Sea Containers Ltd. Sea Containers Ltd. Sea Containers Ltd. 41Cedar Avenue P.O.Box HM 1179 Annual Report 2000 Hamilton HM EX Bermuda Annual Report 2000 Tel: +1 (441) 295 2244 Fax: +1 (441) 292 8666 Correspondence: Sea Containers Services Ltd. Sea Containers House 20 Upper Ground London SE1 9PF Tel: +44 (0) 20 7805 5000 Fax: +44 (0) 20 7805 5900 www.seacontainers.com 2860-AR-00 Sea Containers Ltd. Front cover: The company participated in a public tender to Sea Containers Ltd. is a Bermuda company with operating subsidiaries in privatize the Corinth Canal, which divides mainland Greece London, Genoa, New York, Rio de Janeiro and Sydney. It is owned primarily from the Peloponnisos, about 30 nautical miles west of Piraeus, Greece’s principal port. It recently won the tender by U.S. shareholders and its common shares are listed on the New York Stock and expects to take over the 40-year concession from mid- Exchange under the trading symbols SCRA and SCRB. 2001. The canal has about 12,000 ship transits a year and The company is engaged in three main activities: passenger transport, marine is a major tourist attraction. It first opened in 602 B.C. when ships were porteraged along a limestone block road which container leasing and leisure-based operations. Within each segment is a still exists. The water canal was completed only in the 19th number of operating units. Passenger transport consists of fast ferry operations century. The company intends to develop both the marine in the English Channel under the name Hoverspeed Ltd., both fast and and tourist potential of the canal. conventional ferry services in the Irish Sea under the name Isle of Man Steam Packet Company, fast ferry operations in New York under the name SeaStreak, fast and conventional ferry services in the Baltic under the name Silja Line (50% owned) and in the Adriatic under the name SNAV-SeaCat (50% owned). Rail operations in the U.K. are conducted under the name Great North Eastern Contents Railway (GNER), and the company has port interests in the U.K. and Greece. Company description 2 Ship management and naval architects subsidiaries support the passenger transport division and have outside clients as well. Financial highlights 3 Marine container leasing is conducted primarily through GE SeaCo SRL, a Directors and officers 4 Barbados company owned 50% by Sea Containers and 50% by General President’s letter to shareholders 7 Electric Capital Corporation. GE SeaCo operates one of the largest marine container fleets in the world, over one million units. Sea Containers also owns Discussion by division: or partly owns six container service depots, five container manufacturing PassengerTransport 14 facilities and a refrigerated container service business. It owns two container ships which are chartered out in Asia and the Middle East. Leisure 20 The company’s leisure business is conducted through Orient-Express Hotels Ltd., a Containers 23 63% owned subsidiary. Orient-Express Hotels’ common shares are listed on the New York Stock Exchange under OEH. This company has 37 de luxe leisure Property, Publishing and Plantations 26 properties in 15 countries. Most of the properties are owned but some are Finance 28 partly owned, and one tourist train is only managed. One joint venture is Financial review 31 PeruRail, the railways of Peru, which operates tourist trains on the Cuzco/Machu Picchu route and from Cuzco and Arequipa to Lake Titicaca. PeruRail has extensive Shareholder and investor information 58 freight train operations as well. The hotels, restaurants, river cruise ship and tourist trains compete in the top end of the market. Other activities of Sea Containers include property development, publishing, fruit farming in the Ivory Coast and Brazil and a U.K.-based travel agency. 2 SEA CONTAINERS LTD. Financial highlights 2000 1999 Change $000 $000 % Revenue 1,360,737 1,339,069 1.6 Earnings before corporate and finance costs: Passenger transport operations 40,892 69,486 (41.1 ) Leisure operations 68,970 62,187 10.9 Container operations 50,417 61,639 (18.2 ) Other 34,735 206 16,761.7 Total 195,014 193,518 0.8 Net earnings 45,961 49,346 (6.9 ) Total assets at book value 2,608,990 2,515,417 3.7 Long-term obligations 1,628,104 1,700,285 (4.2 ) $ $% Net earnings per class A and class B common share: - basic 2.42 2.63 (8.0) - diluted 2.42 2.62 (7.6) Cash dividends per class A common share 0.975 1.10 (11.3 ) Cash dividends per class B common share 0.878 0.9945 (11.7 ) 3 Directors and officers Back row, left to right: Robert M. Riggs* W. Murray Grindrod* Philip J.R. Schlee John D. Campbell Ian Hilton Member of Carter, Chairman of Grindrod Chairman of Robert Senior Counsel of Private investor Ledyard & Milburn Unicorn Group Ltd. Anderson & Co. Ltd. Appleby Spurling & (attorneys) (a shipping and (a private investment firm) Kempe (attorneys) transportation company) Front row, left to right: Michael J.L. Stracey* James B. Sherwood Charles N.C. Sherwood Executive Vice President President of the Partner of Schroder (retired) and Consultant company Ventures (a private to the company equity investment firm) * member of the Audit Committee 4 SEA CONTAINERS LTD. Officers other than the President Back row, left to right: David G. Benson Senior Vice President, Passenger Transport James G. Struthers Vice President, Controller Christopher W.M. Garnett Vice President, Rail Edwin S. Hetherington Vice President, General Counsel and Secretary Daniel J. O’Sullivan Senior Vice President, Finance and Front row, left to right: Chief Financial Officer Stephen O. Whittam Vice President, Management Information Systems Simon M.C. Sherwood President, Orient-Express Hotels Ltd. Michael V. Scawn Vice President, Funding James A. Beveridge Vice President, Administration and Property Robert S. Ward Senior Vice President, Containers Regional Managers Franco Chresten A. Ian Routledge Robin Lynch Toby G. Grey delle Piane Bjerrum Regional Regional Regional Regional Regional Manager, Manager, Manager, Manager, Manager, Australasia North America South America Mediterranean Asia 5 As a short-term solution to 20-year franchise. Problems of has decided to place responsibility capacity shortage, GNER has the track and signal provider, for rail upgrade in the hands of been able to lease several idle Railtrack, have caused a delay a public-private partnership in Eurostar train sets until its own in the franchise award because which Sea Containers has new trains are delivered. The new the franchise plan depends on offered to participate. Award trains cannot be ordered until major improvements to the rail of the new franchise to GNER is GNER has been awarded a new infrastructure. The U.K. government expected soon. 6 SEA CONTAINERS LTD. President’s letter to shareholders May 1, 2001 Wasa-Umea of Silja Line, Gothenburg-Frederikshavn and Folkestone-Boulogne, suffered losses and had Dear Shareholder, to be stopped. Both we and Silja incurred significant 2000 was a year of mixed results for your company. wind-up expense in the process. We also took the Leisure, rail and the Isle of Man Steam Packet decision to replace our fuel thirsty, low capacity and Company had excellent earnings, while fast ferries, expensive-to-maintain hovercraft on Dover-Calais Silja and marine container leasing were disappointing. with less costly and higher capacity SuperSeaCats James B. Sherwood The year closed with net income of $46.0 million and this created additional wind-up costs. President and Founder on revenue of $1.4 billion compared with net income in 1999 of $49.3 million on revenue of Silja is 50% owned by Sea Containers, and 2000 was $1.3 billion. Diluted earnings per common share our first full year of involvement. Silja’s earnings were $2.42 compared with $2.62 in 1999. A major were adversely impacted by fuel costs, losses on contributor to 2000 earnings was a gain of $36 the Wasa-Umea former duty free sales route and million on the sale of Orient-Express Hotels Ltd. start-up costs of a new fast ferry service on the common shares. Helsinki-Tallinn route. The start-up costs related to the unwillingness of Finnish trade unions to allow Passenger Transport Operations Silja to man the fast ferry on a basis competitive Earnings from these activities collapsed from with other operators. A compromise was finally $69.5 million in 1999 to $40.9 million despite the reached, so operations in 2001 should be less costly. good performance from rail and the Isle of Man Silja has purchased much of its fuel requirements Steam Packet Company. At the risk of over- for 2001 at much lower prices and has stopped the simplification, our fuel bill was $20 million higher Wasa-Umea service and sold the related assets. in 2000 compared with 1999 and we were unable Silja and its main competitor decided to move to recover this from our customers. In April, 2000 their ships from the Finnish flag to another regional fuel prices were coming down, and we expected flag unless Finland adopted 'net wages' agreements them to be little higher for the year than in 1999. comparable to those of other Nordic countries. Then they shot through the roof, and we could Finland has indicated it will adopt such agreements not adjust our fares in time to recover from our shortly and the Finnish trade unions have further customers. For 2001, we purchased forward nearly said they will cooperate to improve productivity. all our fuel at much lower prices, and we have 'Net wages' means that employees receive wages been able to increase fares for 2001 on many routes.