<Page>
EXHIBIT 99.1
CARNIVAL CORPORATION ANNOUNCES PRE-CONDITIONAL OFFER
----------------------------------------------------
FOR P&O PRINCESS CRUISES PLC
----------------------------
LONDON (12/16/01) - Carnival Corporation (NYSE:CCL) today announced the terms of
a pre-conditional offer to acquire all of the outstanding shares of P&O Princess
Cruises PLC (NYSE: POC).
Under the terms of the pre-conditional offer, P&O Princess Cruises' shareholders
would receive 200 pence in cash and 0.1361 Carnival shares for each P&O Princess
Cruises share. Based on the New York Stock Exchange closing price of a Carnival
share of $27.30 on Dec. 14, 2001, the last business day prior to the date of the
announcement of the offer, the value of the offer is approximately 456 pence per
share, a premium of 44 percent to the closing middle market price of 317 pence
per P&O Princess Cruises share on November 19, 2001, the last business day prior
to the announcement of P&O Princess Cruises' proposed transaction with Royal
Caribbean Ltd. It represents a premium of 27 percent to the closing middle
market price of 360 pence per P&O Princess Cruises share on Dec. 14, 2001, the
last business day prior to Carnival's offer announcement.
(more)
1
<Page>
"We believe that our proposal is in the best interest of P&O Princess Cruises'
shareholders," said Carnival Corporation Chairman and CEO, Micky Arison. "The
proposed combination of Carnival Corporation and P&O Princess Cruises creates a
global vacation and leisure company with an enhanced offering of complementary
brands and greater geographic reach. We are offering P&O Princess Cruises'
shareholders the opportunity to share in the future successes that we believe
the combined management teams will bring to this enlarged group," he explained.
Arison went on to say that Carnival believed that the Royal Caribbean proposal
would leave P&O Princess Cruises' shareholders with an investment in a less
attractive entity with greater financial risk and on terms which give Royal
Caribbean shareholders a greater proportion of the ownership of the combined
group than is merited by its profit contribution to the combined group's net
income.
(more)
2
<Page>
Carnival has made several approaches to P&O Princess Cruises in the past two
years, most recently on September 24, 2001, less than 9 weeks before the
proposed merger with Royal Caribbean was announced. "We were quite surprised by
the announcement and its terms, particularly the break fee and Southern European
Joint Venture, given that P&O Princess Cruises senior management ignored our
approach although they were acutely aware of our ongoing keen interest in
entering into discussions," Arison said.
If successful, the proposed transaction is expected to be accretive to Carnival
Corporation's earnings per share in the first full financial year after the
combination.*
* THIS STATEMENT SHOULD NOT BE INTERPRETED TO MEAN THAT THE EARNINGS PER
CARNIVAL SHARE FOR THE CURRENT OR FUTURE FINANCIAL YEARS WILL NECESSARILY MATCH
OR EXCEED THE HISTORICAL PUBLISHED EARNINGS PER CARNIVAL SHARE.
On Thursday, Dec. 13, 2001 Carnival Corporation submitted a proposal letter
outlining a combination with P&O Princess Cruises to the P&O Princess Cruises'
board. A copy of the proposal letter follows this release. Late today, P&O
Princess Cruises advised Carnival that it was rejecting the proposal. Carnival
has therefore decided to communicate the offer directly to P&O Princess Cruises
shareholders. The summary of the pre-conditional announcement follows this
release; a full copy of the pre-conditional announcement and slides for the
analyst presentation is posted on Carnival's website under www.carnivalcorp.com.
The pre-conditional offer is subject to the pre-conditions attached and to
certain customary closing conditions and other regulations.
There will be a UK and European analysts' presentation at 9.00 a.m. (GMT)/4.00
a.m.(EST) and a press briefing at 1.00 p.m. on Monday 17 December 2001. The
venue for both will be the offices of UBS Warburg, 1 Finsbury Avenue, London,
EC2M 2PP.
3
<Page>
There will be a dial-in conference call facility for the 9.00 a.m. (GMT)
analysts' presentation. The number for this facility is +44 (0) 20 8781 0596;
password: Carnival.
There will be a US and European analyst conference call at 3.00 p.m. (GMT) /
10.00 a.m. (EST). The number for this facility is +1 800 553 2165; password:
Carnival
Unless otherwise determined by Carnival and permitted by applicable law and
regulation, the Offer will not be made, directly or indirectly, in or into, or
by use of the mails of, or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce
of, or of any facility of a national securities exchange of, nor will it be made
in or into Australia, Canada or Japan and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities. Accordingly,
unless otherwise determined by Carnival and permitted by applicable law and
regulation, copies of this Announcement and any other documents related to the
Offer are not being, and must not be, mailed or otherwise forwarded, distributed
or sent in or into Australia, Canada or Japan and persons receiving such
documents (including custodians, nominees and trustees) must not distribute or
send them in, into or from such jurisdictions.
The availability of the Offer to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions in which they are located.
Persons who are not resident in the United Kingdom should inform themselves of,
and observe, any applicable requirements.
The Offer will be made in the United States by Carnival. References in this
Announcement to the Offer being made by Merrill Lynch or UBS Warburg should be
read accordingly.
Merrill Lynch International and UBS Warburg ., a business group of UBS AG, are
acting as joint financial advisors and joint corporate brokers exclusively to
Carnival and no-one else in connection with the 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 as the
case may be or for providing advice in relation to the Offer.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the 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 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 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
THE OFFER. THE FORM S-4 WILL CONTAIN A PROSPECTUS AND OTHER DOCUMENTS RELATING
TO THE OFFER. CARNIVAL PLANS TO MAIL THE PROSPECTUS CONTAINED IN THE FORM S-4 TO
SHAREHOLDERS OF PORT 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, PORT, THE 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 OFFER CAREFULLY BEFORE THEY MAKE ANY
DECISION WITH RESPECT TO THE OFFER. THE FORM S-4, THE PROSPECTUS, THE SCHEDULE
TO AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE 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 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.
4
<Page>
IN ADDITION TO THE FORM S-4, PROSPECTUS, THE SCHEDULE TO AND THE OTHER DOCUMENTS
FILED WITH THE SEC IN CONNECTION WITH THE OFFER, CARNIVAL IS OBLIGATED TO FILE
ANNUAL, QUARTERLY AND SPECIAL 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.
5
<Page>
PROPOSAL TO THE BOARD OF P&O PRINCESS
Set out below is the full text of the detailed proposal sent by Carnival to the
board of P&O Princess and their advisors on 13 December 2001;
"
Carnival Corporation
Carnival Place
3655 N.W. 87 Avenue
Miami, Florida 33178-2428
United States
The Board of Directors
P&O Princess Cruises plc
77 New Oxford Street
London WC1A 1PP
United Kingdom
13 December 2001
For the attention of Lord Sterling of Plaistow and Mr Peter Ratcliffe
Dear Sirs
INTRODUCTION
I am writing to set out a proposal by Carnival Corporation ("Carnival") to make
an offer for P&O Princess Cruises plc ("P&O Princess") (the "Offer"). We
strongly believe that our proposal has a clear strategic rationale and is a
compelling investment case for the shareholders of both companies, and is
therefore worthy of detailed and serious consideration by you and your advisors.
Our Offer would give P&O Princess shareholders 200p in cash and 0.1361 Carnival
Shares for each P&O Princess Ordinary Share. Based on yesterday's closing price
of $26.55 per Carnival Share, (1837p, converted at an exchange rate of
$1:(pound)0.692), P&O PRINCESS SHAREHOLDERS WILL RECEIVE CONSIDERATION WITH AN
AGGREGATE VALUE OF 450P FOR EACH P&O PRINCESS ORDINARY SHARE.
We believe that our proposal delivers substantially more value to P&O Princess
shareholders than the proposed dual listed company (the "DLC") transaction with
Royal Caribbean Cruises Ltd (the "Royal Caribbean Proposal"). Unlike the Royal
Caribbean Proposal, which does not offer a premium to P&O Princess shareholders,
our Offer provides P&O Princess shareholders with a significant premium for
their shares. Furthermore, our Offer includes a substantial cash element.
As you know, we have had discussions over recent years with P&O Princess and its
former parent regarding a possible combination of Carnival and P&O Princess.
Most recently, on 24 September 2001, Howard Frank, Vice Chairman and COO of
Carnival, called Peter Ratcliffe to say that Carnival wished to pursue a
combination of the two groups. We have not received a response to this approach.
Against this background, we were surprised to see the announcement of the Royal
Caribbean Proposal, as Carnival has the interest and capability to offer an
attractive proposal to your shareholders and had clearly expressed a strong
interest in a combination with P&O Princess. We have decided that, in the
circumstances, we should write this letter to the board of P&O Princess to seek
to ensure that our proposal receives the attention we believe it deserves.
We ask that, prior to 6pm (UK time) on Sunday, 16 December 2001, you respond
formally to our request for a recommendation of our Offer. To demonstrate our
commitment to progress the Offer as rapidly as possible, my senior colleagues
and I are keen to meet with you at your earliest convenience. I shall be
contacting Lord Sterling and Peter Ratcliffe by telephone, in order to discuss
our proposal with them directly.
6
<Page>
THE ROYAL CARIBBEAN PROPOSAL P&O PRINCESS EARNINGS
The proposed transaction between P&O PrincCONTRIBUTIONlPRErSYNERGIES, in our
view, disadvantageous to P&O Princess' shareholders, as the terms of the
transaction fail to recognize a number of substantive issues:
o P&O Princess shareholders do not receive any premium or cash
consideration
o P&O Princess shareholders will own 50.7% of the combined entity but,
based on analyst forecasts, P&O Princess is expected to contribute
significantly more than this to the combined entity's net income before
synergies. P&O Princess' contribution, based on publicly available
selected analysts' forecasts where 2003 estimates are available, is as
follows:
<Table>
<Caption>
P&O Princess earnings
contribution pre synergies
DATE 2002 2003
------------------------------------------------------------------------------------
SSSB 29-Nov-01 64.4% 57.7%
Bear Stearns 9-Nov-01, 21-Nov-01 53.0% 57.7%
MSDW 21-Nov-01 59.5% 45.7%
UBSW 5-Dec-01 65.5% 59.6%
P&O PRINCESS' PROPOSED SHARE OF COMBINED EARNINGS 50.7% 50.7%
</Table>
o Accordingly, a disproportionate share of the synergy benefits is
expected to accrue to Royal Caribbean's shareholders, in the form of
earnings enhancement, rather than to P&O Princess' shareholders
o Royal Caribbean is highly geared and currently has a sub-investment
grade rating. The terrorist events of September 11 have had a
significant negative impact on the cruise industry and such an event
could happen again. Given these uncertain times, as well as the
significant capital commitments that Royal Caribbean and P&O Princess
have made, prudent management practice makes it incumbent that a strong
and flexible balance sheet be maintained. P&O Princess' credit rating
has already been downgraded in anticipation of the Royal Caribbean
Proposal. Despite this, the Royal Caribbean Proposal does not
compensate P&O Princess' shareholders for the extra financial risk they
would bear if the transaction were to be consummated
o the most senior management position in the combined group has been
awarded to the Royal Caribbean Chairman and CEO. P&O Princess' return
on capital has been superior to that of Royal Caribbean, which has
lagged both Carnival and P&O Princess. P&O Princess and its
shareholders should consider whether the decision to appoint Royal
Caribbean's Chairman and CEO to the same position in the combined group
is in the company's best interests
o the DLC structure in the Royal Caribbean Proposal may constrain P&O
Princess' ability to raise capital, make acquisitions and engage in
other corporate activity. Furthermore, there can be no assurance that
P&O Princess will not trade at a discount to Royal Caribbean after the
DLC structure has been implemented.
In summary, we believe the Royal Caribbean Proposal will leave P&O Princess
shareholders with an investment in a less attractive entity with greater
financial risk and on terms which give Royal Caribbean a greater proportion of
the ownership of the combined group than is merited by its contribution to the
combined group's net income.
7
<Page>
THE "POISON PILLS"
We are particularly concerned that certain details of the Royal Caribbean
Proposal, namely the Southern European joint venture (the "Joint Venture") and
the $62.5 million break fee (the "Break Fee"), both entered into without
shareholder approval, appear to have been constructed as "poison pills",
designed to deter or thwart any counterproposal to P&O Princess shareholders.
Carnival has reviewed the publicly available information on the Joint Venture
and Break Fee and makes the following observations:
o no substantive commercial reason has been advanced for the immediate
need to conclude the Joint Venture agreement, with its associated costs
on a change of control, particularly when the Joint Venture itself is
not intended to commence cruise operations until 2003. Indeed, we
believe the Joint Venture company's aims could be achieved solely
through the DLC. The main, if not sole, effect of the Joint Venture is,
in our opinion, to make P&O Princess less attractive and less
vulnerable to a third party offeror, as it seriously disadvantages P&O
Princess if there is a change of control of P&O Princess. This is
clearly contrary to the interests of P&O Princess shareholders
o the Break Fee is significantly in excess of the UK market norm. On 19
November 2001, P&O Princess' market capitalization was approximately
$3.1 billion and, therefore, the size of the Break Fee greatly exceeds
the maximum that would have been permitted under the City Code on
Takeovers and Mergers (the "Takeover Code", which is recognized in the
UK as best practice) of 1% or approximately $31 million.
WHY CARNIVAL IS THE BEST PARTNER FOR P&O PRINCESS
The board of Carnival firmly believes that Carnival is the best partner for P&O
Princess. Set out below are a number of key historic measures that compare the
financial and operating performance of Royal Caribbean and Carnival. These data
reinforce our belief that Carnival's management team has a stronger track
record, clearly focused on enhancing shareholder value, which will be critical
in rapidly delivering the synergies a combination should bring.
o Carnival's shareholder returns have consistently outperformed those of
Royal Caribbean
<Table>
<Caption>
TOTAL SHAREHOLDER RETURNS TO 12 DECEMBER 2001(1) CARNIVAL ROYAL
CARIBBEAN
last 12 months 0.2% (27.9%)
last 5 years 87.5% 38.3%
(1) Source: Datastream
</Table>
o Carnival's operational measures are consistently and significantly
better than those of Royal Caribbean
<Table>
<Caption>
EBITDA PER AVAILABLE BERTH DAY ($) (1) CARNIVAL ROYAL
CARIBBEAN
2000 80 64
1995 - 2000 average 81 57
EBITDA MARGIN (1) CARNIVAL ROYAL
CARIBBEAN
2000 33.6% 27.9%
1995 - 2000 average 34.5% 24.8%
ROIC (1) (2) CARNIVAL ROYAL
CARIBBEAN
2000 12.9% 9.0%
1995 - 2000 average 15.0% 9.6%
</Table>
(1) Source: Public filings
(2) ROIC is (taxed EBIT / Average opening and closing total debt plus
equity balances)
o Carnival has significantly greater balance sheet strength and
flexibility than Royal Caribbean
8
<Page>
<Table>
<Caption>
NET DEBT AT YEAR END/EBITDA (1) CARNIVAL ROYAL CARIBBEAN
2000 1.7x 4.0x
1995 - 2000 average 1.4x 4.0x
EBITDA CASH INTEREST EXPENSE (1) CARNIVAL ROYAL CARIBBEAN
2000 15.4x 4.0x
1995 - 2000 average 11.6x 3.7x
(1) Source: Public filings
CREDIT RATINGS CARNIVAL (1) ROYAL CARIBBEAN(2)
Investment grade Non-investment
grade
S&P A BB+
Outlook Negative Negative
Moody's A2 Ba2
Outlook Negative Stable
</Table>
(1) Current
(2) Prior to the announcement of the Royal Caribbean Proposal
Based on Carnival's performance as outlined above, we believe that P&O Princess
shareholders would be better served through a combination with Carnival than
with Royal Caribbean, particularly where such a combination includes a premium
valuation of P&O Princess' business.
BENEFITS OF THE PROPOSED COMBINATION OF CARNIVAL AND P&O PRINCESS We believe
that a combination of Carnival and P&O Princess has a strong strategic rationale
and represents a compelling investment case that, particularly in the current
economic climate, would be well received by the shareholders of both our
companies.
We believe that this proposed combination:
o generates significant synergies to the benefit of both shareholders and
customers. These savings are expected to come from leveraging the best
practice of the two best management teams in the industry to achieve
efficiencies from, inter alia, purchasing, marketing and information
systems, and also from rationalizing support operations in locations
served by both companies. We hope to identify substantial additional
benefits when we are provided with access to P&O Princess' detailed
financial and operational data
o benefits from the financial flexibility of the combined group's strong
balance sheet and cash flow. We believe that the terms of the Offer
would ensure that the proposed combination of Carnival and P&O Princess
would retain a strong financial position with an investment grade
rating
o creates a broader and more complementary portfolio of brands operating
in the US and Europe, thereby enhancing the combined group's ability to
attract more customers away from land-based vacations to cruise
vacations, and creates a wider range of vacation choices for our
combined customer base
9
<Page>
CARNIVAL'S PROPOSAL
OFFER STRUCTURE
CARNIVAL IS PREPARED TO MAKE THE OFFER ON THE FOLLOWING BASIS:
FOR EACH P&O PRINCESS SHARE 200P IN CASH AND 0.1361 CARNIVAL SHARES
On the basis of a Carnival Share price of $26.55 (being the price at the close
of business yesterday), and an exchange rate of $1:(pound)0.692, the Offer
values each P&O Princess Ordinary Share at 450p (equivalent to $26.01 per ADR)
(consisting of 200p in cash and 250p in Carnival Shares) and values the entire
existing ordinary share capital of P&O Princess at approximately (pound)3.1
billion. This represents:
o a premium of 42.0% to the closing middle market price of 317p per P&O
Princess Ordinary Share on 19 November 2001, the last business day prior to
the announcement of the Royal Caribbean Proposal
o a premium of 22.6% to the closing middle market price of 367p per P&O
Princess Ordinary Share on 12 December 2001, the last business day prior to
this letter
o a premium of 13.4% to the highest closing middle market price of 397p per
P&O Princess Ordinary Share at which P&O Princess has traded since its
demerger.
It is Carnival's intention that the cash element of the Offer be provided under
a mix and match structure such that shareholders have an element of choice to
take shares or cash.
Carnival intends to seek a listing for its shares on the London Stock Exchange
to facilitate and encourage the continuing participation by P&O Princess'
shareholders in the combined group.
It is intended that the cash consideration for the Offer amounting to $2.0
billion be financed through existing resources of Carnival and new facilities.
Currently Carnival has cash and undrawn facilities totalling approximately $2.4
billion.
POTENTIAL FOR INCREASED CONSIDERATION
If P&O Princess is able to reduce or eliminate the costs to Carnival of the
poison pills, Carnival is prepared to increase the value of the Offer.
ALTERNATIVE TRANSACTION STRUCTURES
Carnival is prepared to discuss alternative transaction structures with P&O
Princess including, inter alia, a dual listed company. In such a scenario,
Carnival envisages that the economic interests of each party under such a
structure would reflect the valuation of P&O Princess as set out in the proposal
above. Such a structure would enable P&O Princess to retain all of perceived
benefits of the proposed DLC structure with Royal Caribbean whilst allowing P&O
Princess shareholders to benefit from our premium economic proposal and stronger
financial position.
OUTSTANDING ISSUES
Before proceeding with the Offer, we would require the following issues to be
resolved:
(i) Carnival having received all information which was provided by
P&O Princess to Royal Caribbean in connection with the Royal
Caribbean Proposal, as would be supplied if Rule 20.2 of the
Takeover Code had applied
(ii) the board of P&O Princess either not convening the EGM for the
approval of the Royal Caribbean Proposal, or, if it is under
an obligation to convene such meeting, recommending that
shareholders vote against the Royal Caribbean Proposal
(iii) appropriate regulatory clearances being obtained in a form
satisfactory to Carnival (see below)
10
<Page>
(iv) Carnival being satisfied that the cost to P&O Princess of
terminating the Joint Venture in the event of the Offer
becoming wholly unconditional will not be in excess of $200
million
(v) The board of P&O Princess undertaking that in the period from
the date of this letter until the Offer becomes wholly
unconditional, P&O Princess will not declare or pay dividends
in excess of 3 US cents per P&O Princess Ordinary Share each
quarter
(vi) Carnival having arranged funding for the Offer on terms
satisfactory to it.
We would envisage that items (i), (ii), (iv) and (v) would be resolved prior to
announcing the Offer. Carnival is willing to secure the relevant funding prior
to announcement if it is necessary to secure the Board's recommendation. On this
basis, the making of the Offer would be subject only to regulatory approval.
REGULATORY APPROVALS
Our proposal is subject to clearance from the relevant antitrust authorities, in
particular those in the EU and US. We have examined the requirements for
approval and have received advice from our external antitrust advisors that the
likelihood of Carnival receiving a favorable outcome is no less than that of the
Royal Caribbean Proposal.
o We believe, as Royal Caribbean and P&O Princess have stated, that we
compete in a broad vacation market rather than simply a cruise market.
Carnival and Royal Caribbean are similarly situated in that market. Both
companies undertake substantial efforts to attract consumers from other
vacation options. That analysis should result in a view that there are no
significant antitrust issues for either transaction
o in Europe, our proposal would be subject to the centralized EU merger
control process, rather than the independent review of certain EU member
states as we understand is the case for the Royal Caribbean Proposal. We
believe that Carnival's antitrust process would be completed within a
similar timeframe to that of the Royal Caribbean Proposal, and would not
face greater regulatory hurdles than the Royal Caribbean Proposal
o in the US, our proposal would be subject to the Hart-Scott-Rodino process,
which will not differ significantly in timing or substantive issues from
the FTC review of the Royal Caribbean Proposal. In fact, Royal Caribbean
and Carnival's comparable brands are very similar in size and scope, as
shown below:
<Table>
<Caption>
CARNIVAL BRANDS BERTHS ROYAL CARIBBEAN BRANDS BERTHS
Carnival Cruise Lines 33,246 Royal Caribbean Intl 33,046
HAL 13,348 Celebrity Cruises 14,332
------ ------
46,594 47,378
</Table>
As a result, whilst we believe that there should be no significant antitrust
issues in the US, if there were to be such issues, they would be substantially
the same for both the Royal Caribbean and Carnival proposals.
11
<Page>
BOARD, 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 our proposal from a larger operating platform and a business
of greater international size and scope.
Carnival operates its various cruise businesses on a decentralized basis, whilst
optimizing the cost base through shared services. We envisage extending this
approach to the businesses of P&O Princess.
We are prepared to offer members of P&O Princess' senior executive management
important and influential positions in the enlarged group, including as
appropriate, at Carnival board level.
OTHER MATTERS
Neither our interest in P&O Princess nor the contents of this letter may be
disclosed by P&O Princess to any person, other than your professional advisors,
without our prior written consent. Carnival reserves the right to terminate
discussions immediately and without any obligation on its part whatsoever.
This letter is intended only to convey Carnival's interest in a possible
transaction with P&O Princess. For the avoidance of doubt, this letter should
not be construed in any regard as constituting an offer, evincing an intention
to make an offer or otherwise giving rise to legal relations and in particular,
does not constitute a firm intention to make an offer for the purposes of Rule
2.2 of the Takeover Code.
We should like to reiterate our strong interest in acquiring P&O Princess and
our ability to move speedily to an announcement. We believe that our proposal is
significantly more attractive to P&O Princess and its shareholders than the
Royal Caribbean Proposal. We look forward to your response to this letter which
in any event should be received prior to 6pm (UK time) on Sunday, 16 December
2001.
Yours sincerely
M. Arison
Chairman and CEO"
12
<Page>
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA OR
JAPAN
CARNIVAL CORPORATION ("CARNIVAL")
-----------------------------------------------------------------
PRE-CONDITIONAL OFFER TO BE MADE BY
MERRILL LYNCH AND UBS WARBURG
FOR P&O PRINCESS CRUISES PLC ("P&O PRINCESS")
SUMMARY
o The board of Carnival today announces the terms of a pre-conditional offer
to acquire the whole of the issued and to be issued share capital of P&O
Princess.
o The Offer comprises 200 pence in cash and 0.1361 Carnival Shares for each
P&O Princess Share with a Mix and Match Election, as described below.
o Based on the New York Stock Exchange closing price of a Carnival Share of
$27.30 on 14 December 2001, the last business day prior to the date of this
Announcement, and an exchange rate of $1:(pound)0.689, the Offer values
each P&O Princess Share at 456 pence and the entire existing share capital
of P&O Princess at approximately (pound)3.2 billion.
o The Offer represents:
- a premium of 44 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; and
- a premium of 27 per cent. to the closing middle market price of 360
pence per P&O Princess Share on 14 December 2001, the last business day
prior to the date of this Announcement.
o If, before the first closing date of the Offer, the board of P&O Princess
is able to achieve a reduction in the cost of the Break Fee and of exiting
the Joint Venture, then Carnival will be prepared to share the savings, net
of costs, with P&O Princess Shareholders.
o The combination of Carnival and P&O Princess will create a global vacation
and leisure company with a strong and flexible financial position. Carnival
believes that the Offer is significantly more attractive to P&O Princess
Shareholders than the Royal Caribbean Proposal.
o Carnival has the strongest operating and financial record among the listed
cruise companies and believes that the adoption of best practice from the
two management teams will generate significant benefits for customers and
shareholders.
o The acquisition of P&O Princess is expected to be earnings enhancing for
Carnival in the first full financial year of ownership.*
* THIS STATEMENT SHOULD NOT BE INTERPRETED TO MEAN THAT THE EARNINGS PER
CARNIVAL SHARE FOR THE CURRENT OR FUTURE FINANCIAL YEARS WILL NECESSARILY MATCH
OR EXCEED THE HISTORICAL PUBLISHED EARNINGS PER CARNIVAL SHARE.
o Carnival has had a number of discussions over recent years with P&O
Princess and its former parent, P&O, regarding a possible combination of
Carnival and P&O Princess. 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 has received no response to this
approach.
o HAVING CONSIDERED ITS OPTIONS FOLLOWING THE ANNOUNCEMENT OF THE ROYAL
CARIBBEAN PROPOSAL ON 20 NOVEMBER 2001, CARNIVAL SUBMITTED A DETAILED
PROPOSAL REGARDING AN OFFER FOR P&O PRINCESS TO THE BOARD OF P&O PRINCESS
ON THURSDAY, 13 DECEMBER 2001. THE PROPOSAL INCLUDED A REQUEST THAT A
RECOMMENDATION BE FORTHCOMING FROM THE BOARD OF P&O PRINCESS FOR THE OFFER.
A COPY OF THIS PROPOSAL IS SET OUT AS APPENDIX V.
13
<Page>
o As of the publication of this Announcement, neither P&O Princess nor its
advisors have entered into any discussion with Carnival or its advisors
regarding the proposal. The board of P&O Princess has, however, today
written to Carnival rejecting the Offer, stating a belief that the Offer is
not as favourable financially to the P&O Princess Shareholders and would
face greater execution risk than the Royal Caribbean Proposal.
o The posting of the Offer Document is pre-conditional, INTER ALIA, on the
board of P&O Princess either not convening the EGM for the approval of the
Royal Caribbean Proposal, or, if it is under an obligation to convene such
meeting, recommending that shareholders vote against the Royal Caribbean
Proposal.
o The posting of the Offer Document is also pre-conditional on certain
regulatory clearances being obtained. Given the probable regulatory
timetable, the posting of the Offer Document is also pre-conditional on
financing to avoid incurring unnecessary expense. Carnival currently has
cash and existing facilities of approximately $2.4 billion.
o CARNIVAL WILL NOT PROCEED WITH THE OFFER IF THE P&O PRINCESS SHAREHOLDERS
APPROVE THE ROYAL CARIBBEAN PROPOSAL.
REASONS FOR THE OFFER
BENEFITS OF THE PROPOSED COMBINATION OF CARNIVAL AND P&O PRINCESS
o 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 and Europe, the combined group will have an
enhanced ability to attract customers from land-based vacations to cruise
vacations.
o Carnival expects that the proposed combination will generate significant
synergies to the benefit of both shareholders and customers. These savings
are expected to come by sharing the best practices of the two management
teams to achieve efficiencies from, INTER ALIA, purchasing, marketing and
information systems, and also from rationalising support operations in
locations served by both companies.
o 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 Offer will ensure that the proposed combination of
Carnival and P&O Princess would retain a strong financial position with an
investment grade credit rating.
o Carnival believes that P&O Princess Shareholders would be better served
through a combination with Carnival than with Royal Caribbean. The greater
strength of Carnival's management team is evidenced by a comparison of the
financial and operating performance of Royal Caribbean and Carnival:
- Carnival shareholder returns have consistently outperformed those of
Royal Caribbean;
- Carnival's operational measures are consistently and significantly
better than those of Royal Caribbean; and
- Carnival has significantly greater balance sheet strength and
flexibility than Royal Caribbean.
o Carnival believes that its Offer bears no greater regulatory risk than the
Royal Caribbean Proposal. Carnival believes, as Royal Caribbean and P&O
Princess have already stated, that cruise operators compete in a broad
vacation market, rather than simply a cruise market and, accordingly, both
companies undertake substantial efforts to attract consumers from other
vacation options. Carnival believes that Carnival and Royal Caribbean are
similarly situated within the wider vacation market based on all meaningful
comparators. Carnival has examined the requirements for approval and has
received advice from its external antitrust advisors that the likelihood of
Carnival achieving a favourable regulatory outcome in the EU and US is no
less than that of the Royal Caribbean Proposal.
14
<Page>
THE ROYAL CARIBBEAN PROPOSAL IS DISADVANTAGEOUS TO P&O PRINCESS SHAREHOLDERS
o Under the Royal Caribbean Proposal P&O Princess Shareholders do not receive
any premium or cash consideration.
o Under the Royal Caribbean Proposal P&O Princess Shareholders will own 50.7
per cent. of the combined entity but, based on selected analysts'
forecasts, P&O Princess is expected to contribute significantly more than
this proportion to the combined entity's net income before synergies.
Accordingly, a disproportionate share of the earnings, as well as the
synergy benefits, is expected to accrue to Royal Caribbean Shareholders
rather than to P&O Princess Shareholders.
o Royal Caribbean is highly geared and currently has a sub-investment grade
credit rating. Given the uncertain economic environment, as well as the
significant capital commitments that Royal Caribbean and P&O Princess have
made, Carnival believes that a strong and flexible balance sheet is
essential. P&O Princess's credit rating has already been downgraded in
anticipation of the Royal Caribbean Proposal. Carnival believes that the
Royal Caribbean Proposal does not compensate P&O Princess Shareholders for
the extra financial risk P&O Princess would bear if the transaction were
consummated.
o The most senior management position in the combined group has been awarded
to the Royal Caribbean Chairman and CEO. However, P&O Princess's
operational and financial performance has been superior to that of Royal
Caribbean, which has lagged both Carnival and P&O Princess. Carnival
believes that P&O Princess Shareholders should consider whether the
decision to appoint Royal Caribbean's Chairman and CEO to the most senior
position in the combined group is in their best interests.
o Carnival believes that the complex DLC structure in the Royal Caribbean
Proposal may constrain P&O Princess's ability to raise capital, make
acquisitions and engage in other corporate activity. Furthermore, there can
be no assurance that P&O Princess will not trade at a discount to Royal
Caribbean after the Royal Caribbean Proposal has been implemented.
o Carnival firmly believes that the Joint Venture and the Break Fee, both
entered into without shareholder approval, have the effect of depriving P&O
Princess Shareholders of the full value of their shares. Both agreements
deviate from permitted norms in public UK takeovers and mergers. Carnival
would have been able to offer a higher price to P&O Princess Shareholders
had these "poison pills" not been put in place.
GENERAL
MICKY ARISON, THE CHAIRMAN AND CHIEF EXECUTIVE OF CARNIVAL, SAID:
"WE BELIEVE OUR PROPOSAL IS CLEARLY MORE FAVOURABLE TO P&O PRINCESS SHAREHOLDERS
THAN THE ROYAL CARIBBEAN DEAL. WE ARE OFFERING A SUBSTANTIAL PREMIUM AND WE ARE
A MUCH STRONGER PARTNER FOR P&O PRINCESS, BOTH FINANCIALLY AND OPERATIONALLY."
There will be a UK and European analysts' presentation at 9.00 a.m. (GMT) and a
press briefing at 1.00 p.m. on Monday 17 December 2001. The venue for both will
be the offices of UBS Warburg, 1 Finsbury Avenue, London, EC2M 2PP.
There will be a dial-in conference call facility for the 9.00 a.m. (GMT)
analysts' presentation. The number for this facility is +44 (0) 20 8781 0596;
password: Carnival.
There will be a US and European analyst conference call at 3.00 p.m. (GMT) /
10.00 a.m. (EST). The number for this facility is +1 800 553 2165; password:
Carnival
The presentation slides will also be available on the internet at the following
address: www.carnivalcorp.com.
15
<Page>
THIS SUMMARY SHOULD BE READ IN CONJUNCTION WITH THE FULL TEXT OF THIS
ANNOUNCEMENT WHICH INCLUDES CARNIVAL'S DETAILED PROPOSAL TO THE BOARD OF P&O
PRINCESS (APPENDIX V).
ENQUIRIES:
CARNIVAL Telephone: +44 20 7567 4861
Micky Arison
Howard Frank
CARNIVAL (US CONTACT) Telephone: +1 305 599 2600, Ext: 16000
Tim Gallagher
Jennifer de la Cruz
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
Unless otherwise determined by Carnival and permitted by applicable law and
regulation, the Offer will not be made, directly or indirectly, in or into, or
by use of the mails of, or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce
of, or of any facility of a national securities exchange of, nor will it be made
in or into Australia, Canada or Japan and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities. Accordingly,
unless otherwise determined by Carnival and permitted by applicable law and
regulation, copies of this Announcement and any other documents related to the
Offer are not being, and must not be, mailed or otherwise forwarded, distributed
or sent in or into Australia, Canada or Japan and persons receiving such
documents (including custodians, nominees and trustees) must not distribute or
send them in, into or from such jurisdictions.
The availability of the Offer to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions in which they are located.
Persons who are not resident in the United Kingdom should inform themselves of,
and observe, any applicable requirements.
The Offer will be made in the United States by Carnival. References in this
Announcement to the Offer being made by Merrill Lynch or UBS Warburg should be
read accordingly.
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 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 Offer.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the 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 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 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-
16
<Page>
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
THE OFFER. THE FORM S-4 WILL CONTAIN A PROSPECTUS AND OTHER DOCUMENTS RELATING
TO THE OFFER. CARNIVAL PLANS TO MAIL THE PROSPECTUS CONTAINED IN THE FORM S-4 TO
SHAREHOLDERS OF PORT 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, PORT, THE 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 OFFER CAREFULLY BEFORE THEY MAKE ANY
DECISION WITH RESPECT TO THE OFFER. THE FORM S-4, THE PROSPECTUS, THE SCHEDULE
TO AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE 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 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 OFFER, CARNIVAL IS OBLIGATED TO FILE
ANNUAL, QUARTERLY AND SPECIAL 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.
17
<Page>
19
PRE-CONDITIONS OF THE OFFER
The making of the Offer by the posting of the Offer Document and related Form of
Acceptance will take place following the satisfaction, or to the extent
permitted, waiver by Carnival, of the following Pre-conditions:
1. 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
paragraph 2 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;
2. 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;
3. 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;
4. at the time that the Pre-conditions in paragraphs 1, 2 and 3 above are
satisfied or waived, there being in existence no:
(i) pending or threatened action or other proceeding before any
court of appropriate jurisdiction or governmental agency
seeking to restrain, enjoin, prohibit or otherwise prevent the
consummation of the contemplated transaction or seeking to
obtain damages or other relief in connection with this
transaction which would have a material adverse effect on
either Carnival or P&O Princess; or
(ii) preliminary or permanent injunction or other order, decree, or
ruling issued by a court of appropriate jurisdiction, which
restrains, enjoins, prohibits, or otherwise makes illegal the
consummation of the contemplated transaction;
5. at the time that the Pre-conditions in paragraphs 1, 2 and 3 above are
satisfied or waived, Carnival being satisfied that the cost to P&O
Princess of terminating the Joint Venture in the event of the Offer
becoming wholly unconditional will not be in excess of $200 million;
18
<Page>
6. Carnival having received all information which was provided by P&O
Princess to Royal Caribbean in connection with the Royal Caribbean
Proposal, as would be supplied if Rule 20.2 of the Takeover Code had
applied;
7. the board of P&O Princess either not convening the EGM for the approval
of the Royal Caribbean Proposal, or, if it is under an obligation to
convene such meeting, recommending that shareholders vote against the
Royal Caribbean Proposal;
8. the P&O Princess Shareholders not having passed the resolutions
required to approve the Royal Caribbean Proposal;
9. financing of the cash element of the Offer being arranged on terms
satisfactory to Carnival by no later than 21 days after the
announcement that the regulatory pre-conditions (Pre-conditions 1, 2, 3
and 4) have been satisfied or waived.
The Offer will not be made unless all the Pre-conditions other than
Pre-condition 9 have been satisfied or waived by no later than 15 October 2002,
or such later date as Carnival may, with the approval of the Panel, determine.
Carnival shall be entitled to waive all and any of the above Pre-conditions
other than Pre-conditions 8 and 9 above.
19