. Neither P&O Princess nor its advisors have been prepared to enter
into any discussion with Carnival or its advisors.

P&O Princess should clarify the considerable uncertainty regarding the exit and
termination provisions of the Joint Venture Agreement. The P&O Princess Board
has stated publicly that P&O Princess has the unilateral right to terminate the
Joint Venture Agreement at no cost, on or after 1 January 2003, if certain
commercial benchmarks are not met. The P&O Princess Board, however, has not
clarified publicly how this could be achieved in practice.

Carnival has consistently tried to ensure that P&O Princess Shareholders are
given the opportunity to judge both the Carnival Offer and the Royal Caribbean
Proposal on a level playing field. Carnival met the artificial 18 January 2002
deadline set by P&O Princess to put forward a revised proposal. By submitting
such a clearly superior proposal Carnival had hoped to enter into discussions
with the P&O Princess Board and its advisors. Once again, Carnival was rebuffed
by the P&O Princess Board.

Nevertheless, Carnival has decided not to withdraw its proposal to acquire P&O
Princess, but to proceed despite P&O Princess' refusal to clarify the basis on
which it is unilaterally able to terminate the Joint Venture and absent
confirmation of Royal Caribbean's position on the issue. Carnival is therefore
taking its Revised Offer direct to P&O Princess Shareholders. In taking this
action, Carnival believes that P&O Princess Shareholders will have the
opportunity to consider a real, attractive and deliverable alternative to the
"nil premium" Royal Caribbean Proposal.

4.       REDUCED PRE-CONDITIONALITY

The only Pre-condition to the Revised Offer which remains relates to regulatory
clearance. Carnival has waived pre-conditions to the original Offer relating to
the supply of information by P&O Princess and the convening of the P&O Princess
EGM. The financing pre-condition is now a Pre-condition to the Partial Cash
Alternative. The pre-condition of the original Offer relating to P&O Princess
Shareholders not having passed the resolution required to approve the Royal
Caribbean Proposal is now solely a Condition of the Revised Offer. If P&O
Princess Shareholders approve the Royal Caribbean Proposal, Carnival will not
proceed with its formal Revised Offer.

At the time of the announcement of the original Offer of 16 December 2001, the
Joint Venture Agreement had not been made publicly available. Carnival therefore
had to formulate its original Joint Venture Pre-condition on the basis of very
limited information. The Joint Venture Agreement has now been published. In
addition, P&O Princess has stated that it has the unilateral right to terminate
the Joint Venture Agreement at no cost, on or after 1 January 2003, if certain
commercial benchmarks are not met. The pre-condition relating to the cost to P&O
Princess of terminating the Joint Venture has now, therefore, been reformulated
as a Condition that the Joint Venture has been terminated in accordance with
Section 9.01(c) (the January or April 2003 commercial benchmarks).

5.       ACTION AT THE EGM

Both the Royal Caribbean Proposal and Carnival's Revised Offer are awaiting
regulatory approval on the same overall timetable. Neither the Royal Caribbean
Proposal nor Carnival's Revised Offer can complete until the appropriate
approvals have been obtained. Carnival believes that P&O Princess Shareholders
should not be forced to make a decision between the Royal Caribbean Proposal and
Carnival's Revised Offer until the outcome of the regulatory reviews of both
proposals is known.

By voting for the Royal Caribbean Proposal, P&O Princess Shareholders will lose
the superior value provided by Carnival's Revised Offer. By voting to adjourn
the EGM, P&O Princess Shareholders retain the option to decide between the Royal
Caribbean Proposal and Carnival's Revised Offer, on their strategic and economic
merits, once the regulatory outcome of both proposals is known.

P&O Princess Shareholders have not received information from their board as to
their right as shareholders to adjourn the EGM. Carnival has been advised that
an adjournment, if proposed and approved by P&O Princess Shareholders, does not
entitle Royal Caribbean to abandon its proposal unless it is prepared to breach
its agreement with P&O Princess. Such a breach would expose Royal Caribbean to
paying damages for breach of contract, likely to be at least $62.5 million. If
there is any doubt about the ability of P&O Princess Shareholders to adjourn the
EGM without prejudicing the Royal Caribbean Proposal, P&O Princess should
clarify this issue for its shareholders.

Carnival believes that the Revised Offer is highly attractive to P&O Princess
Shareholders, and therefore strongly urges them to vote to adjourn the EGM,
until after the results of the antitrust reviews are known, or, in the event
that the EGM is not adjourned, to vote against the Royal Caribbean Proposal.

Carnival will be writing to P&O Princess Shareholders shortly in connection with
its Revised Offer and will provide them with a new form of proxy and further
information on what action they should take in relation to the EGM.

6.       SOME FACTS ABOUT ROYAL CARIBBEAN AND ITS PROPOSAL

There is speculation that Royal Caribbean might walk away from the Royal
Caribbean Proposal if it is not approved by P&O Princess Shareholders at the
EGM. Carnival believes this is highly unlikely. In addition to incurring damages
as outlined above and other costs, Royal Caribbean could lose a highly
attractive transaction for its shareholders. The facts are:

         o        the Royal Caribbean Proposal gives Royal Caribbean
                  Shareholders a disproportionately favourable share of
                  ownership under the DLC;

         o        Royal Caribbean's Chairman and Chief Executive has secured the
                  same position in the enlarged group;

Royal Caribbean is a highly leveraged company and has a major programme of
capital spending over the next few years, which could exacerbate its already
weak financial condition; and

         o        Royal Caribbean's credit ratings before the announcement of
                  the Royal Caribbean Proposal were BB+ (negative outlook) and
                  Ba2 - i.e. "junk" status.

Carnival believes that Royal Caribbean needs the Royal Caribbean Proposal,
because it can then take advantage of P&O Princess' relative financial strength.
In these circumstances, Carnival believes it is highly unlikely that Royal
Caribbean will walk away from the Royal Caribbean Proposal if the EGM is
adjourned.

7.       BENEFITS OF THE PROPOSED COMBINATION OF CARNIVAL AND P&O PRINCESS

A combination of Carnival and P&O Princess creates a global vacation and leisure
company with a broader, more diverse and more complementary portfolio of brands,
creating a wider range of vacation choices for its customers. Operating in the
US, Europe and Australia, the combined group will have an enhanced ability to
attract customers away from land-based vacations to cruise vacations.

Carnival expects that the proposed combination will generate cost savings of at
least $100 million on an annualised basis, in the first full year following
completion of the transaction, to the benefit of both shareholders and
customers. These savings are expected to come by sharing the best practices to
achieve efficiencies from, inter alia, purchasing and information systems, and
also from rationalising support operations in locations served by both
companies.

The Enlarged Carnival Group will benefit from the financial flexibility of the
combined group's strong balance sheet and cash flow. Carnival believes that the
terms of the Revised Offer will ensure that the proposed combination of Carnival
and P&O Princess will retain a strong financial position with an investment
grade credit rating.

Carnival strongly believes that it can deliver greater value to P&O Princess
Shareholders through its Revised Offer than can be delivered through the Royal
Caribbean Proposal, because Carnival has:

         o        proven operating practices and a better management track
                  record, resulting in higher shareholder returns;

         o        a more effective brand strategy;

         o        a proven record of delivering greater profitability and
                  superior performance; and

         o        a significantly stronger balance sheet.

In Carnival's experience, as previously stated, it is principally operating
practices and management, rather than scale, which drive margins and market
rating.

P&O Princess Shareholders should consider which management team has the superior
track record and is therefore best placed to deliver on a combination with P&O
Princess - that of Carnival or Royal Caribbean?

8.       VALUE

Carnival believes that its Revised Offer is clearly a superior proposal and
represents full and fair value for P&O Princess:

o    on a LTM (last twelve months) EV/EBITDA multiple basis, at the Revised
     Offer value of 515 pence, P&O Princess Shareholders would receive a 43 per
     cent. and a 39 per cent. premium respectively to the P&O Princess and Royal
     Caribbean EV/EBITDA multiples on 19 November 2001, the last business day
     prior to the announcement of the Royal Caribbean Proposal;

o    on a LTM P/E multiple basis, at the Revised Offer value of 515 pence, P&O
     Princess Shareholders would receive a 62 per cent. and a 112 per cent.
     premium respectively to the P&O Princess and Royal Caribbean P/E multiples
     on 19 November 2001, the last business day prior to the announcement of the
     Royal Caribbean Proposal; and

o    the Revised Offer value of 515 pence is at a 34.5 per cent. premium to the
     "look through" value of the Royal Caribbean Proposal.

Carnival does not believe that the Royal Caribbean management has the
credibility to deliver even these synergies. Carnival's superior record on
delivering value speaks for itself:

                                                 CARNIVAL        ROYAL CARIBBEAN

     Total shareholder returns since Royal         268%               136%
     Caribbean IPO

     Total shareholder returns since P&O Princess   25%               (9)%
     demerger

Carnival does not believe that the Royal Caribbean Proposal will be able to
generate synergies significantly above the $100 million figure announced by P&O
Princess and Royal Caribbean.

Carnival also believes that the DLC does not offer certain value to P&O Princess
Shareholders:

o    the value that the market could place on the DLC is heavily dependent on
     the ratings the companies in the DLC are likely to attract and the
     synergies generated. The table below sets out the average current and
     forward P/Es of Royal Caribbean since its flotation:

                                  ROYAL CARIBBEAN

     Current P/E                       14.5x
     Forward P/E                       13.0x

o    the table below sets out the implied value of P&O Princess based on 2003
     earnings forecasts for P&O Princess and Royal Caribbean of Schroder Salomon
     Smith Barney, P&O Princess' house broker, at a range of forward multiples,
     and including $100 million of synergies:

     FORWARD P/E


              11.0x                    340p
              12.0x                    371p
              13.0x                    402p
              14.0x                    433p
              15.0x                    463p

     P&O Princess would need to trade on a forward multiple of 16.7x to justify
     a value of 515 pence. Carnival does not believe that such a multiple is
     realistic given the average multiple at which Royal Caribbean has traded
     historically.

o    P&O Princess' own brokers, Schroder Salomon Smith Barney, forecast that
     over the next three years the Royal Caribbean Proposal will fail to
     generate a return on invested capital in excess of its current weighted
     average cost of capital.

                                              2002         2003         2004

Invested capital ($bn)                        13.7         14.8         15.5
Average ROIC                                  5.2%         7.2%         9.5%
Current WACC (1)                             11.5%        11.5%        11.5%
Negative spread                              (6.3)%       (4.3)%       (2.0)%
Negative spread per P&O Princess              45p          33p          16p
Share (pence)

Note 1: Royal Caribbean's and P&O Princess' long term bonds are currently
yielding in excess of 10.3 per cent. and 8.8 per cent. respectively.

     According to the analysis above, the DLC is expected to destroy value for
     shareholders over the next three years. Assuming that P&O Princess can
     return its weighted average cost of capital in 2005 and beyond, Carnival
     believes that its shares should trade at a substantial discount to its book
     value of 341 pence per P&O Princess Share. The forecast negative spreads
     between 2002 and 2005 support a value of 261 pence per P&O Princess Share.

9.       TIMETABLE

Due to the timing of the regulatory process, this Revised Offer remains
structured as a pre-conditional offer in order to comply with the Code. The fact
that the Revised Offer is structured as a pre-conditional offer does not reduce
the level of commitment with which Carnival is obliged to pursue it. If this
Pre-condition is satisfied, Carnival will be obliged to post the Offer Document
as explained herein. The P&O Princess Board has stated that it is entitled to
exit the Joint Venture through the commercial benchmark mechanism on or after 1
January 2003. Carnival has therefore undertaken to the Panel that, subject to
the satisfaction of the regulatory Pre-condition, it will post the Offer
Document at such time that the Joint Venture Agreement can terminate through the
January commercial benchmark mechanism within the normal 60 day Code timetable.
In certain circumstances, this timetable may be extended, as described in
paragraph 2 above, with the consent of the Panel.

Set out below is an indicative timetable to completion:

14 February 2002                P&O Princess EGM. P&O Princess Shareholders vote
                                to adjourn, or, in the event that the EGM is not
                                adjourned, vote against Royal Caribbean Proposal

Q2/Q3 2002                      Regulatory process complete for both Carnival's
                                Revised Offer and the Royal Caribbean Proposal.
                                Pre-condition to Revised Offer satisfied

Q2/Q3 2002                      Reconvened EGM, if applicable

December 2002                   Posting of Offer Document including Partial Cash
                                Alternative

January 2003 / April 2003       The Joint Venture Agreement terminates through
                                the benchmark mechanism. Revised Offer wholly
                                unconditional. Shareholders receive
                                consideration

10.      REGULATORY APPROVALS

Carnival continues to believe firmly, and has been so advised, that there is no
material difference between the regulatory positions of a Carnival/P&O Princess
combination and a Royal Caribbean/P&O Princess combination. Carnival believes
that P&O Princess' claim that the Royal Caribbean Proposal faces less risk is
therefore both unsupportable and disingenuous.

P&O Princess, Royal Caribbean and Carnival have all publicly stated that the
appropriate market in which to evaluate the competitive effects of both
transactions is the wider vacation market. There is no doubt that cruise
companies undertake substantial efforts to attract consumers from other vacation
options. On that basis it follows that both Carnival's Revised Offer and the
Royal Caribbean Proposal face the same antitrust issues.

EUROPE
The cruise business in Europe is in its infancy, accounting for less than 1 per
cent. of the outbound vacation market. In 2000, outbound European holiday volume
totalled approximately 370 million persons, whilst the total number of European
cruise holidays totalled only 2.1 million. As such, Carnival believes that
antitrust issues should not represent a major hurdle.

Even if regulators look at the cruise sub-sector, Carnival believes that the
proposed Carnival/P&O Princess combination would not lead to the creation or
strengthening of a dominant position in the EEA.

In the cruise sub-sector, Carnival and P&O Princess hold a combined share of
only 32 per cent. in the EEA as a whole, which is well below the level at which
there is a risk of the combined entity being dominant. Moreover, at national
level within the EEA, there is very little overlap between Carnival and P&O
Princess. P&O Princess has significant cruise sales only in Germany and the UK,
where Carnival is relatively weak. In contrast, Carnival's main strength in
Europe is in the southern countries of Italy, Spain and France, where P&O
Princess' cruise sales are virtually non-existent.

The only EEA countries in which Carnival and P&O Princess have any material
overlap are the UK and Germany. In the UK, P&O Princess is estimated to carry 23
per cent. of all cruise passengers whilst Carnival accounts for only 9 per
cent., giving a combined share of 32 per cent. in cruises. Royal Caribbean's
share of UK cruise passengers is estimated to be 7 per cent. so its combined
share with P&O Princess would be 30 per cent.

In Germany, P&O Princess is estimated to have 18 per cent. of cruise passengers,
while Carnival's share is only around 10 per cent., giving a combined share of
28 per cent. Royal Caribbean's share in Germany is estimated to be 6 per cent.,
so its combined share with P&O Princess would be 24 per cent.

Consequently, there are only very minor differences in the combined cruise
shares in the UK and Germany that would result from either deal. Carnival
believes, and has been advised, that these minor differences should make no
difference to the antitrust assessment of the two transactions.

Carnival has had a number of discussions with the European Commission in
relation to a Carnival/P&O Princess combination and expects to file its
submission shortly.

The UK Secretary of State for Trade and Industry announced on 29 January 2002
that the Royal Caribbean Proposal has been referred to the UK Competition
Commission. The Secretary of State's decision does not affect the advice that
Carnival has received about the prospects for clearance of its offer by the
European Commission.

US
Both the Carnival Offer and the Royal Caribbean Proposal are now under review at
the FTC at the same time, on the same schedule and by the same lawyers and
economists, who will apply the same legal standards and analysis to both
proposals based on the same information. Indeed, on 22 January 2002, Carnival
announced that it had received a compulsory information request from the FTC
with respect to a Carnival/P&O Princess combination. On 24 January 2002, P&O
Princess acknowledged that it had received a similar request from the FTC with
respect to both the Carnival Offer and the Royal Caribbean Proposal. On 25
January 2002, Royal Caribbean announced that it had received a similar request
from the FTC in respect of the Royal Caribbean Proposal. Carnival has been
advised that there will be no adverse impact on the regulatory outcome of either
proposal as a result of the two proposals being reviewed simultaneously.

Carnival believes that P&O Princess' statement that a combination of the number
one and the number three cruise operator must bear more risk than a combination
of the number two and number three cruise operator is irrelevant and incorrect.
Carnival has been advised that on this issue, Heinz/Beechnut is the most
relevant recent case. There, both the FTC and the US Court of Appeals rejected
the same arguments as those being advanced by P&O Princess and Royal Caribbean.

TIMING
Carnival believes the FTC is likely to be the last significant regulatory body
to conclude its review. The fact that both the Royal Caribbean Proposal and
Carnival's Revised Offer are now under review at the FTC on the same timetable
means that the antitrust conditionality of both transactions should be
determined at the same time.

11.      INFORMATION ON CARNIVAL

Carnival is the world's largest multiple-night cruise company based on the
number of consumers served. The Carnival Group offers a broad range of cruise
brands serving the vacation market through Carnival Cruise Lines, Holland
America Line, Costa Cruises, Cunard Line, Seabourn Cruise Line and Windstar
Cruises. Carnival's various brands operate 43 ships, offering a total of 60,472
berths, in the Caribbean, Alaska, Europe, Mexican Riviera, South America and
other worldwide destinations. Carnival has 14 new ships on order, which will
offer a further 32,704 berths. These ships are expected to enter service over
the period from the third quarter of 2002 through to late 2005. In addition to
its cruise operations, Carnival operates a tour business, through Holland
America Tours which markets sightseeing tours both separately and as a part of
its cruise/tour packages. Carnival's business strategy is to use this wide,
diverse range of options to attract consumers from other land-based vacation
choices.

Carnival was incorporated under the laws of the Republic of Panama in November
1974 and the Carnival Shares are listed on the New York Stock Exchange.

In the year ended 30 November 2000, Carnival reported turnover of $3,778.5
million (1999: $3,497.5 million) and operating profit of $983.0 million (1999:
$1,019.7 million). Reported earnings per share (basic) were $1.61 (1999: $1.68).
Net assets at 30 November 2000 were $5,870.6 million (1999: $5,931.2 million).

In the three-month period ended 31 August 2001, Carnival reported turnover of
$1,489.9 million (2000: $1,228.2 million) and operating profit of $425.3 million
(2000: $420.5 million). Reported earnings per share (basic) were $0.84 (2000:
$0.67). Net assets at 31 August 2001, the date of the most recently published
balance sheet, were $6,546.4 million.

Carnival's preliminary unaudited results for the year ended 30 November 2001
included reported turnover of $4,535.8 million and operating profit of $891.7
million. Reported earnings per share (basic) were $1.58.

12.      INFORMATION ON P&O PRINCESS

P&O Princess is a global cruise vacation company operating under the following
brand names: Princess Cruises in North America; P&O Cruises in the United
Kingdom and in Australia; AIDA, A'ROSA and Seetours in Germany and Swan Hellenic
also in the United Kingdom. It provides cruises to Alaska, the Caribbean,
Europe, the Panama Canal and other exotic destinations. The P&O Princess Group
currently has a fleet of 18 ships offering a total of 27,370 berths, with 8 new
ships on order, offering a further 17,520 berths. The new ships are expected to
be delivered over the period from the first quarter of 2002 through to the
second quarter of 2004. P&O Princess' tour division, Princess Tours, is a tour
operator in Alaska with four riverside lodges (with a fifth being built), a
fleet of deluxe motorcoaches and luxury Midnight Sun Express rail cars.

P&O Princess was incorporated and registered in England and Wales in July 2000
and was listed in London and New York in October 2000 on its demerger from P&O.

In the year ended 31 December 2000, P&O Princess reported turnover of $2,423.9
million (1999: $2,111.6 million) and operating profit of $373.6 million (1999:
$388.3 million). Reported earnings per share (basic) were $0.401 cents (1999:
$0.455 cents). Net assets at 31 December 2000 were $2,463.8 million (1999:
$2,196.5 million).

In the three month period ended 30 September 2001, P&O Princess reported a
turnover of $776.0 million (2000: $778.1 million) and operating profit of $186.5
million (2000: $189.3 million). Reported earnings per share (basic) were $0.235
(2000: $0.221). Net assets at 30 September 2001 were $2,632.8 million.

13.      MANAGEMENT AND EMPLOYEES

The combination of Carnival and P&O Princess will offer P&O Princess employees
exciting career prospects for the future. P&O Princess' management and employees
will benefit under the Revised Offer from a larger operating platform and a
business of greater international size and scope. Carnival operates its various
cruise businesses as separate decentralised units and envisages extending this
approach to the businesses of P&O Princess.

Carnival confirms that the existing employment rights, including pension rights,
of employees of P&O Princess will be fully safeguarded. Carnival does not
anticipate that there will be significant redundancies arising from its
combination with P&O Princess.

14.      PARTIAL CASH ALTERNATIVE

Upon making the formal Revised Offer, Carnival will make available a Partial
Cash Alternative of 250 pence for each P&O Princess Share. The Partial Cash
Alternative is pre-conditional on financing being arranged on terms satisfactory
to Carnival by no later than the date of posting of the Offer Document, as set
out in Appendix II. There will also be an Additional Cash Election enabling P&O
Princess Shareholders to elect for extra cash to the extent that the Partial
Cash Alternative is not taken up in full by P&O Princess Shareholders.

P&O Princess Shareholders electing to receive cash will also receive such number
of Carnival Shares so that the total value of the consideration, on the date the
terms of the Partial Cash Alternative are fixed, equals the value of 0.2684
Carnival Shares. The terms of the Partial Cash Alternative may be fixed at the
time the formal Revised Offer is made or such earlier date as Carnival may
determine. The value of 0.2684 Carnival Shares will be calculated by reference
to the average closing price of a Carnival Share on the New York Stock Exchange
over the 10 business days prior to the date on which the terms of the Partial
Cash Alternative are fixed, translated into pounds sterling at the average US
dollar/pounds sterling exchange rate over this period. The difference between
this value and such P&O Princess Shareholder's cash entitlement for each P&O
Princess Share will be divided by the average closing price of a Carnival Share
referred to above to give the number of New Carnival Shares to which that P&O
Princess Shareholder is entitled for each P&O Princess Share. This structure
allows P&O Princess Shareholders to benefit fully from any upturn in the sector,
whilst retaining the option to receive the certainty of a cash element when the
formal offer is made.

To satisfy the Partial Cash Alternative, Carnival requires cash of approximately
$2.4 billion. Carnival currently has cash and existing undrawn debt facilities
of over $2.4 billion.

15.      FRACTIONAL ENTITLEMENTS

Fractional entitlements to New Carnival Shares arising under the Revised Offer
will be aggregated and sold in the market and the proceeds (converted into
pounds sterling at the prevailing exchange rate) remitted to the persons
entitled thereto, except that amounts of less than (pound)3 will be retained for
the benefit of the Enlarged Carnival Group.

16.      P&O PRINCESS EMPLOYEE SHARE INCENTIVE PLANS

The Revised Offer will extend to any P&O Princess Shares which are
unconditionally allotted or issued before the date on which the Revised Offer
closes (or such earlier date as Carnival may, subject to the City Code, decide),
as a result of the exercise of options granted under the P&O Princess Employee
Share Incentive Plans or otherwise. If the Revised Offer is declared
unconditional in all respects, appropriate proposals will be made to
participants in the P&O Princess Employee Share Incentive Plans.

17.      COMPULSORY ACQUISITION AND APPLICATION FOR DELISTING OF P&O PRINCESS
         SHARES

If the Revised Offer becomes, or is declared, unconditional in all respects, and
sufficient acceptances are received, Carnival intends to implement the
procedures under sections 428 to 430F of the Companies Act to acquire
compulsorily any outstanding P&O Princess Shares not acquired or agreed to be
acquired pursuant to the Revised Offer.

When the Revised Offer becomes, or is declared, unconditional in all respects,
Carnival intends to procure the making of an application by P&O Princess for the
removal of P&O Princess Shares from the Official List and for the cancellation
of trading of P&O Princess Shares on the London Stock Exchange's market for
listed securities. It is anticipated that such cancellation of listing and
trading will take effect no earlier than 20 business days after the Revised
Offer becomes, or is declared, unconditional in all respects. Such cancellation
of listing and trading would significantly reduce the liquidity and
marketability of P&O Princess Shares that have not assented to the Revised
Offer.

18.      INTERESTS IN P&O PRINCESS SHARES

Neither Carnival, nor any of the directors of Carnival, nor, so far as Carnival
is aware, any other party acting in concert with Carnival, owns or controls any
P&O Princess Shares or holds any option to purchase any P&O Princess Shares or
has entered into any derivatives referenced to P&O Princess Shares, except that
Mr A. Kirk Lanterman, a director of Carnival, owns 10,000 P&O Princess Shares.

Appendix IV contains the definitions of terms used in this announcement.

ENQUIRIES:

CARNIVAL                                Telephone: +1 305 599 2600
Micky Arison
Howard Frank

MERRILL LYNCH                           Telephone: +44 20 7628 1000
Philip Yates
James Agnew
Stuart Faulkner

UBS WARBURG                             Telephone: +44 20 7567 8000
Tom Cooper
Alistair Defriez
Philip Ellick

FINANCIAL DYNAMICS                      Telephone: +44 20 7831 3113
Nic Bennett
Scott Fulton

This announcement does not constitute an offer or an invitation to acquire
shares or securities.

GENERAL

The Revised Offer and any acceptances thereunder will be governed by English
law.

The Revised Offer will be subject to the Conditions and terms set out in
Appendix III and on the further terms which will be set out in the Offer
Document and Form of Acceptance when issued, together with such further terms as
may be required to comply with the provisions of the City Code.

The directors of Carnival accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Carnival (who have taken all reasonable care to ensure such is the case), the
information contained herein for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information except that the only responsibility accepted by them for the
information in this announcement relating to P&O Princess and Royal Caribbean
which has been compiled from published sources is to ensure that the information
has been correctly and fairly reproduced and presented.

Merrill Lynch International and UBS Warburg Ltd., a subsidiary of UBS AG, are
acting as joint financial advisors and joint corporate brokers exclusively to
Carnival and no-one else in connection with the Revised Offer and will not be
responsible to anyone other than Carnival for providing the protections afforded
to clients respectively of Merrill Lynch International and UBS Warburg Ltd. as
the case may be or for providing advice in relation to the Revised Offer.

SHAREHOLDER DISCLOSURE OBLIGATIONS

Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of P&O Princess or Carnival, owns or controls, or become the owner or
controller, directly or indirectly of one per cent. or more of any class of
securities of P&O Princess or Carnival is generally required under the provision
of Rule 8 of the City Code to notify the London Stock Exchange and the Panel of
every dealing in such securities during the period from 16 December 2001, the
date of the announcement of the original Offer, until the first closing date of
the Revised Offer or, if later, the date on which the Revised Offer becomes, or
is declared, unconditional as to acceptances or lapses. Dealings by Carnival or
P&O Princess or by their respective "associates" (within the definitions set out
in the City Code) in any class of securities of Carnival or P&O Princess must
also be disclosed. Please consult your financial advisor immediately if you
believe this rule may be applicable to you.

Disclosure should be made on an appropriate form before 12 noon (London time) on
the business day following the date of the dealing transaction. These
disclosures should be sent to the Company Announcements Office of the London
Stock Exchange (fax number: +44 20 7588 6057) and to the Panel (fax number: +44
20 7256 9386).

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the US Private Securities Litigation Reform Act of 1995.
Carnival has tried, wherever possible, to identify such statements by using
words such as "anticipate," "assume," "believe," "expect," "intend," "plan" and
words and terms of similar substance in connection with any discussion of future
operating or financial performance. These forward-looking statements, including
those which may impact the forecasting of Carnival's annual cost savings that
underlie estimates of synergies and one time costs to implement synergies, net
revenue yields, booking levels, price, occupancy or business prospects, involve
known and unknown risks, uncertainties and other factors, which may cause
Carnival's actual results, performances or achievements to be materially
different from any future results, performances or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions which may impact levels
of disposable income of consumers and the net revenue yields for Carnival's
cruise products; consumer demand for cruises and other vacation options; other
vacation industry competition; effects on consumer demand of armed conflicts,
political instability, terrorism, the availability of air service and adverse
media publicity; increases in cruise industry and vacation industry capacity;
continued availability of attractive port destinations; changes in tax laws and
regulations; Carnival's ability to implement its brand strategy, Carnival's
ability to implement its shipbuilding program and to continue to expand its
business outside the North American market; Carnival's ability to attract and
retain shipboard crew; changes in foreign currency rates, security expenses,
food, fuel, insurance and commodity prices and interest rates; delivery of new
ships on schedule and at the contracted prices; weather patterns; unscheduled
ship repairs and dry-docking; incidents involving cruise ships; impact of
pending or threatened litigation; and changes in laws and regulations applicable
to Carnival.

Carnival cautions the reader that these risks may not be exhaustive. Carnival
operates in a continually changing business environment, and new risks emerge
from time to time. Carnival cannot predict such risks nor can it assess the
impact, if any, of such risks on its business or the extent to which any risk,
or combination of risks may cause actual results to differ from those projected
in any forward-looking statements. Accordingly, forward-looking statements
should not be relied upon as a prediction of actual results. Carnival undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

CARNIVAL PLANS TO FILE A REGISTRATION STATEMENT ON FORM S-4 AND A STATEMENT ON
SCHEDULE TO WITH THE US SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH
COMMENCEMENT OF THE REVISED OFFER. THE FORM S-4 WILL CONTAIN A PROSPECTUS AND
OTHER DOCUMENTS RELATING TO THE REVISED OFFER. CARNIVAL PLANS TO MAIL THE
PROSPECTUS CONTAINED IN THE FORM S-4 TO SHAREHOLDERS OF P&O PRINCESS WHEN THE
FORM S-4 IS FILED WITH THE SEC. THE FORM S-4, THE PROSPECTUS AND THE SCHEDULE TO
WILL CONTAIN IMPORTANT INFORMATION ABOUT CARNIVAL, P&O PRINCESS, THE REVISED
OFFER AND RELATED MATTERS. INVESTORS AND STOCKHOLDERS SHOULD READ THE FORM S-4,
THE PROSPECTUS, THE SCHEDULE TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE REVISED OFFER CAREFULLY BEFORE THEY MAKE ANY DECISION WITH
RESPECT TO THE REVISED OFFER. THE FORM S-4, THE PROSPECTUS, THE SCHEDULE TO AND
ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE REVISED OFFER WILL
BE AVAILABLE WHEN FILED FREE OF CHARGE AT THE SEC'S WEB SITE, AT WWW.SEC.GOV. IN
ADDITION, THE PROSPECTUS AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE REVISED OFFER WILL BE MADE AVAILABLE TO INVESTORS FREE OF
CHARGE BY WRITING TO TIM GALLAGHER AT CARNIVAL CORPORATION, CARNIVAL PLACE, 3655
N.W. 87 AVENUE, MIAMI, FLORIDA, 33178-2428, US.

IN ADDITION TO THE FORM S-4, PROSPECTUS, THE SCHEDULE TO AND THE OTHER DOCUMENTS
FILED WITH THE SEC IN CONNECTION WITH THE REVISED OFFER, CARNIVAL IS OBLIGATED
TO FILE ANNUAL, QUARTERLY AND CURRENT REPORTS, PROXY STATEMENTS AND OTHER
INFORMATION WITH THE SEC. PERSONS MAY READ AND COPY ANY REPORTS, STATEMENTS AND
OTHER INFORMATION FILED WITH THE SEC AT THE SEC'S PUBLIC REFERENCE ROOM AT 450
FIFTH STREET, N.W., WASHINGTON, D.C. 20549. PLEASE CALL THE SEC AT
1-800-SEC-0330 FOR FURTHER INFORMATION ON THE PUBLIC REFERENCE ROOM. FILINGS
WITH THE SEC ALSO ARE AVAILABLE TO THE PUBLIC FROM COMMERCIAL DOCUMENT-RETRIEVAL
SERVICES AND AT THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.



                                   APPENDIX I

                       PRE-CONDITION TO THE REVISED OFFER

The Revised Offer is subject to the satisfaction, or to the extent permitted,
waiver by Carnival, of the following Pre-condition:

1.       (a)      insofar as the proposed acquisition of P&O Princess by
                  Carnival constitutes a concentration with a Community
                  dimension within the scope of Council Regulation (EEC) 4064/89
                  (as amended) (the "Merger Regulation"):

                  (i)      the European Commission shall have made (or be deemed
                           to have made) a decision, in terms satisfactory to
                           Carnival, not to initiate proceedings under Article
                           6(1)(c) of the Merger Regulation; or

                  (ii)     if such proceedings are initiated, the European
                           Commission shall have made (or be deemed to have
                           made) a declaration or issued a decision, in terms
                           satisfactory to Carnival, that the concentration (or
                           such part of the concentration as has not been
                           referred to a competent authority as described in sub
                           paragraph (b) below) is compatible with the common
                           market, any conditions attached to the Commission's
                           declaration or decision being in form and substance
                           satisfactory to Carnival;

         (b)      if the European Commission has made a referral to a competent
                  authority under Article 9(1) of the Merger Regulation in
                  connection with the proposed acquisition of P&O Princess by
                  Carnival, such competent authority shall have issued such
                  decision, finding or declaration, in terms satisfactory to
                  Carnival, as is necessary to approve the proposed acquisition
                  and permit the closing of the proposed acquisition to occur
                  without any breach of applicable law;

         (c)      the expiration or early termination of all waiting periods, if
                  any, applicable to the contemplated transaction under the
                  Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15
                  U.S.C. ss. 18a;

         (d)      at the time that each part of the Pre-condition in paragraphs
                  (a), (b) and (c) above is satisfied or waived, there being in
                  existence no pending or threatened action or other proceeding
                  by any governmental or supranational agency seeking to
                  restrain, enjoin, prohibit or otherwise prevent the
                  consummation of the Revised Offer.

Carnival shall be entitled to waive the above Pre-condition in whole or in part.

The Revised Offer will not be made unless the Pre-condition has been satisfied
or waived by no later than 15 November 2002, or such later date as Carnival may,
with the approval of the Panel, determine.



                                   APPENDIX II

                  PRE-CONDITION TO THE PARTIAL CASH ALTERNATIVE

The Partial Cash Alternative is subject to financing being arranged on terms
satisfactory to Carnival by no later than the date of the posting of the Offer
Document.







                                  APPENDIX III

            CONDITIONS AND CERTAIN FURTHER TERMS OF THE REVISED OFFER

The Revised Offer, which will, subject to the satisfaction or waiver of the
Pre-condition referred to in Appendix I and in the case of the Partial Cash
Alternative subject to the satisfaction of the Pre-condition in Appendix II, be
made by Merrill Lynch International and UBS Warburg on behalf of Carnival and
will comply with the Code and will be governed by English law and be subject to
the jurisdiction of the courts of England. The Revised Offer will be made on the
terms and conditions set out in the Offer Document and related Form of
Acceptance.

The Revised Offer will be conditional on:

1.       valid acceptances being received (and not, where permitted, withdrawn)
         by 3.00 p.m. on the first closing date of the Revised Offer (or such
         later time(s) and/or date(s) as Carnival may, subject to the rules of
         the Code, decide) in respect of not less than 90 per cent. (or such
         lesser percentage as Carnival may decide) of the P&O Princess Shares to
         which the Revised Offer relates, provided that this condition will not
         be satisfied unless Carnival and/or any of its wholly-owned
         subsidiaries shall have acquired or agreed to acquire, whether pursuant
         to the Revised Offer or otherwise, P&O Princess Shares (including the
         P&O Princess Shares represented by P&O Princess ADS) carrying, in
         aggregate, more than 50 per cent. of the voting rights attaining to the
         P&O Princess Shares and more than 50 per cent. of the voting rights
         then exercisable at a general meeting of P&O Princess, including for
         this purpose to the extent (if any) required by the Panel, any such
         voting rights attaching to any P&O Princess Shares (including the P&O
         Princess Shares represented by P&O Princess ADS) that may be
         unconditionally allotted or issued before the Revised Offer becomes or
         is declared unconditional as to acceptances whether pursuant to the
         exercise of any outstanding conversion or subscription rights or
         otherwise, and for this purpose:

         (i)      the expression "P&O Princess Shares to which the Revised Offer
                  relates" shall be construed in accordance with sections 428 to
                  430F of the Companies Act; and

         (ii)     shares which have been unconditionally allotted but not issued
                  shall be deemed to carry the voting rights which they will
                  carry on being entered into the register of members of P&O
                  Princess;

         provided always that this Condition 1 will not be satisfied unless and
         until Condition 7 (termination of the Joint Venture Agreement) is
         satisfied;

2.       the P&O Princess Shareholders not passing the resolutions required to
         approve the Royal Caribbean Proposal;

3.       if Carnival decides to seek a listing on the Official List, admission
         to the Official List and admission to trading on the London Stock
         Exchange of the issued share capital of Carnival including the New
         Carnival Shares becoming effective by the decision of the United
         Kingdom Listing Authority to admit such shares to listing being
         announced in accordance with paragraph 7.1 of the Listing Rules and by
         the decision of the London Stock Exchange to admit such shares to
         trading being announced in accordance with the London Stock Exchange
         Admission Standards;

4.       the Form S-4 Registration Statement registering the issuance of the New
         Carnival Shares being declared effective by the SEC, remaining
         effective and not being the subject of a stop order or other proceeding
         by the SEC to suspend its effectiveness;

5.       the New York Stock Exchange agreeing to list the New Carnival Shares,
         subject only to official notice of issuance;

6.       Carnival shareholders having passed all resolutions necessary for the
         issue of New Carnival Shares pursuant to the Revised Offer;

7.       the Joint Venture Agreement having been terminated in accordance with
         Section 9.01(c) (the January or April 2003 benchmarks) and the P&O
         Princess Board having notified Carnival accordingly;

8.       insofar as the proposed acquisition of P&O Princess by Carnival
         constitutes a concentration with a Community dimension within the scope
         of Council Regulation (EEC) 4064/89 (as amended) (the "Merger
         Regulation"):

         (i)      the European Commission shall have made (or be deemed to have
                  made) a decision, in terms satisfactory to Carnival, not to
                  initiate proceedings under Article 6(1)(c) of the Merger
                  Regulation;

         (ii)     if such proceedings are initiated, the European Commission
                  shall have made (or be deemed to have made) a declaration or
                  issued a decision, in terms satisfactory to Carnival, that the
                  concentration (or such part of the concentration as has not
                  been referred to a competent authority as described in
                  paragraph (iii) below) is compatible with the common market,
                  any conditions attached to the Commission's declaration or
                  decision being in form and substance satisfactory to Carnival;
                  or

         (iii)    if the European Commission has made a referral to a competent
                  authority under Article 9(1) of the Merger Regulation in
                  connection with the proposed acquisition of P&O Princess by
                  Carnival, such competent authority shall have issued such
                  decision, finding or declaration, in terms satisfactory to
                  Carnival, as is necessary to approve the proposed acquisition
                  and permit the closing of the proposed acquisition to occur
                  without any breach of applicable law;

9.       the expiration or early termination of all waiting periods, if any,
         applicable to the contemplated transaction under the Hart-Scott-Rodino
         Antitrust Improvements Act of 1976, 15 U.S.C.ss.18a;

10.      no government or governmental, quasi-governmental, supranational,
         statutory, administrative or regulatory body, authority, court, trade
         agency, association, institution, environmental body or any other
         person or body in any jurisdiction (each a "Relevant Authority") having
         decided to take, instituted, implemented or threatened any action,
         proceedings, suit, investigation, enquiry or reference, or made,
         proposed or enacted any statute, regulation, order or decision or taken
         any other steps and there not continuing to be outstanding any statute,
         regulation, order or decision, which would or might:

         (i)      make the Revised Offer or the acquisition of any P&O Princess
                  Shares, or control of P&O Princess by Carnival void, illegal
                  or unenforceable or otherwise materially restrict, restrain,
                  prohibit, delay or interfere with the implementation thereof,
                  or impose material additional conditions or obligations with
                  respect thereto, or require material amendment thereof or
                  otherwise challenge or interfere therewith;

         (ii)     require or prevent the divestiture by P&O Princess or any
                  member of the wider P&O Princess Group or by Carnival or any
                  member of the wider Carnival Group of all or a material
                  portion of their respective businesses, assets or property or
                  impose any material limitation on the ability of any of them
                  to conduct their respective businesses or own any of their
                  material assets or property;

         (iii)    impose any limitation on or result in a delay in the ability
                  of any member of the wider P&O Princess Group or the wider
                  Carnival Group to acquire or to hold or to exercise
                  effectively any rights of ownership of shares or loans or
                  securities convertible into shares in any member of the wider
                  P&O Princess Group or of the wider Carnival Group held or
                  owned by it or to exercise management control over any member
                  of the wider P&O Princess Group or of the wider Carnival Group
                  to an extent which is material in the context of the P&O
                  Princess Group taken as a whole or, as the case may be, the
                  Carnival Group taken as a whole;

         (iv)     require any member of the wider Carnival Group or the wider
                  P&O Princess Group to acquire or offer to acquire any shares
                  or other securities in any member of the wider P&O Princess
                  Group where such acquisition would be material in the context
                  of the P&O Princess Group taken as a whole;

         (v)      otherwise materially and adversely affect the assets,
                  business, profits or prospects of any member of the wider
                  Carnival Group or of any member of the wider P&O Princess
                  Group; or

         (vi)     and all applicable waiting and other time periods during which
                  any such Relevant Authority could decide to take, institute,
                  implement or threaten any such action, proceeding, suit,
                  investigation, enquiry or reference having expired, lapsed or
                  been terminated;

11.      all necessary filings having been made, all applicable waiting periods
         (including any extensions thereof) under any applicable legislation or
         regulations of any jurisdiction having expired, lapsed or been
         terminated, in each case in respect of the Revised Offer and the
         acquisition of any P&O Princess Shares, or of control of P&O Princess,
         by Carnival, and all authorisations, orders, recognitions, grants,
         consents, licences, confirmations, clearances, permissions and
         approvals ("Authorisations") necessary or appropriate in any
         jurisdiction for, or in respect of, the Revised Offer and the proposed
         acquisition of any P&O Princess Shares, or of control of P&O Princess,
         by Carnival and to carry on the business of any member of the wider
         Carnival Group or of the wider P&O Princess Group having been obtained,
         in terms and in a form satisfactory to Carnival, from all appropriate
         Relevant Authorities and from any persons or bodies with whom any
         member of the wider Carnival Group or the wider P&O Princess Group has
         entered into contractual arrangements and all such Authorisations
         remaining in full force and effect at the time at which the Revised
         Offer becomes unconditional in all respects and Carnival having no
         knowledge of an intention or proposal to revoke, suspend or modify or
         not to renew any of the same and all necessary statutory or regulatory
         obligations in any jurisdiction having been complied with;

12.      there being no provision of any arrangement, agreement, licence, permit
         or other instrument to which any member of the wider P&O Princess Group
         is a party or by or to which any such member or any of their assets is
         or may be bound, entitled or be subject to and which, in consequence of
         the Revised Offer or the acquisition of any P&O Princess Shares, or
         control of P&O Princess, by Carnival or otherwise, would or might, to
         an extent which is material in the context of the P&O Princess Group
         taken as a whole, result in:

         (i)      any monies borrowed by, or other indebtedness actual or
                  contingent of, any such member of the wider P&O Princess Group
                  being or becoming repayable or being capable of being declared
                  immediately or prior to its or their stated maturity or the
                  ability of any such member to borrow monies or incur any
                  indebtedness being inhibited;

         (ii)     the creation of any mortgage, charge or other security
                  interest over the whole or any part of the business, property
                  or assets of any such member or any such security (whenever
                  arising or having arisen) being enforced or becoming
                  enforceable;

         (iii)    any such arrangement, agreement, licence or instrument being
                  terminated or adversely modified or any action being taken of
                  an adverse nature or any obligation arising thereunder;

         (iv)     any assets of any such member being disposed of or charged, or
                  right arising under which any such asset could be required to
                  be disposed of or charged, other than in the ordinary course
                  of business;

         (v)      the interest or business of any such member of the wider P&O
                  Princess Group in or with any firm or body or person, or any
                  agreements or arrangements relating to such interest or
                  business, being terminated or adversely modified or affected;

         (vi)     any such member ceasing to be able to carry on business under
                  any name under which it presently does so;

         (vii)    the creation of liabilities (actual or contingent) by any such
                  member; or

         (viii)   the financial or trading position of any such member being
                  prejudiced or adversely affected;

13.      except as publicly announced by P&O Princess prior to the date of this
         announcement, no member of the wider P&O Princess Group having, since
         31 December 2000:

         (i)      issued, agreed to issue or proposed the issue of additional
                  shares or securities of any class, or securities convertible
                  into, or exchangeable for or rights, warrants or options to
                  subscribe for or acquire, any such shares, securities or
                  convertible securities (save as between P&O Princess and
                  wholly-owned subsidiaries of P&O Princess and save for options
                  granted, and for any P&O Princess Shares allotted upon
                  exercise of options granted under the P&O Princess Employee
                  Share Incentive Plans) or redeemed, purchased or reduced any
                  part of its share capital;

         (ii)     recommended, declared, paid or made or proposed to recommend,
                  declare, pay or make any bonus, dividend or other distribution
                  other than to P&O Princess or a wholly-owned subsidiary of P&O
                  Princess, other than any dividends paid or payable in respect
                  of the period from the date of this announcement until the
                  Revised Offer becomes wholly unconditional at times and in a
                  manner consistent with P&O Princess' normal practice prior to
                  the date of this announcement and which do not in any event
                  exceed 3 cents in each quarter in respect of each P&O Princess
                  Share;

         (iii)    agreed, authorised, proposed or announced its intention to
                  propose any merger or demerger or acquisition or disposal of
                  assets or shares which are material in the context of the P&O
                  Princess Group taken as a whole (other than in the ordinary
                  course of trading) or to any material change in its share or
                  loan capital;

         (iv)     issued, authorised or proposed the issue of any debentures or
                  incurred any indebtedness or contingent liability which is
                  material in the context of the P&O Princess Group taken as a
                  whole;

         (v)      acquired or disposed of or transferred, mortgaged or
                  encumbered any asset or any right, title or interest in any
                  asset (other than in the ordinary course of trading) in a
                  manner which is material in the context of the P&O Princess
                  Group taken as a whole;

         (vi)     entered into or varied or announced its intention to enter
                  into or vary any contract, arrangement or commitment (whether
                  in respect of capital expenditure or otherwise) which is of a
                  long-term or unusual nature or involves or could involve an
                  obligation of a nature or magnitude, and in either case which
                  is material in the context of the P&O Princess Group taken as
                  a whole;

         (vii)    entered into or proposed or announced its intention to enter
                  into any reconstruction, amalgamation, transaction or
                  arrangement (otherwise than in the ordinary course of
                  business) which is material in the context of the P&O Princess
                  Group taken as a whole;

         (viii)   taken or proposed any corporate action or had any legal
                  proceedings instigated or threatened against it for its
                  winding-up, dissolution or reorganisation or for the
                  appointment of a receiver, administrator, administrative
                  receiver, trustee or similar officer of all or any of its
                  assets and revenues (or any analogous proceedings or
                  appointment in any overseas jurisdiction);

         (ix)     been unable, or admitted in writing that it is unable, to pay
                  its debts or having stopped or suspended (or threatened to
                  stop or suspend) payment of its debts generally or ceased or
                  threatened to cease carrying on all or a substantial part of
                  its business;

         (x)      entered into or varied or made any offer to enter into or vary
                  the terms of any service agreement or arrangement with any of
                  the directors of P&O Princess;

         (xi)     waived, compromised or settled any claim which is material in
                  the context of the wider P&O Princess Group; or

         (xii)    entered into any agreement, arrangement or commitment or
                  passed any resolution with respect to any of the transactions
                  or events referred to in this paragraph;

14.      since 31 December 2000, except as publicly announced by P&O Princess
         prior to the date of this announcement:

         (i)      there having been no adverse change in the business, assets,
                  financial or trading position or profits or prospects of any
                  member of the wider P&O Princess Group which in any such case
                  is material in the context of the P&O Princess Group taken as
                  a whole;

         (ii)     no litigation, arbitration proceedings, prosecution or other
                  legal proceedings having been instituted, announced or
                  threatened by or against or remaining outstanding against any
                  member of the wider P&O Princess Group and no enquiry or
                  investigation by or complaint or reference to any Relevant
                  Authority against or in respect of any member of the wider P&O
                  Princess Group having been threatened, announced or instituted
                  or remaining outstanding which in any such case could have a
                  material affect on that member of the P&O Princess Group;

15.      Carnival not having discovered that:

         (i)      the financial, business or other information concerning the
                  wider P&O Princess Group as contained in the information
                  publicly announced or disclosed at any time by or on behalf of
                  any member of the wider P&O Princess Group either contains a
                  material misrepresentation of fact or omits to state a fact
                  necessary to make the information contained therein not
                  materially misleading; or

         (ii)     any member of the wider P&O Princess Group is subject to any
                  liability, contingent or otherwise, which is not disclosed in
                  the P&O Princess Listing Particulars dated 26 September 2000
                  or in the Report and Accounts dated 31 December 2000 or in the
                  interim report for the six months to 30 June 2001 or otherwise
                  publicly announced by P&O Princess prior to the date of this
                  announcement and which is material in the context of the P&O
                  Princess Group taken as a whole;

16.      Carnival not having discovered that, save as publicly announced prior
         to the date of this announcement:

         (i)      any past or present member of the wider P&O Princess Group has
                  not complied with all applicable legislation or regulations of
                  any jurisdiction or any notice or requirement of any Relevant
                  Authority with regard to the storage, disposal, discharge,
                  spillage, leak or emission of any waste or hazardous substance
                  or any substance likely to impair the environment or harm
                  human health which non-compliance would be likely to give rise
                  to any liability (whether actual or contingent) on the part of
                  any member of the wider P&O Princess Group;

         (ii)     there has been a disposal, spillage, emission, discharge or
                  leak of waste or hazardous substance or any substance likely
                  to impair the environment or harm human health on, or from,
                  any land or other asset now or previously owned, occupied or
                  made use of by any past or present member of the wider P&O
                  Princess Group, or which any such member may now or previously
                  have had an interest, would be likely to give rise to any
                  liability (whether actual or contingent) on the part of any
                  member of the wider P&O Princess Group;

         (iii)    there is or is likely to be any obligation or liability
                  (whether actual or contingent) to make good, repair, reinstate
                  or clean up any property now or previously owned, occupied or
                  made use of by any past or present member of the wider P&O
                  Princess Group or in which any such member may now or
                  previously have had an interest under any environmental
                  legislation or regulation or notice, circular or order of any
                  Relevant Authority in any jurisdiction; or

         (iv)     circumstances exist whereby a person or class of persons would
                  be likely to have any claim or claims in respect of any
                  product or process of manufacture, or materials used therein,
                  now or previously manufactured, sold or carried out by any
                  past or present member of the wider P&O Princess Group which
                  claim or claims would be likely to affect adversely any member
                  of the wider P&O Princess Group.

Carnival reserves the right to waive, in whole or in part, all or any of
Conditions 7 to 16 inclusive. Carnival also reserves the right, subject to the
consent of the Panel, to extend the time allowed under the Code for satisfaction
of Condition 1. If Carnival is required by the Panel to make an offer for P&O
Princess Shares under the provisions of Rule 9 of the Code, Carnival may make
such alterations to the above conditions, including Condition 1 above, as are
necessary to comply with the provisions of that Rule.

The Preference Offer and the Subscriber Share Offer are conditional on the
Revised Offer becoming wholly unconditional.

CERTAIN FURTHER TERMS OF THE REVISED OFFER

The Revised Offer will lapse unless otherwise agreed with the Panel if the
European Commission either initiates proceedings under Article 6(1)(c) of the
Merger Regulation or makes referral to a competent authority of the United
Kingdom under Article 9(1) of the Merger Regulation and there is a subsequent
reference to the Competition Commission, before in each case the later of the
first closing date of the Revised Offer and the time and date at which the
Revised Offer becomes or is declared unconditional as to acceptances. If the
Revised Offer so lapses, the Revised Offer will cease to be capable of further
acceptance and accepting P&O Princess Shareholders and Carnival will cease to be
bound by acceptances submitted before the time when the Revised Offer lapses.

Unless Carnival determines otherwise, the Revised Offer will not be made,
directly or indirectly, in or into, Australia, Japan or Canada and the Revised
Offer will not be capable of being accepted from within Australia, Japan or
Canada. Accordingly, copies of this announcement are not being, and must not be,
mailed or otherwise forwarded, distributed or sent in, into or from Australia,
Japan or Canada.



                                   APPENDIX IV

                                   DEFINITIONS

"Additional Cash Election"                   the proposed entitlement of P&O
                                             Princess Shareholders to elect to
                                             receive additional cash to the
                                             extent that other P&O Princess
                                             Shareholders do not elect to
                                             receive the Partial Cash
                                             Alternative

"Australia"                                  the Commonwealth of Australia, its
                                             territories and possessions and all
                                             areas subject to its jurisdiction
                                             and any political subdivision
                                             thereof

"Canada"                                     Canada, its provinces and
                                             territories and all areas subject
                                             to its jurisdiction or any
                                             political subdivision thereof

"Carnival"                                   Carnival Corporation

"Carnival Group"                             Carnival, its subsidiaries and its
                                             subsidiary undertakings

"Carnival Shares"                            shares of common stock of Carnival
                                             of $0.01 each

"Code" or "City Code" or "Takeover Code"     the City Code on Takeovers and
                                             Mergers

 "Companies Act"                             the Companies Act 1985, as amended

 "Conditions"                                the conditions set out in Appendix
                                             III of this announcement

"DLC"                                        dual listed company

"EEA"                                        European Economic Area

"Enlarged Carnival Group"                    the Carnival Group as enlarged on
                                             successful completion of the
                                             Revised Offer

"FTC"                                        the US Federal Trade Commission

"Form of Acceptance"                         the form of acceptance and
                                             authority for use in connection
                                             with the Revised Offer

"Japan"                                      Japan, its cities, prefectures,
                                             territories and possessions

"Joint Venture"                              the Joint Venture between P&O
                                             Princess and Royal Caribbean
                                             described in the P&O Princess
                                             Circular

"Joint Venture Agreement"                    the joint venture agreement entered
                                             into between P&O Princess and Royal
                                             Caribbean on 19 November 2001

"Listing Rules"                              The Listing Rules issued by the UK
                                             Listing Authority

"London Stock Exchange"                      London Stock Exchange plc

"London Stock Exchange Admission Standards"  the rules issued by the London
                                             Stock Exchange in relation to the
                                             admission to trading of, and
                                             continuing requirements for,
                                             securities admitted to the Official
                                             List

"Merrill Lynch"                              Merrill Lynch International

"New Carnival Shares"                        Carnival Shares to be issued in
                                             connection with the Revised Offer

"New York Stock Exchange"                    the New York Stock Exchange, Inc.

"Offer"                                      the pre-conditional offer announced
                                             by Carnival on 16 December 2001

"Offer Document"                             the document to be sent on behalf
                                             of Carnival to P&O Princess
                                             Shareholders after the
                                             Pre-condition has been satisfied or
                                             waived, containing and setting out
                                             the full terms and conditions of
                                             the Revised Offer

"Official List"                              the list maintained by the of the
                                             United Kingdom Listing Authority
                                             pursuant to Part VI of the
                                             Financial Services and Markets Act
                                             2000

"Panel"                                      the Panel on Takeovers and Mergers

"Partial Cash Alternative"                   the partial cash alternative of 250
                                             pence for each P&O Princess Share
                                             proposed to be made available to
                                             P&O Princess Shareholders

"P&O"                                        The Peninsular & Oriental Steam
                                             Navigation Company

"P&O Princess"                               P&O Princess Cruises plc

"P&O Princess ADRs"                          American Depositary Receipts
                                             evidencing title to one or more
                                             ADSs

"P&O Princess ADSs"                          American Depositary Shares
                                             representing four underlying P&O
                                             Princess Shares

"P&O Princess Board"                         the board of directors of P&O
                                             Princess

"P&O Princess Circular"                      the circular to P&O Princess
                                             Shareholders published by P&O
                                             Princess on 27 December 2001

"P&O Princess EGM" or "EGM"                  the Extraordinary General Meeting
                                             of the P&O Princess Shareholders to
                                             be held on 14 February 2002

"P&O Princess Employee Share Incentive       the P&O Princess Deferred Bonus and
Plans"                                       Co-investment Matching Plan, and
                                             the P&O Princess Executive Share
                                             Option Plan

"P&O Princess Group"                         P&O Princess, its subsidiaries and
                                             its subsidiary undertakings

"P&O Princess Preference Shares"             the 49,998(pound)1 redeemable
                                             preference shares in issue in P&O
                                             Princess

"P&O Princess Shareholders"                  holders of the P&O Princess Shares

"P&O Princess Shares"                        the existing unconditionally
                                             allotted or issued and fully paid
                                             ordinary shares of US$0.50 each in
                                             the capital of P&O Princess
                                             (including those represented by P&O
                                             Princess ADSs but not, for
                                             avoidance of doubt, such ADSs) and
                                             any further such shares which are
                                             unconditionally allotted or issued
                                             and fully paid before the date on
                                             which the Revised Offer closes (or
                                             such earlier date(s) as Carnival
                                             may, subject to the Code,
                                             determine), including any such
                                             shares so unconditionally allotted
                                             or issued pursuant to the exercise
                                             of options granted under the P&O
                                             Princess Employee Share Incentive
                                             Plans

"P&O Princess Subscriber Shares"             the two issued subscriber shares
                                             of(pound)1 each in P&O Princess

"Pre-condition"                              the pre-condition to the Revised
                                             Offer contained in Appendix I

"Preference Offer"                           the offer for the P&O Princess
                                             Preference Shares to be made by
                                             Merrill Lynch and UBS Warburg on
                                             behalf of Carnival conditional on
                                             the Revised Offer becoming wholly
                                             unconditional

"Revised Offer"                              the Revised Offer for the P&O
                                             Princess Shares to be made by
                                             Merrill Lynch and UBS Warburg on
                                             behalf of Carnival after the
                                             Pre-condition has been satisfied or
                                             waived, including, as appropriate,
                                             the offer to be made by Carnival to
                                             the holders of the P&O Princess
                                             ADRs in respect of the P&O Princess
                                             ADSs' title which is evidenced by
                                             such P&O Princess ADRs, on the
                                             terms and conditions set out in
                                             this announcement and to be set out
                                             in the Offer Document including,
                                             where the context so requires, any
                                             subsequent revision, variation,
                                             extension or renewal of the Revised
                                             Offer

"Royal Caribbean"                            Royal Caribbean Ltd

"Royal Caribbean Proposal"                   the proposed transaction between
                                             P&O Princess and Royal Caribbean
                                             described in the P&O Princess
                                             Circular

"SEC"                                        the United States Securities and
                                             Exchange Commission

"Section 9.01(c)"                            Section 9.01(c) of the Joint
                                             Venture Agreement

"Subscriber Share Offer"                     the offer for the P&O Princess
                                             Subscriber Shares to be made by
                                             Merrill Lynch and UBS Warburg on
                                             behalf of Carnival conditional on
                                             the Revised Offer becoming wholly
                                             unconditional

"subsidiary", "subsidiary undertaking",      shall be construed in accordance
"associated undertaking" and "undertaking"   with the Companies Act (but for
                                             this purpose ignoring paragraph
                                             20(1)(b) of Schedule 4A of the
                                             Companies Act)

"UBS Warburg"                                UBS AG, acting through its business
                                             group UBS Warburg or, where
                                             appropriate, its subsidiary, UBS
                                             Warburg Ltd.

"UK Listing Authority"                       the Financial Services Authority in
                                             its capacity as the competent
                                             authority for the purposes of the
                                             Part VI of the Financial Services
                                             and Markets Act 2000

"UK" or "United Kingdom"                     the United Kingdom of Great Britain
                                             and Northern Ireland

"US" or "United States"                      the United States of America, its
                                             territories and possessions, and
                                             States of the United States of
                                             America and the District of
                                             Columbia and all other areas
                                             subject to the jurisdiction of the
                                             United States

"wider Carnival Group"                       Carnival and any of its subsidiary
                                             undertakings or any associated
                                             undertaking or company of which 20
                                             per cent. or more of the voting
                                             capital is held by the Carnival
                                             Group or any partnership, joint
                                             venture, firm or company in which
                                             any member of the Carnival Group
                                             may be interested

"wider P&O Princess Group"                   P&O Princess and any of its
                                             subsidiary undertakings or any
                                             associated undertaking or company
                                             of which 20 per cent. or more of
                                             the voting capital is held by the
                                             P&O Princess Group or any
                                             partnership, joint venture, firm or
                                             company in which any member of the
                                             P&O Princess Group may be
                                             interested

"(pound)" or "pounds sterling" or            the lawful currency of the United
"pence" or "p"                               Kingdom

"$" or "US dollars" or "cents"               the lawful currency of the United
                                             States of America



                                   APPENDIX V

                        SOURCES AND BASES OF INFORMATION

GENERAL

Unless otherwise stated: (i) information relating to Carnival has been extracted
from the relevant published audited financial statements and SEC filings of
Carnival; (ii) information relating to Royal Caribbean has been extracted from
the relevant published audited financial statements and SEC filings of Royal
Caribbean; (iii) information relating to P&O Princess has been extracted from
the relevant published annual reports and accounts, interim reports and SEC
filings of P&O Princess; and (iv) information relating to the Royal Caribbean
Proposal is based upon the information contained in the P&O Princess Circular
and related documents.

Share prices for Carnival, P&O Princess and Royal Caribbean are taken from
Bloomberg.

The $1:(pound) 0.709 exchange rate is the World Market rate as published in the
Financial Times on 29 January 2002.

REVISED OFFER

The Royal Caribbean Proposal "look through" value is based upon the Royal
Caribbean closing price on 29 January 2002 of $18.70 and an exchange ratio of
3.46386 P&O Princess Shares per Royal Caribbean Share as per the Implementation
Agreement dated 19 November 2001 between P&O Princess and Royal Caribbean.

References to the value of the Revised Offer for the entire existing share
capital of P&O Princess are based upon the Carnival closing price on 29 January
2002 of $27.05 and the 692,632,324 50 cent ordinary shares in issue (by
reference to the Royal Caribbean/P&O Princess Implementation Agreement).

References to the amount of cash of approximately $2.4 billion required to
satisfy the Partial Cash Alternative are based upon the entire existing share
capital of P&O Princess of 692,632,324 50 cent ordinary shares in issue (by
reference to the Royal Caribbean/P&O Princess Implementation Agreement).

SOME FACTS ABOUT ROYAL CARIBBEAN

References to Royal Caribbean's credit ratings are based on Bloomberg and
Standard & Poors Ratings Direct 20 November 2001.

VALUE

EBITDA is unadjusted operating income plus depreciation and amortisation.
Enterprise value is the market value of equity plus net debt and minorities. The
EV/EBITDA multiple is the enterprise value on the last day of the financial
period divided by the EBITDA for that financial period.

The P/E multiple is the share price on the last day of the financial period
divided by the earnings per share for that financial period.

The relevant financial period for the last twelve months multiples is the twelve
months ended 30 September 2001 for Royal Caribbean and P&O Princess and the
twelve months ended 31 August 2001 for Carnival.

The average current and forward P/Es for Royal Caribbean since flotation are
sourced from Factset. This data is only available for the period from 1 July
1993.

The implied value of P&O Princess is calculated using consensus figures derived
from the equalisation ratio as stated in the P&O Princess Circular and assuming
$100 million of synergies taxed at the 2000 effective rate.

Total shareholder returns are sourced from Datastream as at 29 January 2002, the
last practicable date prior to the date of this announcement. Datastream
calculates the total shareholder return, assuming gross dividend income is
reinvested in additional shares.

References to the return on invested capital likely to be generated by the Royal
Caribbean Proposal are calculated based on Salomon Smith Barney research dated
29 November 2001, using forecasts disclosed therein. Return on invested capital
is defined as return on average invested capital and is calculated by dividing
EBIT, taxed at the effective tax rate, by the average opening and closing total
debt plus shareholder equity plus minority interests plus preferred stock
balances, adjusted for the cumulative post-tax effect of synergies. Total debt
is the sum of long term debt and current portion of long term debt.

Book value per share is calculated by multiplying the forecast shareholder
equity for the DLC by the P&O Princess share of the DLC economics, and then
dividing this number by the number of P&O Princess Shares outstanding. The
forecast for shareholder equity is sourced from Salomon Smith Barney research
dated 29 November 2001.

Weighted average cost of capital is calculated by adding the weighted cost of
debt and equity. The weighting of the cost of debt is calculated by dividing
total debt by the sum of total debt plus market value of equity for the period
in question. The weighting of the cost of equity is calculated by subtracting
the weighting of the cost of debt from 100 per cent. The cost of debt is
calculated by taking the average of the yield-to-maturity of outstanding public
bonds as at 29 January 2002. For Royal Caribbean, the source used is Advantage
Data and for P&O Princess the source is Bloomberg. The cost of equity is
calculated by multiplying the appropriate market risk premium by the beta of the
company in question and adding this to the risk-free rate. The source for the
betas used in the analysis above is Barra. The market risk premium is assumed to
be 5 per cent. for both Royal Caribbean and P&O Princess.

BENEFITS OF THE PROPOSED COMBINATION OF CARNIVAL AND P&O PRINCESS

For details on the expected synergy benefits, please refer to Carnival's
announcement dated 24 January 2002.

REGULATORY APPROVALS

The figure for outbound European holiday volume and the number of European
cruise holidays in 2000 are sourced from the "Cruise Industry Statistical Review
2001", published by G.P. Wild (International) Limited in November 2001.

The percentage of the vacation market accounted for by the cruise industry is
calculated by dividing the outbound European holiday volume by the number of
European cruise holidays in 2000.

The combined market share of Carnival and P&O Princess in the EEA is based on
information about the total market obtained from the "Cruise Industry
Statistical Review 2001", published by G.P. Wild (International) Limited in
November 2001 and the Passenger Shipping Association (PSA) "Annual Cruise Market
Digest UK Europe 2000"; the market share of Carnival is derived from internal
management sources and that of P&O Princess is based on Carnival estimates.

The market shares of the cruise segment in the UK and Germany for Royal
Caribbean and P&O Princess are extracted from an equity research report
published by Deutsche Bank on 11 December 2001. The market share of Carnival is
derived from internal management sources.