2001 Maritime

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December 19, 2001

Princess to Carnival: " make a better offer"
P&&O Princess continues to move toward completion of its merger with Royal Caribbean. Before the end of December, said a statement issued today, Princess intends to post its shareholders' circular recommending that shareholders approve, at an EGM, the merger with Royal Caribbean. In order to give its shareholders time to consider fully their alternatives in light of Carnival's intervention, Princess will hold the EGM more than six weeks later on February 14, 2002. Copies of all agreements with Royal Caribbean will be made publicly available when the shareholders' circular is posted.

The Princess board today said it "remains convinced" that its proposed merger with Royal Caribbean "has already and will continue to create significant shareholder value." It said the DLC (dual listed company) structure will allow P&O Princess to retain its primary listing in London and its inclusion in the FTSE All-Share Index. The Board believes that the transaction with Royal Caribbean is deliverable and will create the world's leading cruise group and a strong competitor to Carnival Corporation .

The Princess board "continues to believe that Carnival's recent unsolicited takeover proposal contains too many pre-conditions to be recommended to its shareholders. In particular, Carnival is asking shareholders to vote down the Royal Caribbean merger in favor of a takeover proposal that might not be made until October 2002 (or might not ever be made), if Carnival persists with its regulatory preconditions. The board also believes that, even if Carnival did make a proper offer on the terms proposed, it would not be as favorable financially and would face greater execution risk than the agreed merger with Royal Caribbean."

The agreement with Royal Caribbean provides a timetable under which the Princess board could consider alternative proposals. Based on these provisions, the Princess board now says that if Carnival makes an offer before January 18, 2002 that the Princess board "believes is credible and superior, then the board will have sufficient time to consider and discuss the offer with Carnival. Under this timetable, P&O Princess shareholders would have sufficient time prior to the EGM to consider both alternatives together with the Board's recommendation."

Princess CEO Peter Ratcliffe commented "We must be absolutely certain that we are not jeopardizing our merger with Royal Caribbean, a committed partner, in return for a proposal which simply turns out to be a spoiling tactic designed to disrupt the creation of significant value for P&O Princess' shareholders. The timetable we have set in place today both honors our agreement with Royal Caribbean and still gives time for Carnival to put forward a credible, deliverable and more valuable transaction."

Hornbeck Leevac responds to Enron-impact questions

Hornbeck-Leevac Marine Services, Inc. yesterday answered questions that have been raised about the impact on its business of the Enron bankruptcy.

"Two of our 200-ft. class offshore supply vessels, the HOS Crossfire and the HOS Brigadoon," said a statement," are currently under long-term charter to Mariner Energy, Inc., which is 96%-owned by an affiliate of Enron Corp. Mariner has been using these two vessels to service an offshore drilling rig it has chartered for drilling operations in the Gulf of Mexico. On December 11, 2001, Mariner notified us of its intent to furlough the drilling rig on or before December 15, 2001 and concurrently terminate its contract on our two vessels. Mariner, in fact, released the HOS Crossfire on December 14, 2001 and the HOS Brigadoon on December 16, 2001."

"We were able to re-deploy the HOS Crossfire on December 14, 2001 and the HOS Brigadoon on December 17, 2001,"continued the statement." Both vessels have been contracted in the deepwater spot market with major oil companies on substantially the same dayrates as the Mariner contract with almost no lapse in utilization. We continue to experience strong demand for offshore supply vessels capable of operating in the deepwater Gulf of Mexico based on the ongoing requests we receive from other customers for the services of our vessels." .

"Under the terms of our contract with Mariner, "said the company, "we do not believe that Mariner is entitled to release our vessels and terminate their charter. We are currently in discussions with Mariner and intend to take all appropriate actions to protect our rights under the contract. Should our discussions with Mariner not lead to a resolution of this issue, we believe that we would have certain rights of recovery against Mariner. In addition, we are in discussions with several customers regarding term contract opportunities for these vessels.

"We believe that Mariner's actions are not indicative of the overall market conditions for our vessels in the deepwater Gulf of Mexico, but are significantly related to the recent financial issues surrounding its parent, Enron Corp. We do not believe that Mariner's actions will have a material adverse affect on our financial condition or results of operations. "