United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 40-F/A

(Check One:)

[  ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES
     EXCHANGE ACT OF 1934

[X]  ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the fiscal year ended 31st December 2003.   Commission File Number 1-15228



                               CP SHIPS LIMITED
            (Exact name of Registrant as specified in its charter)

                                 NEW BRUNSWICK
       (Province or other jurisdiction of incorporation or organization)

                   4012                                    N.A.
       (Primary Standard Industrial            (I.R.S. Employer Identification
   Classification Code (if applicable))            Number (if applicable))


                                 2 City Place
                               Beehive Ring Road
                                Gatwick Airport
                              West Sussex RH6 0PA
                                United Kingdom
                     telephone number: +44 (0) 1293 866200
   (Address and telephone number of Registrant's principal executive office)

                                 J.P. LaCasse
                          CP Ships (Americas) Limited
                     Suite 3300, 401 East Jackson Street,
                             Tampa, Florida 33602
                       telephone number: 1 813 276 4600
           (name, address (including zip code) and telephone number
       (including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


<PAGE>



Title Of Each Class                   Name Of Each Exchange On Which Registered
-------------------                   -----------------------------------------

Common Shares, no par value           New York Stock Exchange
Common Share Purchase Rights[1]

[1]Initially attached to and trade
with Common Shares


Securities registered or to be registered pursuant to Section 12(g) of the
Act:

                                Title Of Class
                                --------------

                                     None

Securities for which there is a reporting obligation pursuant to Section
15(d) of the Act:

                                Title Of Class
                                --------------

                                     None

For annual reports, indicate by check mark the information filed with this
Form:

[X]  Annual information form    [X] Audited annual financial statements

     Indicate number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

     89,890,519 Common Shares were outstanding as of 31st December 2003

     Indicate by check mark whether the registrant by filing the information
contained in this Form is also thereby furnishing information to the
Commission pursuant to Rule 12g3 2(b) under the Securities Exchange Act of
1934 (the "Exchange Act"). If "Yes" is marked, indicate the file number
assigned to the Registrant in connection with such Rule.

     Yes _____                  82 - ______               No  X

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

     Yes  X                     No  _____



<PAGE>


Part A.




                                    CP SHIPS
                         REGIONAL FOCUS o GLOBAL SCALE











                                CP SHIPS LIMITED



                      REVISED 2003 ANNUAL INFORMATION FORM

                            As of 3rd September 2004







<PAGE>

<TABLE>
<CAPTION>



                                TABLE OF CONTENT

<S>                                                                                             <C>
Forward Looking Statements........................................................................3
Notes to Readers..................................................................................3
Currency Exchange Rates...........................................................................4
Corporate Structure...............................................................................5
General Development of the Business...............................................................6
         Significant Acquisitions.................................................................6
         Trends...................................................................................7
Narrative Description of the Business.............................................................8
         Overview.................................................................................8
         Competitive Strengths....................................................................8
         Strategy.................................................................................9
         Service.................................................................................10
         Markets and Trade Lanes.................................................................11
         Joint Service Agreements................................................................16
         Operations..............................................................................18
         Sales and Marketing.....................................................................23
         Customers...............................................................................24
         Competition.............................................................................24
         Employees ..............................................................................25
         Insurance...............................................................................25
         Security................................................................................26
         Regulatory Matters......................................................................26
         Environmental Regulations...............................................................29
Selected Consolidated Financial Information......................................................32
         Consolidated Statements of Income Data..................................................32
         Consolidated Balance Sheet Data.........................................................33
         Dividend Policy.........................................................................35
Management's Discussion and Analysis of Financial Condition and Results of Operations............36
Market for Securities............................................................................36
Directors and Management.........................................................................36
         Directors...............................................................................36
         Management..............................................................................39
         Committees of the Board of Directors....................................................40
Description of Indebtedness and Other Obligations and Taxation of CP Ships and subsidiaries......42
         Indebtedness Corporate Structure........................................................42
         Revolving Credit Facility...............................................................43
         10-3/8% Senior Notes due 2012...........................................................44
         4% Convertible Senior Subordinated Notes due 2024.......................................45
         Pacific Class Vessel Loan...............................................................46
         Capital Leases..........................................................................46
         Operating Leases........................................................................48
         Capital Commitments.....................................................................50
         Taxation of CP Ships and Subsidiaries...................................................50
Additional Information...........................................................................52



                                                                                                     2


</TABLE>

<PAGE>


                           FORWARD LOOKING STATEMENTS

          This Annual Information Form ("AIF") and the documents incorporated by
reference into it contain certain forward-looking information and statements
within the meaning of the United States Private Securities Litigation Reform Act
of 1995 relating, but not limited, to operations, anticipated or prospective
financial performance, results of operations, business prospects and strategies
of CP Ships Limited ("CP Ships"). These statements can be found in General
Development of the Business (Trends), Narrative Description of the Business
(Strategy, Ship Replacement Program) and elsewhere in this document.
Forward-looking information typically contains statements with words such as
"consider," "anticipate," "believe," "expect," "plan," "intend," "likely" or
similar words suggesting future outcomes or statements regarding an outlook on
future changes in volumes, freight rates, costs, achievable cost savings, the
estimated amounts and timing of capital expenditures, anticipated future debt
levels and incentive fees or revenue, or other expectations, beliefs, plans,
objectives, assumptions, intentions or statements about future events or
performance. Readers should be aware that these statements are subject to known
and unknown risks, uncertainties and other factors that could cause actual
results to differ materially from those suggested by the forward-looking
statements.

          Although CP Ships believes it has reasonable basis for making the
forecasts or projections included in this AIF, readers are cautioned not to
place undue reliance on such forward-looking information. By its nature, the
forward-looking information of CP Ships involves numerous assumptions, inherent
risks and uncertainties, both general and specific, that contribute to the
possibility that the predictions, forecasts and other forward-looking statements
will not occur. These factors include, but are not limited to, changes in
business strategies; general global, political and economic and business
conditions, including the length and severity of any economic slowdown in the
countries and regions where CP Ships operates, including seasonality,
particularly in the United States, Canada, Latin America, Australasia, Asia and
Europe; the effects of competition and pricing pressures; industry
over-capacity; changes in demand for container shipping; availability and cost
of chartered ships; changes in laws and regulations, including tax,
environmental, employment, competition, anti-terrorism and trade laws;
difficulties in implementing a cost savings program; currency exposures and
exchange rate fluctuations, fuel price and interest rate fluctuations; changes
in access to capital markets and other sources of financing; various events
which could disrupt operations, including war, acts of terrorism, severe weather
conditions and external labour unrest, all of which may be beyond CP Ships'
insurance coverage; compliance with security measures by governmental and
industry trade practise groups and CP Ships' anticipation of and success in
managing the risks associated with the foregoing.

          The above list of important factors affecting forward-looking
information is not exhaustive. CP Ships undertakes no obligation, except as
required by law, to update publicly or otherwise revise any forward-looking
information, whether as a result of new information, future events or otherwise,
or the above list of factors affecting this information.


                                 NOTE TO READERS

          On 16th August 2004, CP Ships restated its financial statements for
the years ended 31st December 2003 and 2002 to reflect increases in container
shipping costs and reductions in revenues and net income. This AIF has been
amended to reflect the restatement. The information contained in the AIF is as
of 31st December 2003 (as restated), unless otherwise indicated.



                                                                             3
<PAGE>



                             CURRENCY EXCHANGE RATES

          Unless otherwise specified, the financial information relating to CP
Ships contained in this AIF is expressed in U.S. dollars (US$). Certain
financial information originates in currencies other than U.S. dollars and has
been converted into U.S. dollars based on prevailing exchange rates, except for
financial information extracted from the consolidated financial statements of CP
Ships.

          The following tables set out, for each period indicated, the high,
low, average and period end exchange rate for U.S. dollars expressed in Canadian
dollars (C$) based on the noon buying rate in New York City as certified by the
New York Federal Reserve Bank for customs purposes:

<TABLE>
<CAPTION>


                                                                  12 months ended 31st December
                                                                  -----------------------------

                                                             2003                  2002                   2001
                                                             ----                  ----                   ----
<S>                                                        <C>                   <C>                    <C>
Canadian dollars per U.S. dollar
High in the period                                         1.5750                1.6128                 1.6023
Low in the period                                          1.2923                1.5108                 1.4933
Rate at end of period                                      1.2923                1.5800                 1.5925
Average rate for the period(1)                             1.4013                1.5704                 1.5487


                                                                               2004
                                                                               ----

                                                            March              February                January
                                                            -----              --------                -------

Canadian dollars per U.S. dollar
High in the period                                         1.3480                1.3442                 1.3340
Low in the period                                          1.3080                1.3108                 1.2690
Rate at end of period                                      1.3100                1.3405                 1.3265

</TABLE>

----------
(1)   The average of the exchange rate on the last day of each month during
the period.




          On 31st March 2004, the noon buying rate in New York City as certified
by the New York Federal Reserve Bank for customs purposes was C$1.31 per $1.00.








                                                                             4


<PAGE>

                               CORPORATE STRUCTURE

          CP Ships subsists under the New Brunswick Business Corporations Act
(Corporation number 515878). The registered office of CP Ships is located at
Brunswick House, 44 Chipman Hill, Saint John, New Brunswick, Canada E2L 4Z6. The
head office of CP Ships is located at 2 City Place, Beehive Ring Road, Gatwick
Airport, West Sussex, RH6 0PA, United Kingdom and its telephone number is
+44-1293 866200.

          The diagram below illustrates the corporate structure of CP Ships
including CP Ships' principal subsidiaries, all of which are wholly owned,
directly or indirectly, and their jurisdiction of incorporation. Certain
subsidiaries of CP Ships which are not material to its business have not been
included in this chart.

<TABLE>
<CAPTION>
<S>                 <C>                      <C>                     <C>

                            -----------------------
                           |                       |
                           |  CP Ships Limited (1) |
                           |    (New Brunswick)    |
                           |                       |
                            -----------------------
                                       |
                                       |
            ----------//---------------|----------//----------------
            |                          |                           |
            |                          |                           |
  -----------------------    -----------------------    -----------------------
 |    Cast Terminal      |  |    CP Ships (Bermuda) |  |  Racine Terminal     |
 |      Company          |  |      Limited (2)      |  |  (Montreal) Company  |
 |    (Nova Scotia)      |  |      (Bermuda)        |  |    (Nova Scotia)     |
 |                       |  |                       |  |                      |
  -----------------------    -----------------------    -----------------------
                                       |
                                       |
                                       |
                                       |
           -------------------------------------------------------------------
           |                     |                     |                      |
           /                     /                     /                      /
           /                     /                     /                      /
           |                     |                     |                      |
 --------------------  --------------------  --------------------   --------------------
|Container Equipment| |   CP Ships (UK)   | |  Lykes Lines      |  | TMM Lines Limited,|
|Leasing Limited (3)| |   Limited (4)     | | Limited, LLC (6)  |  | LLC (7) (Delaware)|
|   (Bermuda)       | |(England and Wales)| |  (Delaware)       |  |                   |
|                   | |                   | |                   |  |                   |
 --------------------  --------------------  --------------------   --------------------
                                 |
                                 |
                                 |
                                 |
                       --------------------
                      |     Italia di      |
                      | Navigazione LLC (5)|
                      |    (Delaware)      |
                      |                    |
                       --------------------



</TABLE>







(1)   CP Ships owns a 100% interest in Racine Terminal (Montreal) Company and
      Cast Terminal Company indirectly through CP Ships (Canada) Holdings
      Company, which is incorporated in Nova Scotia.
(2)   CP Ships (Bermuda) Limited holds a 100% interest in (i) CP Ships (UK)
      Limited indirectly through three intermediate holding companies, one of
      which is incorporated in Bermuda and the other two in England and Wales,
      (ii) TMM Lines Limited, LLC and Lykes Lines Limited, LLC indirectly
      through two intermediate holding companies incorporated in Bermuda.
(3)   Owns and leases CP Ships' containers.
(4)   Services are marketed under the following brands: Canada Maritime, Cast,
      Contship Containerlines and ANZDL.
(5)   Services are marketed under the Italia Line brand.
(6)   Services are marketed under the Lykes Lines brand.
(7)   Services are marketed under the TMM Lines brand.


                                                                              5
<PAGE>



                       GENERAL DEVELOPMENT OF THE BUSINESS

          On 1st October 2001, CP Ships' former parent, Canadian Pacific Limited
("CPL"), reorganized and divided into five separate companies. As a result, CP
Ships became an independent publicly listed company on the Toronto Stock
Exchange ("TSX") and New York Stock Exchange ("NYSE") on 3rd October 2001. CP
Ships' maritime roots date back to 1886 when CPL established a marine service to
Asia to generate volume for the Pacific terminal of its newly completed
trans-Canada railway. CPL began operating a shipping business on the Atlantic in
1903. In 1968, CPL reorganized its North Atlantic shipping operations to
concentrate on container services and in 1984, co-founded Canada Maritime,
purchasing the minority interest in 1993.

          Since 1993, CP Ships has grown substantially both through organic
growth and through strategic acquisitions where it has established a record of
successfully improving the operations and the profitability of acquired
businesses. CP Ships focuses on maintaining and improving results of acquired
businesses by increasing volumes, enhancing operating efficiencies, reducing
costs, improving the organization and building brand strength.

Significant Acquisitions

          Since 1993, CP Ships has successfully completed the nine acquisitions
listed below. The remarks include the condition of each business at the time of
acquisition. Other than Ivaran Lines and CCAL, which have been merged into Lykes
Lines, each of the other acquired businesses continues as a significant brand in
CP Ships' current operations.
<TABLE>
<CAPTION>


           Year          Acquisition               Remarks
           ----          -----------               -------
<S>                     <C>                        <C>
           1993         Canada Maritime            Purchase of 43% minority
           1995         Cast                       Bankrupt
           1997         Lykes Lines                Bankrupt
           1997         Contship Containerlines    Profitable
           1998         Ivaran Lines               Unprofitable
           1998         ANZDL                      Profitable
           1999         TMM Lines                  Unprofitable; 50/50 joint venture
           2000         TMM Lines                  Acquired the remaining 50%
           2000         CCAL                       Small
           2002         Italia Line                Breakeven

</TABLE>

          In January 1993, CP Ships acquired the 43% minority interest in Canada
Maritime which it did not already own. This acquisition permitted it to plan
more effectively as the sole shareholder.

          In April 1995, Cast was acquired out of a bankruptcy proceeding. A new
management team was appointed and Cast's service offering and organization were
revitalized. Both Canada Maritime and Cast operate services on the TransAtlantic
market between Europe and Montreal, serving the U.S./Canada market.

          CP Ships acquired Lykes Lines in July 1997, also out of bankruptcy.
This acquisition extended its TransAtlantic coverage to the U.S. East and Gulf
Coasts. The same management team that had turned around Cast restructured Lykes
Lines' services, repositioned its marketing strategy, reorganized the management
structure and implemented cost reduction programs.

          The acquisition of Contship Containerlines in October 1997 provided CP
Ships with a platform to enter other markets, principally Australasia. Contship
Containerlines' Gulf-Mediterranean service complemented Lykes Lines' service in
that trade lane. Contship Containerlines also operates Round-the-World Services.


                                                                              6
<PAGE>

          Ivaran, which was acquired in May 1998, extended CP Ships' coverage to
the U.S. East Coast and Gulf Coast-South America trade lanes. This acquisition
permitted it to secure trade lane economies of scale and cost synergies. The
Ivaran brand name was replaced by Lykes Lines in 2000.

          In December 1998, CP Ships acquired ANZDL, the market leader in the
U.S. West Coast-Australasia trade lane. ANZDL also offered CP Ships improved
economies of scale and operating and cost synergies in the Australasian market.

          In January 1999, CP Ships formed the Americana Ships joint venture
with Transportacion Maritima Mexicana SA de CV ("TMMsa") in order to create a
strong regional competitor in the U.S. Gulf, Mexico, Central and South American
trade lanes. The 50/50 joint venture combined services in this region, Lykes
Lines and Ivaran Lines, with TMM Lines, the container shipping business of
TMMsa. Effective 1st January 2000, CP Ships acquired TMMsa's 50% interest in the
Americana Ships joint venture.

          In August 2000, CP Ships purchased Christensen Canadian African Lines
("CCAL"), which provides services between Montreal and the U.S. East Coast and
South Africa, building on Lykes Lines' position in the South Africa trade lane.
CCAL now operates under the Lykes Lines brand name.

          In August 2002, CP Ships acquired from d'Amico Societa di Navigazione
S.p.A. and others all of the issued and outstanding shares of Italia di
Navigazione S.p.A., an Italian company headquartered in Genoa, Italy. Italia
Line operated services between the Mediterranean-West Coast North America,
Mediterranean-Central and South America, West Coast North America-West Coast
Central and South America, and Intra-Central and South America. On 31st January
2004, the registered office of Italia was moved to Delaware, USA and the name
changed to Italia di Navigazione LLC.


Trends

          Between 1996 and 1998, container shipping capacity grew faster than
demand for container shipping services. This situation, coupled with the Asian
economic crisis in 1998, caused a sharp decline in industry profitability in
1998. In 1999, improved container volumes due to higher demand, combined with
lower deliveries of new ship capacity, led to an improved balance between supply
and demand and to higher freight rates, particularly in the Asian export
markets. In 2000, stable freight rates and a further improved balance between
supply and demand generally resulted in substantially improved profitability
among carriers. Since the Asian economic crisis in 1998, the industry has
demonstrated a greater willingness to rationalize services on all trade lanes,
mainly through joint service agreements and slot charter agreements. Carriers
also successfully adjusted to deregulation of the industry in the United States
that occurred in 1998. In 2001, growth in global container shipping capacity
outpaced the 3.8% growth in international container trade growth which was
adversely affected by the global economic slowdown, particularly in the U.S.
These combined factors had a negative impact on the industry's profitability in
2001. In 2002, global container capacity growth grew at 10.4% and growth in
international container trade grew at 10.2%, narrowing the gap between supply
and demand.

          In 2003 global container capacity growth was 9.4% with strong growth
in international container trade at 12.1%, driven by growth in the Asian
markets. This strong demand led to improved trading conditions in 2003 and
improved industry profitability.

          CP Ships recorded an improvement in profits(1) during 2003 despite
significant pressure on costs and strong competition in most of our trade lanes.
Both volume and revenue were CP Ships records. Container carryings at 2.2
million teu were 9% higher than 2002, reflecting strong growth in TransAtlantic,
Latin America and Asia, partly offset by lower volume in Australasia. Revenue(1)
at $3.13 billion was 16% higher than $2.69 billion in 2002. The average freight
rate, which excludes inland transport and slot charter revenue, increased 7% in
2003 due to better market conditions in most trade lanes. These improvements
were partially offset by higher operating costs. Cost per teu for 2003 was up by
7% compared to 2002 due mainly to three factors: firstly, the estimated net
effect of the weaker US$ was adverse by $57 million; secondly, fuel costs

     ---------------------
(1)  As restated (see Note 6 under the heading to Selected Consolidated
     Financial Information for further information).



                                                                              7
<PAGE>

were up $71 million, of which $38 million was from higher price; thirdly,
charters for 26 ships were renewed in 2003, nearly all at higher rates with an
estimated adverse impact of $17 million. The annualized effect of these charter
renewals is $34 million. Other operating expenses including terminal and inland
transport were also higher due to price inflation. The overall increase was
partly offset by the cost reduction program.


                      NARRATIVE DESCRIPTION OF THE BUSINESS

Overview

          CP Ships is one of the world's leading container shipping companies,
offering its customers door-to-door as well as port-to-port containerized
services for the international transportation of a broad range of industrial and
consumer goods, including raw materials, semi-manufactured and finished goods.
It operates a fleet of 80 ships in 22 trade lanes focusing on four principal
markets. In 2003, the Company transported 2.2 million twenty foot equivalent
units ("teu"), the standard measure of volume in the industry, on behalf of
approximately 23,700 customers. Based on standing capacity, CP Ships ranks as
the eleventh largest carrier in the world, giving it the economies of scale
available to global carriers.

          In 2003, the Company had revenue(1) of $3.13 billion and EBITDA(1,2)
of $221 million before an exceptional charge of $10 million related to its
organizational restructuring in Europe.

          CP Ships is a regional specialist that offers direct services to a
wider range of ports within a particular market than is generally offered by
global carriers. This approach, together with its global scale, allows it to
provide customers with the local expertise and market presence of a regional
specialist combined with many of the operating advantages of a global carrier.
CP Ships provides scheduled services in its four principal markets:
TransAtlantic, Australasia, Latin America and Asia, which it serves through
seven well-recognized brands: Canada Maritime, Cast, Contship Containerlines,
ANZDL, Lykes Lines, TMM Lines and Italia Line.

          CP Ships operates in an industry whose annual volume growth has on
average exceeded global gross domestic product growth by two to three times over
the last 20 years. Since its introduction in the 1950's, the container shipping
industry has facilitated world trade because of its simplicity, efficiency and
low cost, becoming an integral part of the global sourcing strategies for many
of the world's major manufacturers and retailers.

          Over the last seven years, CP Ships considers it has outperformed, on
the basis of return on capital employed ("ROCE"), in both weak as well as strong
market conditions, the average ROCE of those carriers in the top 20 for which
data is publicly available, due to its business model based on its competitive
strengths and strategy which are discussed below.


Competitive Strengths

          CP Ships considers it has the following strengths which allow it to
compete successfully:

          Leading market position. CP Ships believes it is the largest carrier
based on market share in a majority of its 14 core trade lanes. This leading
market position has been achieved by focusing on customers and customer service
through its well-recognized and highly-regarded brands.

          Regional focus. The Company's regional focus provides more reliable
and frequent service schedules, flexible and timely responses to changes in
local market conditions, the ability to offer customized

     --------------------
(1)  As restated (see Note 6 under the heading to Selected Consolidated
     Financial Information for further information).

(2)  EBITDA is earnings before interest, tax, depreciation, amortization,
     exceptional items and minority interest and equals operating income
     before exceptional items plus depreciation and amortisation. EBITDA,
     which is considered to be a meaningful measure of operating performance,
     does not have a standardised meaning under Canadian GAAP and may not be
     comparable with similar measures used by others.

                                                                             8
<PAGE>


services, greater trade lane economies of scale and premium pricing for its
services. These attributes, along with its strong market position, provide it
with a measure of protection from new competitors on its core trade lanes.

          Low cost operator. A combination of global scale economies and trade
lane scale economies based on strong market position has allowed CP Ships to
reduce its costs significantly. Savings in costs associated with ship networks,
terminals and stevedoring, the container fleet, inland transport and
administration have contributed to a 19% reduction in cost per teu from 1996 to
2002. Cost per teu increased in 2003 compared to 2002 by 7%, mainly due to
increased fuel and charter costs and the depreciation of the U.S. dollar, which
increased the reported amount of the substantial portion of CP Ships' costs
incurred in other currencies, such as the euro, Canadian dollar and GB Pound. CP
Ships remains committed to its cost savings programs.

          Diversified customer base. CP Ships has approximately 23,700 customers
which are diversified both by geography and by industry. Its largest customer
represented 2.1% of its revenue in 2003, and its top ten customers accounted for
only 8.5%. This diversity protects CP Ships against the adverse effect of
relying on a single customer or industry.

          Successful track record of acquisitions. CP Ships has successfully
completed nine acquisitions since 1993 mainly involving the turn-around of under
performing businesses. It has successfully integrated those businesses,
improving both services and profitability. Acquisitions have contributed to a
compound annual growth of revenue of 25% since 1994.

          Experienced management team. CP Ships' senior management team average
over 20 years experience in the container shipping industry. The large majority
of the management team has worked for CP Ships or with its acquired businesses
for many years. Incentives are provided to senior management through share-based
compensation and to all staff (including senior management) through cash
incentives based on operating income.

Strategy

          Six principal strategies underpin CP Ships' business model.

          Concentration on container shipping. CP Ships concentrates on
container shipping services, which allows management to focus and to plan for
and quickly respond to often rapidly changing economic, political and trade
conditions in what is a truly international business.

          Focus on regional markets. CP Ships has built strong positions in a
number of regional markets. It is the leading carrier in the majority of its
core trade lanes, which allows it to offer the best schedules and services to
its customers and to maximize trade lane economies of scale.

          Pursue selective acquisitions. Since 1993, nine acquisitions have been
executed and integrated successfully, often involving the turnaround of
under-performing businesses. CP Ships' revenue is now seven times larger than in
1994. In a relatively fragmented and cyclical industry, there will likely be
further acquisition opportunities. CP Ships expects to continue to pursue a
disciplined acquisition strategy that enables it either to grow in its existing
markets or to carefully expand into new markets, thereby helping it to achieve
further economies of scale that improve operating performance.

          Furthermore, as a way of leveraging strong regional positions and
adding value to our core container services, CP Ships intends to selectively and
modestly develop logistics services. In April 2004, CP Ships completed the
acquisition of Montreal based ROE Logistics, a family owned business
specializing in providing a range of freight forwarding, customs brokerage,
logistics, warehousing and distribution services.

          Enhance strong brands. CP Ships offers two or more of its
well-recognized brands in nearly all of its trade lanes. It intends to
strengthen its brands by continuing to respond to the evolving needs of its
customers by selectively expanding its services, improving service frequencies
and transit times, improving the efficiency of its inland transportation
networks and implementing effective training and staff retention programs. CP
Ships considers that its multiple branding approach results in higher levels of
service and customer loyalty and is one of the best ways to build and retain
market share.




                                                                              9


<PAGE>


          Provide supply chain solutions. Integrated door-to-door or intermodal
container transportation is the largest component in the logistics supply chains
of international trade. CP Ships continues to emphasize consistently reliable,
tailor-made intermodal supply chain solutions for its customers to strengthen
customer relationships and protect operating margins.

          Reduce costs. Delivering low-cost, high-quality service is a key to
success in the highly competitive container shipping industry. CP Ships reduced
its cost per teu by 14% from 1996 to 2003, and remains committed to its cost
savings programs.


Service

          CP Ships provides port-to-port and door-to-door ocean container
shipping services with 27 weekly sailings and eight non-weekly sailings covering
more than 145 ports on six continents. It emphasizes the provision of
door-to-door services to its customers. A typical shipment generally involves
the following steps:

     o    A customer makes a booking at a price and on other terms which
          usually have been agreed previously or determined under contract.

     o    The customer service department checks the existing customer profile
          and updates equipment, scheduling and transport requirements.

     o    CP Ships arranges for an inland transport provider to position an
          empty container at the customer's (exporting) plant or warehouse at
          an agreed time.

     o    Once the container is filled, the nominated inland transport
          operator picks up and moves the container by truck, rail, barge,
          feeder ship, or combination thereof, from the customer's loading
          point to a marine terminal in time to meet a particular sailing.

     o    The container is received by the marine terminal and is loaded
          directly into a pre-determined slot in the ship using specialist
          cranes or is stored at the terminal until loaded onto its scheduled
          ship.

     o    The ship sails at a fixed time according to a pre-set schedule on
          fixed day of the week sailings.

     o    The container is discharged at the marine terminal in the
          destination port, again according to the pre-set schedule.
          Just-in-time shipments and containers moving in high-density
          corridors move directly from ship to rail or truck, subject to
          satisfying the requirements of local customs. Otherwise, containers
          are stored at the arrival terminal for customs clearance and
          arrangement of inland transport.

     o    Delivery of a full container to a customer's (importing) premises is
          co-ordinated with an inland transport provider.

     o    After unloading the cargo at the importer's plant or warehouse, the
          empty container moves directly to an exporter's warehouse for
          reloading or to a depot to await future use.



                                                                            10
<PAGE>

Markets and Trade Lanes

          As at 31st December 2003, CP Ships operated in the following trade
lanes of its principal markets under the following brand names:



<TABLE>
<CAPTION>


Principal Market       Services     Trade Lanes                                 Brands
----------------       --------     --------------------------------------      ------------------------------------
<S>                        <C>      <C>                                         <C>
TransAtlantic              12       US/Canada via Montreal-North Europe         Canada Maritime, Cast
                                    US/Canada via Montreal-Mediterranean        Canada Maritime, Cast
                                    West Coast North America-Mediterranean      Lykes Lines, TMM Lines, Contship
                                                                                Containerlines, Italia Line
                                    US East Coast-North Europe                  Lykes Lines, TMM Lines
                                    Gulf-North Europe                           Lykes Lines, TMM Lines
                                    Gulf-Mediterranean                          Lykes Lines, TMM Lines, Contship
                                                                                Containerlines, Italia Line

Australasia                 6       Europe and US East Coast-Australasia        Contship Containerlines, ANZDL,
                                                                                Lykes Lines
                                    US West Coast-Australasia                   ANZDL, Contship Containerlines
                                    TransTasman                                 ANZDL, Contship Containerlines

Latin America              10       North Europe-East Coast South America       Lykes Lines, TMM Lines, Contship
                                                                                Containerlines
                                    Mediterranean-East Coast South America      Lykes Lines, Contship Containerlines,
                                                                                Italia Line
                                    US East Coast-East Coast South America      Lykes Lines, TMM Lines
                                    Gulf-East Coast South America               Lykes Lines, TMM Lines
                                    Gulf-Caribbean                              Lykes Lines, TMM Lines

                                    Mexico-Central America-West  Coast          Lykes Lines, TMM Lines, Italia Line
                                    South America
                                    Mediterranean-West Coast South America      Lykes Lines, TMM Lines
                                    Panama-West Coast South America             Lykes Lines, TMM Lines, Italia Line

Asia                        5       Asia-Americas                               Lykes Lines, TMM Lines, Canada
                                                                                Maritime
                                    Europe-India/Pakistan                       Contship Containerlines
                                    US East Coast-India                         Contship Containerlines, Lykes Lines

</TABLE>


          In addition to its four principal markets, CP Ships also operates in
the North America-West/South Africa trade lane and provides a small break-bulk
service between Asia-Latin America-Caribbean, both under the Lykes Lines and TMM
Lines brands.



                                                                             11
<PAGE>

              The following tables illustrate volume and revenue for CP Ships'
principal markets for the last three years. Percentages of total are shown for
both volume and revenue(1) for 2003.
<TABLE>
<CAPTION>


                                        Volume By Market

                                      2003                           2002           2001
                                     Volume           % of          Volume         Volume
     Market                        (teu 000s)        Total        (teu 000s)     (teu 000s)
     ---------------------------  --------------  ------------  --------------  ------------
<S>                                   <C>              <C>          <C>             <C>
     TransAtlantic                    1,163             53           1,039            942
     Australasian                       304             14             334            348
     Latin American                     239             11             174            162
     Asian                              453             21             424            331
     Other                               36              1              37             59
                                         --              -              --             --
     Total                            2,195            100           2,008          1,842
                                      =====            ===           =====          =====



                                        Revenue By Market

                                      2003                            2002            2001
                                    Revenue            % of          Revenue         Revenue
     Market                      ($ millions)(1)       Total       ($ millions)    ($ millions)
     ---------------------------  ---------------  -----------  ---------------- --------------
                                 (as restated)
     TransAtlantic                   1,573               50          1,328           1,323
     Australasian                      515               16            531             549
     Latin American                    297               10            238             244
     Asian                             635               20            508             435
     Other                             110                4             82              95
                                       ---                -             --              --
     Total                           3,130              100          2,687           2,646
                                     =====              ===          =====           =====



</TABLE>

TransAtlantic Market

          In 2003, 53% of CP Ships' volume was in the TransAtlantic market,
where it provided services under the Canada Maritime, Cast, Contship
Containerlines, Italia Line, Lykes Lines and TMM Lines brands. CP Ships offers
12 services on the TransAtlantic, of which 10 are fixed-day weekly sailings,
providing the most comprehensive service network in the market. Through
efficient links to an extensive inland transportation network in North America,
Mexico and Europe, CP Ships provides its customers with the choice of seamless
door-to-door services as well as port-to-port service options.

          Within the TransAtlantic market, CP Ships is the leader in the
US/Canada via Montreal-North Europe and the US/Canada via Montreal-Mediterranean
trade lanes with five weekly services, using a fleet of owned ice-strengthened
container ships which are designed to operate throughout the year. Two
ice-strengthened newbuilds were introduced in the second half of 2003 in the
Montreal-North Europe trade lane. The consequent cascading of ships that took
place within the services including the Montreal-Mediterranean trade lanes
served to modernise, upgrade and improve each of the five weekly services. The
Montreal Gateway provides a more direct route to Canada and the U.S. Midwest and
accesses a more cost effective Canadian infrastructure, including CP Ships'
operated terminals in Montreal and Canadian Pacific Railways' rail network than
alternate services via the U.S. East Coast.

          CP Ships' Gulf trade lanes serve U.S. and Mexican ports in the Gulf of
Mexico with three weekly services and one nine day service. Its regional focus
on the Gulf within the TransAtlantic market and its market share are
strengthened by the strong brand recognition of Lykes Lines in the U.S. Gulf,
TMM Lines in Mexico and Italia Line in the Mediterranean.

          CP Ships also operates two weekly services in the US East Coast-North
Europe trade lane and with the acquisition of Italia Line, CP Ships has
increased its presence on the West Coast North America-Mediterranean trade lane
where it operates a 10 day service.



     ------------------
(1)  As restated (see Note 6 under the heading to Selected Consolidated
     Financial Information for further information).


                                                                             12
<PAGE>

<TABLE>
<CAPTION>


Trade Lanes                         Services      Company Ships     Frequency     Brands
------------                        --------      -------------     ---------     -------
<S>                                     <C>             <C>         <C>           <C>
US/Canada via Montreal-North            3               7           3 x weekly    Canada Maritime, Cast
Europe

US/Canada via                           2               6           2 x weekly    Canada Maritime, Cast
Montreal-Mediterranean

West Coast North                        1               6           1 x 10 days   Lykes Lines, TMM Lines, Contship
America-Mediterranean                                                             Containerlines, Italia Line

US East Coast-North Europe              2               1           2 x weekly    Lykes Lines, TMM Line

Gulf-North Europe                       3               8           3 x weekly    Lykes Lines, TMM Line

Gulf-Mediterranean                      1               5           1 x 9 days    Lykes Lines, TMM Lines, Contship
                                                                                  Containerlines, Italia Line

</TABLE>



          CP Ships believes that its extensive low cost service network,
regional multi-brand focus, door-to-door capabilities, and significant volume
and trade lane economies of scale strengthen its position as the leading carrier
in the TransAtlantic market.

Australasian Market

          CP Ships operates six services in three trade lanes in the
Australasian market through its Contship Containerlines, ANZDL and Lykes Lines
brands. The Australasian market accounted for 14% of CP Ships' volume in 2003.
CP Ships is a leader in its Australasian trade lanes.

          In January 2003, following two years of planning, CP Ships in
cooperation with P&O Nedlloyd, CMA-CGM, Hamburg Sud, Hapag Lloyd and Marfret,
substantially restructured the services within the Europe-Australiasia and
Round-the-World trade lanes. CP Ships, with its partners, now operates two
separate fixed-day weekly Round-the-World services, one eastbound and the other
westbound. These services link Australia, New Zealand and the Pacific Islands
with Northern and Mediterranean Europe and the U.S. East Coast. The new services
are supported by 22 vessels, 10 of which are new purpose-built larger vessels
with a high reefer capacity. These changes achieve a more consistent market
coverage, offer better schedule integrity through improved frequency and better
transit times with the deployment of fewer ships at lower cost.

          In the US West Coast-Australasia trade lane, two weekly services are
operated. CP Ships also operates two services in the TransTasman trade lane
under the ANZDL and Contship Containerlines brands. One service operates two
ships and the other operates on a slot charter basis. In addition, a number of
CP Ships' other mainline services also serve the TransTasman trade lane.




                                                                             13
<PAGE>


<TABLE>
<CAPTION>

     Trade Lanes                        Services     Company Ships     Frequency     Brands
     -----------                        --------     -------------     ---------     ------
<S>                                        <C>             <C>         <C>           <C>
     Europe and US East Coast-             2               6            2 x weekly   Contship Containerlines,
     Australasia                                                                     ANZDL, Lykes Lines

     US West Coast-Australasia             2               6            2 x weekly   ANZDL, Contship Containerlines

     TransTasman                           2               2            1 x 14 days  ANZDL, Contship Containerlines
                                                                        1 x weekly
                                                                        (plus
                                                                        various
                                                                        mainline
                                                                        services)

</TABLE>

Latin American Market

          The Latin American market accounted for 11% of volume in 2003 with ten
services in eight trade lanes. The North American services are marketed under
the Lykes Lines and TMM Lines brands and the European services under the Lykes
Lines, TMM Lines, Italia Lines and Contship Containerlines brands. Lykes Lines
and TMM Lines also market services in the Asia-Americas trade lane (which is
discussed in "Asian Market" below) as well as the Gulf-North Europe and
Gulf-Mediterranean services included in the TransAtlantic market, all of which
call at Mexican ports.

          During the fourth quarter of 2003, the Gulf-West Coast South America
service, formerly the Italia relay was discontinued and replaced by three slot
charter arrangements (described below) to improve performance.

          Mediterranean-West Coast South America service operated by Compania
Sudamericana de Vapores ("CSAV") and Compania Chilena de Navegacion
Interoceanica SA ("CCNI") covering the Mediterranean-West Coast South America
tradelane and the West Coast North America-Mediterranean trade;

          Panama-West Coast South America service operated by P&O Nedlloyd,
which connects West Coast South America with the Caribbean via Manzanillo
International Terminal relay;

          Mexico-Central America-West Coast South America service operated by
MSC. The Asia to Central America and West Coast South America trades will now be
served on this arrangement via Manzanillo, Mexico relay following the
termination notice on the Asia-West Coast North America-Mexico-West Coast South
America service, which is to be terminated.





                                                                            14
<PAGE>

<TABLE>
<CAPTION>


     Trade Lanes                       Services      Company Ships     Frequency     Brands
     -----------                       --------      -------------     ---------     ------
<S>                                       <C>         <C>              <C>           <C>
     North Europe-East Coast               2                2          1 x weekly    Contship Containerlines, Lykes
     South America                                                     1 x 8 days    Lines, TMM Lines

     Mediterranean-East Coast              1          Slot charter     1 x weekly    Contship Containerlines, Lykes
     South America                                                                   Lines, Italia Line

     US East Coast-East Coast              2          Slot charter     2 x weekly    Lykes Lines, TMM Lines
     South America

     Gulf-East Coast South                 1                4          1 x weekly    Lykes Lines, TMM Lines
     America

     Gulf-Caribbean                        1                3          1 x weekly    Lykes Lines, TMM Lines

     Mediterranean-West Coast              1          Slot Charter     1 x 14 days   Lykes Lines, TMM Lines, Italia
     South America                                                                   Line

     Mexico-Central America-               1          Slot Charter     1 x 8 days    Lykes Lines, TMM Lines, Italia
     West Coast South America                                                        Line

     Panama-West Coast South               1          Slot Charter     1 x 7 days    Lykes Lines, TMM Lines, Italia
     America                                                                         Line

</TABLE>

Asian Market

          The Asian market accounted for 21% of CP Ships' volume in 2003. Its
presence in Asia was established with the acquisition of Contship Containerlines
in 1997 and expanded with the formation of the Americana Ships joint venture in
January 1999. At present CP Ships operates five services in three trade lanes.

          CP Ships operated three services in the Asia-Americas trade lane. One
service between Asia and the West Coast North America and Mexico, one between
Asia and the West Coast North America, Mexico and West Coast South America and,
launched during 2003, a fixed day weekly service between North East Asia
including China and Vancouver, BC deploying five ships. This third Asia-Americas
route strengthened market presence and created further operating efficiencies by
using existing organizations in Asia and North America. CP Ships tendered a
termination notice on the Asia-West Coast North America, Mexico, West Coast
South America service with a phase out from December 2003 to February 2004. In
February 2004, a new service between Asia and Vancouver and Oakland was
announced. Scheduled to start in April, it complements the existing
Asia-Vancouver service, further strengthening market presence in the
Asia-Americas trade lane where trade growth is expected to remain strong.

          On the Asia-North Europe and Asia-Mediterranean trade lanes, CP Ships
did not renew its slot charter agreement with CMA-CGM which terminated in March
2003.

          On the Europe-Indian Subcontinent trade lane, CP Ships continues to
co-operate with P&O Nedlloyd and CMA-CGM, providing two of the seven vessels
deployed in a fixed-day weekly service. Hapag Lloyd and Hamburg Sud also
participate on the service, through means of slot charter arrangements.
Safmarine withdrew from the service in July 2003, but sustained growth in the
Indian economy has allowed the remaining members of the Agreement to
successfully absorb the capacity vacated by Safmarine. The Service scope covers
Europe, Red Sea, Arabian Gulf, Pakistan and India.

          The US East Coast - India Service is fixed-day weekly, operated in
conjunction with CMA-CGM, Shipping Corporation of India and APL. CP Ships
contribute two of the seven vessels operated in the service. The service
connects the U.S. East Coast, Mediterranean, Sri Lanka and India.




                                                                           15

<PAGE>

<TABLE>
<CAPTION>

     Trade Lanes                  Services      Company Ships     Frequency         Brands
     -----------                  --------      -------------     ---------         ------
<S>                                  <C>              <C>         <C>               <C>
     Asia-Americas                    3               11          3 x weekly        Lykes Lines, TMM Lines, Canada
                                                                                    Maritime

     Europe-India/Pakistan            1               2           1 x weekly        Contship Containerlines, Lykes Lines

     US East Coast-India              1               1           1 x weekly        Contship Containerlines, Lykes Lines

</TABLE>

     The Westabout Europe and US East Coast - Australasia service, which is in
     the Australasian market, calls at South East Asian ports en route to North
     Europe and the Mediterranean.


Other Markets

          Other markets comprised approximately 1% of CP Ships' 2003 volumes.
Lykes Lines operates a roll-on roll-off ("Ro Ro") service between North America
and West/South Africa. Ro Ro ships are designed to handle cargo that is driven
on and off the ship, as well as containers that are lifted by cranes on and off
the ship.

          CP Ships also operates an Asia-West Coast Latin America-Caribbean
break-bulk service. Other markets activities also include the two terminals in
Montreal that CP Ships operates for Canada Maritime and Cast and their service
partners, together with sub-chartering out of ships that are temporarily surplus
to needs.

<TABLE>
<CAPTION>

     Trade Lanes                   Services     Company Ships     Frequency       Brands
     -----------                   --------     -------------     ---------       ------
<S>                                   <C>             <C>         <C>             <C>
     North America-                    1               5           1 x 15 days    Lykes Lines, TMM Lines
     West/South Africa

     Break-bulk service                1               1           1 x 30 days    Lykes Lines, TMM Lines

</TABLE>

Joint Service Agreements

          In nearly all of its trade lanes, CP Ships participates in joint
services with other container shipping companies either by contributing ships to
a joint service agreement or by entering into slot charters. It generally
prefers to contribute owned or chartered ships into a joint service agreement
where the economic benefits justify the capital investment. By operating its own
ships within a joint service, CP Ships believes it is better able to influence
important decisions regarding investment in ship and schedule improvements,
including number, size, and quality of ships deployed, sailing frequency, port
calls and port rotations. It also believes that lower costs can be achieved by
operating its own ships compared to chartering space from other carriers.

          The following describes selected joint service agreements to which CP
Ships is a party:

     o    US/Canada via Montreal-North Europe trade lane: CP Ships operates
          two services in partnership with Orient Overseas Container Line
          ("OOCL") under the St. Lawrence Co-ordinated Service, which was
          established in 1981. Canada Maritime provides four ships and OOCL
          provides two ships. In December 2002, CP Ships and OOCL agreed to
          charter a fixed number of slots to members of the Canex consortium:
          Maersk Sealand, Mediterranean Shipping Company and P&O Nedlloyd. The
          two year agreement took effect from January 2003. At the same time,
          Canex moved its existing service to CP Ships' Montreal Gateway
          Terminals.

     o    US East Coast-North Europe and Gulf-North Europe trade lanes: Since
          October 2000, the Lykes Lines and TMM Lines brands have been
          operating two joint weekly services in the US East Coast-



                                                                            16
<PAGE>

          North Europe trade lane and three joint weekly services in the Gulf-
          North Europe trade lane with the Grand Alliance, one of the three
          principal Alliances, whose partners in the TransAtlantic trade lane
          are P&O Nedlloyd, Nippon Yusen Kaisha, OOCL, and Hapag Lloyd. CP
          Ships contributes nine of the 31 ships deployed in this arrangement.

     o    Europe/US East Coast-Australasia trade lane: At the beginning of
          2003, CP Ships in cooperation with P&O Nedlloyd, CMA-CGM, Hamburg
          Sud, Hapag Lloyd and Marfret, extensively restructured the services
          within its Europe-Australasia and Ocean Star Round-the-World trade
          lanes. CP Ships, with its partners now operates two separate
          fixed-day weekly Round-the-World services; one eastbound and the
          other westbound. These services link Australia, New Zealand and the
          Pacific Islands with Northern and Mediterranean Europe and the U.S.
          East Coast. The services are supported by 22 vessels, 10 of which
          are new purpose-built larger vessels with a high reefer capacity.

     o    Gulf-East Coast South America: CP Ships operates a fixed-day weekly
          service between the U.S., Mexico and East Coast South America, under
          the Lykes Lines and TMM Lines brands. It is operated under a
          co-operation agreement with Libra using six ships, four of which are
          provided by CP Ships.

     o    Asia-Americas trade lane: CP Ships operates three fixed-day weekly
          services under the Lykes Lines, Canada Maritime and TMM Lines
          brands. One service is operated between Asia and U.S. West Coast
          North America,Mexico under a co-operation agreement with APL using
          six ships, four of which are provided by CP Ships.

     o    The trade lanes between the Indian Subcontinent and Europe and the
          Indian Subcontinent and the U.S. East Coast are each governed by
          Joint Service Agreements. The service to Europe is operated in
          conjunction with CMA-CGM and P&O Nedlloyd, with slot capacity
          distributed in agreed proportions. The parties to the Agreement
          collectively sell slot capacity to Hapag Lloyd and Hamburg Sud. The
          service to the U.S. East Coast is operated in conjunction with
          CMA-CGM, Shipping Corporation of India and APL. Under this
          Agreement, slot capacity is distributed in accordance with slot
          provision. Hapag Lloyd and United Arab Shipping Company participate
          in the service via means of Slot Charter Agreements with CP Ships.


          CP Ships generally charters space when it enters a new trade lane, if
the anticipated economic benefits of deploying its own ships do not justify the
size or risk of the investment or where CP Ships' volumes in that particular
trade lane are likely to be initially small. CP Ships regularly evaluates the
potential for deploying its own ships in growing or new markets.

          CP Ships has restructured and rationalized its operations in many
trade lanes, most frequently by combining with other carriers a larger number of
independent services into jointly-operated services. These rationalized
operations enhance service on the trade lanes by increasing frequency, expanding
port calls, improving reliability and reducing costs.





                                                                             17
<PAGE>

<TABLE>
<CAPTION>

Operations

Ships

          The following table lists the 80 ships owned and chartered by CP Ships
as at 31st December 2003:

                                                                          NOMINAL                  MAX SERVICE
    SHIP                  YEAR              TRADELANES                  CAPACITY(2)     OWNED /       SPEED      SHIP
                          BUILT                                            (teu)    CHARTERED(1)(3)  (knots)   TYPES(4)
<S>                       <C>    <C>                                       <C>           <C>            <C>       <C>
Canmar Honour             1998   US/Canada via Montreal-North Europe       3000          Owned          22        U
Canmar Pride              1998   US/Canada via Montreal-North Europe       3000          Owned          22        U
Cast Prominence           1996   US/Canada via Montreal-North Europe       2400          Owned          20        U
Cast Premier              1995   US/Canada via Montreal-North Europe       2300          Owned          21        U
Cast Prospect             1995   US/Canada via Montreal-North Europe       2400          Owned          21        U
Canmar Spirit             2003   US/Canada via Montreal-North Europe       4100          Owned (8)      23        U
Canmar Venture            2003   US/Canada via Montreal-North Europe       4100          Owned (8)      23        U
Canmar Endurance          1983   US/Canada via Montreal-Mediterranean      1900          Owned          20        U
Canmar Valour             1979   US/Canada via Montreal-Mediterranean      1000          Owned          19        U
Canmar Glory              1979   US/Canada via Montreal-Mediterranean      1000          Owned          19        U
Canmar Triumph            1978   US/Canada via Montreal-Mediterranean      1000          Owned          19        U
Canmar Victory            1979   US/Canada via Montreal-Mediterranean      1000          Owned          19        U
Canmar Bravery            1978   US/Canada via Montreal-Mediterranean      1700          Owned          19        U
Lykes Hero                1986   US East Coast-North Europe                2900          Owned          21        U
TMM Jalisco               1988   Gulf-North Europe                         3300          Owned          21        U
Lykes Discoverer (5)      1987   Gulf-North Europe                         3000          Owned          19        U
Lykes Explorer (5)        1987   Gulf-North Europe                         3000          Owned          19        U
Lykes Liberator (5)       1987   Gulf-North Europe                         3000          Owned          19        U
Lykes Navigator (5)       1987   Gulf-North Europe                         3000          Owned          19        U
Lykes Motivator (5)       1990   Gulf-North Europe                         3000          Owned          22        U
TMM Campeche              1989   Gulf-North Europe                         3000          Owned          21        U
TMM Yucatan               2003   Gulf-North Europe                         3200          Owned          22        G
Lykes Ambassador          1987   Gulf-Mediterranean                        3300          Owned          21        U
TMM Sinaloa               1987   Gulf-Mediterranean                        3300          Owned          21        U
TMM Hermosillo            1986   Gulf-Mediterranean                        3300          Owned          21        U
Lykes Achiever            1987   Gulf-Mediterranean                        3300          Owned          21        U
Lykes Challenger          1986   Gulf-Mediterranean                        3300          Owned          21        U
TMM Sonora                1994   West Coast North America-Mediterranean    2400           MTC           20        U
Lykes Commander           1994   West Coast North America-Mediterranean    2400           MTC           20        U
Cielo di San Francisco    1998   West Coast North America-Mediterranean    2500           MTC           21        G
Cielo del Canada          1998   West Coast North America-Mediterranean    2500           MTC           21        G
Cielo d' America          2002   West Coast North America-Mediterranean    2500           MTC           21        G
Cielo d' Europa           2002   West Coast North America-Mediterranean    2500           MTC           21        G
Contship Rome             1998   Europe and US East Coast-Australasia      2200           MTC           21        G
Contship London           1997   Europe and US East Coast-Australasia      2200           MTC           21        G
Contship Aurora           2002   Europe and US East Coast-Australasia      4100          Owned          25        U
Contship Australis        2002   Europe and US East Coast-Australasia      4100          Owned          25        U
Contship Borealis         2002   Europe and US East Coast-Australasia      4100          Owned          25        U
Contship Auckland         1998   Europe and US East Coast-Australasia      2200           STC           21        G
Direct Kea                1998   US West Coast-Australasia                 2200           MTC           21        G
Direct Tui                1998   US West Coast-Australasia                 2200           MTC           21        G
Direct Condor             2000   US West Coast-Australasia                 1700           STC           20        G
Direct Jabiru             2000   US West Coast-Australasia                 1700           STC           20        G
Direct Kestrel            2000   US West Coast-Australasia                 1700           STC           21        G





                                                                                                                 18
<PAGE>
                                                                          NOMINAL                  MAX SERVICE
    SHIP                  YEAR              TRADELANES                  CAPACITY(2)     OWNED /       SPEED      SHIP
                          BUILT                                            (teu)    CHARTERED(1)(3)  (knots)   TYPES(4)

Direct Eagle              2000   US West Coast-Australasia                 1600           STC           20        G
Rotoiti                   1977   Trans Tasman                               800          Owned          16      Ro Ro
Rotorua                   1993   Trans Tasman                               700           STC           16      Ro Ro
Lykes Envoy               2003   North Europe-East Coast South America     2500           MTC           23        G
Altonia                   2000   North Europe-East Coast South America     1700           STC           20        G
Lykes Flyer               2002   Gulf-East Coast South America             3200          Owned          22        G
Lykes Ranger              2002   Gulf-East Coast South America             3200          Owned          22        G
TMM Colima                2002   Gulf-East Coast South America             3200          Owned          22        G
TMM Guanajuato            2002   Gulf-East Coast South America             3200          Owned          22        G
TMM Chiapas               2001   Gulf-Caribbean                            1600           STC           21        G
Colombia                  1996   Gulf-Caribbean                            1600           STC           20        G
Puerto Limon              1996   Gulf-Caribbean                            1500           STC           20        G
TMM Tabasco               2000   Asia-Americas                             2100          Owned          22        G
Lykes Voyager             1995   Asia-Americas                             2100          Owned          21        G
Lykes Deliverer           2002   Asia-Americas                             4100          Owned (9)      25        U
Lykes Provider            2003   Asia-Americas                             4100          Owned (9)      25        U
TMM Monterrey             2003   Asia-Americas                             4100          Owned (9)      25        U
Canmar Dynasty            1994   Asia-Americas                             2100          Owned          21        G
Dorian                    1994   Asia-Americas                             1500           STC           20        G
TMM Aguascalientes        2003   Asia-Americas                             4100          Owned (9)      25        U
TMM Hidalgo               1997   Asia-Americas                             1700           STC           20        G
Canmar Promise            1997   Asia-Americas                             2100           STC           20        G
Lykes Eagle               2000   Asia-Americas                             2100          Owned          22        G
Indamex Malaber           2001   US East Coast-India                       2500           STC           23        U
Indamex Mumbai            1996   US East Coast-India                       2800           STC           22        U
Contship Champion         1994   Europe-India/Pakistan                     3500           STC           23        U
Contship Innovator        1994   Europe-India/Pakistan                     3500           STC           23        U
Lykes Energizer           1992   North America-South Africa                 700           MTC           17      Ro Ro
Lykes Raider              1990   North America-South Africa                 800           MTC           17      Ro Ro
Lykes Inspirer            1990   North America-South Africa                 700           MTC           17      Ro Ro
Lykes Winner              1990   North America-South Africa                 700           MTC           17      Ro Ro
Lykes Runner              1992   North America-South Africa                 800           MTC           17      Ro Ro
National Pride (6)        1981   Break-bulk                                 500           STC           16        BB
Montreal Senator (7)      1983   Sub-Charter                               1900          Owned          20        U
APL Honduras (7)          2002   Sub-Charter                               4100          Owned (9)      25        U
APL Panama (7)            2002   Sub-Charter                               4100          Owned (9)      25        U
                                                                       -------------
CP Ships total standing capacity                                        197,500



</TABLE>

(1)  Owned ships includes four long-term chartered ships owned by certain U.S.
     trusts, the beneficial interests in which were purchased by CP Ships in
     September 2001, two ships under 25 year capital leases and six long-term
     (8 year) time chartered ships which for accounting purposes are treated as
     operating leases.
(2)  Nominal capacity represents the total number of slots theoretically
     available both above and below decks and is therefore different from
     operational capacity which takes account of average cargo weight,
     destination of cargo, likely weather conditions, draft limitations, ship
     stability, and other factors which generally reduce the ship capacity,
     often significantly.
(3)  Bareboat charters are arrangements where the charterer becomes directly
     responsible for providing crew and costs relating to operation and
     maintenance. In contrast, under a time charter the owner remains
     responsible for providing the crew and for certain repairs and
     maintenance costs. A short-term charter ("STC") is a time charter of one
     year or less, medium-term charter ("MTC") is a time charter more than
     one year but less than three years; and long-term charter ("LTC") is a
     time charter three years or more other than those included in footnote
     one. For each ship listed, the duration of the term is determined as from
     the date of entering into the charter.
(4)  Geared ("G") ships have on-board cranes, while ungeared ("U") do not.
     Roll-on Roll-off ("Ro Ro") ships are designed to handle cargo that is
     driven on and off the ship, as well as containers that are lifted by
     cranes on or off the ship. Break-bulk ("BB") ships may also handle
     containers.
(5)  U.S. flag ships.
(6)  One-way voyage charters.
(7)  Ships not employed by CP Ships at 31st December 2003.
(8)  Ships subject to 25 year capital lease.
(9)  Long term (8 year) time chartered.



                                                                            19
<PAGE>


Ship Replacement Program

          During 2003, CP Ships completed its $800 million ship replacement
program, commenced in 1999, to replace a number of its chartered ships with
owned ships. The replacement program comprised purchasing 13 used ships,
building ten new ships and entering into long-term charter arrangements on a
further six new ships. It followed the integration of various acquisitions
during the 1990s and a comprehensive review of its ship fleet requirements and
took into account three key factors. First, CP Ships believes that it can reduce
its costs over the medium to long-term by owning ships rather than chartering
them. Second, a higher proportion of owned ships will reduce its exposure to
volatility in operating costs from the charter market and therefore improve the
stability of CP Ships expenses. Third, it can be difficult to charter ships with
optimum characteristics for certain trade lanes at the time they are needed.

          The 23 replacement ships are medium-sized from 2100 to 4100 teu, which
CP Ships believes to be the optimal size range for operations in regional
markets. Each of the new ships has been specifically designed for the trade in
which it is intended to operate. Three, which operate in the Australasian
trades, have the capacity to carry a significant number of refrigerated
containers for temperature sensitive cargo, two are ice-strengthened to operate
into Montreal and the remaining five are geared, enabling them to operate in
Latin American and other ports without shore side cranes. The replacement
program has resulted in the percentage of CP Ships owned fleet capacity,
including long-term charters, increasing from 28% as at 30th June 2000 to 68% at
the end of 2003. The average age of the owned fleet has also decreased from 12.6
years at the beginning of 2000 to just under eight years at the end of 2003. The
estimated useful life of a containership is 25 years.

          Whilst the replacement program has resulted in CP Ships achieving its
goal of owning or long-term chartering the majority of its ship fleet, the
combined impact of service expansions, the acquisition of Italia Line during
2002 and the prospects for future trade growth means that CP Ships requirements
have evolved from those set out in 1999 and, therefore, to ensure that it
continues to have the appropriate ships to operate its trades and to minimize
its reliance on the volatile, and through the cycle more expensive, short to
medium term charter market, CP Ships reached agreement during August 2003 to
charter from Seaspan Container Lines for a period of up to 12 years, a further
nine 4250 teu containerships to be built and delivered between end 2005 and mid
2007. The charter costs for these nine ships, which will be constructed by
Samsung Heavy Industries of Korea, is close to CP Ships equivalent cost of
ownership including financing. Further details on the charter terms can be found
in the Indebtedness section of this document.

          The composition of CP Ships ship fleet by type of commitment is set
out in the table below:
<TABLE>
<CAPTION>

                                                                                            2007 proforma fleet after delivery
                                                     Fleet as at 31st December 2003              of the nine Seaspan ships(3)
                                                          Ships          % Capacity(1)          Ships         % Capacity(1)
<S>                                                        <C>                  <C>                <C>                <C>
           Owned                                            40                    55%              40                  45%
           Long-Term Committed                               6                    13%              15                  27%
                                                   ------------------------------------------------------------------------
           Total Owned and Long-Term Committed(2)           46                    68%              55                  72%
                                                   ------------------------------------------------------------------------
           LT Charter                                        -                     -                -                   -
           MT Charter                                       16                    15%              16                  13%
           ST Charter                                       18                    17%              18                  15%
                                                   ------------------------------------------------------------------------
           Total Chartered                                  34                    32%              34                  28%
                                                   ------------------------------------------------------------------------
           Total Fleet                                      80(4)                100%              89                 100%
                                                   ------------------------------------------------------------------------
</TABLE>


(1)   The proportion of capacity in each category of ship within the overall
      fleet is based on the standing capacity for each class of ships.
(2)   Owned and Long-Term Committed ships includes four long-term chartered
      ships owned by certain U.S. trusts, the beneficial interests in which
      were purchased by CP Ships in September 2001, two ships under 25 year
      capital leases and six long-term (8 year) time chartered ships which
      for accounting purposes are treated as operating leases. The 2007
      proforma fleet also includes the nine Seaspan charters.
(3)   Assumes 5% increase in total capacity per year to meet trade growth.
(4)   The fleet at 31st December 2003 includes three ships which are sub
      chartered out, two of which are long term chartered ships, each 4100
      teu standing capacity and one owned ship at 1900 teu.



                                                                            20
<PAGE>

Containers

          CP Ships operates the following fleet of containers with a total
capacity of approximately 443,000 teu as at 31st December 2003:


         Container Type         Owned(1) (teu)    Leased (teu)    Total (teu)
         Standard                      148,000         252,000        400,000
         Specialized(2)                  4,000          39,000         43,000
                                ----------------------------------------------
         Total                         152,000         291,000        443,000
                                ----------------------------------------------
         Percentage                        34%             66%           100%
                                ----------------------------------------------


(1)   Includes containers subject to capital leases.
(2)   Temperature-controlled (reefer) and other specialized units.



          As at 31st December 2003, 34% of CP Ships' container fleet was owned
or held under capital leases or sale and leaseback arrangements. CP Ships'
believes that owning containers is generally less expensive than hiring them
under short-term leases. However, short-term leases provide CP Ships with the
ability to reduce or otherwise adjust its container fleet in response to
changing trade conditions or container imbalances in specific trade lanes. CP
Ships' objective is to increase over time the proportion of owned and long term
leased containers in its fleet, although there are currently no commitments to
purchase containers.

          During August 2004, CP Ships' ordered 3,000 temperature-controlled
containers.  This investment of about $50 million is the first phase of a plan
to expand CP Ships' presence in the growing, higher margin, temperature-
sensitive cargo market and to replace older units.

Montreal Terminals

          CP Ships operates two of the three terminal properties at the Port of
Montreal. In 2003, CP Ships completed the refurbishment of two gantry cranes at
a cost of $6 million. This project has resulted in improved productivity for
these cranes.

          At the terminals, workers employed by the Maritime Employer's
Association were subject to contracts that expired at the end of December 2003.
Negotiations regarding new contracts are in progress.

          The main container handling equipment at the Montreal terminals
comprises nine ship-to-shore gantry cranes, 14 rubber-tired gantry cranes, 20
front-end loaders and 64 yard tractors.

Other Property

          CP Ships has offices throughout the world, including its head office
in London, UK and major offices in Gatwick, UK, Tampa, Florida and
Montreal, Quebec. In addition, CP Ships has other assets used in its business,
such as furniture and fixtures, information systems hardware and software,
leasehold improvements and motor vehicles, none of which are individually
material.

Group Shared Services

          Over time, CP Ships has achieved significant operating efficiencies
and cost savings by combining the management of various decentralized services,
including container fleet, inland transport, marine operations, marine
terminals, administration, information systems and insurance and risk
management. CP Ships expects that opportunities for further significant savings
are reduced, however, some opportunities exist from transferring further
processing activities from both Europe and the U.S. to India and further
consolidation of facilities in Europe, including the UK.


                                                                           21
<PAGE>


          Container Fleet - Provision and Management. CP Ships operates with a
single company-wide container fleet acquiring containers either by direct
purchase from manufacturers or through short, medium or long-term leasing
arrangements with leasing companies. Purchasing and leasing activities are fully
centralized in order to achieve cost savings through greater purchasing power.
Empty positioning and other aspects of container management are performed by
regional units, which  implement a centrally developed strategy.

          Inland Transport. The main regions where CP Ships provides a high
volume of inland transport services are Europe and North America. Inland
transport activities include the planning, execution and management of mainly
outsourced rail, truck, feeder ship and barge services used to transport
containers between ports and customer warehouses or inland depots or plants.
Inland transport movements are planned and executed through a network of local
operational offices located throughout Europe and North America under regional
direction.

          CP Ships believes that it can achieve further efficiencies by
continuing to combine its volume of inland transport management at a regional
and local level. As a result, regional inland transport activities in Europe are
managed from operating centres in the UK, Germany, Belgium, France and Italy. In
North America, inland transport activities are managed from operating centres in
Montreal, Quebec and Tampa, Florida.

          Marine Operations. Marine operations include ship procurement
(including under time charters) and deployment, marine fuel purchasing, the
contracting and control of ship management services and the negotiation of
marine terminal contracts. CP Ships provides many of these services centrally to
all of its brands in order to achieve economies of scale, with regional and
local resources employed as appropriate. Marine fuel is available from a large
number of suppliers throughout the world.

          CP Ships does not employ any sea-going staff. Instead, it contracts
with independent ship managers who provide crew for its owned and bareboat
chartered ships. A bareboat charter is broadly equivalent to ownership but for a
set period of time and involves the leasing of a ship only, with the charterer
providing the crew and paying all operating costs including repairs and
maintenance. A time charter, which typically is for a shorter duration than a
bareboat charter, includes crew provided by the owner. Under the control of CP
Ships, the ship managers also supervise ship maintenance, dry-docking and
technical management according to an agreed budget and agreed ship maintenance
policies and procedures, and co-ordinate compliance with relevant legislation
and regulation. In 2003, CP Ships recruited 20 cadet officers, who are employed
by a third party, as part of the UK tonnage tax cadet training program.

          Marine Terminals. CP Ships focuses on marine terminal operations in
several ways. First, it aims to combine volume from its various trade lanes and
services through common ports, where commercial, economic and operational
factors allow. Second, the marine operations group negotiates stevedoring and
marine terminal contracts using total volume to secure competitive pricing.
Third, CP Ships operates two marine terminals in Montreal, Quebec.

          CP Ships may actively pursue or participate in initiatives to improve
its existing terminal arrangements with independent port and terminal companies
where volumes, scale of operations and other economic factors justify focus. For
example, in late 1999, CP Ships concluded a long-term agreement with Hesse-Nooed
Natie, an Antwerp-based stevedore company, whereby it has committed all its
volume to secure priority berthing, ample terminal space and reduced cost at a
planned new terminal, due to open late 2005 at Deurganckdok in the port of
Antwerp.

          Administration. In 2003 a Global Processing Center in India was
established to handle certain back office activities, primarily data processing
work. The benefits of this operation will include reduced transaction costs,
standardized processes, and improved service levels through extended operating
hours. As of 31st December 2003, 150 positions had been transferred from Europe
and North America.

          Information Systems. CP Ships is in the process of developing a single
company-wide system as a replacement for the diverse operational information
systems it inherited with its various acquisitions. This includes
standardization of CP Ships on a single financial system platform, SAP, which
began operation for

                                                                            22
<PAGE>


the majority of the company in January 2004. CP Ships continues to
reduce the number of separate operational and financial information system
functions across its organization in order to achieve better operating
efficiencies. Centrally-managed application development and technical support
will provide effective cost control and support common information technology
("IT") processes across the group. Two major data centres located in the UK
and in the U.S. support IT hardware and software for all corporate systems.

          Implementation efforts continue within several of the lines to enhance
capabilities with GT Nexus, an industry e-commerce portal. The portal covers
rate requests, sailing schedule queries, documentation submissions and shipment
tracking functions. These efforts complement internal e-commerce projects. In
2003, a new e-commerce system was deployed to five of the company's brand web
sites.

          Insurance and Risk Management. CP Ships provides centrally managed
insurance, risk management and claims support services with centres in Europe,
North America and Australia.


Sales and Marketing

Brands

          CP Ships serves its customers through seven distinct brands: ANZDL,
Canada Maritime, Cast, Contship Containerlines, Italia Line, Lykes Lines and TMM
Lines. CP Ships believes that its brands are recognized in the industry for
their distinct service offering, strong operating performances and superior
customer relations. In 2003 Contship Containerlines won IFW's Shipping Line of
the Year and Lykes Lines was a finalist. ANZDL and Cast both won Logistics
Management's Quest for Quality Awards. Cast also won S.C Johnson's Carrier of
the Year Award and was named as a Star Performer in the Lloyd's Loading List
annual North Atlantic trade analysis. Lykes Lines was named Best Carrier to
Africa by the Canadian International Freight Forwarders Association ("CIFFA").
Canada Maritime won three CIFFA awards - Best European, Best Mediterranean and
Best Overall Carrier - for the third year in a row. It also won the Ocean
Carrier Award from Canadian Transportation and Logistics magazine and was
re-certified to Q1 Quality Status by the Ford Motor Group.

Sales

          Sales and marketing activities are organized around the individual
brands, reinforcing CP Ships' strategy of maintaining and strengthening its
brands within its regional markets. CP Ships' policy is to have its own sales
and marketing organizations based, in the large majority of locations, in its
principal markets. It has over 200 sales and marketing offices.

          Third party agents are utilised in smaller low volume locations. Third
party agency arrangements may comprise "full service" agreements (including
sales, marketing, customer service and back-office) or may be functionally
specific, for example covering back-office services only.

          A Global Account group manages sales, marketing and customer support
relationships with large global customers with activities in many trade lanes.
This allows CP Ships to offer tailored regional coverage on a global scale
thereby capitalizing on the capabilities of the regional management teams and
market knowledge.

Trademark and Licences

          CP Ships does not rely on the licensing of intellectual property
belonging to other companies in marketing its brands other than in respect of
certain "CP" related trademarks which are owned by the successor of CPL,
Fairmont Hotels & Resorts Inc., and licensed to CP Ships on a royalty free
perpetual basis.



                                                                           23
<PAGE>

Customers

          CP Ships has three types of customers: exporters, importers and
intermediaries. Exporters include a wide range of enterprises, from global
manufacturers (including the major automotive companies that may ship
thousands of teu annually) to small family owned businesses (which may ship
just a few teu each year). Importers are usually the direct purchasers of
goods from exporters but may also comprise sales or distribution agents or may
be the receiver of the containerized goods at the final point of delivery.
Intermediaries act as agents for exporters and importers, performing a range
of duties such as rate negotiation, bookings, documentation, insurance,
customs clearance, billing and payments, inland transport, warehousing and
container tracking services which would otherwise be part of the carrier's
door-to-door service. Intermediaries usually receive a commission from the
carrier as well as from customers for performing these activities. Commissions
paid to intermediaries by carriers generally range from 1.5% to 2.5% of the
shipping contract value, although they may sometimes be paid on a fixed fee
basis, typically in the range of $25 to $35 per teu.

          Normally one party involved in a shipment, either the exporter, the
importer or the intermediary, controls the selection of the carrier with such
control usually depending on the terms of sale in the contract between an
exporter and an importer. The extent to which exporters, importers or their
intermediaries control carrier selection varies depending on the trade lane
involved.

          CP Ships markets its services to exporters and importers at both ends
of the trade lane. By providing comprehensive sales coverage in this way, CP
Ships builds knowledge about its customers (and other parties involved in the
shipment), enhances its customer relations, builds brand loyalty and preserves
market share. In CP Ships' view, based on industry and company customer surveys,
customers expect to receive from carriers reliable, consistent and
cost-effective ocean and inland transport services, schedule reliability,
container availability and problem solving.

          General practice within the container shipping industry is to provide
standard credit terms to the party that is responsible for paying the
transportation charges. The amount of credit and the credit period depends on a
number of factors including the customer's financial status, its credit history
with the carrier, the frequency and size of its shipments and overall size and
type of business. CP Ships' credit terms are consistent with general industry
practice.

          CP Ships has a diverse customer base. In 2003, CP Ships' top ten
customers accounted for 9.8% of volume or 8.5% of revenue. The single largest
customer accounted for 2.0% of volume and 2.1% of revenue in 2003.


Competition

          The container shipping industry is highly competitive. While the
world's top 20 carriers, by capacity, control 63% of global container capacity,
the industry remains highly fragmented with over 550 carriers operating
world-wide. Within the trade lanes it serves, CP Ships competes against a wide
range of global, regional and niche carriers. However, CP Ships participates in
joint service agreements with other container shipping companies in nearly all
of its trade lanes.

          Global carriers generally deploy significant ship capacity and operate
extensive service networks in most trade lanes in the major East-West markets,
as well as in selected regional markets. These carriers generally deploy large
ships and serve major ports with direct calls and other ports through
transhipment over regional hubs. Global carriers that compete with CP Ships
include APL, CMA-CGM, Hapag Lloyd, Maersk Sealand, Mediterranean Shipping, OOCL
and P&O Nedlloyd.

          Regional carriers generally focus on a number of smaller trade lanes
within the major East-West markets, or within regional markets such as
Australasia, Africa, Latin America and India. These carriers tend to offer
direct services to a wider range of ports within a particular market than global
carriers.


                                                                             24

<PAGE>

Regional carriers that compete with CP Ships include CSAV, Hamburg Sud,
Shipping Company of India and CCNI.

          Niche carriers are similar to regional carriers but tend to be smaller
in terms of the amount of ship capacity they operate and the number and size of
the markets they cover. Niche carriers that compete with CP Ships include
Atlantic Container Line, Dole Ocean Cargo Express and Seaboard Marine.

Employees

          The number of employees of CP Ships at 31st December 2003 was
approximately 4,720 with 44% of the staff located in North America, 38% in
Europe and the balance mainly in Australasia and South America. CP Ships'
employees are divided by function almost evenly between (i) sales and marketing,
(ii) customer service, (iii) shared services and (iv) administration and
accounting, with the head office of CP Ships being less than 1% of the total.
Employees engaged in shared services include those responsible for container
fleet management, co-ordination of inland transport services, certain IT
functions, insurance and risk management and marine operations such as ship
procurement, marine fuel purchasing, ship management services and the
negotiation of marine terminal contracts.

          Less than 3% of CP Ships' employees are employed under collective
bargaining agreements. CP Ships believes that its relations with employees are
good. CP Ships further believes that the material terms of its collective
bargaining agreements and other terms of employment are customary for the
industry, as are the classification of its employees and the geographic
locations covered by such agreements.

Insurance

          CP Ships maintains insurance policies to cover risks related to
physical damage to its ships and ship equipment, other equipment (such as
containers, chassis, terminal equipment, trucks) and properties, as well as
third party liabilities arising from the carriage of goods and the operation of
ships and shore-side equipment, and general liabilities which may arise through
the course of its normal business operations.

          CP Ships' owned ships are insured with a group of major insurance
companies for physical damage (hull and machinery insurance), including war and
terrorist risks, and total loss up to their full individually declared values on
an annual basis. The declared value of the ship is its assessed market value. A
further 25% of the value is covered under an "increased value" policy, in order
to meet additional expenses that might arise from the total loss of a ship. In
addition, owned ships calling in areas identified by the marine insurance market
as specified war risk zones are temporarily covered for war risks by declaration
and payment of an additional premium. Under its charter agreements, CP Ships is
required to pay additional premiums when its chartered ships call in a war risk
zone.

          Protection and Indemnity insurance (P&I) provides cover for: third
party claims arising from the carriage of goods including loss or damage to
cargo; claims arising from the operation of owned and chartered ships including
injury or death to crew, passengers, or other third parties; claims arising from
collisions with other ships; damage to other third-party property; pollution
arising from oil and other substances; and salvage and other related costs. CP
Ships' P&I cover is divided between two P&I Clubs, both of which are members of
the International Group of P&I Clubs. Members of this association, who insure
approximately 90% of the world's ocean-going merchant fleet, arrange a pooling
insurance and a substantial re-insurance program. Members of P&I Clubs are
subject to calls payable to the association based on the member's claim record
as well as the claim records of all other members of the association. The sum
insured by P&I cover is up to approximately $4.25 billion per incident. CP
Ships' terminals in Montreal and its equipment fleet (containers and chassis)
are insured in the London Companies market for physical damage, including war
risks, and liabilities arising thereunder. As a result of the significant
insurance losses incurred in the September 11, 2001 attacks and related concern
regarding terrorist attacks, the world's insurance markets increased premiums
and reduced or restricted cover for terrorist losses generally. Accordingly,
premiums payable by CP Ships have increased substantially and the level of
terrorist cover has been significantly reduced. The impact on Marine insurance
cover and cost of developing U.S. legislation,






                                                                           25

<PAGE>

including the U.S. Terrorism Risk Insurance Act of 2002, which aims to restore
terrorism coverage in insurance policies, and security requirements generally,
is regularly assessed.

          CP Ships also maintains additional insurance policies to cover a
number of other risks including: strikes and delays; liability arising from
documentary or procedural errors and omissions; workers compensation; motor
fleet; office buildings; directors' and officers' liability; and general
liabilities. A US re-insurance program has been set up to provide additional
cover in respect of liabilities including trucking, terminal and charterers
liabilities. CP Ships believes that the types and amounts of insurance coverage
it currently maintains are in line with customary practice in the international
container shipping industry and are adequate for the conduct of its business.

Security

          As a matter of course, CP Ships gives high priority to security and
has traditionally supported industry and government efforts to ensure the safe
carriage of cargo. CP Ships' Security Committee reports directly to the Chief
Executive Officer. Membership is drawn from experts across the group including
marine and land based operations, sales and customer service, cargo
documentation, information systems, communications and regional management. CP
Ships' Vice-President of Supply Chain Security maintains focus on ensuring
company-wide compliance with international security initiatives. Top priorities
in 2003 were to ensure compliance with Customs-Trade Partnership Against
Terrorism (C-TPAT) in the U.S., Partners in Protection in Canada and the U.S.
Customs 24-Hour Advance Notification Rule. As these programs and others develop,
CP Ships will make compliance a top priority.

Regulatory Matters

          CP Ships' operations are materially affected by government regulation
in the form of international conventions, national, state and local laws and
regulations in force in the jurisdictions in which the ships operate, as well as
in the country or countries of their registration. Because such conventions,
laws and regulations are subject to revision, it is difficult to predict the
continuing cost of compliance with such conventions, laws and regulations, the
impact thereof on the resale price or useful life of ships or on business
operations. Various governmental and quasi-governmental agencies require holding
certain permits, licenses and certificates with respect to marine operations.
Subject to the discussion below and to the fact that the kinds of permits,
licenses and certificates required for the operations of its owned ships will
depend upon a number of factors, CP Ships believes that it has been and will be
able to retain or obtain all permits, licenses and certificates material to the
conduct of its operations.


Maritime Regulations

          United States. In the U.S., carrier operations of CP Ships serving
U.S. ports are subject to the provisions of the Shipping Act of 1984 (the
"Shipping Act"), as amended by the Ocean Shipping Reform Act of 1998 ("OSRA").
Among other things, the Shipping Act confers immunity from anti-trust laws for
certain co-operative agreements between ocean common carriers operating in the
U.S. The most common types of agreements are slot exchange agreements, whereby
carriers share space on each others' ships, and rate discussion agreements, in
which carriers may co-ordinate, discuss and voluntarily agree on ocean freight
rates and charges and other terms and conditions of service (collectively,
"Carrier Agreements"). Adherence to decisions reached in such discussion
agreements is purely voluntary. To receive an antitrust exemption, Carrier
Agreements must be filed with the U.S. Federal Maritime Commission ("FMC").
Under the Shipping Act, as amended, carriers serving U.S. ports may offer
transport services to customers either through semi-confidential service
contracts or through publicly available tariffs. The Shipping Act requires
carriers to publish their tariff rates and certain service contract terms
electronically to allow public internet access. Carrier operations of CP Ships
via U.S. ports are subject to Shipping Act and FMC regulatory requirements
relating to Carrier Agreements, tariffs, and service contracts. Civil penalties
of up to $30,000 per violation can be imposed on carriers that fail to adhere to
these statutory and regulatory requirements.

          Under the U.S. Maritime Security Act of 1996, U.S. documented ships
that are operated in a common carrier service are eligible to apply for an
annual subsidy payment ("MSP Program"). As at 31st




                                                                           26

<PAGE>


December 2003, CP Ships had five U.S. flag ships enrolled in the MSP Program,
and these ships receive an annual subsidy payment of approximately $2
million per ship. Although the current MSP Program continues until 30th
September 2005, funding for the MSP Program must be approved by U.S. Congress
on an annual basis. As a pre-condition to receipt of the annual subsidy
payment under the MSP Program, the operator or charterer of the ship must
enter into an emergency preparedness agreement with the U.S. Secretary of
Transportation. Accordingly, Lykes Lines has entered into such an agreement
with the U.S. Secretary of Transportation pursuant to which Lykes Lines agrees
to make its ships, capacity in ships, intermodal systems and equipment,
terminal facilities, management service and related service available to the
U.S. Government in the event of war, national emergency or when the U.S.
Secretary of Defence determines it to be necessary for national security. A
new MSP program will become effective 1st October 2005. CP Ships is presently
considering whether and to what extent it will seek participation in the new
program.

          Following the terrorist attacks on 11th September 2001 the U.S.
Government adopted certain measures to improve security at various U.S. ports
and with respect to cargo movements to and from the U.S.. Congress and federal
agencies have adopted or are considering the adoption of additional security
related measures. Such measures include increased security for facilities and
vessels, mandatory filing requirements for certain data, improved container
seals, electronic vessel and equipment tracking, enhanced personnel security
checks and identification procedures, reviews of vendors and subcontractors,
changes to cargo documentation requirements, automated filing procedures for
customs and vessel entries, and other actions. It is possible that some of these
measures could adversely affect the efficiency of operations of CP Ships or
result in additional costs. It is as yet too early to determine with any
precision the nature and extent of the full scope of measures that may be
adopted in the U.S.

          Canada. In Canada, the Shipping Conferences Exemption Act, 1987
("SCEA") exempts certain shipping conference practices, such as agreeing to
terms and prices by way of published tariffs or service contracts, pooling
volumes, and exchanging market data with the objective of achieving trade
stability, from the provisions of the Competition Act. This allows for partial
anti-trust immunity provided that, among other things, on request a shipping
conference is required to meet, notify and discuss issues with the Canadian
Shippers Council.

          Recent amendments to SCEA include provisions (a) permitting conference
carriers to offer individual confidential service contracts, (b) permitting
carriers to file rates and tariffs electronically, (c) providing for penalties
of C$10,000 per offence, and (d) reducing the notice period for independent
action from fifteen to five days. In general, these amendments brought the
Canadian regulatory environment closer to U.S. and European regulation.

          European Union. The European Union ("EU") recognizes traditional
conferences but not discussion agreements. In the EU, CP Ships is affected by
the regulations under the Treaty of Amsterdam (formerly the Treaty of Rome)
("Treaty"). Under the Treaty, CP Ships is subject to European Community ("EC")
Regulation 4056/86 ("Reg. 4056/86") and EC Regulation 823/00 ("Reg. 823/00").

          Under Reg. 4056/86, carriers are entitled to give effect to rate
fixing agreements in relation to the ocean carriage of cargo to and from the EU
(and the European Economic Area) member states. This is in derogation of the
fundamental prohibition of cartels imposed by Article 81 of the Treaty. Such
derogation is subject to certain qualifications. These permitted rate fixing
agreements relate to specific trade lanes. They are known as "liner
conferences". Many of CP Ships' liner services are members of the relevant liner
conferences, primarily in the trade lanes between North Europe and Canada, and
between Europe and Australia, New Zealand, South America and India/Pakistan.
Changes to Reg. 4056/86 have now been brought into effect pursuant to the
"modernisation" of EC competition rules brought into effect by Council
Regulation No 1/2003 dated 16 December 2002. These changes came into effect on
1st May 2004. The changes transfer the burden of testing compliance with Reg.
4056/86 and Article 81 of the Treaty, and the application of exemptions to
Article 81, from the Commission (of the EC) to a self-assessment regime open to
verification by interested parties (at the national court level or with or by
the commission) or by the EC itself.

          Reg. 823/00, known as the "consortia" regulation, permits carriers
trading to and from the EU to co-ordinate, subject to certain conditions, the
operation of their ships in particular trade lanes, in order to



                                                                          27
<PAGE>

promote greater efficiency in the optimising and scheduling of shipping
capacity. Such permitted co-ordination is subject to certain qualifications
and is distinct from, and must not include, freight rate fixing agreements
(as permitted by Reg. 4056/86). CP Ships participates, world-wide, in a
number of such arrangements, several of which are subject to Reg. 823/00
by reason of trade to and from EU member states. There are currently under
discussion proposals to change the verification procedure under this
Regulation from that conducted by the Commission (of the EC) to a
self-assessment regime, broadly in line with the changes to Reg. 4056/86.

          Australia. In Australia, Part X of the Trade Practices Act 1974
("TPA") provides registered liner cargo shipping conference agreements with
exemptions from provisions of the TPA which would otherwise prohibit contracts
or arrangements to lessen competition and corporations engaging in the practice
of exclusive dealing. These exemptions allow conferences to agree upon freight
rates, pool earnings and costs, rationalize capacity and restrict new entrants
to the conference agreement.

          Recent amendments to Part X include the extension of exemptions
relating to rate setting to "port to port" type shipping negotiations, the
extension of Part X to cover inward conferences, the increase in the powers of
the Minister of Transport and the Australian Competition and Consumer Commission
to resolve anti-competitive conduct, a requirement that closed conferences
accept new members in certain circumstances and allowing shipping conferences to
negotiate collectively with stevedores for the provision of stevedoring services
to member lines of those conferences.

          Recent developments in anti-trust immunities. The anti-trust
immunities described above have historically been justified on the grounds that
they are necessary to assure shippers of stable freight rates and reliable
scheduled liner shipping services. These immunities have been in place in
various forms for many years in the U.S., Canada, EU and Australia. However,
they have been gradually eroded and narrowed through legislative and regulatory
amendments and court decisions. For example, in 1998 the OSRA introduced
measures designed to increase the level of competition in the U.S. between
carriers. In 2001, amendments to the SCEA in Canada contained changes similar to
those found in the OSRA and which were also designed to increase competition in
Canada between carriers.

          Three decisions issued by the European Court of First Instance on 28th
February 2002 held that the immunities contained in EC Reg. 4056/86 apply only
to port to port services, and do not permit fixing of tariffs for the inland leg
of intermodal services. Further, the lengthy decision of the European Court of
First Instance of 30th September 2003 confirmed in all material respects (save
to annul the fines) the substantive Decision of the Commission in the TAA case
dated 18th September 1998. It thereby confirmed general guidelines as to certain
impermissible conduct on the part of conferences subject to this Regulation.

          In May 1999, the Secretariat of the Organisation for Economic
Co-operation and Development (the "OECD") published a report entitled
"Discussion document on regulatory reform in international maritime transport".
The report recommended, among other things, that agreements among carriers to
set common rates should no longer receive automatic antitrust immunity or
exemption.

          In April 2002, the OECD Secretariat published its final report
entitled "Competition Policy in Liner Shipping" (the "OECD Report") which, among
other things, concluded that there is no evidence that the liner shipping
industry needs to be protected from competition by anti-trust immunity for
price-fixing and rate discussions, and that there is no evidence that the
conference system leads to more stable freight rates or more reliable shipping
services than would be the case in a fully competitive market. The OECD Report
concluded that countries should (i) seriously consider removing anti-trust
exemptions for common pricing and rate discussion and (ii) have the discretion
to retain exemptions for other operational arrangements relating to liner
shipping so long as these did not result in excessive market power. The
container shipping industry has disputed many of the factual findings contained
in the OECD Report and is vigorously opposing the implementation of its
recommendations.

          In February 2002, the European Commission, noting the Draft OECD
Report (published in November 2001 prior to the OECD Report), announced that it
would study, and re-assess the justifications for, the existing exemptions for
liner conferences provided in EC Reg. 4056/86. This is the first time that EC
Reg. 4056/86 will have been formally reviewed by the European Commission since
enactment of the








                                                                            28

<PAGE>


Regulation in 1986. This review process has now proceeded to detailed comments
from interested parties on a Commission questionnaire, and a recent public
hearing.


Environmental Regulations

          United States. In the U.S., ship operators are subject to a number
of federal and state laws and regulations with respect to protection of the
environment in the course of ship operations in U.S. trade lanes. The primary
laws are the Oil Pollution Act of 1990 ("OPA 90") with respect to oil spill
liability, the Comprehensive Environmental Response, Compensation, and
Liability Act ("CERCLA") with respect to spills or releases of hazardous
substances, the Federal Water Pollution Control Act ("FWPCA"), also called the
Clean Water Act, and the National Invasive Species Act of 1996 ("NISA") with
respect to ballast water management.

          Under OPA 90, ship owners, operators, and bareboat charterers are
deemed "Responsible Parties" and are jointly, severally and strictly liable for
all removal costs and other damages caused by oil spills from their ships.
Although OPA 90 is primarily directed at oil tankers (which CP Ships does not
operate), it also applies to non-tanker ships with respect to the fuel carried
on board the ships. OPA 90 limits the liability of non-tanker owners to the
greater of $600 per gross ton or $500,000 per discharge, which may be adjusted
periodically for inflation. The liability limits do not apply if the incident
was caused by the Responsible Party's gross negligence, wilful misconduct, or a
violation of an applicable federal safety, construction, or operating
regulation. In addition, the liability is not limited if the Responsible Party
fails to report the oil spill or fails to cooperate or comply with a removal
order.

          OPA 90 requires all Responsible Parties to establish and maintain
evidence of financial responsibility sufficient to meet the maximum liability to
which it could be subject under OPA 90. Financial responsibility may be
established by any combination of the following: evidence of insurance, surety
bond, guarantee, letter of credit, qualification as self-insurer or other
evidence of financial responsibility. CP Ships believes that it has sufficient
insurance with its P&I Clubs to cover damages that might arise under OPA 90.
However, OPA 90 specifically preserves state law liability and remedies, whether
by statute or common law, which liability is not subject to the OPA 90
limitations of liability. Some states have enacted legislation providing for
unlimited liability for oil spills both in terms of removal costs and damages.
As such, overall liability under state law for a spill maybe virtually
unlimited, and could theoretically exceed CP Ships' available insurance coverage
in the case of a catastrophic spill.

          CERCLA governs spills or releases of hazardous substances other than
petroleum, natural gas, and related products. CERCLA imposes strict and joint
and several liability on the owner or operator of a ship, vehicle or facility
from which there has been a release, as well as other responsible parties.
Spills or releases could occur during shipping, land transport, terminal or
transport-related operations. Damages may include removal costs, natural
resource damages, and economic losses without regard to physical damage to a
proprietary interest.

          The Clean Water Act prohibits the discharge of oil or hazardous
substances and imposes strict liability in the form of penalties for damages and
remedial costs. The Clean Water Act now serves largely to provide backup
coverage with respect to remedial costs to the more recent OPA 90 and CERCLA.

          NISA was enacted in 1996 in response to growing reports of harmful
organisms being released into U.S. ports through ballast water taken on by ships
in foreign ports. NISA established a ballast water management program for ships
entering U.S. waters calling for voluntary mid-ocean ballast water exchange,
retention of ballast water onboard the ship, or the use of environmentally sound
alternative ballast water management methods approved by the U.S. Coast Guard.
If the mid-ocean ballast exchange is made mandatory throughout the U.S., or if
water treatment requirements or options are instituted, the costs of compliance
could increase for ocean carriers, including CP Ships.

          Canada. In Canada, shipowners are faced with a number of Canadian
federal and, concurrently, provincial environmental laws which do or may apply
to shipping operations and related activities in Canadian waters. The federal
laws include the Marine Liability Act, Canada Shipping Act, Canadian





                                                                            29
<PAGE>


Environmental Protection Act and Fisheries Act. The Marine Liability Act ("MLA")
gives effect to the International Convention on Civil Liability for Oil
Pollution Damages, 1992 and the International Convention on the Establishment of
the International Fund for Compensation for Oil Pollution Damage as amended by
protocols in 1976 and 1992. The MLA imposes liability on the shipowner for oil
pollution damage and for costs and expenses to prevent, repair, remedy or
minimize that pollution. Unless the pollution results from a personal act or
omission of the shipowner committed with intent to cause the pollution, or
recklessly and with knowledge that pollution damage would probably result, the
maximum liability of the shipowner is limited to 4,510,000 International
Monetary Fund Special Drawing Rights for the first 5,000 tons and 631 Special
Drawing Rights per subsequent ton, to a maximum of 89,770,000 Special Drawing
Rights. The law requires that certificates of insurance or other security be
issued in respect of each ship. All of CP Ships' owned ships carry such
certificates.

          The Marine Liability Act, Canada Shipping Act, Canadian Environmental
Protection Act and Fisheries Act and comparable provincial laws, prohibit
dumping of deleterious substances in water which would adversely affect the
fishery and other aspects of the environment. These statutes can be publicly or
privately prosecuted and in some cases create a civil cause of action. Common
law causes of action may also be available for those affected by acts of
pollution. Those laws, as well as the common law, create a civil cause of action
against the offender.

          The CP Ships terminals in Montreal are subject to various federal and
province of Quebec environmental laws. The Quebec Environmental Quality Act
imposes liability jointly and severally on all persons who have ownership,
custody or control over contaminants and persons responsible for emission,
deposit or discharge of any contaminant.

          Australia. Australian law governing marine pollution from ships takes
the form of domestic enactment of international conventions. The Commonwealth,
the States and the Northern Territory of Australia have all legislated to give
effect to some of the conventions listed below, but there is no uniformity
between the various jurisdictions. Different jurisdictions have given effect to
different conventions in different ways. The core of MARPOL 73/78 (referred to
below) has been adopted in Australia by the Protection of the Sea (Prevention of
Pollution from Ships) Act, 1983 ("PSA"). All of the States of Australia and the
Northern Territory have their own legislation implementing Annex I and II of
MARPOL.

          Effective as at October 2001, the PSA was amended to include
provisions: (a) requiring ships of 400 tons or more, or certified to carry 15 or
more persons, to have a shipboard waste management plan and to carry and
maintain a garbage record book; (b) expanding incident reporting requirements so
that ships of 15 metres or more must report any incident that affects the safety
of the ship having the potential to result in pollution (previously reporting
was required in respect of an incident only when there was a probability of
pollution) and (c) empowering surveyors to require a ship to discharge waste in
port, where it becomes clear that the ship would have to discharge some waste at
sea before reaching its next port of call.

          The Commonwealth and State Acts implementing Annex I and II of MARPOL
(a) prohibit the discharge of oil or an oily mixture into the sea subject to
certain exceptions; (b) impose a duty to report certain incidents involving oil
or an oily mixture; and (c) require all Australian tankers or ships over 400 GRT
(Gross Registered Tonnage) to maintain an oil record book according to the
regulations outlined in those Acts. A maximum penalty of A$1.1 million can be
imposed against the owner of a ship and A$220,000 against the master of a ship
for breaches of the Acts. In New South Wales, oil pollution legislation
effective as of 1st November 2002 increased the maximum penalties for pollution
from A$220,000 to A$500,000 for individuals and from A$1.1 million to A$10
million for corporations. These new penalties are the highest fines in Australia
for marine oil and chemical spills.

          The International Convention on Civil Liability for Oil Pollution
Damage, 1969 (known as CLC), as amended by Protocols dated 1976, 1984 and 1992,
was implemented by the Commonwealth by enactment of the Protection of the Sea
(Powers of Intervention) Act, 1981. The Dumping Convention was implemented by
the Commonwealth by enactment of the Environment Protection (Sea Dumping) Act,
1981. That Act was amended in 1994 to give effect to Australia's obligations
under the Protocol for the Prevention of Pollution of the South Pacific Region
by Dumping ("SPREP") Protocol. Legislation was passed in 1993 to give effect to
the Fund Convention in Australia. The Protection of the Sea (Oil Pollution
Compensation Fund) Act,





                                                                           30

<PAGE>

1993 provides for who is to contribute to an international oil pollution
compensation fund, how much they must contribute and how such contributions
are to be completed.

          The Protection of the Sea (Civil Liability) Amendment Act, 2000
provides that: (a) ships over 400 GRT will be required to have appropriate
insurance in place to meet liabilities arising from pollution damage caused by
the discharge of oil; and (b) a breach of this Act will result in a strict
liability offence which carries penalties of up to A$55,000.

          International. Globally, the International Maritime Organization
("IMO") has adopted MARPOL 73/78, which relates to environmental standards
including oil leakage or spilling, garbage management, as well as the handling
and disposal of noxious liquids, harmful substances in packaged forms, sewage
and air emissions. Compliance with MARPOL is not yet mandatory. However, CP
Ships endeavours to comply with all materially relevant provisions of the
convention.

          The IMO adopted the International Convention for the Safety of Life at
Sea or SOLAS Convention, which imposes a variety of standards to regulate design
and operational features of ships. SOLAS standards are revised periodically. CP
Ships believes that all ships, either owned or chartered by it, comply with
SOLAS standards. SOLAS also incorporates the International Safety Management
Code ("ISM"). The ISM requires, among other things, ship operators to implement
environmental and safety management systems. CP Ships has obtained ISM
accreditation for all its owned ships and for the management companies operating
those ships.

          The majority of CP Ships' marine operations activities has been
certified to the ISO 14001 Environmental Management standard. The purpose of ISO
14001 certification is to ensure that all company marine operations activities
which relate to the environment conform to a specific standard which makes it
mandatory to comply with relevant international conventions, national and local
laws and regulations and create the framework required to continuously improve
directly or indirectly related internal processes, procedures and activities.
Certification of CP Ships' remaining marine and terminal operations is expected
during the course of 2004.

          All of CP Ships' owned and chartered ships operate under the
International Ship Management Code's standard of safe operations. CP Ships'
owned ships are registered with internationally recognized Classification
Societies including Lloyds, Bureau Veritas, ABS, and DNV. The principal purpose
of Classification Societies is to provide objective and independent confirmation
to the insurance underwriters that ships are being maintained to the standards
that are considered appropriate to minimize claims on underwriters. A beneficial
by-product of the activities of Classification Societies is to provide
reassurances to owners and others with a financial or other interest in those
ships that they are being regularly surveyed and properly maintained.




                                                                            31
<PAGE>

                   SELECTED CONSOLIDATED FINANCIAL INFORMATION

          Prior to 1st October 2001, CP Ships Holdings Inc. ("CPSHI") was the
wholly owned holding company of CPL's container shipping interests. On 1st
October 2001, as part of a Plan of Arrangement, CPL distributed its interests in
CPSHI to CP Ships, a newly created subsidiary company of CPL. CPL then
distributed its investment in CP Ships to its common shareholders on the basis
of one new common share in CP Ships for four old CPL common shares. Where
appropriate, share numbers in the financial statements reflect the effect of the
Plan of Arrangement applied retroactively. As both CPSHI and CP Ships were under
the control of CPL at the time, the transactions have been accounted for in a
manner similar to a pooling-of-interests and the historical financial
information of CPSHI has become the historical financial information of the now
publicly held CP Ships.

          Subject to the foregoing, the following table sets forth certain
financial information for CP Ships or its predecessor and its subsidiaries on a
consolidated basis under Canadian Generally Accepted Accounting Principles for
the last three fiscal years.

Consolidated Statements of Income Data
(US$ millions, except amounts per share, presented in $)

<TABLE>
<CAPTION>

                                                           Year ended 31st December
                                                   ------------------------------------------
                                                        2003(6)        2002(6)      2001(1)
                                                   (as restated)    (as restated)

<S>                                                     <C>           <C>          <C>
Revenue                                                 3,130         2,687         2,646
Expenses                                               (3,028)       (2,611)       (2,507)
                                                   ------------------------------------------
Operating income before exceptional items (2)             102            76           139
Exceptional items                                         (10)            2           (43)
                                                   ------------------------------------------
Operating income                                           92            78            96
Interest (expense), net                                   (36)          (23)            -
Income tax expense                                         (3)          (10)          (12)
Minority interest                                           -             -             1
Goodwill charges (3)                                        -             -           (16)
                                                   ------------------------------------------
Net income (3)                                           $ 53          $ 45          $ 69

                                                   ==========================================

Earnings per common share basic before                   $0.70         $0.51         $1.37
exceptional items (3) (4) (5)

Earnings per common share basic (3) (4)                  $0.59         $0.53         $0.83

Earnings per common share diluted (3) (4)                $0.57         $0.52         $0.83

Cash dividend declared per common share                  $0.16         $0.16             -

Cash dividend declared per preference share                 -             -         $17.69

</TABLE>





                                                                             32
<PAGE>

<TABLE>
<CAPTION>


Consolidated Balance Sheet Data
(US$ millions)

                                                                At 31st December
                                                   ----------------------------------------
                                                      2003(6)        2002(6)        2001(1)
                                                   (as restated)  (as restated)
<S>                                                     <C>           <C>           <C>
Cash and cash equivalents                                  75           110           116
Property, plant and equipment                           1,235         1,134           774
Total assets                                            2,500         2,487         1,923
Total long-term liabilities                               639           589           223
Total debt                                                651           597           230
Common share capital                                      686           685           597
Shareholders' equity                                    1,278         1,218         1,096

</TABLE>


(1)    The 2001 financial statements have been revised.  See note 2 to CP
       Ships' 2002 Financial Statements.
(2)    Exceptional items include an exceptional charge in 2001 of $43
       million, an exceptional credit in 2002 of $2 million and an
       exceptional charge of $10 million in 2003.
(3)    Goodwill was not amortized in 2003 and 2002 due to changes in Canadian
       GAAP. The impact of not amortizing goodwill for the year ended 31st
       December 2001 would have been to increase net income by $16 million,
       and increase basic and diluted earnings per share by $0.20.
(4)    Earnings per common share is calculated after deduction of preference
       dividends in the years ended 31st December 2003, 2002 and 2001 of
       $0, $0 and $3 million, respectively. Basic and diluted earnings per
       common share have been calculated using net income (as restated, see
       note (6) below) after deducting the preference shares dividend
       divided, by 89.8 million and 92.6 million shares, respectively, for
       the year ended 31st December 2003 and 84.8 million and 86.1 million
       shares, respectively, for the year ended 31st December 2002 and 79.3
       million and 79.9 million shares, respectively, for the year ended
       31st December 2001.
(5)    Exceptional items include a charge of $10 million in 2003, a credit
       of $2 million in 2002 and a charge of $43 million in 2001.
(6)    On 16th August 2004, CP Ships' restated the previously reported
       results for 2003 to reflect an increase in container shipping costs
       of $23 million and a reduction in revenue of $6 million, resulting in
       a reduction in net income of $29 million. At the same time, 2002
       results were also restated to reflect an increase in container
       shipping costs and a reduction in net income of $7 million.

       The balance sheet as at 31st December 2003 has been restated to increase
       accounts payable and accrued liabilities by $30 million and to reduce
       accounts receivable by $6 million, with a corresponding reduction of $36
       million in retained earnings.

       The balance sheet as at 31st December 2002 has been restated to increase
       accounts payable and accrued liabilities by $7 million with a
       corresponding $7 million reduction in retained earnings.

       a) Impact of restatement of consolidated statements of income

       The impact of the restatements on net income for the years ended 31st
December 2003 and 2002 are as follows:
<TABLE>
<CAPTION>

       US$ millions                                                   31st December 2003      31st December 2002
       ----------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                     <C>
       Net income - as previously reported                                    82                      52

       Adjustments:
       -----------

       Revenue

       Container shipping operations (i)                                     (6)                       -

       Expenses

       Container shipping operations (ii), (iii)                             (23)                     (7)
                                                        ----------------------------------------------------------

       Total adjustments                                                     (29)                     (7)
                                                        ----------------------------------------------------------

       Net income - as restated                                               53                      45
                                                        ----------------------------------------------------------


</TABLE>


       (i)  Adjustment required to eliminate revenue-related balances that
            should not have been included on the balance sheet. Of this amount
            $3 million is to eliminate intercompany items previously not
            eliminated on consolidation and included within



                                                                            33
<PAGE>

            accounts receivable. A further $3 million relates to the
            elimination of other miscellaneous revenue-related balances which
            should not have been recognized as revenues and accounts
            receivable.

      (ii)  The 2003 adjustment includes $20 million to correct the level of
            accruals established for container shipping costs. These
            underaccruals resulted from issues that affected certain of the
            processes and controls required to make and maintain reasonable
            estimates of accruals. A further $2 million relates to an incorrect
            reversal of cost accruals. An additional $1 million relates to the
            elimination of certain other cost-related balances.

     (iii)  The 2002 adjustment of $7 million is to charge additional costs for
            container shipping operations, required as a result of the
            unintentional recording of an intercompany liability within accruals
            and the subsequent charging of third party costs against this
            balance.

       None of the adjustments reflected above are affected by income taxes and
       therefore no restatement of the company's previously reported provisions
       for income taxes is required.

        b) Impact of restatement on consolidated statements of retained earnings

<TABLE>
<CAPTION>


                                                              31st December      31st December      31st December
                                                                  2003               2002               2001
       US$ millions
       --------------------------------------------------------------------------------------------------------------
<S>                                                                <C>               <C>                <C>
       Retained earnings - as
       previously reported
                                                                   615                547                509

       Adjustments                                                (36)                (7)                 -
                                          ---------------------------------------------------------------------------

       Retained earnings - as restated                             579                540                509
                                          ---------------------------------------------------------------------------

</TABLE>

       As at 31st December 2003, accounts receivable has decreased by $6 million
       and accounts payable and accrued liabilities have increased by $30
       million.

       As at 31st December 2002, accounts payable and accrued liabilities have
       increased by $7 million.


       c) Impact of restatement on segmented reporting



       The impact of the restatement on operating income by segment for the
years ended 31st December 2003 and 2002 is as follows:

<TABLE>
<CAPTION>

       2003
       ----
                          Trans Atlantic                  Latin America
       US$ millions                         Australasia                      Asia          Other            Total
       ---------------------------------------------------------------------------------------------------------------
       <S>                     <C>            <C>             <C>            <C>             <C>            <C>
       Operating income
       before
       exceptional items
       as reported in
       2003

                                82              27             15             (8)             15             131

       Restatement             (17)            (3)             (4)            (4)             (1)            (29)
                           --------------------------------------------------------------------------------------------

       Restated
       operating income
       before
       exceptional items
                                65              24             11             (12)            14             102
                           --------------------------------------------------------------------------------------------







                                                                                                                    34
<PAGE>


          2002
          ----

                          Trans Atlantic                  Latin America
       US$ millions                         Australasia                      Asia          Other            Total
       ---------------------------------------------------------------------------------------------------------------

       Operating income
       before
       exceptional items
       as reported in
       2002

                                60              27             21             (38)            13              83

       Restatement              (4)             -               -             (3)              -             (7)
                           -------------------------------------------------------------------------------------------

       Restated
       operating income
                                56              27             21             (41)            13              76
                           ============================================================================================


</TABLE>

Dividend Policy

          On 16th August 2004, CP Ships' Board of Directors declared a dividend
for the second quarter of 2004 of $0.04 per common share ($3.6 million in
aggregate), payable on 6th September 2004.

          The Board of Directors determines the amount of the quarterly
dividends based on its view of anticipated net income and in accordance with CP
Ships' capital expenditure and working capital needs as well as its strategic
spending plans. Should the Board's view change, the amount of the dividend could
be increased, decreased or eliminated entirely.

          The Board of Directors is under no obligation to declare dividends and
the declaration of dividends is wholly within its discretion. Restrictions under
CP Ships' existing or future financing agreements and the provisions of
applicable law preclude, or may preclude, the payment of dividends in certain
circumstances.






                                                                          35
<PAGE>



  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                  OPERATIONS

          Reference is made to CP Ships' revised Management's Discussion and
Analysis for the year ended 31st December 2003, which is incorporated by
reference in this Annual Information Form.


                              MARKET FOR SECURITIES

Stock Exchange Listings

          The common shares are traded on The TSX and the NYSE and trade under
the symbol "TEU".



                            DIRECTORS AND MANAGEMENT

Directors

          Set out below are the names, municipality of residence, business
addresses, offices within CP Ships and principal occupations within the past
five years of the directors of CP Ships together with the common shares
beneficially owned or controlled by such individuals as at 29th February 2004.
As at 31st March 2004, no single director beneficially owns or controls 1% or
more of the common shares.

<TABLE>
<CAPTION>


                                                                                                                   Number of
                                                                                                                   Common
                                                                                                                   Shares
                                                                                                                   Beneficially
                                                                                                                   Owned or
     Name, Municipality of Residence and                                                                           Controlled as at
     Business Address if different from                                          Principal Occupation              29th February
     CP Ships                                                Office             (where different from office)      2004
     <S>                                                     <C>                 <C>                             <C>
     John P. Bowmer.................................         Director since      Corporate Director                6,503
     Atherton, California                                    October 2001

     Business Address:
     100 Redwood Shores Parkway
     Redwood City
     California, U.S.A. 94065

     Robert J. Clanin...............................         Director since      Corporate Director                6,486
     Alpharetta, Georgia                                     October 2001

     Business Address:
     14780 East Bluff Road
     Alpharetta
     Georgia, U.S.A. 30004

     Peter J. Dey....................................        Director since      Partner, Osler Hoskin &           8,735
     Toronto, Ontario                                        October 2001        Harcourt LLP (law firm)

     Business Address:
     1 First Canadian Place
     Toronto, Ontario
     Canada M5X 1B8

     Frank J. Halliwell..............................        Director since                                      201,790(1)
     Tampa, Florida                                          October 2001 and
                                                             Chief Executive
                                                             Officer

     Business Address:
     401 East Jackson St., Suite 3300
     Tampa
     Florida, U.S.A. 33602

                                                                                                                        36

<PAGE>


                                                                                                                   Number of
                                                                                                                    Common
                                                                                                                     Shares
                                                                                                                   Beneficially
                                                                                                                     Owned or
     Name, Municipality of Residence and                                                                         Controlled as at
      Business Address if different from                                          Principal Occupation              29th February
                CP Ships                                         Office      (where different from office)             2004

     John D. McNeil.................................         Director since      Corporate Director               23,735
     Toronto, Ontario                                        October 2001

     Business Address:
     150 King Street West
     Toronto, Ontario
     Canada M5H 1J9

     Raymond R. Miles...............................         Director since                                      276,116(2)
     London, England                                         October 2001 and
                                                             Chairman
     Business Address:
     2 City Place
     Beehive Ring Road
     Gatwick Airport
     RH6 0PA England

     Nigel M.S. Rich .................................       Director since      Corporate Director                3,387
     London, England                                         October 2001

     Business Address:
     7 Lower Sloane Street
     London
     SW1W 8AY England

     Ian J. Webber.....................................      Director since                                      135,318(3)
     Kent, England                                           October 2001 and
                                                             Chief Financial
                                                             Officer
     Business Address:
     2 City Place
     Beehive Ring Road
     Gatwick Airport
     RH6 0PA England

     Viscount Weir... .................................      Director since      Corporate Director                3,895
     Glasgow, Scotland                                       October 2001 and
                                                             Lead Director
                                                             since May 2004
     Business Address:
     2 City Place
     Beehive Ring Road
     Gatwick Airport
     RH6 0PA England




</TABLE>

          (1)   As at 29th February 2004, Frank J. Halliwell held 201,790 common
                shares of which 131,778 are Restricted Shares, 41,778 of which
                vest on 18th October 2004 and 41,778 vest on 1st December 2005,
                and 48,222 subject to company performance criteria also vest on
                1st December 2005, all under compensation plans.
          (2)   As at 29th February 2004, Raymond R. Miles held 276,116 common
                shares of which 184,445 are Restricted Shares, 73,778 of which
                vest on 18th October 2004 and 73,778 vest on 1st December 2005,
                and 36,889 subject to company performance criteria also vest on
                1st December 2005, all under compensation plans.
          (3)   As at 29th February 2004 Ian J. Webber held 135,318 common
                shares of which 103,556 are Restricted Shares, 33,556 of which
                vest on 18th October 2004 and 33,556 vest on 1st December 2005,
                and 36,444 subject to company performance criteria also vest on
                1st December 2005, all under compensation plans.

          Ray Miles was appointed Chairman following the annual meeting on 4th
May 2004. He joined CP Ships in 1988 as Chief Executive Officer. He has worked
in the shipping industry since 1972. He is a non-executive Director of
Provident Financial and West of England P&I Club, Chairman of Box Club the
container shipping industry's CEO forum, Chairman of the World Shipping
Council, the industry's US representative organization, and a trustee of the
National Maritime Museums at both Greenwich, London and Falmouth, Cornwall.

          Viscount Weir, was appointed Lead Director following the annual
meeting on 4th May 2004. He was Chairman of CP Ships from 2001 to 2004.
Viscount Weir also served as Chairman of Balfour Beatty, one of the UK 's
largest construction companies until May 2003. He was Chairman of the Weir
Group, a UK-based




                                                                            37
<PAGE>

mechanical engineering group, from 1983 to 1999. He is also a Director of St
James's Place Capital and Canadian Pacific Railway. Formerly, he was a Director
of the Bank of England, British Steel and CPL. He is Chairman of the
Compensation Committee and a member of the Audit and Corporate Governance
Committees.

          John Bowmer was Chairman of Adecco of Switzerland, the world's largest
international staffing and recruitment company until 2004. He was Chief
Executive Officer of Adecco from 1996 to 2002 and Chief Executive Officer of
its predecessor, Adia, since 1993. He has served in a variety of executive
positions in the UK, Asia, Australia and the US since he joined Adia in 1987.
He is a member of the Audit, Corporate Governance and Compensation Committees.

          Robert Clanin is Chairman of Overseas Partners, a Bermuda reinsurance
company, a Director of Caraustar Industries, which produces recycled packaging,
of John H Harland, a financial services company and of Serologicals. a global
provider of biological products. He was Chief Financial Officer of United Parcel
Service, the US-based international parcel delivery and logistics company, from
1994 to 2001, having joined the company in 1971. He oversaw what was at the time
the largest ever initial public offering of stock in the US. He is a member of
the Audit, Corporate Governance and Compensation Committees.

          Peter Dey was Chairman of Morgan Stanley Canada from 1998 until 2001
and President from 1994. From 1985 to 1994 he was a partner in the Canadian law
firm Osler, Hoskin & Harcourt which he first joined in 1969 and to which he
returned as a partner in 2001. He was Chairman of the Ontario Securities
Commission from 1983 to 1985 and was responsible for the Dey Report on corporate
governance in Canada. He is a director of Stelco, Camco, Workbrain Corporation
and Atlas Cold Storage Income Trust. He is Chairman of the Corporate Governance
Committee and a member of the Audit and Compensation Committees.

          Frank Halliwell was appointed Chief Executive Officer of CP Ships
following the annual meeting on 4th May 2004. He previously served as Chief
Operating Officer since 2001, having been Executive Vice President since 1995.
He has filled a number of senior roles in the CP Ships group since joining
Canada Maritime as Commercial Director in 1991. He entered the container
shipping industry in 1971.

          John McNeil was Chairman and Chief Executive Officer of Sun Life
Assurance Company of Canada from 1988 to 1998 and Chairman until retirement in
1999, having originally joined the company in 1956. He is a Director of Sun Life
Financial. He serves as Chairman of Fairmont Hotels and Resorts having been
Director of its former parent company, Canadian Pacific Limited from 1992 to
2001. He is also a Director of Shell Canada and DWL (USA). He is Chairman of the
Audit Committee and a member of the Compensation and Corporate Governance
Committees.

          Nigel Rich is Chairman of Exel, the global logistics business. He is
also Chairman of the Hamptons Group, a real estate services company, and a
Director of Pacific Assets Trust. He spent 20 years with the Jardine Matheson
group in Asia and was its Chief Executive from 1989 to 1994. He is a member of
the Audit, Compensation and Corporate Governance Committees.

          Ian Webber, a Chartered Accountant, was appointed Chief Financial
Officer in 1996 after 17 years with PricewaterhouseCoopers LLP, the last five as
an audit partner.

          The Articles of Amalgamation of CP Ships provide for a minimum of
three and a maximum of 15 directors. The directors are empowered to exercise all
the powers of CP Ships, including the power to borrow money. A director may not
vote in respect of any contract, arrangement, transaction or proposal in which
he, or any person connected with him, has any material interest other than by
virtue of his interests in securities of, or otherwise in or through, CP Ships.
A director shall not vote or be counted in any quorum concerning his own
appointment or terms of his appointment. Directors are not required to hold any
shares of CP Ships by way of qualifications but the board has decided that each
should own 10,000 shares within five years of election. There is a mandatory
retirement for a director at the AGM after reaching 70 years of age, however,
the board may waive the mandatory disqualification for directors having reached
70 years of age for successive one year periods when it is in the best interests
of the company.


                                                                          38
<PAGE>


Management

          The names, municipality of residence and principal occupations within
the past five years of CP Ships' senior officers who are not directors are shown
below. Unless otherwise noted below during the past five years each of the
following senior officers has been engaged in the principal occupation shown
opposite his name or in another position with the same or an affiliated company.

          Salvador Bruno, Tampa, USA, Senior Vice-President, joined in July 1997
with the acquisition of Lykes Lines, where he had worked since 1985 having
served in a number of senior positions until his appointment as VP Commercial.

          Terry Burrows, Sussex, England, Senior Vice-President, appointed in
August 2000. He joined CP Ships in 1964 and has served in various senior
commercial and marketing roles for the Montreal Gateway.

          Dave Dawson, Sussex, England, Senior Vice-President, was appointed in
January 2003. He joined CP Ships in 1966 and has held a number of senior
administrative and commercial positions.

          Jeff Drake, London, England, was appointed Vice-President Logistics in
June 2004. He joined CP Ships in October 2000 and previously served as Vice
President Corporate Planning. From 1998, he was Director Marketing and Planning
for Contship Italia in Italy and before that a partner with Mercer Management
Consulting in Boston, Massachusetts.

          Juan Manuel Gonzalez, Tampa, USA, was appointed Executive
Vice-President in July 2004, he was previously Senior Vice President and joined
CP Ships on the merger with TMM in 1999.

          Glenn Hards, Tampa, USA, was appointed Executive Vice-President in
July 2004. He joined CP Ships in 1978 and has held management positions in
finance, audit and business development.

          John Irving, Surrey, England, Vice-President General Counsel and
Secretary, joined CP Ships in June 2001 after five years as Senior
Vice-President and General Counsel for Dairyworld Foods in Vancouver, British
Columbia. He was Vice-President, General Counsel and Secretary of Emco Limited
from 1993 to 1996.

          JP LaCasse, Tampa, USA, Senior Vice-President, joined in January 1998.
Before that he was with APL for nine years, most recently as North American
Controller. He started in the shipping business in 1978 as international tax
counsel for Sea-Land Service Inc.

          Jeremy Lee, Montreal, Canada, Vice-President Investor Relations since
June 2001. He joined CP Ships in 1989 and has served in various senior
commercial, marketing and corporate planning positions.

          Jeremy Masters, Sussex, England, was appointed Senior Vice-President
in May 2004.  He joined CP Ships in 1984 and previously served in a number of
senior commercial positions.

          Paul Stone, Essex, England, Vice-President Human Resources, was
appointed in November 1999 after serving as General Manager, Human Resources for
Contship Containerlines since 1996. Previously he was UK HR Manager for Deloitte
& Touche and previously in similar roles in other companies.

          Iain Torrens, London, England, Vice-President Treasurer, was appointed
in January 2002. He joined from Cookson Group where he was Deputy Group
Treasurer.

          There is no family relationship between any of the directors and
officers.


                                                                           39
<PAGE>


Committees of the Board of Directors

          The Board of Directors of CP Ships has constituted three standing
committees - an Audit Committee, a Compensation Committee and a Corporate
Governance Committee. Each standing committee is comprised of non-employee
directors. Matters regarding employee health and safety and the protection of
the environment are dealt with by the full Board of Directors.


Audit Committee

          The mandate of the Audit Committee includes:

     o    Reviewing with management and CP Ship's internal and external
          auditors, the financial reporting in connection with the annual
          audit and the preparation of the financial statements including the
          judgement of the external auditors as to the quality and
          appropriateness of CP Ship's accounting principles.

     o    Reviewing CP Ship's Quarterly Financial Statements and recommending
          the release of those statements to the public.

     o    Discussing with management the policies and procedures for managing
          the principal financial risks of the business to satisfy themselves
          that the principal financial risks have been identified and that
          systems have been implemented to effectively manage these risks.

     o    Reviewing the effectiveness of CP Ship's disclosure controls and
          procedures and internal financial controls.

     o    Subject to shareholder approval, selecting, retaining and where
          appropriate replacing the external auditors, including a review and
          discussion with the external auditors of all significant
          relationships that the external auditors and their affiliates have
          with CP Ships.

     o    Approving the audit and non-audit services and fees of the external
          auditors.

     o    Establishing procedures for anonymous complaints regarding
          questionable accounting or auditing matters.

          The Chairman of the Audit Committee is John McNeil and the members are
John Bowmer, Robert Clanin, Peter Dey, Nigel Rich and Viscount Weir.


Corporate Governance Committee

          The mandate of the Corporate Governance Committee includes:

     o    Monitoring and assessing the functioning of the Board and the
          committees of the Board and developing and implementing good
          corporate governance practices.

     o    In consultation with the Chairman and the CEO, reviewing the size,
          composition and profile of the Board and identifying candidates to
          be appointed to fill any vacancies.

     o    Reviewing from time to time the compensation for the Board and for
          committee service.

     o    Reviewing and making recommendations to the Board from time to time
          with respect to the performance of the Board and various committees
          of the Board.


                                                                            40
<PAGE>

          The Chairman of the Corporate Governance Committee is Peter Dey and
the members are John Bowmer, Robert Clanin, John McNeil, Nigel Rich and Viscount
Weir.


Compensation Committee

          The mandate of the Compensation Committee includes:

     o    Defining the reporting relationships of senior management and its
          major business units

     o    Reviewing on a regular basis, succession plans for senior management
          positions

     o    Assessing the performance of senior management, their compensation
          and reviewing the compensation policy of CP Ships.

          The Chairman of the Compensation Committee is Viscount Weir and the
members are John Bowmer, Robert Clanin, Peter Dey, John McNeil and Nigel Rich.



                                                                            41
<PAGE>

     DESCRIPTION OF INDEBTEDNESS AND OTHER OBLIGATIONS AND TAXATION OF CP
                            SHIPS AND SUBSIDIARIES

          The following is a summary of the terms and conditions of CP Ships'
revolving credit facility, 10-3/8% Senior Notes due 2012, 4% Convertible Senior
Subordinated Notes due 2024, Pacific Class Vessel loan, and certain capital
leases and other operating leases. This summary is necessarily of a general
nature and does not purport to describe all of the terms and conditions of such
financing transactions.


Indebtness Corporate Structure

<TABLE>
<CAPTION>


                                   ------------------------------------------------------------
                                   |                   CP Ships Limited (1)                   |
                                   |                     (New Brunswick)                      |
                                   |            Borrower under 10-3/8% Senior Notes           |
                                   |    Borrower under 4% Convertible Senior Subordinated     |
                                   |                          Notes                           |
                                   |          Guarantor under $525 Million Facility           |
                                   |              Guarantor under Container Sale              |
                                   |                      and Leaseback                       |
                                   |          Guarantor of Pacific Class Vessel Loan          |
                                   |          Guarantor of Venture and Spirit Leases          |
                                   |             Guarantor of Long-term Charters              |
                                   ------------------------------------------------------------
                                                               |
                     -------------//--------------------------------------------//-----------------------
                     |                                         |                                         |
                     |                                         |                                         |
<S>         <C>                            <C>                                             <C>
           -------------------------       ------------------------------------------      -----------------------------
           |Cast Terminal Company  |       |      CP Ships (Bermuda) Limited (2)    |      |Racine Terminal (Montreal) |
           |    (Nova Scotia)      |       |                (Bermuda)               |      |         Company           |
           |                       |       |  Guarantor of Pacific Class Vessel Loan|      |       (Nova Scotia)       |
           -------------------------       ------------------------------------------      -----------------------------
                                                                           |
                                                                           |
              -----------------------------------------------------------------------------------------------------
              |                                 |                                |                                 |
              /                                 /                                /                                 |
              /                                 /                                /                                 |
              |                                 |                                |                                 |
              |                                 |                                |                                 |
|--------------------------|   |-------------------------------|   |-----------------------------|   |---------------------------|
|     Container Equipment  |   |    CP Ships (UK) Limited (4)  |   |       CP Ships (Americas)   |   |   CPS Number 1 Limited (8)|
|     Leasing Limited (3)  |   |       (England and Wales)     |   |       Limited (8) (Bermuda) |   |          (Bermuda)        |
|          (Bermuda)       |   |      Guarantor of 10-3/8 %    |   |        Borrower under       |   |     Borrower under $525   |
|  Lessee under Container  |   |           Senior Notes        |   |   Pacific Class Vessel Loan |   |       Million Facility    |
|     Sale and Leaseback   |   |  Guarantor under $525 Million |   |                             |   |                           |
|                          |   |            Facility           |   |                             |   |                           |
|                          |   |    Lessess under Venture and  |   |                             |   |                           |
|                          |   |         Spirit Leases         |   |                             |   |                           |
|--------------------------|   |-------------------------------|   |-----------------------------|   |---------------------------|
                                                |                                 |
                              |-----------------|                                 |----------------|
                              |                                                                    |
                              |                                                                    |
                --------------------------------                                -------------------------------------
                |                              |                                |                                   |
                |                              |                                |                                   |
                |                              |                                |                                   |
|--------------------------|   |-------------------------------|   |-----------------------------|   |---------------------------|
|  CPS Number 2 Limited (8)|   | Italia di Navigaazione LLC (5)|   | Lykes Lines Limited, LLC (6)|   | TMM Lines Limited, LLC (7)|
|     (England and Wales)  |   |          (Delaware)           |   |          (Delaware)         |   |         (Delaware)        |
|     Borrower under $525  |   |                               |   |     Guarantor of 10-3/8 %   |   |     Guarantor of 10-3/8%  |
|      Million Facility    |   |                               |   |         Senior Notes        |   |        Senior Notes       |
|                          |   |                               |   |     Guarantor under $525    |   |    Guarantor under $525   |
|--------------------------|   |-------------------------------|   |       Million Facility      |   |      Million Facility     |
                                                                   |     Guarantor of Venture    |   |    Guarantor of Venture   |
                                                                   |      and Spirit Leases      |   |      and Spirit Leases    |
                                                                   |   Lessee under Long-term    |   |                           |
                                                                   |          Charters           |   |                           |
                                                                   |-----------------------------|   |---------------------------|
</TABLE>





(1)      CP Ships owns a 100% interest in Racine Terminal (Montreal) Company
         and Cast Terminal Company indirectly through CP Ships (Canada)
         Holdings Company, which is incorporated in Nova Scotia.
(2)      CP Ships (Bermuda) Limited holds a 100% interest in (i) CP Ships (UK)
         Limited indirectly through three intermediate holding companies, one
         of which is incorporated in Bermuda and the other two in England and
         Wales, (ii) CP Ships (Americas) Limited through an intermediate
         holding company incorporated in Bermuda.
(3)      Owns and leases CP Ships' containers.
(4)      Services are marketed under the following brands: Canada Maritime,
         Cast, Contship Containerlines and ANZDL.
(5)      Services are marketed under the Italia brand.
(6)      Services are marketed under the Lykes Lines brand.
(7)      Services are marketed under the TMM Lines brand.
(8)      Ship-owning company.





                                                                           42
<PAGE>


Revolving Credit Facility

$525 Million Facility

          On 25th March 2004, CP Ships and certain of its subsidiaries entered
into a $525 million secured revolving credit facility (the "$525 Million
Facility") with a syndicate of financial institutions represented by ING Bank
NV, as agent and security trustee. The $525 Million Facility replaces CP Ships'
previous $175 million and $350 million revolving credit facilities, which have
been cancelled. The $525 Million Facility has a five-year term expiring in March
2009. Borrowings under the $525 Million Facility are by subsidiaries of CP Ships
(CPS Number 1 Limited and CPS Number 2 Limited), are presently secured by 25
owned ships, and are guaranteed by CP Ships, Lykes LLC, TMM LLC and CP Ships
(UK).

          Under the $525 Million Facility, CP Ships must pay interest on amounts
borrowed at a rate equal to LIBOR (or, in relation to any advance in Euro,
Euribor), plus the applicable margin and mandatory costs (if any), in addition
to a quarterly commitment fee on the unused portion of the $525 Million Facility
equal to 40% of the applicable margin. The applicable margin is based on the
average of the Moody's and S&P corporate ratings of CP Ships. For so long as CP
Ships' corporate ratings continue to be Ba2 (as rated by Moody's) and BBB-- (as
rated by S&P) and the amount outstanding under the $525 Million Facility is less
than 50% of the total commitments thereunder at such time, the applicable margin
is 1.10%. The applicable margin is subject to adjustment in the event of a
change in such ratings. If the amount outstanding under the $525 Million
Facility is more than 50% of the total commitments thereunder at such time, the
applicable margin is increased by a further 0.15%.

          Under the $525 Million Facility, CP Ships may borrow an amount up to
the aggregate of 75% of the appraised value of the ships on which the facility
is secured. The value of all secured ships is subject to an annual reappraisal
and, to the extent that borrowings under the facility exceed the 75% threshold,
CP Ships may be required to reduce the borrowings within 15 business days of
notification. CP Ships may also be required to make a prepayment if and to the
extent that the sale or total loss of a ship, or the release of a mortgage on a
ship results in borrowings under the facility exceeding the 75% threshold. Based
on the appraised value of the 25 secured ships, CP Ships was able to borrow $525
million under the $525 Million Facility as at 3rd September 2004.

          Voluntary prepayments, including partial prepayments, are permitted
under the $525 Million Facility and amounts prepaid may be re-borrowed.

          As guarantor, CP Ships is subject to certain financial and other
covenants including: (i) an ongoing obligation to maintain free liquid assets
(defined as credit balances on current or deposit accounts, short-term (less
than one-year maturity) certificates of deposit, investments in money market
funds rated AAA by S&P or Aaa by Moody's, and amounts up to $35 million of any
unutilized, committed credit facilities with a remaining term of greater than
one year) of at least $75 million; (ii) an ongoing obligation to maintain
consolidated tangible net worth (defined as shareholders' equity less any
goodwill and other intangibles) equal to or in excess of $500 million; (iii) an
ongoing obligation to ensure that the ratio of total debt (excluding up to $225
million of subordinated debt) and capitalized lease obligations (excluding (a)
the impact of ship charters which commence on a future date and (b) leases of
office equipment, office premises, motor vehicles, trucks and chassis) to
shareholders' equity does not exceed 1.2 to 1.0; (iv) an ongoing obligation to
ensure that the ratio of total debt (excluding up to $225 million of
subordinated debt) to earnings before interest, depreciation, taxes and
amortization does not exceed 4.0 to 1.0.

          In addition to events of default customary for this type of facility,
any event of default or default with respect to CP Ships, Lykes LLC, TMM LLC and
CP Ships (UK) or the borrowing subsidiaries' indebtedness for money borrowed
having an aggregate principal amount of $15 million or more would constitute an
event of default under the $525 Million Facility. If CP Ships ceases to be
listed on The TSX, the London Stock Exchange or the NYSE (or other approved
stock exchanges) or any person or group acquires more than 25% of CP Ships'
outstanding common shares, this will constitute a change of control under the
$525 Million Facility and an event of default. The occurrence of an event of
default, unless waived by the lenders, will result in all amounts owing under
the facility becoming immediately due and payable.



                                                                           43
<PAGE>

10-3/8% Senior Notes due 2012

          On 3rd July 2002, CP Ships completed a private placement of senior
notes in the aggregate principal amount of $200 million at a price of 97.722% of
their principal amount. Following an exchange offer made by CP Ships on 31st
October 2002, all of the senior notes were exchanged for senior notes registered
under the Securities Act (the "10-3/8% Senior Notes"). The 10-3/8% Senior Notes
are issued pursuant to a Trust Indenture dated 3rd July 2002 between CP Ships as
issuer, CP Ships (UK), Lykes LLC and TMM LLC (together, the "Note Guarantors")
as subsidiary guarantors and The Bank of New York as trustee and reference is
made to the Trust Indenture for a full description of the terms and conditions
attaching to the 10-3/8% Senior Notes. The 10-3/8% Senior Notes are listed on
the Luxembourg Stock Exchange (CUSIP number 22409VAC6).

          The 10-3/8% Senior Notes bear interest at 10.375% payable
semi-annually and mature in July 2012 unless redeemed earlier. The obligations
of CP Ships under the 10-3/8% Senior Notes are guaranteed by the Note
Guarantors. Under the terms of the 10-3/8% Senior Notes, CP Ships has the
option, in each case subject to payment of any accrued and unpaid interest:

          (i) at any time prior to 15th July 2005, to redeem up to 35% of the
aggregate principal amount of the 10-3/8% Senior Notes with the proceeds of one
or more public equity offerings, at a redemption price equal to 110.375% of the
principal amount of the redeemed 10-3/8% Senior Notes;

          (ii) at any time prior to 15th July 2007, to redeem any of the 10-3/8%
Senior Notes at a redemption price equal to the principal amount thereof plus a
redemption premium equal to the greater of (a) 1% of such principal amount and
(b) the excess of (x) the present value at the redemption date of the redemption
price of such 10-3/8% Senior Notes at 15th July 2007 plus all required interest
payments that would otherwise be due to be paid on such 10-3/8% Senior Notes
between the redemption date and 15th July 2007 excluding accrued but unpaid
interest, computed using a discount rate equal to the U.S. Treasury Rate at such
redemption date plus 0.50%; over (y) the principal amount of such 10-3/8% Senior
Notes; and

          (iii) at any time after 15th July 2007 and prior to their maturity, to
redeem any of the 10-3/8% Senior Notes at an applicable fixed redemption price
which gradually decreases from 105.188% of the aggregated principal amount of
such 10-3/8% Senior Notes if such option is exercised in 2007 to 100% of such
amount if such option is exercised in 2010 and thereafter.

          Under the terms of the 10-3/8% Senior Notes, if any person or group
directly or indirectly acquires 50% or more of CP Ships' outstanding common
shares, or if CP Ships consummates certain specific merger or consolidation
transactions or sells substantially all of its or its subsidiaries' assets, or
the majority of the Board of CP Ships is replaced during any consecutive two
year period and, within 90 days of any such event, the credit rating of the 10
3/8% Senior Notes is downgraded or withdrawn by both S&P and Moody's, CP Ships
will be required to make an offer to purchase all of the outstanding 10-3/8%
Senior Notes at a price equal to 101% of the principal amount thereof plus
accrued and unpaid interest to the date of purchase.

          CP Ships is also required to make an offer to purchase outstanding 10
3/8% Senior Notes in the principal amount equal to any proceeds (when such
proceeds exceed $25 million) from a sale of assets by CP Ships or its
subsidiaries that have not been used to repay third-party debt of any subsidiary
of CP Ships or to acquire assets, at a price equal to 100% of such principal
amount plus accrued interest up to the date of purchase.

          The indenture governing the 10-3/8% Senior Notes contains various
restrictive covenants that, among other things, limit the ability of CP Ships
and each of its subsidiaries to: (i) incur certain additional indebtedness; (ii)
pay dividends on capital stock or redeem capital stock or prepay any
subordinated debt; (iii) make certain investments; (iv) sell assets other than
at a fair market value and for cash or other equivalent consideration; (v) enter
into transactions with direct or indirect holders of more than 10% of the common
shares of CP Ships or of its subsidiaries and with affiliates that are not
subsidiaries of CP Ships, other than in good faith and on arm's-length terms;
(vi) create security interests over any of their respective assets other than
certain permitted security interests; (vii) sell shares in its subsidiaries or
permit its subsidiaries to issue


                                                                            44
<PAGE>

shares; (viii) sell and leaseback assets; (ix) guarantee debt; (x) consolidate,
merge or transfer all or substantially all of CP Ships' assets or
(xi) in the case of the Note Guarantors, dispose of their respective assets.
All of these restrictions are subject to a number of important limitations and
qualifications.

          Events of default under the 10-3/8% Senior Notes are customary for
this type of debt and, among other things, include the occurrence of an event of
default or default with respect to CP Ships' or its subsidiaries' indebtedness
for borrowed money having an aggregate principal amount of $20 million or more
that results in acceleration of the payment of such indebtedness.

4% Convertible Senior Subordinated Notes due 2024

          On 24th February 2004, CP Ships completed a private placement of
convertible senior subordinated notes due 2024 (the "Convertible Notes") in the
aggregate principal amount of $200 million at a price of 100% of their principal
amount. The Convertible Notes are issued pursuant to an Indenture dated 24th
February 2004 between CP Ships and The Bank of New York as trustee (the
"Convertible Notes Indenture") and reference is made to the Convertible Notes
Indenture for a full description of the terms and conditions attaching to the
Convertible Notes. The Convertible Notes are traded in The PORTAL Market (CUSIP
number 22409VAD4).

          The Convertible Notes bear interest at 4% payable semi-annually and
mature 30th June 2024 unless redeemed earlier. The Convertible Notes are
unsecured obligations of the Company subordinated in right of payment to all
existing and future senior indebtedness.

          Under the terms of the Convertible Notes, the Convertible Notes are
convertible into common shares of CP Ships at an initial conversion rate of
39.6542 shares per $1,000 principal amount of Convertible Notes (which results
in an initial conversion price of approximately $25.22 per share), subject to
adjustment, prior to the close of business on 30th June 2024 under the following
circumstances:

          (i)  during any fiscal quarter commencing after 30th June 2004 and
               only during such fiscal quarter, if the closing sale price of
               one of CP Ships' common shares exceeds 120% of the conversion
               price for at least 20 trading days in the 30 trading day period
               ending on the last trading day of the preceding fiscal quarter;

          (ii) during the five business day period after any five consecutive
               trading day period in which the trading price per Convertible
               Note for each day of that period was less than 98% of the
               product of the closing sale of CP Ships' common shares and the
               conversion rate for such date;

         (iii) if the Convertible Notes have been called for redemption; or

          (iv) upon the occurrence of certain specified corporate
               transactions.

          On or after 3rd July 2009, by giving investors at least 30 days'
notice, CP Ships may redeem any of the Convertible Notes at a redemption price
of 100% of the principal amount of the Notes being redeemed, plus accrued and
unpaid interest. Holders may require CP Ships to purchase the Notes on 30th June
2009, 30th June 2014 and 30th June 2019, or upon the occurrence of certain
designated events, at a purchase price equal to 100% of the principal amount of
the Convertible Notes, plus accrued and unpaid interest.

          CP Ships may, in lieu of delivering its common shares upon conversion
of all or a portion of the Convertible Notes, elect to pay cash or a combination
of cash and common shares.

          CP Ships has entered into a registration rights agreement pursuant to
which CP Ships has agreed to:

          o    File a shelf registration statement with the SEC within 120
               days after the closing date of the offering covering resales of
               the Convertible Notes and the common shares issuable upon
               conversion of the Convertible Notes;

                                                                            45
<PAGE>

          o    Use reasonable best efforts to have the shelf registration
               statement declared effective within 180 days of the closing
               date of this offering; and

          o    Use reasonable best efforts to keep the shelf registration
               statement effective until the date that there cease to be
               limitations on resale of the Convertible Notes or common shares
               thereunder or there are otherwise no longer any outstanding
               registrable securities.

          If CP Ships is party to a consolidation, amalgamation, statutory
arrangement, merger, binding share exchange or other combination or a transfer
of all or substantially all of CP Ships' consolidated property asset, as
determined under applicable law, pursuant to which CP Ships' common shares are
converted into, or become the right to receive, cash, securities or other
property, a holder may convert Notes at any time from and after the date which
is 15 days prior to the anticipated effective date of the transaction, as
determined by CP Ships, until 15 days after the effective date of the
transaction.

          Whilst the Convertible Notes Indenture does not restrict CP Ships
ability to incur additional senior indebtedness, CP Ships has agreed not to
incur any indebtedness that is contractually subordinate in right of payment to
any senior indebtedness unless it ranks pari passu or is contractually
subordinated in right of payment to the convertible bonds ; provided, however,
that unsecured debt will not be deemed to be subordinate in right of payment to
secured debt merely by virtue of its nature as unsecured debt.

          Events of default under the Convertible Notes are customary for this
type of debt and, among other things, include the occurrence of an event of
default or default with respect to CP Ships' or its subsidiaries' indebtedness
for borrowed money having an aggregate principal amount of $25 million or more
that results in acceleration of the payments of such indebtedness.


Pacific Class Vessel Loan

          CP Ships acquired on 14th September 2001 the beneficial interest in
four trusts (the "PCV Trusts"), each of which owns a U.S. flag Pacific Class
ship which was and continues to be chartered to Lykes LLC under long-term
charter arrangements. Prior to such acquisition, the PCV Trusts had entered into
agreements dated 22nd July 1998 with a financial institution pursuant to which
they borrowed a total of $70.5 million (the "Pacific Class Vessel Loan"). As a
result of such acquisition, CP Ships effectively acquired the four ships and
assumed the Pacific Class Vessel Loan. As at 31st December 2003 the principal
amount outstanding under the Pacific Class Vessel Loan was $37 million.

          The obligations of the PCV Trusts under the Pacific Class Vessel Loan
are secured on the four ships and are guaranteed by CP Ships and CP Ships
(Bermuda). The loan is repayable in monthly instalments with the final
instalment being due in June 2008, at an interest rate of 6.71% per annum.

          Under the Pacific Class Vessel Loan, CP Ships is subject to certain
covenants including: (i) a restriction on the sale of assets outside the
ordinary course of business and (ii) an ongoing obligation to ensure that a
subsidiary, CP Ships (Bermuda), has a net worth of at least $100 million.

          CP Ships may prepay in whole the Pacific Class Vessel Loan at any time
by paying to the lender an amount equal to the principal amount outstanding
under the Pacific Class Vessel Loan plus a premium.

Capital Leases

Venture and Spirit Leases

          CP Ships (UK) has entered into two leases with Seaspirit Leasing
Limited (the "Lessor") to lease from the Lessor two container vessels. The first
lease, entered into on 29th May 2003 (the "Venture Lease"), is in relation to a
4080 TEU ice-strengthened container vessel called the "Canmar Venture" (the
"Venture") and the second lease, entered into on 23rd July 2003 (the "Spirit
Lease"), is in relation to a similar vessel called the "Canmar Spirit" (the
"Spirit"). All obligations of CP Ships (UK) under the leases (and/or any of its
affiliates which manages either vessel under any related agreements) are
guaranteed by CP Ships, Lykes LLC



                                                                            46
<PAGE>

and TMM LLC.

          The primary lease period for each lease is 25 years commencing on the
delivery date of the vessel (3rd June 2003 in respect of the Venture and 25th
July 2003 in respect of Spirit and each a "Delivery Date") with one-year
secondary lease periods renewable at CP Ships (UK)'s option thereafter. CP Ships
(UK) is required to make quarterly rental payments to the Lessor which are
determined in accordance with the financial schedule forming part of the
relevant lease. The rental instalments during the primary lease period for each
lease are calculated by reference to factors such as the cost of the vessel,
interest and assumptions as to, in particular, changes in UK tax rates and the
level of capital allowances available to the Lessor and is therefore variable
throughout the lease.

          During the lease period, CP Ships (UK) is liable for all costs and
expenses in relation to the operation of the vessels, including but not limited
to, the maintenance, repair, insurance and use of the vessels. CP Ships (UK)
bears the full risk of any damage to or loss of the vessels.

          During June 2004, as part of conforming the financial covenants
contained in the Venture Lease and Spirit Lease documentation with those
contained in the $525 million Facility, the Lessee agreed that the Lessor be
entitled to review (according to its own criteria) the "creditworthiness" of
CP Ships during 2009 and 2019, in order to monitor the adequacy of the
guarantees provided by CP Ships. If the Lessor determines, in its sole
discretion, that the creditworthiness of CP Ships is inadequate, it can
require CP Ships (UK) to provide additional security in respect of each lease
by way of letter of credit or other security, or to prepay rental to a
specified level. Failure to provide such security and/or make the prepayment
will be a termination event. The Spirit Lease is further secured by a 364-day
letter of credit (the "LC") with a bank currently rated AA (the "LC Bank") in
the maximum aggregate amount of (pound)7,000,000 which decreases throughout
the lease period as rental instalments are paid. The Lessor may only make a
demand under the LC following a termination of the Spirit Lease and the
termination sum (as calculated in the financial schedule) becoming due and
payable if not already paid at that time. If the rating of the LC Bank is
lower than A- at any time or if the LC is not renewed, and CP Ships has not
replaced the LC or otherwise provided additional security acceptable to the
Lessor, a termination event would arise under the Spirit Lease.

          Other than in connection with the LC, the termination provisions are
consistent in both leases and cover standard defaults such as non-payment,
breach of representations, warranties and undertakings and insolvency events in
respect of the Lessor, CP Ships and any security provider. In particular, there
will be a termination event if CP Ships breaches any of its financial
indebtedness (including pursuant to any lease agreement or hire purchase
agreement) with any other party in excess of $15,000,000 unless the Lessor
notifies CP Ships (UK) that such default does not have a material adverse effect
on the ability of CP Ships and/or CP Ships (UK) to discharge its obligations
under the leases. There will also be a termination event if CP Ships ceases to
be a public limited liability company listed on the stock exchanges of Toronto,
London or New York. A termination event under one lease will cross-default the
other lease.

          Upon the occurrence of a termination event under either lease, the
Lessor may require CP Ships (UK) to pay (i) all outstanding amounts under the
lease and the associated finance documents; (ii) any loss which the Lessor has
incurred in relation to the termination, and (iii) a fixed termination amount as
calculated in the relevant financial schedule. On the termination of a lease
(either following a termination or mandatory prepayment event or upon expiry),
the Lessor irrevocably appoints CP Ships (UK) as its exclusive sales agent for
the purpose of negotiating the sale of the vessel with a purchaser. The Lessor
may terminate such appointment if no sale has been made within six (6) months of
the termination date of the relevant lease. Any sale proceeds which are realized
can be used to repay the outstanding amounts under the relevant vessel's lease
and any excess can be used to prepay unpaid amounts under the other lease. Upon
satisfaction of amounts due under the lease, 99.9% of any excess sale proceeds
would be payable to CP Ships.

          During June 2004, CP Ships, as guarantor, conformed the financial
covenants contained in the Venture Lease and Spirit Lease documentation with
those contained in the $525 Million Facility. See "Revolving Credit Facility".


                                                                            47
<PAGE>


Other Capital Lease Obligations

          CP Ships has entered into a number of other capital leases, which are
repayable in monthly installments ending between 2004 and 2007 and are secured
on the leased equipment, mainly containers. Obligations under capital leases
bear primarily fixed interest rates, which range from 3% to 18%. Interest
expense on such leases amounted to $5 million in 2003 ($2 million in 2002).


Operating Leases

Container Sale and Leaseback

          On 7th November 2000, a subsidiary of CP Ships (the "Container
Lessee") agreed to sell containers with a total capacity of approximately 44,350
teu (the "Leased Containers") to a leasing counterparty (the "Lessor") for $63.9
million, and agreed to lease such containers from the Lessor for a minimum of
five years (and up to nine years at the option of CP Ships) under a container
lease contract (the "Container Lease"). The obligations of the subsidiary in
connection with this transaction are fully guaranteed by CP Ships (the
"Container Guarantee"). Under the Container Lease, the Container Lessee is
required to make fixed quarterly rental payments to the Lessor based on the
amortization of the purchase price plus a specified return to the Lessor. The
rate of return to the Lessor is 8.05% if and for so long as CP Ships' long term
corporate credit rating by S&P is not lower than BBB-- or CP Ships' long term
senior implied rating by Moody's is not lower than Baa3 (whichever is the
lower). This rate of return will increase to 8.4% if and for so long as the
lower of such ratings is BB+ (in the case of S&P) or Ba1 (in the case of
Moody's), and 8.9% if and for so long as the lower of such ratings is BB or
lower (in the case of S&P) or Ba2 or lower (in the case of Moody's). For so long
as CP Ships' long term senior implied rating by Moody's is Ba2, the rate of
return to the Lessor is 8.9%.

          During September 2004, CP Ships, as guarantor, conformed the financial
covenants contained in the Container Sale and Leaseback documentation with those
contained in the $525 Million Facility. See "Revolving Credit Facility".In
addition, the Lessor may require the Container Guarantee and the Container Lease
to be amended to include any other financial covenants given by CP Ships (or the
Container Lessee) under any future ship mortgage loan, bareboat charter
agreement, container financing arrangement or secured long-term credit facility.
Under the Container Sale and Leaseback, the Lessor can declare a "material
adverse change" if CP Ships' long term corporate credit rating by S&P is lower
than BB+ (as at 31st December 2003 it was BBB--) or its long term senior implied
rating from Moody's is lower than Ba1 (as at 31st December 2003 it was Ba2),
whichever rating is higher from time to time. Such a "material adverse change"
could lead to an event of default under the Container Sale and Leaseback.

          If any event of default or default occurs with respect to CP Ships'
obligations under any contract with the Lessor or under any material contract
with a third party having an aggregate principal amount or value in excess of $5
million, the Lessor may declare an event of default under the Container Sale and
Leaseback.

          Upon the occurrence of an event of default under the Container Sale
and Leaseback, the Lessor may, at its option (i) require CP Ships to repurchase
the Leased Containers at a purchase price based on a fixed termination price
plus certain breakage costs incurred by the Lessor or (ii) retain ownership of
the Leased Containers and demand payment of an amount equal to certain breakage
costs incurred by the Lessor. If the Lessor declares an event of default under
the Container Sale and Leaseback, this will also constitute an event of default
under CP Ships' other financing transactions which, unless waived, will result
in all amounts owing thereunder becoming immediately due and payable.

          The Container Lessee may at its option, in order to avoid the
occurrence of an event of default under the Container Sale and Leaseback,
repurchase the Containers at a specified purchase price based on a fixed
termination price (as at 31st December 2003, approximately $54 million).

          Under the Container Lease, the Container Lessee has the option
exercisable at the end of the fifth, sixth and seventh years of the Container
Lease to repurchase the Leased Containers at a fixed purchase price


                                                                            48
<PAGE>

based on the projected fair market value of the Leased Containers at the
relevant time plus the Lessor's breakage costs.

Long-term Charter Arrangements

          In June 2000, Lykes LLC entered into individual long term time charter
parties (the "Long-Term Charters") for six 4100 teu vessels then under
construction. Lykes took delivery of four of the vessels during the first
quarter of 2003 and the remaining two vessels during the third quarter of 2003.
The Long-Term Charters have been guaranteed by CP Ships.

          Each of the Long-Term Charters prescribes an initial hire period (the
"Initial Period") of eight years from the date of delivery of the relevant
vessel with an option, exercisable at the end of the seventh year, to extend
hire for a further two years, or until 2010 (the "Second Period"). Should the
charter be so extended, Lykes LLC then has a second option, exercisable at the
end of the ninth year of the charter, to further extend hire for another two
years (the "Third Period"). The daily rate is fixed, but increases by an agreed
amount on each renewal.

          In August 2003, CP Ships' subsidiary Lykes LLC entered into individual
long term charter parties (the "Seaspan Charters") with affiliates of Seaspan
Container Lines Limited ("Seaspan") for nine new 4,250 teu vessels (the "Seaspan
Vessels") of identical specifications. The Seaspan Vessels are presently under
construction and are scheduled for delivery between 2005 and 2007. Lykes LLC's
obligations under each of the Seaspan Charters are guaranteed by CP Ships.

          The daily charter hire under each of the Seaspan Charters is for a
fixed amount for the primary charter period (the "Primary Term").Each charter
party delineates two distinct payments to Seaspan for the use and hire of the
relevant Seaspan Vessel. One payment reflects the capital cost of the Seaspan
Vessel and the other reflects certain ship management and operating costs on
account of the costs of a management services agreement that is attached to and
forms a part of the charter party (the "Management Contract"). Lykes LLC's
payment obligations under each Seaspan Charter and the related Management
Contract will commence only on delivery of the relevant Seaspan Vessel.

          The Primary Term under each Seaspan Charter is up to ten years, with
options for CP Ships to extend the charter for up to two further years at a
slightly higher daily charter rate; payments under the Management Contract
remain fixed at the previous level. The Primary Term is structured such that
Lykes LLC has entered into an initial charter period of three years from
delivery of each vessel, with seven annual extension options (the "Extension
Options"). Each Extension Option must be declared two years in advance, thereby
creating a rolling minimum three year obligation. If Lykes LLC does not exercise
an Extension Option and the charter terminates at the end of the relevant three
year period, Lykes LLC becomes liable to pay Seaspan an additional
pre-determined exit fee (the "Exit Fee") at the date of termination.

          The Exit Fee payable declines with each renewal such that no Exit Fee
is payable if the Primary Term extends to 10 years.

          Amounts due under long-term charters are included in the table under
the heading "Commitments" below.




                                                                            49
<PAGE>


Commitments

          CP Ships has commitments under operating leases, including obligations
under time charters which include certain ship operating expenses. The
commitments in each of the next five years and thereafter are:
<TABLE>
<CAPTION>

                                                Current
                                               operating          Future
               Year                             leases        commitments(1)         Total
           ----------------                     ------        --------------         ------
                                                       (in $ millions)
<S>                                                <C>             <C>            <C>
           2004.......                             204               --               204
           2005.......                             127                1               128
           2006.......                             105               25               130
           2007.......                              94               53               147
           2008.......                              63               59               122
           2009 and thereafter                     137              454               591
                                                   ---              ---               ---
                                                   730              592             1,322
                                                   ===              ===            =======


</TABLE>

          (1) Future commitments comprise operating leases and associated
management services agreements for 10 years for the Seaspan vessels from their
expected delivery dates between late 2005 and early 2007. The lease terms allow
for termination at CP Ships' option on an annual basis from the end of the third
year of each lease by giving two years notice and paying a termination fee. The
associated management services agreements would terminate at the same time.
Under the early termination option, the minimum future lease commitments at 31st
December 2003 would be $249 million.

Capital Commitments

          CP Ships had capital commitments at 31st December 2003 of $2 million
that fall due in 2004.

Taxation of CP Ships and Subsidiaries

          CP Ships is subject to taxation in the countries in which it and its
constituent companies operate. CP Ships' corporate structure is such that much
of the income it generates from container shipping is subject to tax at
relatively low tax rates.

Bermuda

          Lykes LLC and TMM Lines are Delaware limited liability companies and
are subject to the taxation regimes of their sole member, which is a Bermuda
company. Lykes LLC and TMM LLC are, therefore, effectively exempt from income
taxation as their sole member has received exemption from income taxation in
Bermuda until 28th March 2016. They are however taxed on their activities in
certain countries other than Bermuda, including in the U.S., with respect to
their operations in those countries.

United States

          CP Ships carries on activities in the United States through various
subsidiaries of CP Ships Holdings (Bermuda) Limited ("CP Ships Holdings
(Bermuda)"), most of which are treated as disregarded entities for U.S. federal
income tax purposes. For such purposes, CP Ships Holdings (Bermuda) is
considered to earn directly all of the income earned by such subsidiaries. A
small amount of activity in the United States, not involving the international
operation of ships, is carried on by non-U.S. subsidiaries of CP Ships Holdings
(Bermuda) in the Cast and Canada Maritime divisions that are not disregarded
entities for U.S. federal income tax purposes.

          Under current law, the income derived by CP Ships Holdings (Bermuda)
from the international operation of ships is excluded from gross income and
exempt from U.S. federal income tax under Section 883 of the Internal Revenue
Code of 1986, as amended. For this purpose, income from the international
operation of ships means the gross amount of any income that is derived from the
operation of ships in carriage of



                                                                             50
<PAGE>

passengers or cargo for hire, from the hiring or leasing of ships for use on a
time, voyage or bareboat charter basis for carriage of passengers or cargo for
hire, or from activities incidental to such operation, with respect to voyages
that either begin or end (but do not both begin and end) in the United States.
As a prerequisite to obtaining the benefits of the Section 883 exemption, a
corporation claiming these benefits must establish that it satisfies a share
ownership test. CP Ships believes that it and CP Ships Holdings (Bermuda)
satisfy this test. As a result, the income derived by CP Ships Holdings
(Bermuda) from activities in the United States is substantially exempt from
U.S. federal income taxation under the Section 883 exemption. However, the
income from certain activities, such as acting as ships' agent and freight
forwarding, is not considered to be income from the international operation of
ships and is not exempt. In addition, recently finalized regulations under
section 883 have created some uncertainty as to the precise scope of the
activities that are incidental to the international operation of ships, the
income from which qualifies for exemption.

          To the extent that income earned by CP Ships Holdings (Bermuda) or its
non-U.S. subsidiaries does not qualify for exemption, it may be subject to U.S.
federal income tax. Non-exempt shipping income from U.S. sources, if any, is
subject to tax at the rate of 4% of the amount of that income, not reduced by
any deductions, unless such taxation is foreclosed by an applicable tax treaty.
To the extent that non-exempt income is effectively connected with the conduct
of a U.S. trade or business (or is attributable to a permanent establishment in
the United States of any subsidiary that qualifies for benefits under an
applicable tax treaty), such income is subject to U.S. federal income tax on a
net basis, in lieu of the 4% tax on gross shipping income. Any such income, net
of applicable deductions, is subject to U.S. federal income tax at graduated
rates, up to a current maximum rate of 35% of net income. CP Ships Holdings
(Bermuda) may also be subject to an additional branch profits tax at the rate of
30% on the earnings and profits attributable to its effectively connected
income, subject to certain adjustments, and on interest paid or deemed paid
which is allocable to effectively connected income. Any non-U.S. subsidiary of
CP Ships Holdings (Bermuda) that qualifies for benefits under an applicable tax
treaty may also be subject to the branch profits tax at such rate as prescribed
by the treaty.

United Kingdom

          The United Kingdom introduced a tonnage tax regime ("Tonnage Tax")
from 1st January 2000 for qualifying shipping companies to stimulate investment
in UK shipping. Under Tonnage Tax, the tax liability is calculated with
reference to a pre-set scale of alternate income based on the tonnage of the
ships in the relevant fleet, rather than actual income earned. Therefore, under
Tonnage Tax, tax expense varies with the tonnage of the fleet rather than with
the profitability of the business.

          In particular, it is generally not permitted for a company within
Tonnage Tax to reduce its liability to Tonnage Tax by offsetting losses or
depreciation. Entry to Tonnage Tax requires an election by the relevant shipping
company. Such an election generally must be made for a ten-year period and, once
made, is irrevocable.

          CP Ships (UK) entered the Tonnage Tax regime with effect from 1st
January 2001, and has recently renewed the election such that it now applies
until 31st December 2013. CP Ships (UK) comprises the Contship Containerlines
business and, from 27th September 2001, the Canada Maritime, Cast and ANZDL
businesses.

Canada

          CP Ships and its Canadian subsidiaries that operate the Racine and
Cast marine terminals in Montreal, Quebec are subject to normal Canadian federal
and provincial taxes.

          CP Ships believes that it is, and intends to take all necessary steps
to remain, resident solely in Canada for income tax purposes. CP Ships' tax
residency is, however, affected by a number of factors, some of which are
outside its control, including the application and interpretation of relevant
tax laws and treaties. If CP Ships were to cease to be tax resident in Canada,
it would be liable to pay additional Canadian taxes, including, but not limited
to, capital gains tax based on the difference between the fair market value and
tax cost of its assets at the relevant time. If such taxes were to become
payable, this would have a material adverse effect on CP Ships' business,
financial condition and results of operations. In addition, CP Ships may




                                                                             51
<PAGE>

be obliged to make indemnification payments under the Plan of Arrangement if its
ceasing to be Canadian tax resident caused the Spin-off to be taxed in a manner
inconsistent with the tax rulings obtained from the Canadian and United States
revenue authorities in connection with the Spin-off. If such indemnification
payments were to become due, this may have an adverse effect on CP Ships.
Further, the tax consequences to holders of Notes would generally be different
from those applicable if CP Ships were not resident in Canada.

          As noted above, a significant portion of CP Ships group income is
earned by controlled foreign affiliates resident in Bermuda, the United States
and the United Kingdom. Canadian tax legislation has a detailed regime for the
taxation of activities carried on by foreign affiliates. In very general terms,
income that is from an active business, a term that is defined for Canadian tax
purposes, earned by controlled foreign affiliates is not taxed in Canada. Active
business income earned by controlled foreign affiliates located in jurisdictions
with which Canada has concluded an income tax convention (which would include
the United States and the United Kingdom) is not subject to any additional tax
in Canada upon repatriation. Active business income earned by a controlled
foreign affiliate in a jurisdiction with which Canada has not concluded an
income tax convention, such as Bermuda, is subject to additional taxation in
Canada upon repatriation of such income via dividends. Such income is subject to
taxation at approximately 39%. CP Ships is of the view that the operations of
its significant operating subsidiaries constitute the carrying on of an active
business for the purpose of the Canadian foreign affiliate rules. Changes to the
Canadian foreign affiliate rules could result in an increase of the tax burden
to the group.


                             ADDITIONAL INFORMATION

          When the securities of CP Ships are in the course of distribution
under a preliminary short form prospectus or a short form prospectus, copies of
the following documents may be obtained upon request from the Vice President
General Counsel and Secretary, CP Ships Limited, 2 City Place, Beehive Ring
Road, Gatwick Airport, West Sussex RH6 0PA, United Kingdom:

          (i)  one copy of the Annual Information Form, together with one copy
               of any document, or the pertinent pages of any document,
               incorporated by reference in the Annual Information Form;

          (ii) one copy of the comparative financial statements of CP Ships
               for its most recently completed financial year for which
               financial statements have been filed together with the
               accompanying report of the auditor and one copy of the most
               recent interim financial statements of CP Ships that have been
               filed, if any, for any period after the end of its most
               recently completed financial year;

         (iii) one copy of the information circular of CP Ships in respect of
               its most recent annual meeting of shareholders that involved
               the election of directors or one copy of any annual filing
               prepared instead of that information circular, as appropriate;
               and

          (iv) one copy of any other documents that are incorporated by
               reference into the preliminary short form prospectus or the
               short form prospectus and are not required to be provided under
               clauses (i), (ii) or (iii).

          At any other time, one copy of any documents referred to in clauses
(i), (ii) and (iii) will be provided upon request, provided that CP Ships may
require the payment of a reasonable charge if the request is made by a person or
company who is not a security holder of CP Ships.

          Additional information including directors' and officers' remuneration
and indebtedness, principal holders of CP Ships' securities, options to purchase
securities and interests of insiders in material transactions, if applicable, is
contained in the CP Ships information circular for its most recent annual
meeting of shareholders that involved the election of directors. Additional
financial information is provided in CP Ships' restated comparative financial
statements for the year ended 31st December 2003. These documents are also
available through the internet on the Canadian securities regulatory
authorities' System for Electronic Document Analysis and Retrieval (SEDAR) which
can be found at www.sedar.com.


                                                                             52












<PAGE>



Part B.

                                  UNDERTAKING

     The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities in relation to which the obligation to file an
annual report on Form 40-F arises; or transactions in the said securities.

                            ADDITIONAL INFORMATION

     The Registrant has in place a Code of Business Conduct applicable to all
officers of the Registrant and no amendments have been made nor exemptions
granted under it during the year ended 31st December 2003. The Code of
Business Conduct is available on the Registrant's website at www.cpships.com.
The Registrant intends to disclose on its website any amendments to or waivers
from its Code of Business Conduct with respect to the Chief Executive Officer,
Chief Financial Officer and Group Controller within five days of any such
event.

          Disclosure controls and procedures are defined by the Securities and
Exchange Commission as those controls and procedures that are designed to
ensure that information required to be disclosed in our filings under the
Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission rules and forms. In connection with the annual report on form 40-F
for the year ended 31st December 2003 originally filed by the Registrant on
15th April 2004, management evaluated the Registrant's disclosure controls and
procedures and concluded that, based on the information available to
management at that time, such disclosure controls and procedures were
effective as at 31st December 2003. Subsequent to that time, a number of
factors have come to light that indicate certain conditions existed, mainly
during 2003 and continuing into 2004, that caused the Registrant to understate
certain expense accruals and to retain certain balances on the balance sheet
that should have been charged to income. For a further description of the
restatement, refer to note 2 of the restated consolidated financial statements
for the year ended 31st December 2003 and to note 3 of the consolidated
financial statements as at 30th June 2004.

          The Registrant had, consistent with management's ongoing efforts to
improve disclosure controls and procedures, introduced a new SAP financial
accounting system in the majority of its business operations with effect from
1st January 2004. The preparations for the implementation of SAP started in
late 2002 and continued throughout 2003, with the implementation itself
spanning the first quarter of 2004. The demands on the finance and related
business functions increased significantly during this period, and certain of
the processes and controls required to make reasonable estimates of accruals
for expenses were affected as a result. In addition, both as a result of the
implementation of SAP and through improved reconciliation procedures of
account balances, the Registrant determined that certain other adjustments to
the Registrant's financial statements were also needed. As a result, certain
adjustments were required which gave rise to the restatement of financial
statements for the years ended 31st December 2002 and 2003 and the first
quarter 2004 first announced by the Registrant on 9th August 2004 and
confirmed in its announcement on 16th August 2004.

<PAGE>


          In light of these discoveries, management has engaged in a review
and will continue to review the Registrant's controls and procedures. In
addition, the Registrant has been advised by PricewaterhouseCoopers LLP, the
Registrant's external auditors, that they view the issues described above as
significant weaknesses in the Registrant's controls and procedures.

          The Registrant believes that its implementation of SAP on 1st
January 2004 has significantly enhanced its financial controls. In addition,
as a result of the Registrant's review to date, it has taken a number of
corrective measures to improve the controls in accounting and business
processes. For example, procedures and controls over the cost estimation
process and monitoring controls over period end accrual balances have been
improved to ensure that changes in shipping activities and cost data are
reflected on a timely basis. Improvements have also been made to ensure that
intercompany and other balance sheet accounts are reconciled on a timely
basis.

          A Special Committee of the Board, constituted in August and
comprising four independent directors, has been charged with overseeing
certain aspects of the restatement of financial results for the first quarter
2004 and the years 2003 and 2002. The committee's mandate includes
independently investigating the principal reasons for the restatement and
management's response to the causes of the restatement, investigating certain
stock trades made by officers of the company in May and June this year,
oversight of the defence of class action lawsuits and liaising with
regulators.

          A senior level task force, reporting to CFO Ian Webber, was
established to review financial controls and related business processes and
implement improvements. Task force members include senior finance, information
systems, business process, commercial and operations executives, many of whom
were involved in identifying the issues behind the restatement. The task force
has overseen the implementation of immediate corrective actions to improve
internal controls, in particular those internal controls involving the
recording and monitoring of accruals for costs and the review and
reconciliation of balances. The task force's continuing mandate is to build on
these improvements and it is coordinating closely with a separate team whose
task is to ensure compliance by the end of 2005 with internal financial
reporting controls required under Section 404 of the US Sarbanes-Oxley Act.

          The task force has also reviewed the finance organizational structure,
resulting in a number of improvements, including the addition of new employees
at both senior and junior levels.

          In connection with the filing of this amended annual report on form
40-F/A, management has re-evaluated the Registrant's disclosure controls and
procedures as of 16th August 2004 and has concluded that, except as described
above, such disclosure controls and procedures were effective as at 31st
December 2003. Except as set forth above, there has been no change in internal
controls during the period covered by this report or subsequent to the period
covered by this report that has materially affected, or is reasonably likely
to materially affect, the Registrant's internal control over financial
reporting.





<PAGE>





     CP Ships' Board of Directors has determined that John McNeil is a
financial expert serving on its Audit Committee. The Board has determined that
Mr. McNeil is an independent director as defined in the NYSE Listed Company
Manual. Mr. McNeil serves as Chairman of the Audit Committee.

     All services to be rendered by the Registrant's external auditors are
subject to approval by the Audit Committee of the Board. The engagement for
the annual audit of the Registrant's consolidated financial statements is
approved by the Audit Committee on an annual basis.

     In addition, certain specified services that fall into the following
categories have been pre-approved by the Audit Committee in accordance with
the Committee's established policy: statutory or other financial audit work,
employee benefit plan audits, financial due diligence in connection with
acquisitions and divestitures, internal control reviews, tax services and
tax-related valuations, and certain fact-finding services and non-financial
systems design and implementation. Specified pre-approved services would
nevertheless require separate Audit Committee approval where the fees for a
particular engagement or series of related engagements are not within
established fee limits, or where the total cost for non-audit services for the
year would exceed the estimated fees for audit services.

     The Audit Committee has delegated the authority for any required approval
to the Chairman of the Committee or, if the Chairman is unavailable, to
another independent member of the Committee. The Audit Committee receives
reports of each engagement of the auditors at its regularly scheduled
meetings.



<PAGE>





     Type of Fees ($ in millions)               2003               2002
---------------------------------------- ------------------ ------------------
              Audit Fees                         2.1                3.3
          Audit Related Fees                     0.6                0.4
               Tax Fees                          2.0                1.2
            All Other Fees                       0.2                0.2
                                                 ---                ---
                 Total                          $4.9               $5.1
                                                ====               ====


     In the above table, in accordance with the SEC's definitions and rules,
"audit fees" are fees paid PricewaterhouseCoopers for audit and other services
in connection with statutory and regulatory filings; "audit related fees" are
for assurance and related services that are reasonably related to the
performance of the audit or review of financial statements; "tax fees" are for
tax compliance, tax advice and tax planning; and "all other fees" are for
acquisition due diligence and fees for other services not included in the
first three categories.





                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant certifies that it meets all of the requirements for filing on Form
40-F, and has duly caused this annual report to be signed on its behalf by the
undersigned, thereto duly authorized.

                                                 CP SHIPS LIMITED

                                         By:     /s/ Ian J. Webber
                                                 -----------------------------
                                         Name:   Ian J. Webber
                                         Title:  Chief Financial Officer
                                         Date:   [   ] September 2004


<PAGE>



                               LIST OF EXHIBITS

The following documents are filed as exhibits to this Form 40-F/A:

Exhibit No.     Description

1               Revised Management's Discussion and Analysis for the year
                ended 31st December 2003 (incorporated by reference to
                Exhibit 10.3 of Registrant's Report on Form 6-K filed on
                3rd September 2004).

2*              Audited Restated Consolidated Financial Statements for the
                years ended 31st December 2003 and 2002.

3*              Consent of Auditors.

4(a)*           Certification of Frank Halliwell, CEO of Registrant, pursuant
                to Section 302 of the Sarbanes-Oxley Act of 2002.

4(b)*           Certification of Ian Webber, CFO of Registrant, pursuant to
                Section 302 of the Sarbanes-Oxley Act of 2002.

5*              Certification of Frank Halliwell, CEO of Registrant, and Ian
                Webber, CFO of Registrant, pursuant to 18 U.S.C. Section 1350,
                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of 2002.


* filed herewith