Sea Cotainers Annual Report 1999

Sea Containers Ltd.
Annual Report 1999

Sea Containers Ltd.
Front cover: The Amalfi Coast Sea Containers is a Bermuda company with operating
seen from a terrace of the
headquarters (through subsidiaries) in London, England. It
Hotel Caruso in Ravello, Italy.
is owned primarily by U.S. shareholders and its common
Orient-Express Hotels
acquired the Caruso in 1999 shares have been listed on the New York Stock Exchange
and will reconstruct the prop- (SCRA and SCRB) since 1974.
erty during 2000-2001 with a
The Company engages in three main activities: passenger
view to re-opening in the
transport, marine container leasing and the leisure business.
spring of 2002. Capri and
Paestum are nearby. Demand Passenger transport includes 100% ownership of Hoverspeed
for luxury hotel accommodation Ltd., cross-English Channel fast ferry operators, the Isle of
on the Amalfi Coast greatly Man Steam Packet Company, operators of fast and conven-
exceeds supply.
tional ferry services to and from the Isle of Man, the Great
North Eastern Railway, operators of train services between
London and Scotland, and 50% ownership of
Neptun Maritime Oyj whose subsidiary Silja Line operates
Contents fast and conventional ferry services in Scandinavia.
Company description 2 Marine container leasing is conducted primarily through

GE SeaCo SRL, a Barbados company owned 50% by
Financial highlights 3
Sea Containers and 50% by GE Capital Corporation.
Directors and officers 4 GE SeaCo is the largest lessor of marine containers in the
world with a fleet of 1.1 million units.
President’s letter to shareholders 7
The leisure business is conducted through Orient-Express
Discussion by Division: Hotels Ltd., also a Bermuda company, which is 100% owned
by Sea Containers. Orient-Express Hotels owns and/or oper-
Passenger Transport 14
ates 35 leisure properties worldwide, including 26 hotels, six
Leisure 18 tourist trains, two restaurants and a river cruise ship. It also
Containers 22 partly owns and manages PeruRail, the sole provider of rail
services in central and southern Peru.
Property, Publishing and Plantations 26
Sea Containers owns three ports in the United Kingdom,
Finance 28 The Illustrated London News publishing group, fresh fruit
plantations in Brazil and the Ivory Coast, marine container
Financial review – SEC Form 10-K 31
manufacturing facilities in the U.K. and U.S., a naval archi-
Principal subsidiaries 80 tects company and a business travel company, both based in
the U.K. It engages in property development, primarily in
Shareholder and investor information 82
the British Isles.
2 SEA CONTAINERS LTD.

Financial highlights 1999
$000
1998
$000
Change
%
Revenue 1,339,069 1,266,533 5.7
Earnings before corporate and finance costs:
Passenger transport operations 69,486 61,919 12.2
Leisure operations 64,804 49,465 31.0
Container operations 61,639 75,386 (18.2 )
Other operations 150 76 97.4
Total 196,079 186,846 4.9
Net earnings 61,652 * 58,684 5.1
Total assets at book value 2,515,417 2,314,455 8.7
Long-term obligations 1,700,285 1,510,278 12.6
$ $ %
Net earnings per class A and class B common share
- basic 3.30* 3.34 (1.2 )
- diluted 3.27* 3.11 5.1
Cash dividends per class A
common share 1.10 0.885 24.3
Cash dividends per class B
common share 0.9945 0.8045 23.6
* Before cumulative effect of change in accounting principle.
3
Directors and Officers
Back row, left to right:
Robert M. Riggs John D. Campbell Philip J.R. Schlee W. Murray Grindrod
Member of Carter, Ledyard & Senior Counsel of Appleby Chairman of Robert Anderson & Chairman of Grindrod Unicorn
Milburn (attorneys) Spurling & Kempe (attorneys) Co. Ltd. (a private investment firm) Group Ltd. (a shipping and
transportation company)
Front row, left to right:
Charles N.C. Sherwood James B. Sherwood Ian Hilton Michael J.L. Stracey
Partner of Schroder Ventures President of the Company Private investor Executive Vice President (retired)
(a private equity investment firm) and Consultant to the Company

Officers other than the President
Back row, left to right: Christopher W.M. Garnett Vice President, Rail
James G. Struthers Vice President, Controller Nicholas J. Novasic Vice President, Funding, North America
Stephen O. Whittam Vice President, Management Information Systems Front row, left to right:
Michael V. Scawn Vice President, Funding Edwin S. Hetherington Vice President, General Counsel and Secretary
Robert S. Ward Senior Vice President, Containers Daniel J. O’Sullivan Senior Vice President, Finance and Chief Financial Officer
Simon M.C. Sherwood Senior Vice President, Leisure David G. Benson Senior Vice President, Passenger Transport
James A. Beveridge Vice President, Administration and Property
Regional Managers
Franco Chresten A. Ian Robin Lynch Toby G.Grey

delle Piane Bjerrum Routledge Regional Regional
Regional Regional Regional Manager, Manager,
Manager, Manager, Manager, North America South America
Mediterranean Asia Australasia
5
President’s letter to shareholders
May 1, 2000 also suffered losses on Gothenburg/ Frederikshavn

when duty free sales stopped and our competitor did
Dear Shareholder, not increase rates to compensate. Again, we think a
1999 was a year of continued improvement in the more stable pricing environment will prevail in 2000
underlying net earnings of your company. Net and we have deployed a smaller, less costly ship on
income excluding the effect of a compulsory the route, handed sales and marketing to Silja which
accounting rule change was up 12% to $60.6 million has an excellent transport brand name in Sweden,
James B. Sherwood
(diluted net earnings per common share before and we will operate twice a week from Gothenburg President and Founder
accounting rule change were up 5% to $3.27). to Norway where duty free sales are still permitted.
This excellent result was achieved despite Our English Channel operations prospered in 1999
increased fuel prices in the second half of the year despite the loss of duty free sales. We operate six
which adversely impacted net earnings by about vessels on four cross-Channel routes and were
$6 million, higher interest costs on our floating rate particularly pleased to have completed a successful
debt, a higher than normal cancellation rate of ferry first year on the Newhaven/Dieppe route. We
and train services in the fourth quarter due to acquired Holyman’s interest in our joint venture
Left: The colorful Cusco/Machu
weather, and loss of duty free sales in the second half Dover/Ostend ferry service and their two vessels as a Picchu narrow gauge railway
of the year on a few ferry routes. As I write this result of the Lang Corporation’s acquisition of runs through Peru’s Urubamba
River Valley. Other than by
letter, fuel prices have come down by $10 per barrel Holyman.
hiking four days the train is the
from their peak. In 2000 we will deploy one SuperSeaCat between
only practical way of visiting
I would like to confine my remarks this year to an Helsinki, Finland and Tallinn, Estonia marketed by the spectacular Machu Picchu
overview of the main business units. Silja Line, and we intend to commence a joint Inca Sanctuary.
venture service with a SeaCat on the Ancona, Italy to The Southern and
Southeastern railways of Peru
Fast ferry operations (excluding Silja Line, the Split, Croatia route together with Mediterranean
were acquired in 1999 by a
Isle of Man Steam Packet Company, cargo ships and Shipping Company. Besides being the owner of joint venture between Orient-
ports). SNAV, the largest fast ferry operator in southern Italy, Express Hotels and Peruval.
We suffered losses on our start-up Belfast, Northern Mediterranean Shipping is the world’s fourth largest They are managed by Orient-
Express Hotels under the
Ireland to Troon, Scotland route in 1999 due to containership operator and a valued major customer
brand PeruRail. Another joint
intense competition from operators to the much less for GE SeaCo’s leased containers.
venture between Orient-
desirable port of Stranraer in Scotland, 50 miles to Our Liverpool, England to Dublin, Ireland Express Hotels and Peruval
the south. Nonetheless, the customers voted with SuperSeaCat route (formerly a duty free sales route) leases the Monasterio Hotel in
Cusco and the Machu Picchu
their feet and supported the Troon service. Our has been altered in 2000 to provide one round trip
Sanctuary Lodge in the
competitors lost money as well. We think a much sailing per day at the peak period followed by one
national park at Machu Picchu.
more stable pricing environment will prevail this year round trip sailing on Liverpool/Isle of Man (the latter Orient-Express Hotels also
and we have been able to cut costs significantly. We was never a duty free sales route). manages these properties.
7
Our New York fast ferry commuter services are investments in the Baltic which will strengthen
straining to accommodate demand and two more profits in the region. In 2002 we will be considering
ships are now under construction in New England, the acquisition of 100% of Neptun Maritime.
which we will long term time charter in order to
meet this demand and open a new route. Ports. We own the ports of Folkestone, Newhaven
We expect greatly improved results from these ferry and Heysham, as well as a large tract of port land
operations in 2000 and future years. near Harwich, all in Britain. These investments
performed well in 1999 and we are in negotiation to
Isle of Man Steam Packet Company. This sell Newhaven and the land at Harwich in 2000 at
business continues to generate increased profits year satisfactory prices.
on year. Freight volumes have been rising in step
with the increased economic growth on the Isle of Marine Container Leasing. 1999 was a tough year
Man and we have been able to take more passengers for this activity with operating profits down $13.8
away from air because of our speedy and comfortable million from 1998 to $61.6 million. This downturn
fast ferry services. was caused primarily by lease renewals at lower rates,
positioning expense of idle containers from surplus to
Neptun Maritime (Silja Line). Our strategy with demand areas and heavy storage costs related to
Charleston Marine Containers Inc. this investment has been to build on the improvements stocks in surplus locations. Demand for new
in Charleston, South Carolina started before our purchase of 51% of the company containers at satisfactory rates was good in 1999 and
manufactures specialized
(1% subsequently sold to Gotland Steamship which continues so in 2000. GE SeaCo purchased $114
containers for the U.S. military
shares our views). Both Finland and Sweden are very million of new containers in 1999 and Sea Containers
forces, chassis (shown here) for
over -the-road carriage of conservative countries and we see the main separately purchased $12 million for finance leases
containers in the U.S. and small opportunity coming from a change of attitude towards and leases to customers in countries where
production run non-standard
the business. The Finnish trade unions, in particular, GE Capital Corporation. does not conduct business.
units of many different types.
are resistant to change and hotel services staff aboard GE SeaCo will purchase at least $100 million of new
The factory incurred heavy
start-up costs in 1999 which Finnish flag vessels get paid twice what shore based containers in 2000 and Sea Containers may acquire
had immediately to be expensed hotel staff are paid and base wages are significantly up to a further $50 million on its own.
as a result of an accounting higher than those paid in nearby countries such as Utilization of refrigerated containers greatly
rule change, but the facility is
Estonia and Poland. We are trying to build a dialogue improved in the high season northern hemisphere
expected to be profitable in
2000 and subsequent years. with the trade unions which will result in keeping winter 1999-2000 and demand for standard dry cargo
Silja always on a competitive footing, realizing that containers did not decline in 2000’s first quarter as
competition is not only with other cruise ferry normal and has increased in the second quarter.
companies but with overseas air holidays as well. We Rates are hardening and movements of containerized
and Silja are currently considering other ferry cargoes are increasing. Far East and European

economies are strengthening. From the second bought properties which we managed from time of SuperSeaCat Four enters historic
quarter of 2000 we expect to see quarter by quarter construction. Tallinn in Estonia on her maiden
voyage from Helsinki, Finland.
improved earnings. Start-up losses in connection We have a large program of internal growth planned:
Silja was forced to withdraw a
with our Charleston container factory (supplying 40 new suites at La Samanna on our development conventional ferry from the
containers to the U.S. military and domestic chassis) land, a new wing for the Windsor Court in New route in 1999 because Finnish
had to be expensed in 1999 under the new Orleans, a new wing for the Hotel Cipriani in Venice, crew costs were uncompetitive
with Estonian costs. The new
accounting rules. We expect to report a profit from a health spa at Reid’s Palace in Madeira, additional
fast ferry is operated by
the factory in 2000. banqueting rooms at ‘21’ Club, doubling of rooms at Sea Containers with mixed
the Inn at Perry Cabin in St. Michael’s and Keswick nationality manning, although
Leisure. Orient-Express Hotels had an excellent at Monticello, rebuild and enlargement of the Hotel the service is marketed by
Silja Line.
year, increasing its operating profits by $15.3 million Caruso in Ravello, a new wing at the Lapa Palace in
or 31% over 1998 to $64.8 million. We have pointed Lisbon, development of La Cabana restaurant in
out before that this activity is based on buying Buenos Aires and construction of a new wing of 150
unique properties with physical expansion potential, rooms in the Copacabana Palace in Rio de Janeiro.
at reasonable prices. We are not interested in city We are committed to Peru, which we feel is the
center hotels where not a single room will ever be most interesting tourist destination in South
added because of physical constraints, nor are we America. There our joint ventures have a long term
interested in hotels which compete merely on rate concession to operate the Southern and South-
with a multitude of other properties, nor are we eastern Railways and own the two best tourist hotels.
interested in hotels which have already maximized We expect to bring the beautiful 1926 lake steamer
their pricing potential. With exceptions, we prefer to Ollanta back into operation on Lake Titicaca later this
participate in new-build projects as a manager with year and to improve passenger rail services for
fees from the outset because of the long time span tourists, not only on the highly profitable
between conception and profitability. We always Cusco/Machu Picchu line but also on Cusco/Lake
retain a right of first refusal to buy managed Titicaca and Lake Titicaca/Arequipa which must be
properties and interestingly in 1998 and 2000 we the most spectacular rail journey in the world (a ten
9
hour daylight trip crossing a summit of 15,000 feet). to our shareholders, they would have to approve the
Our British tourist train service is so over- transaction and bank lenders would have to consent
subscribed that we have had to acquire and restore a in cases where their approval is required.
second train, the Northern Belle, to meet demand.
Our cruise ship on the Irrawaddy River in Burma has Property. Our land holdings near Harwich and our
bookings for 2000 well ahead of 1999 (when we port lands come under this activity, as well as our
experienced low water levels in our peak season) and residential house construction program in the south
the opening of the new international airport in of England where house prices have soared. So do
Mandalay where our ship is based, combined with a our plantations in the Ivory Coast and northeast
direct daily air service to Bangkok, should increase Brazil. We have achieved a major breakthrough in
profitability of this operation. table grape production in Brazil, and are now growing
In 1999 Orient-Express Hotels’ operating profits the first tasty seedless white and red grapes in the
exceeded those of rival Four Seasons and were 50% region. This development is so important that
Neptun Maritime’s pure cruise higher than Mandarin Oriental, so we think the ultimately it could challenge the Chilean and South
ship Leeward was chartered to time is opportune to float the company. New shares African supremacy in southern hemisphere seedless
Star Cruises of Singapore in in the company would be sold to raise capital and pay table grape production. Those countries can only
1999. This 1,200 passenger
off intercompany debt owed to Sea Containers. A produce one crop a year in a defined time period
ship will serve the Japanese
spin-off of Sea Containers’ holding in Orient-Express while in northeast Brazil we can produce 21/2 crops
market and is on a three year
charter. Neptun Maritime’s Hotels to Sea Containers’ existing shareholders is not per year from the same vines, targeted to meet the
other pure cruise vessel, the excluded but this can only happen when our highest price windows in the European market.
Walrus, is based in Hong Kong
investment advisors say the market price of We have submitted a zoning application to build
and operates overnight gaming
Orient-Express Hotels shares would not be the largest office building in the Isle of Man on our
cruises. It is on a four year
charter and can accommodate significantly affected by doing so. We would also have existing property. We are in the planning stage for
620 passengers. to be satisfied that the spin-off would not be taxable three new parkway stations for GNER which will be
subject to our obtaining a new 20 year franchise
which is currently under negotiation.
GNER. While PeruRail is managed by our Leisure

Division, GNER comes under our Passenger
Transport Division. GNER had a subsidy reduction
of $33 million in 1999 and its earnings declined by
$1.4 million from 1998. In 2000 the subsidy
reduction will only be $21 million, setting the stage
for an improved result. Two Eurostar trains are being

introduced in 2000 to alleviate the serious deteriorated since then, making the interest cost of GNER has leased two Eurostar
high speed trains for operation
overcrowding which is now prevalent on many services. new issues prohibitive. We have been making
on the London to York, England
I know that our shareholders are anxious to know the limited open market purchases of our earlier debt
route, which should be extended
outcome of the new GNER franchise as soon as issues. We think at the present time that sale of to Newcastle when cleared by
possible, however, I must make the point that this is shares in Orient-Express Hotels would be the most the safety authorities. These
the first franchise to be renewed by the new Strategic cost effective way to fund capital needs for trains will enable GNER to
increase its daily departures in
Rail Authority in Britain and they are naturally expansion. Cash flow should greatly improve in our
2000 from 112 to 125. The
proceeding cautiously. Virgin Trains has lodged an passenger transport, property and container train sets will be returned to
alternative plan which would cost $10 billion versus businesses for the reasons indicated above. We are in their owners when GNER
our $3 billion, yet not provide any more services or the midst of refinancing Silja with a consortium of acquires new tilting trains in
2004 subject to winning a new
capacity to and from London where 72% of our banks. GE SeaCo funds its new container purchases
franchise which is currently
passengers travel. Our $3 billion plan would be funded with bank debt which is guaranteed half by
under negotiation with Britain’s
through natural growth while Virgin’s plan would have GE Capital Corporation and half by ourselves. Strategic Rail Authority. In 1999
to be funded largely through government subsidy. GNER carried 14.7 million
passengers (1998 14.2 million).
Other issues, such as Virgin’s poor record in running Outlook. Our share price of late has been
its own trains plus giving it control over all disappointing despite a healthy dividend payout and
Scotland/England rail services make us feel that our our plans for the Orient-Express Hotels flotation.
proposal will win favor over theirs. We will be For investors seeking longer term appreciation we
upgrading train speeds from the current 125 miles think our shares represent excellent value.
per hour to 140 miles per hour within 10 years when Our 14,000 employees are to be congratulated for
the track authority makes physical changes to allow their efforts in achieving fine results in 1999 despite
us to do so. Virgin would only operate at a higher the challenges, all of which we took in stride.
speed on a 120 mile section of new track (it is 400
miles from London to Edinburgh) which they
Sincerely,
propose to own separately from the track authority.
Finance. In 1999 we sold $115 million of 10.75%

p.a. unsecured senior notes which were swapped into
euros at 7.75% p.a. to fund the purchase of the shares
in Neptun Maritime (Silja). The bond market has James B. Sherwood President
11
Silja Line’s Turku/Stockholm ships cross every
day at Mariehamn, Åland at 1pm. Shown
here are the Silja Europa (left) out of
Stockholm bound for Turku, Finland and
Silja Festival (right) out of Turku bound for
Stockholm, Sweden. Ships calling the Åland
Islands are permitted to sell duty free
merchandise, although such sales are now
prohibited on other intra-European Union
routes by legislation which came into force
on July 1, 1999.

13
New ticket office opened in first class lounges. Part of parking will be expanded at longer term goal is to
1999 at Kings Cross Station, its plan for the new rail all stations north of London. manage all the major stations
London. GNER is embarked franchise is to provide GNER leases and manages in its network so it can
upon a program to rebuild elevators at all stations, 12 stations out of 50 in its deliver a standardized quality
ticket offices at all key escalators at key stations and network from Railtrack, the product.
stations and to provide new new platform paving. Car track authority. GNER’s

Vice President’s analysis:
Passenger Transport
Ferry operations. Duty free sales between these routes totalled $23.5 million (1998 $16.9 million).
countries within the European Union ceased at the SuperSeaCat Three continued in service between
end of June 1999, although sales continue on Silja Liverpool, England and Dublin, Ireland and carried
ships calling at the Åland Islands between Finland 264,000 passengers (1998 308,000) and 49,000
and Sweden and on services between Finland and vehicles (1998 56,000). Revenue totalled $17.3
Estonia. The ferry industry has been adjusting to million (1998 $17.7 million).
the loss of this important source of revenue by The Isle of Man Steam Packet Company continued
David G. Benson
increasing prices. 1999 average yields for to expand. Total revenue increased to $53.3 million Senior Vice President,
Hoverspeed traffic increased by 60% for cars and 31% from $51.2 million with passenger carryings up to Passenger Transport
for foot passengers compared with 1998. Attention 557,000 from 502,000 in 1998 and cars, motorcycles
Great North Eastern Railway
has also switched to the sale of liquor, wine, beer and and coaches up to 148,000 from 140,000 in the
Silja Line
tobacco at French duty paid prices. Sales of these previous year. Freight meterage shipped was 355,000 The Isle of Man Steam Packet
items by Hoverspeed are currently $1.5 million per (1998 326,000). Company
month. Passengers can now buy much larger SeaStreak, our New York commuter ferry service Hoverspeed
SeaStreak
quantities of these goods than previously but the acquired in January 1999, carried 374,000 passengers
Ports of Heysham, Newhaven
margin to Hoverspeed is lower, and foot passengers for revenue totalling $5.1 million in the 11 months
and Folkestone
have reduced their travel frequency. under our operation. Cargo ships
Hoverspeed carried 3.5 million passengers in 1999 Our Gothenburg/Frederikshavn SuperSeaCat Hart, Fenton & Co.
(1998 3.9 million) and 722,000 vehicles (1998 operation carried 490,000 passengers (1998 615,000)
710,000). SuperSeaCat Two was introduced on the and 106,000 vehicles (1998 110,000) with the revenue
Newhaven/Dieppe route during April 1999. Total falling to $20.5 million from $27.5 million in 1998,
revenue from Hoverspeed including retail sales was reflecting the adverse impact of the loss of duty free
$110 million (1998 $111 million). sales.
On the Irish Sea, new routes were started between Sea Containers has
Belfast, Northern Ireland to Troon in Scotland and held 50% of the Divisional revenue Divisional operating income
$millions $millions
between Belfast and the Sea Containers’ owned port of listed company
Heysham, England. These routes offer reduced total Neptun Maritime since
918.6
journey times for Scotland/Northern Ireland and the second quarter of 837.3
754.0
England/Northern Ireland motorists. These new routes 1999. Neptun’s 69.5
61.9
together with sailings on Belfast/Stranraer carried business is to offer
46.4
486,000 passengers (1998 403,000) and 137,000 vehicles high-quality passenger
(1998 108,000). Belfast/Stranraer SeaCat services and and cargo transport
the conventional ferry service from Ballycastle to primarily in the Baltic
Campbelltown have now ceased. Revenue from all Sea area. A fifty-year 1997 1998 1999 1997 1998 1999
15
SuperSeaCat One enters the long, continual development of the concept of revenue for Neptun Maritime was $573 million
port of Newhaven on Britain’s combination tonnage, with high standard passenger (1998 $658 million), of which $546 million
south coast. The boat marina
cabins, excellent public areas and large car decks in (1998 $603 million) was from Silja Line.
immediately to the left of the
harbor entrance was re-acquired the same hull, forms the framework of operations
from the lessee in 1999 and is today and in the future. Cargo ships. One of our two remaining container
now being enlarged and improved. Silja Line, the leading passenger shipping company ships, the Puerto Cortes, is on charter trading Far
The port has considerable
in the Baltic Sea, accounts for 95 per cent of Neptun’s East/Arabian Gulf and the other, Boxer Captain Cook,
development potential and
sales. Silja Line’s renowed brand, built up over a is being recommissioned and should be in service in
several interested parties have
expressed interest in buying it. long period through purposeful investment in quality the same region by mid May 2000. Three small ro-ro
Sea Containers has said it will in a wide sense, is based on five values, which permeate ferries are currently laid up pending disposal or long
sell at a profit or will develop
the group’s activities. These values are: safety - the term charter work.
the port itself. A sale, if
customer - commitment - quality - profitability.
consummated, would likely take
place in 2000. Other operations include two chartered out pure Ports. Revenue at Heysham was $13.5 million (1998
cruise ships which will be sold when the opportunity $12.8 million). Following the departure of our ferry
arises. A third cruise ship was sold for net book value tenant in January 1999, revenue at Newhaven
in late 1999. declined to $4.3 million (1998 $7.7 million including
In 1999 Silja Line carried 5.5 million passengers lease termination payments). Revenue at Folkestone
(1998 5.8 million), 308,000 cars (1998 347,000) and totalled $2.3 million (1998 $2.7 million).
118,000 freight units (1998 123,000). Declines were
due to reduced volumes on the Gulf of Bothnia GNER. During 1999 GNER carried 14.7 million
service, which in turn were a consequence of loss of passengers and produced total revenue of $605
duty free sales in the second half of the year. Gross million from its highly intensive service of 112 train

Below: The port of Heysham Ireland’s economies have service between Belfast and
on the west coast of England been growing rapidly and Heysham and it was an
connects the industrial cargo volumes through the instant success.
heartland of England with port have increased as a
Ireland. Both the Republic of result. In 1999 Sea Containers
Ireland’s and Northern opened a new fast ferry
departures per day. Over 90% of the fleet was in

daily operation. This high level of service was achieved
with improved punctuality which by the end of the
year had risen to 89.3% of all trains arriving within 10
minutes. With an average journey time for a GNER
train of 180 minutes, this is a major achievement.
During 1999 the significant investment program in
stations resulted in the opening of the new first class
lounges at London Kings Cross, Edinburgh,
Newcastle, Berwick upon Tweed, Darlington and
Doncaster along with new ticket offices at London
Kings Cross and Edinburgh. These improved
facilities have been well received by passengers and
have drawn much favorable comment by the press. 90.1%. At the end of May 2000 GNER will increase Below: When the Lang Corp. in
Australia acquired Holyman Ltd.
GNER has received further recognition for the high its number of services from 112 per day to 125
in 1999 they wished to exit the
quality of its customer service, being awarded the services per day as a result of leasing two Eurostar
ferry business so Sea Containers
U.K. Rail Industry Innovation Award for Customer sets to be operated between London Kings Cross and acquired their 50% shareholding
Service. York. These trains were originally designed to in Hoverspeed-Holyman for a
nominal amount and bought
1999 saw a major increase in catering revenue on operate between the U.K. and Paris, France.
the two fast ferries which
trains as a result of further improvements in the operate the Dover, England to
quality and range of food being sold to passengers Ostend, Belgium service.
Although duty free sales were
and the full effect of electronic point of sale systems
stopped between Britain and
providing accurate information on sales trends and
France and Belgium from July 1,
margins. Average passenger spend has increased 15%. 1999, neither France nor
2000 started successfully with further David G. Benson Senior Vice President Belgium imposes excise taxes
as does the U.K., so VAT paid
improvements in train punctuality which is now at
goods purchased in these
countries are priced the same
as duty free goods were before.
The ferry companies have had
to increase ticket prices to
compensate for loss of profit
margin on duty free sales but
despite this extra cost it is still
of substantial economic benefit
for British residents to travel to
France and Belgium to shop.
17
Leisure
The leisure group had an excellent year, generating Keswick Hall at Monticello, Virginia and the Inn at
operating profits of $64.8 million, up 31% from $49.5 Perry Cabin at St. Michaels, Maryland at reasonable
million in 1998. This was fuelled partly by new prices. We hope to double the size of each property
acquisitions but also from improved performance by by 2002.
our existing businesses. On a same store basis, Business in Latin America moved ahead with
operating profits increased by 20% on the back of a profitability of the Copacabana Palace in Rio up 20%
7% increase in rooms revenue measured in local over 1998. The Brazilian real devalued 56% during
Simon M.C. Sherwood
currency (the U.S. dollar REVPAR figure is 1999 which is giving another boost to profits as Senior Vice President,
somewhat misleading as a significant portion of our operating costs are lower in U.S. dollars whereas Leisure
revenue is in currencies that weakened relative to dollar based rates are holding up well.
Orient-Express Hotels
the dollar). Occupancy decreased slightly as we had In the last annual report, we announced our Peruvian
Restaurants
fewer rooms available in 1998 due to several hotel joint venture, which brought us the Hotel Tourist trains
refurbishment projects. Monasterio in Cusco and the Machu Picchu Sanctuary River cruising
Profits at our Italian properties were up 14% Lodge, located beside the famous ruins. We were Left: Lilianfels Hotel at
continuing the pattern of steady growth. In able to build on this investment in September 1999 Katoomba, Blue Mountains,
about 1 hr. 30 minutes drive
September 1999 we acquired the historic Hotel with another joint venture (also 50/50) which won a
west of Sydney, Australia.
Caruso in Ravello, Italy, perched above the town long- term concession to operate most of the Peruvian
Within easy walking distance of
center with stunning views over the Amalfi Coast. railways. This serves both passenger and freight the famous “Three Sisters” rock
This famous property has fallen into disrepair, but traffic, but most significantly, includes the profitable formation and enjoying
spectacular views over Australia’s
once refurbished, will complement perfectly the tourist train services from Cusco to Machu Picchu. In
“Grand Canyon”, the hotel has
Cipriani, Splendido and Villa San Michele. 1999, we received $2.5 million in profit share and
86 rooms and is managed
1999 was the first full year of ownership of the fees from our Peruvian ventures. We expect this to together with the Observatory
Lapa Palace, Lisbon and Hotel Quinta do Lago in more than double in 2000, our first full year of operation. Hotel in downtown Sydney.
the Algarve. Both turned in solid results, as did our

other Portuguese hotel, Reid’s Palace in Madeira. Operating Income
Total Comparable
We believe that these Portuguese properties have $millions $millions
tremendous potential and our priority is to enlarge Comparable figures Hotel Statistics Hotels represent over 85% of total leisure assets.
exclude any properties
not owned or managed Total Comparable
them, especially the Lapa Palace where work has by the company for all of
1998 and 1999. 1999 1998 1999 1998
already started on 15 extra keys. 64.8 Occupancy 66.1% 67.8% 65.4% 67.6%
North America generates our highest regional 55.2
49.5 46.1 ADR* 256.24 262.89 267.72 264.02
return on investment but our growth in the area was REVPAR+ 169.43 178.32 175.08 178.48
hampered for several years as prices were inflated by
*ADR = Average Daily Rate (for accommodation only)
buying activity of real estate investment trusts. In + REVPAR = Revenue Per Available Room (the rooms department revenue
divided by the number of lettable hotel rooms for each night of operation)
1999, this activity died down allowing us to purchase 1998 1999 1998 1999
19
Left: The Northern Belle is decided to concentrate its
Orient-Express Hotels’ itineraries in the south and
second tourist train in west, while the new train
Britain. Demand for the will operate north of
British Pullman has reached London.
such a level that it was
Southern Africa offset some of these achievements.

The market remained weak and we actually lost
ground versus 1998. Our biggest challenge was The
Westcliff, Johannesburg, which suffered a loss of $1.1
million. The good news is that business is picking
up and occupancy in the first quarter of 2000 was
twice that of the first quarter of 1999.
The other major disappointment was the Road to
Mandalay river cruiser in Myanmar. Early in 1999, the

water level of the river fell to such an extent that the
ship could not operate the normal itinerary, which
seriously affected the popularity of the cruise. In
Right: The entrance of the
Observatory Hotel in Sydney, 2000, with the river now navigable, business should
Australia. Orient-Express recover and bookings are already 33% ahead of last
Hotels has managed this hotel
year.
since it was built in 1993 and
Our luxury trains business continues to develop well,
recently the opportunity arose
to buy it. The hotel is located especially the British Pullman and Venice Simplon-
just under the Sydney Orient-Express in Europe. We are getting a lot of
Observatory in the popular interest in our new Northern Belle train which we will
“Rocks” area, yet is within easy
launch in May. All this progress is encouraging as the
walking distance of the
commercial center of Sydney. luxury trains are so important in establishing and

Left: Keswick Hall at Monticello, 18 hole golf course and a Monticello, and the nearby
near Charlottesville,Virginia 600 acre estate which can University of Virginia whose
was acquired in 1999 by be developed into home core buildings were
Orient-Express Hotels. This lots. There are nearly half a designed by Jefferson
property includes a million visitors a year to attracts many others for
spectacular Arnold Palmer Thomas Jefferson’s home, sports and cultural events.
promoting the Orient-Express Hotels brand and Overall, 1999 was a memorable year. Not only was Above: The Inn at Perry Cabin
in St. Michael’s, Maryland was
image. it a record year, with profits up over 30%, but we also
acquired in 1999. This quaint
In March 2000, we acquired The Observatory Hotel acquired six new properties. Over the last five years, 41 room resort is in great
in Sydney (96 keys) and Lilianfels (86 keys) in the Orient-Express Hotels has more than doubled in size demand for business groups
weekdays and for tourists at
Blue Mountains, Australia. Orient-Express Hotels and operating profits have grown at a compound weekends. It is within easy driving
has managed The Observatory Hotel for many years annual growth rate of 39%. Given the potential distance of Washington, D.C.,
Baltimore and Philadelphia.
and the contract had provisions which helped us of our recent acquisitions, there seems plenty of
Haunt of the famous Blue Crab
secure the property at an attractive price. Both scope for further growth. and other Chesapeake Bay
hotels are expected to have a strong 2000 as Sydney seafood delicacies, St. Michael’s,
established in the 1650s has
hosts the Olympic Games. Longer term, the outlook become an increasingly popular
is good as tourism to Australia is growing steadily and short break destination. The
hotel sits on 25 acres and
the hotels have been purchased at well below Simon M.C. Sherwood Senior Vice President
Orient-Express Hotels plans to
replacement cost. double the number of rooms.
21
Containers
In the second half of 1999 new container prices started to of 2,000 40ft. high cube refrigerated containers late in
rise and by the end of 2000 are expected to be more than 1999. We are pleased that we have participated fully in
15% higher than they were in the middle of 1999, the leasing requirements of a major new Far Eastern
strengthening the value of our existing fleet. Sensible shipping line. All our new purchases are being placed on
curtailment of production by Chinese container good term leases, usually five years but sometimes longer,
manufacturers – who control the vast majority of the and our investment program for 2000 is on target and
world’s capacity – is restoring the balance between might be exceeded.
Robert S.Ward
supply and demand. International container trade is We have also noted a considerable revival in demand for Senior Vice President,
increasing fast. The main Asian economies have largely 20ft. refrigerated containers and are buying new units of Containers
recovered their losses of 1998 and demand for all this length for the first time for some years. In particular
GE SeaCo
standard dry cargo types is extremely strong throughout the 20ft. refrigerated unit, as well as being the dominant
Container manufacturing
the region. We are now seeing an increasingly better factor in the large Australasian market, is coming into Container depots
balance of trade in Europe and although imbalances greater and greater use in the fast growing intra Asian
remain between the USA and particularly the Far East, trades.
Left: GE SeaCo tank containers
our aggressive positioning program is keeping this under I foresee a very healthy business for the refrigerated
about to be loaded aboard a
control. container in the future. The latest large containerships vessel in the port of Singapore.
All this is good news for us. Our older fleet is gaining under construction are installing huge capacity for its GE SeaCo’s fleet numbered
utilization rapidly. Rate pressures have reduced and carriage and taking an increasing share of this trade from 1.1 million units at the end of
1999, making it the largest
leases are being renegotiated at existing and often better conventional break bulk vessels.
operating lease lessor in the
rates. Rates for new equipment have risen by Our patented SeaCell, a unit which, while still world. The Asian financial crisis
percentages greater than the rise in container prices and compatible with all forms of intermodal transport, has in 1998 had an adverse impact
interest rates. extra cubic and pallet carrying capacity, continues to on the marine container
business in 1999 but with
We, and our partners in GE SeaCo, have embarked on a make inroads. Whole trades, such as that between Spain
Asian economies now
controlled program of disposal of older units from recovering and U.S. and
surplus locations which will in itself increase Divisional revenue Divisional operating income European imports rising,
$millions $millions
utilization and reduce costs. A steady tightening up demand for containers has
increased. GE SeaCo’s tank
of return quantities allowed to our lessees in low 186.2 185.5 container fleet surpassed 5,000
demand locations is gradually restoring a better
154.8 75.4 units at the end of 1999,
shape to our business. 66.8 representing an initial
61.6
Demand for new containers, particularly for 20ft. investment of more than $100
standard and 40ft. high cube dry cargo and 40ft. million. Many of GE SeaCo’s
tanks are manufactured by
high cube refrigerated units is very high. We
Yorkshire Marine Containers
concluded our largest lease since the inception of Ltd., one of Sea Containers’
GE SeaCo with the supply to a major world carrier 1997 1998 1999 1997 1998 1999 factories in the U.K.
23
Tri-Con containersmanufactured
Tri-Con containers manufactured These containers as well as 34,000 Quad-Cons which will
for the U.S. Marine Corps at the Quad-Con unit for the keep one line busy for the
Charleston Marine Containers U.S. Army are used for the next five years.
Inc., Sea Containers’ factory in carriage of ammunition.
the old U.S. Navy Yard in Charleston Marine Containers
Charleston, South Carolina. received in 1999 an order for

and its island possessions and Australia and New Zealand
are converting to SeaCell, and of increasing interest are
the very considerable interplant movements of the
automobile industry who largely palletize CKD parts.
Our first major contract, using up to 1,500 40ft. units, is
now underway for such movements.
Tank container leasing continues to grow and our fleet
now numbers over 5,000 units - a 25% growth over last requirements from us – and selling swapbodies to a The SeaCell container is a
year. As well as buying low priced new units in volume in variety of customers. GE SeaCo proprietary design.
It is a standard dry cargo unit
1999, we bought and leased back over 200 tanks to a Our Charleston factory, CMCI, is now full with one line
which has an extra 40 cubic
major U.S. mining company who will also lease a further producing Quad-Con containers for the U.S. Military feet of cargo space in the 20ft.
250 units replacing those of other lessors. This contract – a contract which is expected to occupy the line for five version and 80 cubic feet more
also entails us managing their tank fleet for a fee and years - and the second making container chassis for a in the 40ft. unit, compared with
traditional containers. This extra
gives us first option on the rest of their substantial shipping line. The shortage of chassis manufacturing
capacity has been achieved by
standard container leasing. This sector of the business is capacity in the U.S. bodes well for the future of this line redesign of the side walls.
increasingly turning towards lessor management in which and Sea Containers expects to enter the chassis leasing Important car manufacturers
we expect to participate in the future in full measure. market in 2000 with units built at CMCI. A third line has have recently dictated the use
of the SeaCell for their
Another growth sector of our business is the European now been opened for the production of a wide variety of
interplant parts shipments. The
swapbody business. Swapbodies are designed to specialized units. The factory is now moving into profit
SeaCell is gradually penetrating
compete with road trailers and come in various sizes. We and we expect a good future for it. markets which up until now
are lucky to have entered this business in volume Our six container depots performed well above budget have been served by traditional
somewhat late in the day and we have been able to learn in 1999. Particularly pleasing were the results in Santos, dry cargo units. Ship operators
naturally do not wish to see
from some of the mistakes of the past. In particular, all Brazil and from our refrigerated container servicing
their existing containers made
our units, unlike the bulk of the rest of the total operations in Australia. obsolete so market penetration
European fleet, can be stacked unladen and laden. We The GE SeaCo and Sea Containers separately owned will be gradual but inexorable.
have avoided inappropriate sizes and a number of marine container fleets at December 31, 1999 totalled
patented features, designed by our Yorkshire Marine 1,104,000 20ft. equivalent units (December 31, 1998
Containers subsidiary, are incorporated into many of them. 1,135,000 units) and utilization of the operating fleets
Yorkshire Marine Containers itself had a year of full was 80% (76%).
production, supplying both GE SeaCo and numerous I am looking at 2000 as a considerably better year than
other customers with a wide variety of specialized types. 1999.
They were particularly active in the waste container
business, selling our proprietary SeaDeck flatracks to our
leasing customers – who then lease their further Robert S.Ward Senior Vice President
25
Property, Publishing and Plantations
My division comprises fruit farming in the tropics, Thankfully it is not causing any interruption to
property management and development, publishing, business in the country. There is still no final
corporate public relations and a travel agency. resolution of the European Union banana regime
The development of our table grape plantation in with the World Trade Organization expected to issue
northeast Brazil is progressing on schedule. 160 acres a final statement within three months.
are supplying the seeded Italia variety of grapes, twice The housing market in the United Kingdom was
a year for northern Europe. The grapes reach Europe buoyant throughout 1999 and remains very strong in
James A. Beveridge
Vice President, at the two times in the year when no other grape the southeast of England. In this area, property price
Administration and Property producing area has product available. An additional increases of between 15%-20% were reported over
110 acres have been prepared for expansion with all the last 12 months. Our Bradford on Avon development
Plantations
wires and trellising in place. We are in the process of has now sold out at excellent prices. During the year
Property development
Publishing
planting seedless grapes in this area with the first we began construction on our new site at Tortington
Corporate relations commercial crops anticipated in 2001. The newly Manor, Arundel in southern England. The sales office
Fairways & Swinford travel constructed packing station and cold storage rooms for the first phase has just opened with very encouraging
significantly improved the quality of grapes arriving in results. The development has virtually uninterrupted
the European market during the last export season. views over the historic Arundel Castle. During the
Production is 2000 tons annually and increasing. summer we will begin construction of 64 town houses
Below right: A new packing and Our 750 acre banana plantation in the Ivory Coast and apartments on the West Quay of our port at
refrigeration center was
continues to trade well with good export prices being Newhaven and improve part of the port infrastructure.
opened in 1999 at the
achieved in the European market. There was a We are, however, in discussions to sell Newhaven. We
Brasiluvas table grape
plantation in northeast Brazil. military coup in the country towards the end of 1999 are also negotiating the sale of the land we still own
Traditionally, only seeded and an interim military government installed. adjacent to the port of Harwich in eastern England.
grapes have come from the
San Francisco Valley but
Sea Containers has now
developed several successful
seedless varieties which are
currently being grafted on to
root stock. It is possible to
harvest 21/2 crops per year
from the same vines in the San
Francisco Valley due to year
round constant growing
conditions, allowing production
to be carefully targeted to
important European market
“windows”.

and “built to suit” developers. We have Above: Construction started in
54 acres of land remaining. We 1999 on the Tortington

residential property
will continue to manage
development near Arundel
Sea Containers House, near Britain’s south coast. A
London (our subsidiaries recent government survey
occupy about 20% of the revealed that human longevity
in Britain was greatest in
building) until 2011.
Arundel, which should
The corporate travel business is
stimulate demand for homes in
going through a period where this area. Home prices in the
commissions are being squeezed. As south of England have risen by
17% in 1999 over 1998.
a result, our Fairways and Swinford travel
agency experienced a profits decline in 1999.
Left: The Illustrated London
Our publishing business moved into News publishes 18 travel,
profit in 1999. 18 titles are now produced mainly lifestyle and other magazines,
In the Isle of Man, we have recently submitted a allied to our principal businesses although we do many for business units within
the Sea Containers group of
planning application for the largest commercial office publish for others under contract. The publishing unit
companies. It also provides
development on the island. If approval is granted we also produces this annual report and other group print print and photo library
will construct c. 190,000 square feet of net lettable items at significantly less cost than using third parties. support to the group.
space which will be partly occupied by the Isle of
Man Steam Packet Company. The building will
greatly enhance the shoreline of the island. In
Houston, Texas, we continue to sell plots of land
adjacent to our container depot to owner occupiers James A. Beveridge Vice President
27
Finance
Cash flow from operations in 1999 was $110.6 million including the purchase of two Australian hotels for
of which $42.2 million was invested in capital $40 million and two Hoverspeed fast ferries for $51
expenditure (net of finance including $110.6 million million in March. Neptun Maritime is close to
net proceeds from the issue of 10 3/4% senior notes completing a bank refinancing of its vessels which
used to finance our 50% shareholding in Silja Line), will reduce debt repayments by $145 million over the
$53.9 million repaid on long-term debt and $21 million next three years. Container purchases are made
paid in dividends on common and preferred shares, principally through GE SeaCo, the 50% owned joint
Daniel J. O’Sullivan
Senior Vice President, leaving a deficit of $6.5 million which was covered by venture company with GE Capital Corporation. Such
Finance and the issuance of common shares of $1.7 million and purchases are currently financed by bank debt in
Chief Financial Officer the use of working capital loans. GE SeaCo which is guaranteed 50% by each parent
Cash on the balance sheet at December 31, 1999 company and it is anticipated an additional
Corporate finance
Information systems
was $103.8 million with additional undrawn bank securitized facility will be put in place during 2000.
Insurance facilities of $72 million. Currently, the Company has debt of $450 million in
On the financing side, the Company issued euros on which interest rates are approximately 21/2%
$115 million principal amount of unsecured 7 year per annum lower than on dollar denominated debt.
3/4%
10 senior notes in October 1999. As the proceeds The book value of euro assets totalled $500 million at
were used to fund our investment in Neptun Maritime December 31, 1999. The Company’s interest cost
which is a euro-based operation, we swapped these averaged 7% in 1999 on total debt outstanding during
notes into euros which had the effect of reducing our the year.
interest cost to 7.75%. The bond market has Depending on market conditions and other factors,
deteriorated since this issue so that current interest the Company believes an issue of common shares in
rates would be substantially higher. Orient-Express Hotels Ltd., the Bermuda based
New long-term bank debt of $144 million was holding company for the leisure division assets, may
issued in 1999 of which $77 million was used to be an effective means of raising capital for further
finance passenger transport division assets, including expansion. The Company is also considering a
two new SuperSeaCats, and $55 million to finance spin-off of the shares in Orient-Express Hotels Ltd.
the acquisition of new hotels and the refurbishment to Sea Containers shareholders but this would not
of existing ones. happen for at least six months after the common
Under the terms of the Company’s loan facilities share issue. The spin-off would be subject to being
the most restrictive covenants are the leverage and tax free to our shareholders and obtaining
interest coverage tests. At December 31, 1999 we shareholder and bank lender approvals.
had the ability to borrow under the covenants a A substantial amount of the equity raised would be
further $275 million. Bank finance has largely been retained by the Company which wishes to see that
arranged for the capital expenditure planned in 2000 its current bond ratings are maintained.

The Company’s tax charge in 1999 of $5 million processed more than 1,200,000 bookings. (From top to bottom)
primarily related to the leisure division since most of GNER successfully introduced an efficient on-train Ben my Chree, SeaCat Isle of
Man and Lady of Mann, all ships
our hotels operate in high tax jurisdictions. Our point of sales system during the year and web-based
of the Isle of Man Steam Packet
passenger transport division profits are mainly taxable applications to conduct e-commerce and to provide Company in the port of Douglas,
in the United Kingdom, where, although a high tax information have been introduced in all our Isle of Man. Sea Containers
jurisdiction, we still have available tax shelter which businesses in 1999. The latter will be greatly has applied for permission to
build a six storey, 220,000 sq. ft.
has kept taxes to a minimum. enhanced and expanded during 2000.
office building at the head of the
The significant effort of our management Our London based insurance department added the
pier to the right of the photo
information systems department led by Steve newly acquired hotel and passenger transport assets (not shown). The Isle of Man
Whittam, continued in 1999 to make our systems in 1999 to our Company-wide policies which we is becoming an increasingly
important offshore financial
year 2000 compliant and as a result, no disruption of believe continue to provide maximum cover at the
center. The new building will
business was experienced at or after the Millennium. minimum cost.
serve as the headquarters of
The GE SeaCo joint venture had its first calendar the Steam Packet Company
year of operation and successfully dealt with 558,000 although a majority of the space
container movements and the U.K. ferries systems Daniel J. O’Sullivan Senior Vice President would be leased out to others.
29
Financial Review
Form 10-K
This report contains, in addition to historical Contents

information, forward-looking statements that involve
Part I
risks and uncertainties. These include statements
regarding earnings growth, capital expenditure and Item 1 Business 32
investment plans and similar matters that are not
Item 2 Properties 47
historical facts. Such statements are based on
management’s current expectations and are subject Item 3 Legal Proceedings 47
to a number of uncertainties and risks that could
Item 4 Submission of Matters to a Vote of
cause actual results to differ materially from those
Security Holders 47
described in the forward-looking statements.
Factors that may cause such a difference include, but
are not limited to, those mentioned in the report,
customer demand and competitive considerations, Part II
inability to increase prices or reduce costs, Item 5 Market for Registrant’s Common Equity
seasonality and adverse weather conditions, variable and Related Stockholder Matters 48
fuel prices, changes in new container prices from
manufacturers, shifting patterns of world trade, the Item 6 Selected Financial Data 49
effects of cessation of duty free shopping privileges in Item 7 Management’s Discussion and Analysis
the European Union, uncertainty of achieving a of Financial Condition and
GNER franchise replacement and acceptability of Results of Operations 50
proposed terms, uncertainty of completing proposed
purchase or sale transactions, obtaining zoning or Item 7a Quantitative and Qualitative
other regulatory approvals neccessary for Disclosures about Market Risk 55
construction, interest rate and currency value Item 8 Financial Statements and
fluctuations, changes in new service and ship Supplementary Data 58
deployment plans and in investment and capital
expenditure proposals or their terms, adequate Item 9 Changes in and Disagreements with
sources of capital and acceptability of finance terms, Accountants on Accounting and
global and regional economic conditions, potentially Financial Disclosure 77
unstable relations with labor unions, and legislative,
regulatory and political developments. Additional
information regarding these and other factors is Part III
included in the company’s reports filed with the U.S. Item 10 Directors and Executive Officers
Securities and Exchange Commission including the of the Registrant 78
1999 Form 10-K annual report beginning on page 31
of this report. Item 11 Executive Compensation 78
Item 12 Security Ownership of Certain Beneficial
Owners and Management 78
Item 13 Certain Relationships and Related
Transactions 78
Part IV
Item 14 Exhibits, Financial Statements Schedules,
and Reports on Form 8-K 79
Signatures 79

Securities and Exchange Commission,Washington, D.C. 20549
FORM 10-K*
(Mark One)
(X) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission File Number 1-7560
Sea Containers Ltd.

(Exact name of registrant as specified in its charter)
BERMUDA 98-0038412
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
41 CEDAR AVENUE, P.O. BOX HM 1179

HAMILTON HM EX, BERMUDA
(Address of principal executive offices)
Registrant’s telephone number, including area code: (441) 295-2244
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Name of each exchange
Title of each class on which registered
91⁄2% Senior Notes Due 2003 New York Stock Exchange
101⁄2% Senior Notes Due 2003 New York Stock Exchange
121⁄2% Senior Subordinated Debentures Due 2004, Series A and B New York Stock Exchange
Class A and Class B Common Shares, $0.01 par value each New York Stock Exchange
Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. (Not applicable. See Preliminary Notes on page 1.)
As of March 15, 2000, 16,725,118 Class A common shares and 14,678,325 Class B common shares of Sea Containers Ltd. were
outstanding (including 12,900,500 Class B shares owned by subsidiaries (see Note 14(e) to the Financial Statements (Item 8)), and the
aggregate market value of the Class A and B common shares held by non-affiliates was approximately $400,000,000.
DOCUMENTS INCORPORATED BY REFERENCE: None.*

* Items 11, 12 and 13, portions of Items 10 and 14, the Exhibits and the Financial Statement Schedule have been included in full in the
registrant’s Form 10-K report filed with the Securities and Exchange Commission, and are omitted from this copy of the Form 10-K
although information comparable to that omitted from Items 10, 11, 12 and 13 is included in the registrant’s Proxy Statement for the 2000
annual general meeting. A copy of the Form 10-K as filed with the Securities and Exchange Commission is available on the website of
Sea Containers Ltd. (www.seacontainers.com) or upon request to Sea Containers America Inc., 1155 Avenue of the Americas, New York,
New York 10036 (telephone +212-302-5066, fax +212-302-5073).
SEA CONTAINERS LTD. & SUBSIDIARIES 31
Preliminary Notes: Sea Containers Ltd. is incorporated in the Islands of Bermuda and is a “foreign private issuer” as defined in Rule 3b-
4 under the Securities Exchange Act of 1934 (the “1934 Act”) and in Rule 405 under the Securities Act of 1933. As a result, it is eligible to
file this annual report pursuant to Section 13 of the 1934 Act on Form 20-F (in lieu of Form 10-K) and to file its interim reports on Form
6-K (in lieu of Forms 10-Q and 8-K). However, Sea Containers Ltd. elects to file its annual and interim reports on Forms 10-K, 10-Q and
8-K.
As a foreign private issuer, Sea Containers Ltd. is not required to make its Commission filings electronically under Regulation S-T
(specifically Rule 601), nor does it do so. Its filings, therefore, are not available on the Commission’s internet website, although recent ones
are available on the company’s website (www.seacontainers.com).
Pursuant to Rule 3a12-3 regarding foreign private issuers, the proxy solicitations of Sea Containers Ltd. are not subject to the disclosure
and procedural requirements of Regulation 14A under the 1934 Act, and transactions in its equity securities by its officers and directors
are exempt from Section 16 of the 1934 Act.
Forward-looking statements concerning the operations, performance, financial condition, plans and prospects of Sea Containers Ltd. and its
subsidiaries are based on management’s current expectations and are subject to various risks and uncertainties. Actual results could differ
materially from those anticipated in the statements due to a number of factors, including those described in Item 1 - Business, Item 7 -
Management’s Discussion and Analysis, Item 7A - Quantitative and Qualitative Disclosures about Market Risk, and Item 12 - Security
Ownership of Certain Beneficial Owners and Management below and substantially repeated in Exhibit 99(b) to this report.
Part I
Item 1. Business
Sea Containers Ltd. (the “Company”) and its subsidiaries (collectively Passenger Transport
with the Company referred to as “SCL”) are engaged in three main SCL provides passenger transport services principally in and
businesses.The first is passenger transport mainly involving passenger around Great Britain and Scandinavia. It operates seagoing ferries
and vehicle ferry services in the English Channel, Irish Sea and between mainland Britain and France, Belgium, Ireland and the Isle
(through its Neptun Maritime Oyj investment) the northern Baltic of Man, between Sweden, Denmark and Norway and, through its
Sea, operation of three ports in Great Britain, and passenger rail 50% investment in Neptun Maritime, in the northern Baltic Sea. It
services in Britain between London and Scotland. The second is also owns a small commuter ferry company operating in New York
ownership and/or management of 22 hotels and resort properties harbor, and owns three ports in Britain. In addition, SCL operates
located in the United States, the Caribbean, Europe, southern Africa, high-speed passenger train services in Britain between London and
Brazil, Peru, Australia and the South Pacific, six tourist trains in Scotland, and engages to a limited degree in ship chartering and
Europe, Southeast Asia, Australia and Peru, a river cruiseship in other shipowning activities.
Burma (Myanmar), and two restaurants in London and New York.
The third is the leasing of cargo containers, principally through SCL’s Ferry and Port Operations
GE SeaCo SRL joint venture, to a diversified customer base of liner SCL’s present ferry and port operations in Europe and Scandinavia
ship operators and others throughout the world, and the are shown on the map on the following page. These primarily
manufacture and repair of container equipment. In addition, SCL involve the deployment of roll-on, roll-off (“ro-ro”) vessels carrying
engages in property development, perishable commodity production passengers and accompanied vehicles (cars, buses and trucks) and
and trading, and publishing. the provision of catering, retail and other services both on board
Revenue, operating earnings and identifiable assets of SCL in and in the terminals. SCL transports cars, small buses and light
1997, 1998 and 1999 for its business segments and (to the extent trucks on nearly all of its routes and heavier freight traffic on some
possible) for its geographic areas are presented in Note 18 to the of them. Linkspans at the ports connect to the ships and allow
Financial Statements (Item 8 below). drive-through loading and unloading, while the amphibious
SCL employed a total of approximately 10,400 persons in its hovercraft load and unload on land. Passengers travel with their
various activities at December 31, 1999, plus another 3,400 vehicles or on foot, some connecting by rail or bus service. The
persons by Neptun Maritime Oyj, GE SeaCo SRL and their New York ferries transport only passengers. In 1999, SCL
respective subsidiaries. operated on a total of 23 routes with 28 vessels and hovercraft,
32 SEA CONTAINERS LTD. & SUBSIDIARIES

SCL ferry and port operations
and collectively transported approximately nine million passengers They feature spacious passenger areas, shopping on board, an aft
and 1.5 million vehicles. Two minor routes have been discontinued passenger deck and lounge with buffet serving light meals, and an
in 2000. observation deck behind the bridge. The SeaCats have relatively
low capital cost, operate with fuel efficient waterjets and require
Fast Ferries smaller crews compared to conventional ferries of similar capacity.
Most of SCL’s ferries travel at high speed, often double the SCL also owns four 100-meter monohull fast ferries built in 1997
operating speed of conventional ferries. SCL’s oldest fast ferries and 1999. Each transports up to 700 passengers and 160 cars at
are two hovercraft built in 1968. These are designed on aviation an operating speed of 38 knots propelled by steering waterjets.
principles and powered by engines driving both overhead Because of their larger size and capacity, the ships are called
propulsion propellers and lift fans mounted underneath. They ride “SuperSeaCats” and have more extensive passenger seating on two
on a cushion of air above the water at an operating speed of about decks, a business class lounge, separate shops and larger food
50 knots and, being amphibious, land on a concrete pad area in service and bar areas than the SeaCats.
front of the terminals. Each hovercraft carries up to 380
passengers and 55 cars or other light vehicles. Passengers sit in English Channel Services
cabins configured like airplanes and are attended by cabin staff. Through its Hoverspeed Ltd. subsidiary (“Hoverspeed”), SCL
SCL owns five 74-meter-high-speed catamarans called “SeaCats” operates its two hovercraft and a SeaCat on the shortest routes to
built in 1990 and 1991 and charters in two larger 81-meter France across the English Channel, from Dover to Calais and from
SeaCats built in 1996. These seven vessels are similar to Folkestone to Boulogne. Frequency ranges from 16 round trips
conventional catamarans except that the hulls are designed to daily in the summer to six round trips daily in the winter on the
pierce the waves, rather than ride over them, and operate at Dover-Calais route, and four round trips daily on the Folkestone-
normal speeds of about 35 knots. Each of the five smaller ones Boulogne route except in the winter when service is suspended.
carries between 430 and 580 passengers and 80 to 90 cars, while Crossings take 35 to 55 minutes compared to approximately 75 to
the two larger ones carry up to 650 passengers and 150 cars. 100 minutes for the conventional ferry competition.

In April 1999, Hoverspeed introduced a seasonal SuperSeaCat with a crossing time of under four hours. SCL also operates a
service between Newhaven in England and Dieppe, France. The SeaCat between Belfast and Troon, Scotland (near Glasgow), on
ship makes one to three daily round trips in a crossing time of two three daily round trips, and a SuperSeaCat between Belfast and
hours. Heysham on one or two daily round trips. The Belfast-Troon
Hoverspeed provides a fast ferry service between Dover and crossing time is about two and a half hours and Belfast-Heysham
Ostend, Belgium, which was owned until July 1999 by a joint under four hours. The berths and terminal facilities for these other
venture in which SCL had a 50% interest. Effective July 1, SCL Irish Sea services are leased from the local port authorities (except
acquired the 50% interest it did not own. See Note 2(a) to the Heysham) and are either used exclusively at Troon or shared with
Financial Statements. The service uses the two larger SeaCats IOMSPC at Liverpool, Dublin and Belfast. Until early 2000, SCL
which are chartered in from Holyman Ltd. of Australia, the former also operated a SeaCat between Belfast and Stranraer, Scotland, but
joint venture partner, but which SCL plans to purchase in April management has decided to concentrate SCL’s northern Irish Sea
2000. Between three and seven daily round trips operate with a services out of Belfast to Troon and Heysham.
crossing time of two hours. Through 1999, SCL operated a seasonal ferry service between
Hoverspeed has exclusive use of its seven terminals. Most of Campbeltown, Scotland, and Ballycastle, Northern Ireland, using a
these offer passengers extensive shopping, restaurants and bars and small conventional ferry built in 1978 having capacity of 300
other travel amenities. SCL owns the ports of Folkestone and passengers and 50 cars. With a crossing time of under three hours,
Newhaven while the terminals in Dover, Calais, Boulogne, Dieppe two daily round trips from May through October each year were
and Ostend are either leased from the local port authority or provided. Because the service was not sufficiently profitable, however,
occupied under operating agreements. SCL has suspended it in 2000 and plans to dispose of the ship.
Irish Sea Services Baltic Sea Services

SCL’s principal ferry operation in the Irish Sea is its Isle of Man In 1999, SCL acquired 50% of the shares in Neptun Maritime Oyj,
Steam Packet Co. Ltd. subsidiary (“IOMSPC”) serving Douglas on a Finnish public company listed on the Helsinki Exchanges that,
the Isle of Man from four locations in Britain and Ireland. These through its “Silja Line” subsidiary, operates a fleet of eight large
are a twice daily ferry service between Douglas and Heysham in conventional multipurpose passenger and freight ferries in the
England, with sailings from Douglas to Liverpool on the weekends northern Baltic Sea. See Note 2(b) to the Financial Statements.
and all week long in the spring and summer, and seasonal ferry Four of the Silja Line ships are deployed on routes from
services up to four times per week from Douglas to Belfast and Helsinki and Turku, Finland, to Stockholm, Sweden, making one
Dublin during the spring and summer. The transit times on the or two round trips every 48 hours; one operates between
most frequent routes, Douglas-Heysham and Douglas-Liverpool, Helsinki and Tallinn, Estonia, making one daily round trip (with
are about four hours with a conventional ferry and two and a half the ship continuing on a 48-hour round trip three times a week
hours by fast ferry. Transit times to Ireland are similar. to Rostock, Germany, in the summer); and one operates
IOMSPC employs on its routes a SeaCat, a SuperSeaCat and two between Vaasa, Finland, and Umea, Sweden, making one or two
conventional vessels owned by IOMSPC. The latter two are a daily round trips. These six vessels are all spacious, high-quality
multipurpose ferry built in 1998 carrying up to 500 passengers and ferries built or substantially upgraded in the early 1990s to
1,200 lane-meters of cars and ro-ro freight, and a passenger and cruiseship standards with passenger capacity of 1,600 to 3,100
car ferry built in 1976 carrying 900 passengers and 135 cars. These persons and ro-ro freight capacity of 470 to 900 lane-meters.
are larger vessels in terms of deadweight capacity than SCL’s fast Passenger amenities altogether include over 60 restaurants and
ferries, and offer cabins with sleeping berths and more extensive bars ranging from self-service cafeterias and pubs to gourmet
bar/cafeteria and shopping areas. IOMSPC also owns a freight restaurants, wine bars and night clubs, nearly 30 shops from
vessel built in 1971 carrying 42 ro-ro vehicles. specialized boutiques to duty-free supermarkets, 4,600 cabins
IOMSPC occupies its berths in Douglas under a long-term user from comfortable single bedrooms to luxury suites, and
agreement with the Isle of Man government. This agreement extensive business meeting and conference facilities. Duty-free
allows IOMSPC to be the exclusive ferry operator to the Isle of shopping is available on all but the Vaasa-Umea route.
Man, in return for a limitation on fare increases at a rate below In addition, Silja Line deploys two ro-ro freight ships, built in
inflation and undertakings by IOMSPC to provide minimum service the 1970s, between Turku and Stockholm. These have limited
levels and to spend certain minimum amounts on ship passenger accommodation and carry up to 850 and 1,100 lane-
improvements and sales and marketing. IOMSPC contracts for meters of freight including rail cars.
port access in Liverpool, Belfast and Dublin with the local port In April 2000, SCL plans to introduce a SuperSeaCat on the
authorities, while Heysham is a port owned by SCL. Helsinki-Tallinn route making three or four daily round trips.
Elsewhere in the Irish Sea, SCL operates IOMSPC’s SuperSeaCat The service will be marketed and sold under the Silja Line
directly between Liverpool and Dublin on a daily round trip service name.

Of Silja Line’s eight conventional ships, seven are owned and one and three freight operators at Heysham, by Hoverspeed and one
is chartered-in with a purchase option. A ninth ferry is laid up pending freight operator at Folkestone, and by Hoverspeed at Newhaven,
sale. Neptun Maritime also owns two modern medium-sized with other customers accounting for the balance of revenue.
cruiseships, built in the early 1990s with passenger capacity of 620 Altogether, these ports occupy approximately 350 acres of land.
and 1,200, that are chartered out to third parties. A third 920- See “Other SCL Activities” below regarding possible development
passenger cruiseship was sold in January 2000. Silja Line owns its of surplus land.
terminal at Turku and leases the terminals at the other ports it serves.
Sales and Marketing
Sweden-Denmark-Norway Services Ferry fares vary depending on the route, type of traffic, degree of
Under the Silja Line name, SCL operates a SeaCat service between competition and seasonality of demand. For fast ferry services,
Gothenburg, Sweden, and Frederikshavn, Denmark, across the SCL generally seeks to charge at least a small premium over
Kattegat Strait in the spring and summer, with two or three round competing conventional ferry operators. The cheapest fares usually
trips most days of the week. SCL owns the terminal building in apply during seasonally low operating periods to encourage
Frederikshavn and has leased terminal facilities in Gothenburg. demand. Special promotional fares are available throughout the
The crossing takes less than two hours compared with the transit year on certain sailings even during peak travel periods. Fares are
time of more than three hours by conventional ferry. Two not government regulated, except in the case of IOMSPC as noted
departures each week also go from Gothenburg across the under “Irish Sea Services” above. Both SCL and Silja Line maintain
Skagerrak Strait to Langesund, Norway, a four-hour crossing which computerized yield management systems to try to maximize
is popular with duty-free shoppers because Norway is outside the revenue on each sailing based on existing bookings, planned
European Union. capacity and forecast demand.
Tickets for passengers and cars are sold through local sales
New York Harbor Services offices, by telephone and mail order, via some of the services’
Early in 1999, SCL acquired a commuter ferry business, renamed internet websites, at the ports, through commercial travel agents
“SeaStreak”, serving three routes across New York harbor to a and at certain railway stations. SCL’s and Silja Line’s marketing
public pier in lower Manhattan from two locations near Sandy staff work closely with sales agents, bus and rail operators, hotel
Hook, New Jersey, and from the Brooklyn Army Terminal. Two groups, tour operators and government tourist authorities to
high-speed passenger-only catamarans built in 1989 and 1990 promote their ferry services. Annual brochures distributed widely
transport up to 300 passengers on the Manhattan-New Jersey in the local travel industry describe the services, schedules, fares
routes, with a crossing time of 45 minutes, while the Manhattan- and inclusive holiday packages. Hoverspeed and Silja Line also
Brooklyn service uses a smaller, high-speed monohull craft built in offer frequent traveler programs to encourage repeat customer
1980 carrying up to 150 passengers on a short 15-minute ride. loyalty.
SeaStreak charters in its three vessels under long-term charter- Promotional activities consist principally of local television, radio
parties and plans to charter in two additional new ships in late and print advertising. Each of the ferry services (other than
2000 to expand its services. It owns one of its New Jersey berths SeaStreak) targets motorist traffic, and foot passengers connecting
and leases the other one and its Brooklyn berth, at all of which by train or bus service. Compared to conventional ferry
there is extensive car parking space for commuters. Between rush operators, SCL projects the benefits of its fast ferries offering high
hours and on weekends, SeaStreak operates special excursions and speed, frequent departures, fast connection times, exclusive
private charters with the vessels. terminal facilities, and superior customer care at booking, check-in
and on board. On routes where SCL’s fast ferries compete
Port Operations directly with conventional ferries, SCL has established market
In addition to the third-party owned ports in Britain from which share in part by creating new demand in the form of day trips and
SCL’s ferry services operate, SCL owns three ports located at business travel by sea. Silja Line emphasizes the mini-cruise
Newhaven and Folkestone on the English Channel and Heysham on atmosphere of its sailings during which passengers enjoy shopping,
the Irish Sea, providing berthing, traffic handling, warehousing, restaurants, entertainment and hotel services, including passengers
storage and ancillary port facilities.They have multiple ship berths on board attending one-or two-day business conferences at sea.
for both oceangoing and smaller vessels, passenger and freight IOMSPC’s and Silja Line’s freight services are marketed through
terminal buildings and freight/vehicle standing areas, and are fitted their own sales personnel who regularly call on major customers.
with ship-to-shore linkspans. Industrial buildings at Newhaven and These are principally trucking companies and freight forwarders
Heysham are leased to third parties. All three ports have good which transport goods door-to-door. Most sales are on a volume
connections to the main road and rail networks in Britain. discount basis. Silja Line transports rail cars through a joint
About three-quarters of port operations revenue in 1999 derived venture, in which it has a one-third interest, with the state-owned
from shipping, stevedoring and handling charges paid by IOMSPC railways in Finland and Sweden.

Competition Retail sales to passengers of wine, spirits, perfume, tobacco and
The ferry industry is highly competitive. Hoverspeed competes other products are an important component of ferry revenue on
with five conventional ferry companies between southern Britain many of SCL’s routes. Until mid-1999, sales to travelers between
and the European Continent, two of which cross the Dover Strait, European Union countries were on a duty-free basis, but the
and also with Eurotunnel under the English Channel. There are five legislation permitting duty-free sales expired on July 1. Since then,
competing ferry operators between Britain and Ireland, including in an effort to compensate for lower sales volume and profits on
three running fast ferries, and six competing ferry operators its affected routes, SCL offers duty-paid shopping for many goods
between Sweden, Denmark and Norway, including three with fast which should remain attractive to passengers because local prices
ferries. A bridge and tunnel link between Malmo in southern and taxes differ greatly in various European countries, and has
Sweden and Copenhagen, Denmark, is scheduled to open in the raised fares to the extent competition allowed. There can be no
latter part of 2000 and may provide additional competition for assurance, however, that this strategy will restore the profitability
SCL’s passenger car traffic on its Gothenburg-Frederikshavn route. of SCL’s former duty-free routes. Silja Line has been less affected
SeaStreak competes with another commuter ferry service from by the abolition of duty-free retail sales because all of its sailings to
New Jersey to Manhattan as well as road and rail commuter and from Stockholm call at the nearby Åland Islands of Finland
services, and Silja Line competes presently with six ferry companies where the duty-free exemption continues due to the islands’
in the northern Baltic Sea. IOMSPC is the only ferry service to the permanent fiscal status outside the European Union. Also the
Isle of Man, although it competes with other freight carriers. SCL’s Helsinki-Tallinn and Helsinki-Tallinn-Rostock routes remain duty-
high-speed car ferries, short routes and crossing times and free as long as Estonia is outside the European Union.
superior customer service, and Silja Line’s modern ships and the A particular characteristic of the ferry market in North Europe
high quality and variety of its on-board services, are important and Scandinavia is the seasonality of demand, principally because
factors in this competitive environment. Airlines compete for volumes are linked to tourism. Approximately half of the
passenger traffic on the longer routes. passengers using ferry services to and from Britain, for example,
travel during the June-September period. The freight market tends
Certain Trading Factors not to be seasonal. The historical and expected pattern of
SCL owns 15 of its ferry ships and hovercraft, most of which are operating results from the collective ferry activities of SCL and Silja
financed under mortgage loans or lease financings. See Notes 5 and Line is a loss in the first and fourth quarters each year.
7 to the Financial Statements. Five others are chartered in. Neptun Other factors affecting the trading performance of SCL’s and Silja
Maritime owns 11 of its ships and charters in one. The ships and Line’s ferry services are principally competitive pressure on ticket
craft are maintained in good condition in compliance with regulatory prices, travel convenience of departure timings, adverse weather
requirements, operated in compliance with applicable conditions disrupting service schedules, regional economic and
safety/environmental laws and regulations, and insured against usual political conditions (including recessions and actual or threatened
risks for such amounts as management deems adequate. Their terrorism), foreign exchange rate fluctuations in countries served
operating certificates and licenses are renewed periodically during by the ferries, variable fuel costs that cannot be covered by fare
each vessel's required annual survey. The operation of ships at sea increases, fluctuating prices in the ship sale and purchase market,
carries an inherent risk of accidents, however, and the consequences lower labor costs of certain competitors, and industrial relations
of these may exceed the insurance coverage in place or result in a fall and strike activity at the ports and regions served by the ferries.
in passenger volume because of a possible adverse impact on the The interaction of many of these factors differs on each route and
public’s perception of ferry safety. the profitability of individual routes may change from year to year.
Recent regulations of the International Maritime Organization and SCL plans to open new ferry services and to deploy its new fast
other government authorities impose improved stability requirements ferries on existing and new routes. Profitability of new services is
on existing conventional ro-ro passenger ferries operating in North subject to many of the foregoing factors as well as the uncertainty
Europe and Scandinavia in case water floods the vehicle deck. These of achieving a sufficient level of sustained market acceptance by
do not apply to SCL’s hovercraft, in which the car decks are not customers. High-speed car ferries are a relatively recent
integral to their stability, while the SeaCats, SuperSeaCats, IOMSPC’s development, and a newly built vessel may not perform to its
newer conventional ferry and all but one of Silja Line’s ferries are in technical specifications under the shipbuilding contract. In addition,
compliance. The regulations will, however, require SCL's other the hull forms and technology of the ships to ensure the comfort
conventional ferries and one of Silja Line’s owned ferries to be of passengers on board in different sea conditions are still evolving.
modified by 2001 to bring them into compliance or be replaced. SCL Silja Line employs about 3,100 staff on board ship and on shore,
does not expect the net capital expenditure for this purpose will be most of whom are unionized. The shipping industry in Finland and
material. There can be no assurance, however, that future Sweden is susceptible to industrial action due to the strong
governmental mandates will not obligate SCL or Silja Line to incur influence of trade unions, resulting both from direct disputes and
large capital cost either to modify its vessels or replace them. from sympathetic industrial action which Finnish legislation

currently permits. While management believes Silja Line has good Great North
relations with its work force, there can be no assurance that Silja Eastern Railway
Line will not be adversely affected by future industrial action such Routes between
as by trying to reduce labor costs or to modify work practices. England and Scotland
Finland has agreed gradually to remove by 2004 the quantity
restrictions on the import of duty-paid alcoholic beverages bought
by private individuals in other European Union countries. Sweden
refused to agree on similar terms but undertook to review its
position in 2000. It is expected that the harmonization of quantity
restrictions in Finland and Sweden with those applying elsewhere in
the European Union will gradually result in a reduction of retail
prices of alcoholic beverages in the state monopoly shops in
Finland and Sweden to a level closer to the retail prices in other
European Union countries. Lower retail prices in the shops on land
will require duty-free shops on board ferries to lower their prices
to maintain their competitive advantage and would therefore be
likely to lead to lower profit margins. This could have an adverse
effect on Silja Line’s financial results because a large part of Silja
Line’s revenue is generated by sales made in shops on board,
almost half of which could be attributed to liquor, wine and beer.
Other Ship-Related Activities

Related to its ferry activities, SCL owns three cargo ships for
chartering out. Two are containerships built in 1979 and 1981
carrying up to 576 TEU and 1,250 TEU of containers, respectively,
and the third is a small ro-ro ship built in 1977 with capacity for 35
trailers. The ships are maintained in good condition in compliance
with relevant government regulations and are insured against usual
risks for amounts SCL deems adequate. They are owned by SCL
under mortgage or lease financings. See Notes 5 and 7 to the
Financial Statements. SCL sold a fourth cargo ship during 1999. calling at 50 stations, in 1999 GNER transported 14.7 million
Hart, Fenton & Co. Ltd., an SCL subsidiary, provides naval passengers, a 23% increase over annual ridership when the
architect and marine engineering services to SCL and other franchise began in 1996. The map above indicates the principal
shipowners. This firm assisted in the design of many of SCL’s destinations. Some of the core routes are as follows:
ferries and cargo ships.
Typical No. Typical
Rail Operations Distance of One-Way Journey
Under a seven-year franchise awarded by the British government in Route (miles) Weekday Trains Time (hours)
1996, SCL operates high-speed passenger trains between London London - Leeds 186 22 2-21⁄2
and Scotland along the east coast main line of Britain. Called Great London - Newcastle 268 29 2 3⁄4 -3
North Eastern Railway (“GNER”), this is one of 25 former British London - Edinburgh 393 19 4-41⁄2
Rail passenger operations privatized by the government. By London - Glasgow 450 6 51⁄2
improving service, increasing ridership and reducing costs, GNER
will eliminate its declining government subsidy by the end of the Connections with other passenger trains are available at most
franchise period and fund capital investment largely from cash flow. stations. Timetables vary between weekdays, weekends and
GNER has applied to the government to replace and extend its holidays to meet different patterns of demand and to allow
franchise agreement by one expiring in 2020. See “Franchise infrastructure engineering works. The summer and winter
Replacement” below. timetables also vary because more services are offered in the
GNER’s customers are mainly leisure and business passengers and summer targeted at the leisure market. Frequency is currently up
some commuters, travelling between London (from King’s Cross to 112 weekday services, 92 Saturday services and 76 Sunday
station), parts of the East Midlands and East Anglia,Yorkshire, services, of which 95% originate or terminate at King’s Cross in
northeast England and Scotland. Covering 935 route miles and London.

Rolling Stock which each party must compensate the other if prescribed
GNER currently operates a fleet of 40 trains totalling 440 cars and performance standards are or are not achieved. Payments by or to
locomotives. Thirty-one are electric, drawing power from GNER vary under this performance regime and may be significant
overhead lines. Built between 1987 and 1990, they provide about in amount if unforeseen events occur affecting either party. The
80% of GNER's timetabled services. They can operate up to a British government may also impose fines on GNER under its
speed of 140 mph but are restricted to 125 mph because of track franchise agreement if GNER causes high numbers of train
and signalling limitations. A typical electric train is two first-class cancellations, but no fines have been incurred to date.
and six standard-class coaches and a kitchen/catering car, having Of the 50 stations along its routes, GNER shares access with
total capacity of about 550 passengers. On-board catering is other train operators to four central stations owned and managed
typically an over-the-counter buffet, supplemented by at-seat trolley by Railtrack (London King’s Cross, Leeds, Edinburgh and Glasgow).
service, with full restaurant service on selected trains. GNER leases from Railtrack 12 other main stations, including
The rest of GNER’s fleet consists of nine diesel trains, Newcastle and York, and provides access and common station
substantially all of which were built between 1975 and 1980 and services to other train operators calling at these stations, such as
travel at a maximum speed of 125 mph. These operate ticket sales, train information, car parking, and station cleaning and
approximately 20% of GNER’s timetabled services, principally to maintenance. The remaining 34 stations where GNER stops are
Aberdeen, Inverness and Hull because the routes are not leased from Railtrack by three other train operators which provide
electrified. A typical diesel train carries up to 480 passengers in GNER with similar services at these stations.
two first-class and five standard class-coaches and a
kitchen/catering car. Sales and Marketing
GNER leases substantially all its rolling stock from two leasing Passengers may purchase tickets on GNER at all major train
companies for the seven-year term of its present franchise. Rental stations in Britain. Railtrack publishes the national system
charges include maintenance and insurance provided by the lessor, timetables, and a trade association of operators in Britain publishes
and are largely fixed. In order to supplement its original rolling their basic fares and provides telephone information about all
stock and improve service, GNER acquired an existing electric operators’ services. GNER is the lead ticket seller at London
locomotive and ten passenger coaches which can be refurbished King’s Cross, Edinburgh, Stevenage and the 12 stations it leases,
and added to the nine diesel trains. GNER plans in 2000 to lease obligating GNER to sell tickets on a commission basis for other
from Eurostar two modern, high-speed electric trains of 14 coaches operators as well as itself. Similarly at GNER’s other 35 stations,
each which are surplus to Eurostar’s operations between Britain the lead ticket seller must sell tickets on behalf of GNER. GNER
and Continental Europe. In addition, as part of its application to also sells tickets through self-service machines at many of its larger
extend its franchise to 2020, GNER plans to buy new tilting trains stations, and through its own telephone sales, enquiry and business
for delivery in 2004 and 2007. See “Franchise Replacement” below. travel center in Newcastle handling up to 50,000 calls per week.
GNER operates and maintains its rolling stock in compliance with Most remaining sales are made by other train operators and
government-supervised safety standards and the lease independent travel agents in Britain and abroad. GNER plans to
requirements. Maintenance work is performed at four depots introduce internet ticket sales in the near future.
leased by GNER in London, Edinburgh and Aberdeen where GNER Previously part of the government-owned British Rail network,
also performs maintenance for other train operators. In addition, GNER services were separately marketed only to a limited degree
GNER contracts for regular maintenance at four other depots. before SCL acquired the franchise in 1996. GNER has since
Consistent with these safety and maintenance requirements, GNER implemented a marketing program based on its separate brand
carries property and liability insurance in amounts which identity. Print and other media advertising and promotions project
management believes are adequate. the high speed and comfort of GNER’s trains. To attract ridership,
GNER has upgraded station services and car parking (part of which
Track and Station Access has been funded by Railtrack) and the technical reliability of its
Substantially all of the railway infrastructure in Britain (track, rolling stock. On-board service, catering, appearance and cleanliness
signalling, stations and depots) is owned and maintained by have all been improved. Flexible fare structures have been
Railtrack Plc (“Railtrack”). GNER has contracted with Railtrack for introduced to attract passengers through price incentives, and
track access based on the level of services GNER provides. Other GNER offers a customer loyalty program for frequent travelers.
train operators run on parts of GNER’s routes, requiring Railtrack’s
coordination of timetables and train paths. Track access charges Competition
are fixed in large part but include variable components for actual Six other passenger train operators run on parts of GNER’s
utilization of track and electric power consumed. To encourage routes. Prior to September 1999, they could increase the
train punctuality and reliability, the track access agreement includes frequency of services they operated but could not introduce new
a system of variable payments between GNER and Railtrack under services in competition with GNER. Thereafter, operators have

been allowed to negotiate with Railtrack for new services and from persons currently making long journeys by car. Much of the
additional train paths and times, representing up to 20% of an improvements to the track, stations and other infrastructure would
existing operator’s revenue, but awards are still government- be funded by Railtrack which will entail amendments of the
regulated to ensure passenger benefits are achieved (such as better agreements with GNER relating to track access and station leases
frequencies, lower fares or new journey opportunities) and to including higher access and usage charges to GNER. While GNER
avoid competition which might interfere with each operator’s believes its replacement franchise bid should satisfy all government
ability to satisfy the minimum service requirements under its requirements, there can be no assurance that GNER will be
franchise. GNER has experienced only limited new competition granted a replacement franchise, or on what terms, and whether
since September 1999. Aggressive bidding by GNER’s rail any investments made by or on behalf of GNER will enhance its
competitors in the future, however, may limit GNER’s expansion profitability.
plans.
GNER also competes with cars, buses and airlines in Britain as Certain Trading Factors
well as other train operators which do not share routes with GNER services may be disrupted, with consequent loss of revenue,
GNER. The choice of transport mode is governed by many factors because of infrastructure problems for which Railtrack is
including frequency, time, reliability, convenience, comfort and cost. responsible, or problems for which GNER is responsible such as
The relative importance of these depends on the leisure or rolling stock breakdowns or employee strike activity. Third party
business purpose of the journey. GNER believes its fast, frequent actions may also cause disruption, among them being actual or
and high-quality services directly into city centers are an important threatened acts of terrorism in mainland Britain.
competitive advantage. Under the original franchise award in 1996, the British
government must pay GNER an annual subsidy which is declining
Franchise Replacement annually to zero by 2003 when the present franchise ends. See
In December 1999, the British government invited GNER to apply Note 1(f) to the Financial Statements. Except in unusual
for a new east coast main-line franchise extended to 2020 in circumstances, this subsidy is fixed. The largest part of GNER’s
replacement of the existing franchise which expires in 2003. The costs are payments for track, station and depot access and rolling
government is seeking higher levels of investment and service in stock rental which, as noted above, are also largely fixed during the
return for a longer franchise term and modified subsidy. One franchise term. Therefore, as the government subsidy decreases,
other train operator was invited to bid in competition with GNER, GNER must increase its revenue and reduce its variable operating
and initial proposals were submitted in February 2000. The costs if it is to maintain profitability, although no assurance can be
government is expected to announce the result of the bidding given that GNER will accomplish these goals. Part of GNER’s bid
process by mid-year. It should be noted that, absent any material to replace and extend its franchise to 2020 involves a new
breach by GNER of its existing franchise agreement, the British government subsidy profile, initially with payments to GNER in the
government may not mandatorily replace GNER as franchisee early years followed by substantial payments to the government in
before 2003. the later years.
Because of the success of GNER’s service improvements and Efforts to increase ridership are described above under “Sales and
marketing to date, ridership has been increasing above the level Marketing”. GNER is contractually obligated not to raise ticket
which can be satisfactorily accommodated with the trains and prices by more than the rate of inflation on ticket types
station facilities originally provided with the franchise award in representing about 20% of GNER’s fare revenue. Other fares are
1996. GNER is prepared to make the necessary capital investment not regulated but are subject to the competitive pricing of
to lessen overcrowding and to continue service improvements, but alternative rail, airline and other transport services. In addition,
believes a longer franchise period is required in order to earn a GNER must pay passenger rebates of varying percentages of its
satisfactory investment return. fares if it fails to meet prescribed punctuality and reliability
GNER’s application for a new franchise includes an undertaking standards.
to order up to 25 new electric or diesel tilting trains for delivery Of GNER’s variable costs, the largest component is labor.
in 2004 and 2007. Because they lean into track curves, tilting trains GNER’s workforce numbers approximately 2,800 employees, about
can travel at a faster average speed (up to 140 mph) than GNER's two-thirds of whom are unionized. Since 1992 there has been no
existing rolling stock and thereby both reduce travel times dispute involving withdrawal of labor solely related to GNER,
(London-Edinburgh in as little as 31/2 hours, for example) and add although nationwide strikes against British Rail disrupted GNER’s
capacity (up to 56 additional daily services). These would be services for short periods in 1994 and 1995. Consistent with
either owned and financed by SCL and/or GNER, or owned by upgrading service standards and continued safe operation,
third parties and leased to GNER on a long-term basis. GNER also management is working with the unions gradually to change work
proposed to upgrade its principal stations and to develop new practices to increase efficiency. There can be no assurance,
park-and-ride stations near motorways to attract new ridership however, that these steps will not result in labor disruption of

GNER’s services, or that larger labor disputes broadly involving the and expanded in 1993 and has 48 guest rooms and suites. SCL
British rail industry will not adversely affect GNER. manages the adjoining golf club with a championship golf course,
Following recent fatal rail accidents in Britain (none involving indoor and outdoor swimming pools, tennis courts and a fitness
GNER), changes are being considered by regulatory authorities to center, and has an option to purchase the club by 2002. The resort
improve the safety of rolling stock and the training of on-board occupies approximately 600 acres much of which is available for
staff, including possible installation of new emergency braking future development as either hotel or residential use.
systems. GNER intends to comply with all final requirements Also in May 1999, SCL purchased from the same seller the Inn at
relating to safety. None of the proposals to date is expected to Perry Cabin located in St Michaels, Maryland, on the eastern shore
have a significant effect on GNER. While GNER believes, as noted of Chesapeake Bay, a short driving distance from Washington, D.C.,
above under “Rolling Stock”, that its trains operate in compliance Baltimore and Philadelphia. This hotel was first built as a country
with relevant safety standards and that it carries adequate property inn in 1812. Expanded and refurbished to deluxe standard in 1991,
and liability insurance against loss, there can be no assurance that it has 41 guest rooms and suites set on 25 shoreside acres that
accidents involving GNER will not occur in the future or that a include a health club and indoor swimming pool as well as boating
serious incident would not have a material adverse effect on and fishing in the bay.
GNER’s operations or financial condition.
Caribbean
Hotels and Leisure SCL owns and operates La Samanna resort hotel on St. Martin in
SCL owns and/or manages 22 deluxe hotels and resorts located in the French West Indies. Built in 1973, the hotel has 83 rooms,
the United States, the Caribbean, Europe, southern Africa, Brazil, suites and villas and two restaurants spread over 16 buildings on
Peru, Australia and the South Pacific, six tourist trains in Europe, ten acres of land along a 4,000-foot beach. Amenities include a
Southeast Asia, Australia and Peru, a river cruiseship in Burma freshwater swimming pool, tennis courts, fitness and conference
(Myanmar), and two restaurants in London and New York. During centers, boating and ocean water sports. The hotel is open most
1999, SCL sold the Windermere Island Club in Eleuthera, Bahamas. of the year, seasonally closing during the fall months which, in 1999,
SCL also engages in merchandising related to its properties. continued to mid-February 2000 because of hurricane damage in
Management focuses on identifying and acquiring unique properties November. The hotel owns an adjacent 45 acres of land available
with potential for operating and marketing improvements through for future development.
expansion and renovation.
Italy
Hotels and Resorts The Hotel Cipriani and Palazzo Vendramin property owned and
United States operated by SCL in Venice was built for the most part in the 1950s
The Windsor Court Hotel owned and operated by SCL opened in and is located on three acres of land on Giudecca Island opposite
1984 and is located in the central business district of New the Piazza San Marco. It has 106 guest rooms and suites, most with
Orleans, Louisiana near the French Quarter and the Mississippi views over the Venetian lagoon, and is fully open about nine months
River front. The only land-based casino in Louisiana is across the each year commencing in March. Features include fine cuisine in
street from the hotel. There are 324 guest rooms and suites, each three indoor and outdoor restaurants, gardens and terraces
with panoramic views over the river or the city. Facilities include encompassing an Olympic-sized swimming pool, a tennis court and
three restaurants and lounges, a rooftop ballroom, several other a private launch service to the Piazza San Marco. The hotel is
banquet and meeting rooms, an outdoor swimming pool and a seeking to acquire adjoining buildings for expansion.
health club. The hotel’s interior decor features a collection of SCL owns and operates the Villa San Michele located in Fiesole
historic European art and antique furniture. on ten acres overlooking Florence and the Arno River valley.
SCL owns a minority interest in Charleston Place Hotel in the Originally built as a monastery in the 15th century with a facade
historic center of Charleston, South Carolina, and manages the attributed to Michelangelo, it was converted to a hotel in the
property under an exclusive long-term contract. Originally opened 1950s. SCL has remodelled and expanded the guest
in 1986, the hotel has 440 guest rooms and suites, two restaurants, accommodation to luxury standards including the addition of a
extensive banqueting and conference space including a grand swimming pool. Currently there are 40 rooms and suites. A
ballroom, a health club with swimming pool and tennis court, and shuttle bus service is provided to the center of Florence. The
27 retail shops leased to third parties. The hotel also owns the hotel closes during the winter each year.
adjacent historic Riviera Theater recently remodelled as an On the Italian Riviera, SCL owns and operates the Hotel
additional conference facility and five retail shops. Splendido overlooking the picturesque seaside village of Portofino.
In May 1999, SCL acquired the Keswick Hall Hotel in the rolling Set in four acres, this resort was built in 1901 and has 69 guest
countryside of central Virginia near Charlottesville. Originally a rooms and suites surrounded by gardens and terraces which
private home built in 1912, the hotel was significantly renovated include a swimming pool and tennis court. It is open ten months

annually. SCL also leases on a long-term basis (with purchase reputation as one of the foremost hotels on the African continent.
option) a small hotel ten minutes’ walk away in the village square. It stands just below Table Mountain and is within walking distance
After remodelling in 1998, it reopened as the Splendido Mare part of the main business, civic and cultural center of the city. The hotel
of the Hotel Splendido with 16 guest rooms and a restaurant. has 226 guest rooms and a ballroom, two swimming pools, tennis
In September 1999, SCL acquired the 27-room Hotel Caruso in courts and a fitness center, all situated in ten acres of grounds and
Ravello, Italy, overlooking the Amalfi coast near Naples. With parts gardens.
dating from the 11th century, the hotel has been closed for In Johannesburg, SCL owns and operates the Westcliff Hotel. This
refurbishment and expansion on its three acres of hill-top grounds. was originally built in 1996 as a residential garden apartment
SCL currently plans to reopen the hotel with additional deluxe complex on six hillside acres (including unused expansion land)
guest rooms in 2002. overlooking the city zoo in the northern suburbs. SCL acquired,
redeveloped and extended the property into a deluxe 120-room
Portugal hotel. It has many resort amenities such as two swimming pools, a
SCL owns and operates Reid's Palace Hotel on the island of tennis court and a health club, and attracts business guests because
Madeira off the coast of Morocco. This resort is situated on ten of the hotel’s proximity to the city center.
acres of semitropical gardens on a cliff top above the sea and the Elsewhere in southern Africa, SCL owns and operates the
bay of Funchal, the main port city. Opened in 1891, the hotel has Gametrackers photo-safari camps in northern Botswana. Established
162 rooms and suites, four restaurants and spacious conference in 1971, these comprise leases of three lodge and camp sites in the
facilities. Leisure and sports amenities include two swimming pools, Okavango River delta and nearby game reserves where some of
a third tide-filled pool, tennis courts, ocean water sports and access the best wildlife in Africa can be observed from open safari vehicles
to two championship golf courses. During 1999, SCL continued a or boats. Each camp has 12 to 15 twin-bedded deluxe tents, and
phased refurbishment of many of the guest rooms and public areas. guests travel between the camps by light aircraft. Boating, fishing,
The Hotel Quinta do Lago owned and operated by SCL is a hiking and swimming are offered at the various sites.
modern resort located on the 1,680-acre Quinta do Lago golf and
property development near Faro in the Algarve region. Opened in Brazil
1988, the hotel occupies eight acres and features 141 rooms and SCL owns and operates the 226-room Copacabana Palace Hotel in
suites with ocean views, two restaurants, a health club, indoor and Rio de Janeiro. Built in the 1920s on a three-acre site facing
outdoor swimming pools, tennis courts and extensive gardens, as well Copacabana Beach near the central business district of Rio, this
as access to ocean beaches and nearby championship golf courses. luxury hotel is one of the most famous in South America and
SCL owns and operates the 94-room Lapa Palace Hotel in the features two gourmet restaurants, several spacious function and
embassy district of Lisbon, near the city center and overlooking the meeting rooms including a 500-seat theater, a large swimming pool
Tagus River. The main part of the hotel was originally built in the and a rooftop tennis court. SCL recently completed an extensive
1870s as the home of a Portuguese noble family. It opened as a refurbishment of most parts of the hotel and future expansion is
luxury hotel in 1992 after extensive conversion and expansion planned.
including the addition of conference facilities and underground car
parking. The hotel is set amid gardens with ornamental fountains Peru
and both indoor and outdoor swimming pools, occupying a total of In March 1999, SCL formed a 50/50 joint venture with local
three acres. During 1999, SCL began adding 15 guest rooms and Peruvian partners which acquired long-term leases of the
plans significant expansion in future years. Monasterio Hotel in Cusco, Peru, and an adjoining site for future
expansion, occupying about three acres altogether. Located in the
France center of the ancient Inca capital of Cusco in the Andes Mountains,
SCL owns and operates Hôtel de la Cité in the medieval fortified the hotel was originally built as a Spanish monastery in the 16th
town of Carcassonne in southwest France. The hotel is situated in century and was converted to hotel use in 1995. The 122 deluxe
the square of Basilica Saint-Nazaire, the town’s main architectural guest rooms and suites and two restaurants are arranged around
attraction, and incorporates one of the 50 watchtowers in open-air cloisters. SCL has been appointed the exclusive long-term
Carcassonne’s ancient fortifications. Opened in 1909, it features 60 manager of the hotel.
rooms, two restaurants, gardens with a swimming pool and a At the same time, the Peruvian joint venture acquired the long-
conference center. SCL has extensively refurbished and upgraded term lease of Machu Picchu Sanctuary Hotel. This is a small, 32-
the hotel in recent years. room property unique in its proximity to one of the world’s most
famous tourist sites, the mountain-top Inca ruins at Machu Picchu.
Southern Africa The site is a three-hour train ride from Cusco. SCL is also the
The Mount Nelson Hotel owned and operated by SCL in Cape exclusive manager of this hotel which includes seven acres of
Town was originally opened in 1899 and has long enjoyed a expansion land in the valley below the site.

Australia in 2000 to commence operating one-or two-day rail excursions,
In March 2000, SCL acquired the Observatory Hotel in Sydney, a either scheduled or chartered, throughout the year on a variety of
property it previously managed for an unaffiliated owner. Within scenic routes in northern England, Scotland and Wales. The train
walking distance of the central business district, this hotel opened comprises a locomotive and six dining cars elegantly decorated to
in 1993 and has 96 guest rooms and suites, two restaurants, be reminiscent of old British “Belle” trains of the 1930s, and can
extensive meeting and banquet rooms, a health club with indoor carry up to 250 passengers. Full-course gourmet meals are served
swimming pool, a tennis court and a large parking garage on a site on board and passengers stay in local hotels on overnight
of about one acre. itineraries.
Also in March 2000, the owner of the Observatory Hotel sold to
SCL the Lilianfels Hotel in the scenic Blue Mountains National Park Southeast Asia
about 60 miles west of Sydney. The hotel is named after the SCL’s Southeast Asian tourist train operates a regularly scheduled
original estate house, dating from 1890 and refurbished as the service between Singapore, Kuala Lumpur and Bangkok. Called the
hotel’s gourmet restaurant. The main hotel built in 1992 has 86 “Eastern & Oriental Express” (“E&O”), it makes one round trip
guest rooms and suites and a second restaurant. The resort’s four each week. The journey lasts about 48 hours each way and
acres of grounds encompass an indoor swimming pool, health club includes two nights on board and side trips to Penang in Malaysia
and spa, outdoor tennis courts and extensive gardens with views and the River Kwai in Thailand. Some overnight trips are also
over the Blue Mountains. made from Bangkok to Chiang Mai in northern Thailand. Haulage
is provided by the Malaysian and Thai railways under contract. SCL
South Pacific has a 25% ownership interest in E&O but manages and markets the
SCL manages the Bora Bora Lagoon Resort in French Polynesia in train exclusively under a long-term contract. Originally built in
the South Pacific under an exclusive contract with the previous 1970, the 24 E&O cars were substantially rebuilt to an elegant
owner of the Observatory and Lilianfels Hotels. This resort oriental style of decor and fitted with modern facilities such as air-
opened in 1993 and has 50 bungalows situated over the lagoon conditioning and private bathrooms. The train is made up of
water plus 30 additional beach and garden bungalows, all built in sleeping cars with three types of berths, three restaurant cars, a
traditional Tahitian style. Guests dine in two restaurants and enjoy bar car and an open-air observation car and can carry 125
extensive water sports and tennis. passengers. Like VSOE, the E&O is available for charter by private
groups.
Tourist Trains
Europe Australia
SCL’s principal European tourist trains, called the “Venice Simplon- SCL manages and markets under an exclusive long-term contract
Orient-Express” (“VSOE”), operate in two parts in a regularly with Queensland Rail its newly built “Great South Pacific Express”
scheduled overnight service between London and Venice and on luxury tourist train (“GSPE”) in Australia. GSPE comprises 21
short excursions in southern England. SCL owns 30 railway cars sleeping, restaurant, bar and observation cars decorated in a late-
originally used on historic “Orient-Express” and other famous 19th-century style with capacity for 100 passengers. Like the E&O
European trains. All have been refurbished in original 1920/1930s tourist train, GSPE is fully air-conditioned and the three types of
decor and meet modern safety standards. The trains (one based in passenger compartments are well appointed with private
Great Britain composed entirely of Pullman cars and the other on bathrooms. Regularly scheduled one or two night itineraries
the Continent made up of wagon-lits sleeping cars and day originating out of Brisbane operate north to Cairns in Queensland
coaches) carry 190 passengers and operate once or twice weekly and south to Sydney in New South Wales. The northern route
between London and Venice from March to November each year includes stopovers for passengers to visit the Great Barrier Reef
via Paris, Zurich and Innsbruck on a scenic route through the Alps. and the Kuranda rainforest. SCL owns a small minority interest in
Passengers travel across the English Channel by Hoverspeed ferry. the train operating company.
Occasional trips are also made to Rome, Prague and Istanbul.
Haulage is provided by local railways under contract. The British Peru
Pullman cars carry up to 250 passengers and operate all year, once In September 1999, the government of Peru awarded 30-year
or twice weekly, originating out of London on short excursions to concessions to another 50/50 joint venture between SCL and its
places of historic or scenic interest in southern England including partners in the Peruvian hotels described above to operate two
some overnight trips when passengers stay at local hotels. Both state-owned railways, now collectively called “PeruRail” by the joint
the British and Continental trains are available for private charter. venture. These concessions are extendible by the government up
During 1999, SCL redeveloped its Regency Rail tourist train to an additional 30 years. One is the 70-mile passenger rail line
business in Britain, acquired in 1998, and has renamed it “Northern between Cusco and Machu Picchu. This is the principal access for
Belle”. Like the British Pullman train of VSOE, Northern Belle plans tourists to the famous Inca ruins because there is no convenient

road. PeruRail operates eight trains carrying a maximum of 300 and features gourmet American cuisine. The main dining and bar
passengers each including those travelling locally to intervening room on the ground floor seats 150 guests, and ten banquet and
villages along the route. PeruRail plans to improve the quality of function rooms upstairs seat up to an additional 600 diners.
the services, particularly for tourists to enjoy the mountain SCL procures and sells high-quality gifts and souvenirs branded
scenery. with the names of its tourist trains, hotels and cruiseship. This
PeruRail also operates the state-owned southern railway in Peru merchandise is sold principally on board the trains and cruiseship,
linking Cusco with Mollendo and Matarani on the Pacific Ocean in SCL’s hotels and through mail-order catalogues and limited third
(via Arequipa in the high Andes) and with Puno on Lake Titicaca, a party retail outlets.
total of about 450 miles of track through scenic mountains, valleys
and plains. At present, these are principally freight routes using 15 Sales and Marketing
locomotives and up to 600 cars of various types. From its SCL’s hotels, tourist trains and other leisure activities provide a
experience in containerization, SCL plans to introduce intermodal high quality of service, cuisine, furnishings and decor attracting first-
cargo handling techniques to make the railway more efficient and class travelers. Management believes SCL’s unique properties
competitive with road hauliers, the main competition for freight. appeal to the premium-traveler market which is less apt to be
The southern railway also transports tourists and local passengers influenced by pricing considerations. The principal markets for
in 40 modern coaches, and PeruRail is investigating how to improve guests are the United States, Europe and Asia. Substantially all of
and expand these services because of their potential for tourism. the properties have won prestigious travel and leisure industry
These concessions were awarded to PeruRail for a modest initial awards over the years which have enhanced their public
investment and include all existing rolling stock, track and other recognition and reputation for excellence.
railway infrastructure and most of the employees. In return, Using the “Orient-Express Hotels” name, SCL promotes and sells
PeruRail must pay the government certain concession fees, which its hotels and resorts through its own staff located in New York,
initially may be offset against expenditure on capital improvements, London and Frankfurt and independent hotel sales representatives
and must maintain the railway infrastructure and provide open and organizations worldwide (including membership of 15 of the
access to potential future operators on the routes. Passenger hotels in The Leading Hotels of the World and five in Preferred
tickets are sold mainly through tour operators and travel agents in Hotels and Resorts Worldwide). The tourist trains and cruiseship
Peru as well as at PeruRail’s stations, while freight sales are on a are sold through sales and reservations offices in New York,
contract basis with local shippers. The PeruRail joint venture has London, Paris, Cologne,Tokyo, Singapore, Brisbane and Cusco, and
appointed SCL as the primary manager to oversee the Machu through independent general sales agents worldwide. SCL
Picchu and southern railway concessions. develops and markets inclusive holiday packages for all of its travel
products. In addition, each hotel conducts its own sales, marketing
Other Leisure Activities and public relations activities and participates in computerized
SCL operates a deluxe cruiseship on the Irrawaddy River in central reservation systems, such as Sabre and Amadeus, facilitating travel
Burma (Myanmar) called the “Road to Mandalay”. The ship was a agent reservations. The internet, through the websites of Orient-
Rhine River cruiser built in 1964 which SCL bought and Express Hotels and most of the individual properties, is a growing
refurbished. It features 66 air-conditioned cabins with private source of direct reservations. As noted above, train and hotel
bathrooms, spacious restaurants and lounge areas and a canopied branded merchandise is sold through limited retail channels.
sun deck with swimming pool. The ship travels between Mandalay
and Pagan up to eight times each month and carries 126 Certain Trading Factors
passengers who enjoy sightseeing along the river and guided shore SCL’s hotels, resorts, tourist trains, cruiseship and restaurants are
excursions to places of historic interest. Five-to eight-night subject to operating conditions common to the hospitality
itineraries are offered including airfare to and from the ship and industry. These include the cyclical nature of the industry and its
hotel accommodation in Rangoon (Yangon). The ship does not dependence on varying levels of tourism and business/commercial
operate in the rainy summer season or when the Irrawaddy travel and entertainment, disposable income of consumers and the
experiences low water levels in other times of the year. traveling public, changes in travel patterns, competition from other
SCL owns a 49% minority interest in Harry’s Bar, a popular 80- hotels and travel products (including competitors with greater
seat private dining club located in the fashionable Mayfair area of financial or other resources than SCL), periodic local oversupply of
London. The majority partner manages the restaurant with guest accommodation which may adversely affect occupancy rates
assistance from SCL’s Italian hotels. Its menu features gourmet and achieved room rates, increases in operating costs due to
Italian cuisine. inflation and other factors which may not be offset by increased
SCL also owns the ‘21’ Club in New York City. Originally a revenues, regional and local economic and political conditions
speakeasy in the 1920s, this famous restaurant is open to the affecting market demand (including recessions, civil disorder and
public, occupies three brownstone buildings in midtown Manhattan terrorism), foreign exchange rate movements, adverse weather

conditions, and seasonality in that many of SCL’s hotels and tourist from SCL or managed on its behalf, 780,000 TEU leased-in from
trains are located in the northern hemisphere where they operate GE Capital or managed on its behalf, and 63,000 TEU owned by
at low revenue or close during the winter months. The effect of GE SeaCo. “TEU” means Twenty-foot Equivalent Unit and is the
these factors varies among SCL’s hotels and other leisure industry standard measurement in the container industry; thus, a 40-foot
activities because of their geographic diversity. container constitutes two TEU. Generally increasing with growth
SCL competes for hotel acquisition opportunities with others in world trade in containerizable goods, cargo containers number
who have substantially greater financial resources than SCL. They approximately 13,300,000 worldwide, about 46% of which are
may be prepared to accept a higher level of financial risk than SCL owned by leasing companies. GE SeaCo is one of the largest
can prudently manage. This competition may have the effect of container lessors in the world, and management believes it offers
reducing the number of suitable investment opportunities offered the widest variety of containers for lease, more than 50 different
to SCL and increasing the bargaining power of property owners types.
seeking to sell or to enter into management agreements. Similarly, GE SeaCo’s containers freely interchange among different modes
SCL’s new hotel and tourist train acquisitions may not perform to of transport. The same container, without in-transit repacking of
SCL management's expectations. its contents, may be carried successively on ships, railroad cars and
SCL’s owned hotels are also subject to conditions generally road trailers. Containers are registered with government
incident to the ownership of commercial real estate and often authorities to permit crossing international frontiers with minimum
beyond SCL’s control, such as changes in national, regional and local customs formalities. They are constructed primarily of steel and
economic and political conditions, local real estate market are built to the recommendations of the International
fluctuations, changes in interest rates and in the availability, cost and Standardization Organization (“ISO”) and other regulatory bodies.
terms of financing, the impact of present or future governmental Substantially all of GE SeaCo’s containers have been built to
legislation and regulations (including environmental laws), the comply with the International Convention for Safe Containers
ongoing need for capital improvements to maintain or upgrade (“CSC”) which requires container owners to obtain type approvals
properties, changes in property taxes and operating expenses, and of their equipment from independent agencies.
the potential for uninsured or underinsured losses. The basic container type is the standard dry freight cargo
container having dimensions of 20 ft. or 40 ft. x 8 ft. x 8 ft. 6 in.
Container Leasing Refrigerated containers carrying perishables, tank containers for
SCL conducts its container leasing activities principally through liquid, powder or gaseous substances, and platforms and flatracks
GE SeaCo SRL (“GE SeaCo”), a joint venture company established for oversized, awkward or heavy cargos are examples of containers
May 1, 1998 with General Electric Capital Corporation built for specialized uses. GE SeaCo also leases non-ISO
(“GE Capital”) on effectively a 50/50 basis. GE SeaCo was formed intermodal containers principally to inland transport operators
to combine the separate marine container leasing activities of SCL such as railroads and truckers, as well as wheeled chassis for road
and GE Capital and thereby to save costs and to acquire new haulage of containers. GE SeaCo routinely sells older containers
equipment jointly. See Note 2(b) to the Financial Statements no longer suitable for its leasing activities.
regarding initial capitalization of GE SeaCo. SCL and GE Capital
have each appointed four persons to the governing board of Leasing Terms
GE SeaCo, and SCL personnel serve as most of GE SeaCo’s Equipment is leased for periods ranging from a few months to
officers including President and Chief Financial Officer. several years. Substantially all of the leases are operating leases
Substantially all of the container fleets of SCL and GE Capital on where the owner retains the residual value of the containers at the
May 1, 1998 are being leased-in to GE SeaCo on an operating basis, end of the term. GE SeaCo also engages to a limited degree in
and GE SeaCo in turn leases the units out to customers. Profits finance leasing where the lessee pays the full cost of the equipment
from the existing fleets after lease payments to the owners are during the term and obtains title at the end of the lease.
distributed 70% to GE Capital and 30% to SCL, reflecting the larger Operating leases are in four basic forms: long-term leases, short-
size of GE Capital’s fleet. Once a container reaches a certain age term leases, master agreements and rate agreements. These
or condition, it is managed by GE SeaCo for the owners, sold at require customers to pay rent monthly and to return the
the owner’s request or purchased by GE SeaCo. GE SeaCo itself equipment at agreed locations. The first two types cover specified
purchases new additions to the combined fleet. Profits from the containers for a definite term. Master agreements set forth the
containers owned and managed by GE SeaCo are divided 50/50 in rental rate and other basic terms and permit customers to pick up
proportion to each participant’s interest in GE SeaCo. and return equipment at their option and in minimum or maximum
quantities up to the end of the lease. Master agreements impose
GE SeaCo Container Activities handling, pick-up and drop-off charges for each delivery and return.
At December 31, 1999, GE SeaCo had approximately 1,092,000 Rate agreements are similar to master agreements except that on-
TEU of containers in its fleet, comprising 249,000 TEU leased-in hire and off-hire terms are agreed at each equipment delivery.

Purchasing GE SeaCo maintains computerized records of every unit, whether
Most of the containers in GE SeaCo’s fleet were purchased new from on lease or off hire. Equipment on lease is checked regularly
manufacturers. GE SeaCo also acquires existing containers from through rent billing and collection procedures. Agents and
customers or other lessors from time to time. The cost of equipment repair/storage depots are responsible for the safekeeping and
is typically financed by banks or other financial institutions. GE SeaCo maintenance of equipment when off hire. Customers are able to
has arranged its own $200,000,000 container finance facility, guaranteed access GE SeaCo’s computerized records for informational
50% by SCL and 50% by GE Capital, to fund its container purchases. purposes directly through its internet website.
See also Notes 5 and 7 to the Financial Statements, and “Certain
Financial Requirements” in the Management’s Discussion and Analysis Competition
(Item 7 below). The container leasing business is highly competitive. GE SeaCo
During 1999, GE SeaCo took delivery of newly manufactured competes with eight major leasing companies and several other
containers and related equipment at an aggregate cost of approximately smaller lessors, as well as manufacturers of container equipment,
$114,000,000. At year end, GE SeaCo had approximately $60,000,000 companies offering finance leases (as distinct from operating
of outstanding purchase orders for container equipment, substantially leases), promoters of container ownership and leasing as a tax
all of which was available for delivery in 2000. It is GE SeaCo’s practice shelter investment, container shipping lines (which lease out their
to order equipment when indicative lease rates and other terms justify excess stocks of containers from time to time) and suppliers of
purchase and appropriate financing is in place. alternative types of equipment for freight transport. Competition
among container lessors depends upon several factors, including
Maintenance and Engineering lease rates, the availability and quality of equipment, and customer
GE SeaCo’s leases require customers to maintain equipment service. See “Certain Trading Factors” below. GE SeaCo considers
properly while on lease, including periodic inspection and safety its ability to offer a wide range of standard and specialized
maintenance in compliance with CSC, and upon return to pay the container equipment, its technical expertise in tailoring specialized
cost of repairs to GE SeaCo’s “SeaWorthy” repair standard. containers to customers' needs, and its strong container
GE SeaCo offers a container damage program (called “SeaCover”) management controls to be important advantages in this
under which a lessee pays a supplemental charge during the lease competitive environment.
in return for GE SeaCo assuming repair responsibility at the end of
the term. GE SeaCo contracts with approximately 250 depots Other Container Activities
worldwide for container repair and storage services including SCL manufactures, assembles and refurbishes containers at three
those owned by SCL. See “Other Container Activities” below. locations in Yorkshire, England, and a fourth location in Charleston,
GE SeaCo’s engineers oversee the repair and storage depots and South Carolina. Collectively, SCL built approximately 6,000 TEU of
the factories from which new containers are sourced. They are containers in 1999. SCL also owns and operates depots for
also responsible for developing new container designs, most repairing, servicing and storing containers in Singapore; Santos,
recently the “SeaCell”, a dry cargo container in which pallets can Brazil; Charleston, South Carolina; and Houston,Texas, and holds
be loaded side by side unlike conventional containers. GE SeaCo’s minority interests in depots in Auckland, New Zealand, and
engineers consult regularly with lessees on equipment matters and Melbourne, Australia. It operates small refrigerated container
have produced many operating and technical manuals regarding the servicing and spare parts businesses in the U.S., Belgium, Brazil,
specialized containers in GE SeaCo’s fleet. Singapore, Australia and New Zealand. Each of these facilities
conducts business with both GE SeaCo and third parties on arm’s
Customers and Marketing length terms. Former SCL factories in Singapore and Santos are
GE SeaCo had leased equipment to about 800 customers at being used principally for depot purposes.
December 31, 1999. Principal lessees are ocean carriers based outside In addition, SCL owns a small number of containers (12,000 TEU
the United States which may also own large parts of their container at December 31, 1999) which are not part of the GE SeaCo joint
fleets. Substantially all of GE SeaCo’s container leasing revenue and venture but which SCL continues to lease out directly to
operating profit is derived from non-U.S. operations. See Note 18 to customers.
the Financial Statements. No customer accounted for more than ten
percent of SCL’s consolidated revenue in 1999. Certain Trading Factors
GE SeaCo markets its equipment for lease or sale through a Demand for leased containers depends largely on levels of
network of 41 agents covering more than 94 countries. GE SeaCo economic growth and international trade, both global and regional.
owns 18 of these agents located in primary areas of container activity Cyclical recessions can negatively affect lessors' operating results
worldwide. Agents are compensated through commissions based on because, during economic downturns, ocean carriers tend to lease
rental or sale revenue they generate and are guided by central fewer containers and rely more on their owned fleets to satisfy a
GE SeaCo marketing staff. greater percentage of their requirements. Thus, a slowdown in

economic growth or trade may adversely affect the results of may be restrained when demand is strong or may not be realized
GE SeaCo’s and SCL’s container activities. There can be no by the time equipment is delivered.
assurance that such cyclical downturns will not occur in the leasing From time to time, GE SeaCo and SCL sell equipment that was
industry in the future. previously leased. The decision whether to sell depends on the
Other factors affecting demand for leased containers include the equipment’s book value, condition, remaining useful life and
available supply and prices of new and used containers (including suitability for continued leasing or for other uses, as well as
the market acceptance of new container types and overbuying by prevailing local market sale prices and an assessment of the
competitors), economic conditions and competitive pressures in economic benefits of repairing and continuing to lease compared
the shipping industry (including containership fleet capacity, freight to those of selling. Because these factors vary, gains or losses on
rates and expansion, consolidation or withdrawal of individual sale of equipment will also fluctuate and may be significant if the
customers in the industry), shifting trends and patterns of cargo decision is made to sell large quantities of units.
traffic, the availability and terms of equipment financing, fluctuations In certain countries like the United States, the owner of a leased
in interest rates and foreign currency values, import/export tariffs container may be liable for the costs of environmental damage
and restrictions, foreign exchange controls, other governmental from discharge of container contents even though the owner is not
regulations and political or economic factors that are inherently at fault. GE SeaCo and SCL maintain insurance against property
unpredictable and may be beyond GE SeaCo’s and SCL’s control. damage and third party liability and require lessees to obtain
Defaults by lessees may result in containers being lost or similar insurance and to provide indemnity against loss. There can
returned at locations where GE SeaCo or SCL cannot efficiently be no assurance, however, that such insurance or indemnity will
re-lease or sell the equipment. In that event, GE SeaCo or SCL protect GE SeaCo or SCL fully against damage stemming from this
may lose lease revenue and incur additional operating expenses in risk.
repossessing, repairing and repositioning the equipment. In recent In recent years, countries have imposed limitations on the
years, defaults by lessees as measured by allowances for specific production of chlorofluorocarbon (“CFC”) refrigerants because of
doubtful accounts have not been material as a percentage of annual their ozone depleting and global warming effects. As a result,
container leasing revenue. substantially all refrigerated containers in the GE SeaCo fleet
If lessees return equipment to locations where supply exceeds acquired since 1992 have been charged with non-CFC refrigerant
demand, GE SeaCo routinely repositions containers to higher gas, and GE SeaCo and SCL are converting older units over time
demand areas. Repositioning expenses vary depending on to non-CFC gas. Future regulation might require refrigerated
geographic location, distance and other factors, and may not be containers using CFCs to be retrofitted with non-CFC refrigerants.
fully covered by drop-off charges collected from the last lessees of In that event, GE SeaCo or SCL would have to bear all or a large
the equipment. portion of the cost to convert their units. While no assurance can
Container leasing revenue is variable and is largely a function of be given in this regard, management does not believe that this
lease rates and equipment utilization and availability. Rates depend expense would be material in relation to SCL’s financial position.
on the type and length of lease, the type and age of equipment, and
the application of the SeaWorthy and SeaCover programs to Other SCL Activities
equipment maintenance obligations under the lease. Lease rates As noted above under “Passenger Transport”, SCL owns three
rise or fall depending on competition, new container prices, ports in Great Britain occupying approximately 350 acres,
economic conditions and the other factors described above. In substantial parts of which are undeveloped. In addition, SCL owns
recent years, rates generally in the leasing industry have tended to approximately 300 acres of land (including reclaimable tidal areas)
decline and may continue to do so. Utilization is the ratio of adjoining the port of Harwich, England. Because most of this
containers on lease to the total container fleet and may also property is located in the prosperous southeastern region of
fluctuate due to these same factors. Since the time GE SeaCo was Britain within 80 miles of London and near good road and railway
formed, for example, overall fleet utilization has declined principally connections, management believes it can be developed in stages
because of consolidations among shipping lines and because of the over time for commercial and residential purposes. Appropriate
trade imbalance with Asia resulting in high equipment returns in cost, engineering and marketing studies have been performed
Europe and North America. In order to meet anticipated demand relating to the development potential of Newhaven and Harwich,
promptly, GE SeaCo maintains inventories of available containers at and outline planning permission has been granted by the local
various depots worldwide. Because demand is difficult to estimate, government authorities. Each project could encompass residential
however, these inventories may be insufficient, and repositioning units and supporting services as well as commercial, office or light
equipment in a timely manner to meet demand may not be industrial buildings. No significant construction is planned in 2000,
economically feasible. Also, container supply from manufacturers, however, other than to commence building 64 residential units in
including SCL’s factories, involves a time delay between order Newhaven. Parts of these sites are being offered for sale to third
placement and equipment delivery, as a result of which revenue parties for their own development projects.

On a smaller scale, SCL has developed in stages over three years Item 2. Properties
a 3.5-acre riverside site acquired in 1996 in Bradford-on-Avon near
Bath, England, as 59 medium-priced residential units, 54 of which The ships, hovercraft, ports and harbor facilities of SCL (including
were sold in 1998 and 1999 and five either have been sold or development land) are described in Item 1 - Business above. The
remain for sale in 2000. During 1999, SCL began redevelopment of SCL subsidiaries engaged in the ferry business own or lease small
a 19-acre former college estate near Arundel Castle on the south operating offices and sales outlets at various locations in Britain
coast of England and plans to convert the buildings to 55 and elsewhere in Europe. SCL leases substantially all of its GNER
residential units in various price categories. First sales are rolling stock, stations and depots as described in Item 1.
expected in 2000. In 1998, SCL completed the four-year SCL owns 18 hotels, three European tourist trains, a cruiseship, a
construction and sale of 64 medium-priced residential units on 2.4 restaurant and two fruit farms as described in Item 1. The small
waterside acres in Portsmouth, England. regional sales and marketing offices of the hotels, tourist trains and
SCL manages a 420,000 net square foot modern office building in cruiseship are occupied under lease.
London, England, called “Sea Containers House” fronting the south SCL owns cargo containers and container factories and depots
bank of the Thames. SCL formerly owned and developed the (except the Singapore facilities and the Charleston, South Carolina,
building and sold it in 1988. SCL retained a long-term lease of part factory which are located on leased premises) as described in Item
of the space for occupancy by London-based employees of 1. In addition, SCL leases regional offices in the following locations
subsidiaries. in connection with its container and other business activities: New
SCL also owns undeveloped commercial land in Houston,Texas, York, New York;Washington, D.C.; San Francisco, California;
adjoining its container repair depot at that location. The land is London, England; Genoa, Italy; and Sydney, Australia.
zoned for light industrial use and has been sold in lots over the
years to developers. In 1999, SCL completed paving roads and
installing utilities at the site and has since sold about six acres. Item 3. Legal Proceedings
Approximately 54 acres of the original 172-acre tract remain for
sale. SCL is not party to any material pending legal proceedings.
In fruit farming, SCL owns a 70% interest in a 750-acre banana
plantation located near Abidjan, Ivory Coast, which produces about
10,000 tons annually for export principally to Europe. Production Item 4. Submission of Matters to a Vote of
has been expanded over the years by introduction of a new banana Security Holders
type grown extensively in Central America and through better
farming techniques. Capital expenditure is funded from the The Company submitted no matter during the fourth quarter of
plantation’s profits. SCL also owns a 650-acre table grape farm in 1999 to a vote of security holders.
northeastern Brazil near Petrolina. It produces two crops each
year for sale on the domestic and export markets. Current output
is about 3,000 tons annually and the farm includes substantial
unused acreage for future cultivation.
SCL owns a British magazine called “The Illustrated London
News” (“ILN”) which has been published continuously since 1842.
At present, two editions of the magazine are produced annually
with about one-half of the circulation in Britain and one-half
abroad. In addition, ILN publishes the on-board magazines for
SCL’s ferries and GNER and the guest magazines for SCL’s hotels
and tourist trains, as well as other limited-circulation publications
for third parties under contract.
SCL owns Fairways and Swinford Travel Ltd., a small licensed
travel agency and tour operator based in London, which supports
SCL’s leisure industry activities and corporate travel requirements.

Part 11
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters
The principal market on which the Class A and B common shares of the Company are traded is the New York Stock Exchange. Both
classes are also listed on the Pacific and London Stock Exchanges. The following table presents the quarterly high and low sales prices of
the common shares in 1999 and 1998 as reported for New York Stock Exchange composite transactions (in U.S. dollars):
1999 1998
High Low High Low
$ $ $ $
Class A Common Shares
First quarter 30 20 3⁄4 39 27
Second quarter 39 25 9⁄16 44 3⁄4 35 1⁄16
Third quarter 34 27 5⁄8 41 5⁄16 22 1⁄2
Fourth quarter 32 3⁄16 23 3⁄4 32 5⁄8 19
Class B Common Shares
First quarter 29 7⁄8 22 1⁄4 38 11⁄16 27
Second quarter 38 3⁄4 26 44 1⁄2 35
Third quarter 34 28 ⁄16
7
41 ⁄16
5
23
Fourth quarter 32 24 1⁄4 32 3⁄8 20 3⁄4
The Company paid cash dividends on its Class A and B common due on its preferred shares. See Note 12(a) to the Financial
shares during the third and fourth quarters of 1999 at the Statements.
quarterly rates of $0.30 per Class A share and $0.27 per Class B The Islands of Bermuda where the Company is incorporated have
share, during the first and second quarters of 1999 and the third no applicable governmental laws, decrees or regulations which
and fourth quarters of 1998 at the quarterly rates of $0.25 per restrict the export or import of capital or affect the payment of
Class A share and $0.22725 per Class B share, and during the first dividends or other distributions to non-resident holders of the
and second quarters of 1998 at the quarterly rates of $0.1925 per Class A and B common shares of the Company or which subject
Class A share and $0.175 per Class B share. United States holders to taxes.
The Company is party to certain credit facilities which restrict At March 15, 2000, the number of record holders of the Class A
the Company’s ability to pay dividends on its Class A and B and B common shares of the Company was approximately 1,600
common shares and which also impose debt/equity ratio, minimum and 300, respectively.
shareholders’ equity and other financial requirements which may
restrict payment of dividends. The Company is in compliance with
all of these restrictions. See Note 14(f) to the Financial Statements
(Item 8 below), and “Certain Financial Requirements” in the
Management’s Discussion and Analysis (Item 7 below).
In addition, the terms of the Company’s $7.25 convertible
cumulative preferred shares contain restrictions on the payment of
dividends on its Class A and B common shares if accrued dividends
or the mandatory redemption of the preferred shares have not
been paid. The Company is current in the payment of all amounts

Item 6. Selected Financial Data
Year ended December 31, 1999 1998 1997 1996 1995
$000 $000 $000 $000 $000
Revenue 1,339,069 1,266,533 1,157,461 868,726 500,735 (1)

Net earnings on Class A
and Class B common shares before
cumulative effect of change in
accounting principle 60,564 54,265 27,773 15,032 91,659
$ $ $ $ $
Net earnings per Class A
and Class B common share before
cumulative effect of change in
accounting principle:
Basic 3.30 3.34 2.07 1.20 8.27
Diluted 3.27 3.11 2.07 1.20 6.54
Cash dividends per
Class A common share 1.10 0.885 0.77 0.77 0.77
Cash dividends per
Class B common share 0.9945 0.8045 0.70 0.70 0.70
$000 $000 $000 $000 $000
Total assets 2,515,417 2,314,455 2,126,100 2,026,220 1,711,360
Long-term obligations 1,700,285 1,510,278 1,365,565 1,270,288 1,091,142
Redeemable preferred shares 15,000 15,000 35,700 44,100 55,224
Shareholders’ equity 470,481 459,555 387,578 386,626 341,621
(1) Does not include $100,000,000 gain on sale of ferry assets.
See notes to consolidated financial statements (Item 8).

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources

At December 31, 1999, SCL’s cash balances totalled $103,763,000. Additionally, there were undrawn working capital bank lines amounting
to approximately $72,000,000, of which $34,000,000 was undrawn under secured revolving credit facilities. Changes in the cash position
over the last three years can be summarized as follows:
1999 1998 1997

$000 $000 $000
Cash provided from operations, after interest 110,606 154,367 152,197

Proceeds from sale of fixed assets and other 21,113 6,868 15,140
Proceeds from issuance of long-term debt 143,717 157,009 225,537
Issuance of shares 1,706 48,049 423
Proceeds from issuance of senior notes 110,611 146,762 -
387,753 513,055 393,297
Capital expenditures (158,423) (153,666) (234,486)

Acquisitions and investments, net of cash
acquired (159,206) (83,888) (9,533)
Repayment of long-term debt (53,913) (53,234) (57,875)
Debentures redeemed - (10,000) (3,000)
Redemption of preferred shares - (36,497) (8,400)
Dividends on shares (21,054) (18,715) (24,441)
(4,843) 157,055 55,562
Working capital facilities and redrawable
loans drawn/(repaid) 7,860 (142,880) (64,868)
Effect of exchange rate on cash (3,982) (88) (3,014)
(Decrease) / increase in cash (965) 14,087 (12,320)
In 1999, SCL had a positive cash flow from operations (after mainly due to increased earnings from passenger transport, leisure
interest) of $110,606,000 (1998 - $154,367,000, 1997 - and container operations, offset in part by increases in net finance
$152,197,000) and proceeds from the sale of fixed assets and others costs and working capital requirements.
of $21,113,000 (1998 - $6,868,000, 1997 - $15,140,000), all of which Proceeds from bank borrowings in 1999 amounted to
were principally utilized to make loan repayments and fund capital approximately $144,000,000 (1998 - $157,000,000, 1997 -
expenditures, acquisitions and dividends, as was the case in 1998 and $225,000,000), of which $5,000,000 (1998 - $24,000,000, 1997 -
1997. Cash flow from operations decreased in 1999 from 1998 $105,000,000) was drawn under loans secured by containers and
mainly due to reduced earnings from container operations, an related factory and depot assets, repayable mainly over five to ten
increase in net finance costs, and increased working capital and years, $77,000,000 (1998 - $43,000,000, 1997 - $75,000,000) was
undistributed earnings of affiliates (including the Neptun Maritime drawn under loans secured by passenger transport assets, repayable
investment), offset in part by increased earnings from passenger over five to ten years, and $62,000,000 (1998 - $90,000,000, 1997 -
transport and leisure operations, including acquisitions in 1999 and $45,000,000) was drawn under term loans mainly secured by leisure
1998. Cash flow from operations increased in 1998 from 1997 and other assets and investments, repayable over five to seven years.

In 1999, the Company issued and sold at a discount One is a $239,600,000 revolving credit facility secured by
$115,000,000 principal amount of unsecured 103/4% senior notes container equipment and a hotel entered into in 1994 with a group
due 2006, and 40,000 Class A common shares for $1,300,000 of banks. This facility is the successor to substantially similar ones
cash pursuant to an SEC registered shelf offering. In 1998, the secured by containers which have been in place since 1982 and
Company issued and sold at par $150,000,000 principal amount under which the revolving loan commitment period has been
of unsecured 77/8% senior notes due 2008 and, in connection with regularly extended, most recently in July 1999 to the present 2004
the completion of the GE SeaCo joint venture, the Company date. Consistent with past practice, management expects this date
issued and sold to General Electric Capital Corporation 391,200 to be further extended, although no assurance can be given in this
Class A common shares of the Company for $10,000,000 cash, respect. The facility imposes financial covenants on SCL, including
and 150,000 $7.25 convertible cumulative preferred shares for (i) a requirement to maintain a minimum consolidated tangible net
$15,000,000 cash. Also in 1998, the Company issued and sold worth, as defined (including preferred shares), (ii) a requirement
672,000 Class A common shares pursuant to an SEC registered not to exceed a specified leverage ratio, as defined,
shelf offering realizing cash proceeds of $23,000,000. (iii) requirements to maintain a minimum debt service coverage
In 1998, the Company voluntarily redeemed all of its ratio and minimum interest coverage ratios, as defined, (iv) a
outstanding $1.4625 cumulative preferred shares, $2.10 requirement that a minimum ratio of fixed assets employed in the
cumulative preferred shares, series 1982, and $4.00 convertible container, passenger transport and related businesses to total fixed
cumulative preferred shares at an aggregate cash cost of assets be maintained, (v) a requirement that SCL not suffer losses
$36,497,000. Substantially all of the convertible preferred shares in any two consecutive years, and (vi) limitations on the payment of
were converted into Class A or B common shares of the dividends, redemption of capital stock or subordinated
Company. These 1998 redemptions resulted in preferred share indebtedness, and investments in third parties, which limitations are
dividend savings of $10,537,000 in 1998. On December 31, 1997, calculated by reference to the sum of a base amount, one-half of
the Company voluntarily redeemed 460,000 $2.10 preferred cumulative net earnings from 1992, and the net proceeds from
shares at a cost of $6,900,000. certain capital stock offerings, less the cumulative amounts of certain
In 1999, SCL made capital expenditures totalling approximately restricted payments and repurchases of preferred shares and
$159,000,000 relating primarily to the purchase and improvement subordinated debt, and less certain investments in unrelated parties.
of passenger transport assets and leisure assets. The majority of The $125,000,000 principal amount of unsecured 121/2% senior
these expenditures was financed from medium or long-term bank subordinated debentures due 2004 contain convenants restricting
borrowings. Also in 1999, SCL purchased a 50% shareholding in (i) the incurrence by SCL of indebtedness unless SCL meets a
Neptun Maritime Oyj for $102,800,000 which was funded initially minimum cash flow coverage ratio, as defined, (ii) the payment of
through a bank bridging facility and later refinanced by the issue dividends, redemption of capital stock or subordinated
of the 103/4% senior notes referred to above. SCL acquired in indebtedness, and investments in third parties (which restriction is
1999 two hotels at a total price of $25,500,000, funded in part by similar to the equivalent one in the container facility described
a bank loan, and made 50% investments in two hotels and rail above), (iii) transactions between SCL and its affiliates unless they
operations in Peru at an aggregate cost of $11,750,000. are on arm's-length terms, (iv) limitations on the ability of certain
Capital expenditures in 2000 are expected to be at a lower material subsidiaries of SCL to make payments to SCL, (v) the
level than 1999. SCL management believes these will be disposition of proceeds of asset sales by SCL, (vi) any lines of
adequately financed from debt and lease financings, operating cash business that are not similar or related to SCL’s existing businesses,
flows and other sources. The purchase of two SeaCats referred and (vii) the ability of SCL to amalgamate, consolidate or merge
to in Note 2(a) to the Financial Statements (Item 8 below) will be with or into another entity or to dispose of its assets substantially
funded in substantial part by lease financings. The purchase of as an entirety. If SCL fails to maintain a specified amount of
two hotels in Australia in March 2000 was financed in substantial consolidated tangible net worth, as defined, or if a change of
part by a bank loan (see Note 20 to the Financial Statements). control, as defined, of SCL occurs, SCL is obligated to make an
The Company filed an SEC registration statement in March 2000 offer to purchase 10% of the debentures at par in the case of the
for a shelf offering under Rule 415 of unsecured debt securities net worth test and 100% of the debentures at 101% of the
up to an aggregate principal amount of $300,000,000, including principal amount in the case of a change of control.
additional 103/4% senior notes due 2006, but has no present plans The $100,000,000 principal amount of 91/2% senior notes due
to issue additional public debt. 2003, $65,000,000 principal amount of 101/2% senior notes due
2003, $150,000,000 principal amount of 77/8% senior notes due
Certain Financial Requirements 2008 and $115,000,000 principal amount of 103/4% senior notes
SCL is party to material credit/financing agreements described in due 2006 (all unsecured obligations) contain restrictive covenants
Notes 7 and 8 to the Financial Statements which impose certain substantially the same as those in the 121/2% debentures described
financial requirements. above. In addition, the notes contain covenants restricting (i)

incurrence by SCL of liens on its assets or property unless the The acquisition by SCL of new assets and properties, both for
notes are secured equally, subject to certain exceptions, and (ii) growth as well as for replacement, is capital intensive. The
sale and leaseback transactions by SCL, subject also to certain availability of new capital to finance these expenditures depends
exceptions. on prevailing market conditions and the acceptability of financing
In 1998, an SCL subsidiary completed a $350,000,000 container terms offered to SCL. Management believes that capital
securitization facility, which increased and restructured a similar expected to be available under various lines of credit, financing
facility established in 1996. Under it, the SCL subsidiary issued a agreements and other sources, and from dispositions of existing
senior note and the Company issued an effectively subordinated assets and properties, as well as cash generated from operations,
note. The senior note requires the SCL subsidiary to maintain a should be sufficient to meet SCL’s capital requirements for the
minimum interest coverage ratio, as defined, and requires SCL to foreseeable future. No assurance, however, can be given that
maintain a minimum cash flow coverage ratio, as defined. Failure to financing will continue to be available, or available on attractive
comply with these requirements will result in accelerated terms.
amortization, but not default, of the senior note. A change of Approximately 70% of SCL’s consolidated long-term
control, as defined, of SCL will also accelerate the senior note. The indebtedness at December 31, 1999 (1998 - 70%, 1997 - 77%)
subordinated note requires that SCL not exceed a specified accrued interest at rates that fluctuate with prevailing interest
leverage ratio, as defined. While no assurance can be given, rates and, accordingly, increases in such rates may increase SCL’s
management expects the term of the senior and subordinated interest payment obligations. From time to time, SCL enters
notes under this securitization facility will be extended in 2000. into hedging transactions with financial institutions in order to
In May 1998, SCL issued a guaranty of 50% of GE SeaCo’s manage its floating interest rate exposure. See Item 7A -
obligations under a $200,000,000 revolving credit and term loan Quantitative and Qualitative Disclosures about Market Risk
facility that GE SeaCo established with a syndicate of banks to below.
finance the purchase of containers. The guaranty imposes no Substantial portions of SCL’s revenues and expenses are
financial covenants on SCL, but does require it to subordinate its denominated in foreign currencies, especially the British pound
loans to GE SeaCo. sterling because a large part of SCL’s passenger transport
At December 31, 1999, SCL was in full compliance with all of the business operates in and around Great Britain and because
foregoing credit/financing agreements as well as less material ones certain corporate costs and selling, general and administrative
to which it is a party. Although management believes that SCL’s expenses of SCL relate to its London offices. Fluctuations in the
current operating plans will not be restricted by the various values of these currencies in U.S. dollar terms may affect SCL’s
financial convenants described above, changes in economic or financial condition and results of operations. The impact of
business conditions, results of operations or other factors may in these fluctuations is mitigated to the extent that SCL has both
the future result in circumstances in which the convenants restrict revenue and expenses denominated in the same currencies. If
SCL’s plans or business operations. revenue and expense items become imbalanced, SCL may enter
into forward foreign exchange contracts from time to time in
Leverage; Foreign Currency Fluctuations order to hedge the imbalance. See Item 7A below.
At December 31, 1999, SCL’s consolidated long-term indebtedness
was $1,700,285,000 (1998 - $1,510,278,000, 1997 - Results of Operations (1999 compared to 1998,
$1,365,565,000) and its redeemable preferred shares and and 1998 compared to 1997)
consolidated shareholders’ equity totalled $485,481,000 (1998 - Revenue
$474,555,000, 1997 - $423,278,000). Redeemable preferred shares The revenue increases of $72,536,000 in 1999 and $109,072,000
amounted to $15,000,000 (1998 - $15,000,000, 1997 - in 1998 included an increase of $23,837,000 and a decrease of
$35,700,000). The terms of SCL’s indebtedness described above $341,000, respectively, from equity in the earnings/losses of
permit SCL to incur substantial additional indebtedness from time unconsolidated companies. Of the remaining increase of
to time. The degree to which SCL is highly leveraged may affect its $48,699,000 in 1999 and $109,413,000 in 1998, $62,130,000 and
ability to obtain additional financing in the future for working $84,668,000 related to passenger transport operations and
capital, capital expenditures, product and service development and $20,746,000 and $27,364,000 related to leisure operations, partly
general corporate purposes, to utilize cash flow from operations offset by reductions of $34,082,000 and $1,916,000 in container
for purposes other than debt service, and to overcome seasonal or operations and $95,000 and $703,000 in other operations.
cyclical variations in its business. The ability of SCL to satisfy its The increase in the equity in the earnings/losses of
obligations and to reduce its debt is dependent upon the future unconsolidated companies in 1999 ($23,837,000) included
performance of SCL, which will be subject to prevailing economic GE SeaCo and the 50% investments made in 1999 in Neptun
conditions and to financial, business and other factors, including Maritime Oyj, two hotels in Peru and the PeruRail operation (see
factors beyond the control of SCL. Note 2(b) to the Financial Statements).

The passenger transport revenue increase of $62,130,000 in 1999 container leasing activities were wholly owned. In 1998,
included $46,100,000 from Hoverspeed’s cross-Channel services, substantially all of the SCL fleet was on lease to GE SeaCo for
including $15,000,000 from the new service between Newhaven eight months of the year.
and Dieppe and $33,200,000 from the Dover-Ostend service Revenue from other operations decreased by $95,000 in 1999
(which was not consolidated until July 1999; see Note 2(a)), and and by $703,000 in 1998, with the decrease in 1998 arising mainly
$17,300,000 from GNER (if adjusted for the adverse effect in 1999 from property-related activities.
of the strengthening of the U.S. dollar against the British pound,
GNER revenue would have increased by $31,500,000). These Depreciation and Operating Expenses
increases were partly offset by reduced revenue from other Depreciation and operating expenses increased in the aggregate in
passenger transport activities of $1,270,000 after taking account of 1999 by $74,508,000 (an increase as a percent of revenue from
revenue increases from the new Irish Sea services and from the 73% to 75%) and in 1998 by $85,332,000 (an increase as a percent
recently acquired New York harbor services. of revenue from 72% to 73%), of which an increase of $74,803,000
The passenger transport revenue increase in 1998 of $84,668,000 in 1999 and $57,839,000 in 1998 related to passenger transport
arose primarily from GNER operations ($57,000,000), the Irish Sea operations. The 1999 increase in passenger transport operations
services ($12,000,000) and the Gothenburg-Frederikshavn service primarily related to SCL’s cross-Channel services ($46,000,000,
($4,000,000) and port operations ($2,000,000). including $13,700,000 from the Newhaven-Dieppe service and
The 1999 revenue increase of $20,746,000 from leisure $27,700,000 from the Dover-Ostend service) and GNER
operations included $22,919,000 relating to SCL’s hotels and ($19,300,000, including the beneficial effect of $12,000,000 due to
restaurants offset by reduced revenue of $2,173,000 from tourist the strengthening of the U.S. dollar against the British pound)
train and cruise operations. The increase in hotel operations together with $9,500,000 from other passenger transport
included $13,900,000 from Hotel Quinta do Lago and Lapa Palace activities. The 1998 increase in passenger transport operations
Hotel (acquired in 1998) and Keswick Hall Hotel and Inn at Perry primarily related to GNER ($42,000,000), the Irish Sea services
Cabin (acquired in 1999) with the balance mainly due to the North ($8,000,000) and the Gothenburg-Frederikshavn service ($4,000,000).
American and Italian properties, partly offset by the Copacabana Leisure expenses increased by $5,075,000 in 1999, of which
Palace Hotel reflecting the devaluation of the Brazilian real. $6,369,000 related to SCL’s hotels and restaurants offset by a
The 1998 revenue increase of $27,364,000 from leisure $1,294,000 decrease from tourist train and cruise operations. The
operations included $21,062,000 relating to SCL’s hotels and increase in hotel and restaurant costs included $7,600,000 relating to
restaurants and $6,302,000 to tourist train and cruise operations. Hotel Quinta do Lago and Lapa Palace Hotel (acquired in 1998) and
The increase in hotel operations included $19,548,000 from the Keswick Hall Hotel and Inn at Perry Cabin (acquired in 1999) together
Hôtel de la Cité (acquired in 1997), the Westcliff, Hotel Quinta do with the North American and Italian properties, partly offset by reduced
Lago and Lapa Palace Hotel (acquired in 1998) and $12,964,000 costs from the other hotel properties, mainly the Copacabana Palace
from the other properties, offset by $11,450,000 due to the Hotel. Leisure expenses increased by $14,111,000 in 1998, of which
absence of the revenue and $5,000,000 sale gain from the Lodge at $11,515,000 related to SCL’s hotels and restaurants and $2,596,000 to
Vail (sold in October 1997). The increase of $12,964,000 from the tourist trains and cruises. The increase in hotel and restaurant costs
other hotels included $5,500,000 from the three Italian hotels and included $11,785,000 for the Hôtel de la Cité, the Westcliff, Hotel
$4,000,000 from the Copacabana Palace Hotel, with the balance Quinta do Lago and Lapa Palace Hotel, all recently acquired.
mainly due to the Windsor Court Hotel and La Samanna. The 1999 decrease of $4,990,000 in container operations mainly
The container division decrease in 1999 of $34,082,000 partly related to reduced depreciation and operating costs on the
reflected the method of accounting for the GE SeaCo joint venture container fleet, partly offset by increased costs from SCL’s
which commenced on May 1, 1998. The rental revenue from the container manufacturing and depot facilities. The 1998 increase of
joint venture was net of costs incurred at the GE SeaCo level of $12,700,000 in container operations mainly related to increased
$7,400,000 for the period. The balance of the decrease mainly costs from SCL’s container manufacturing and depot facilities as a
related to leasing operations reflecting the effect of lower result of increased sales, including to GE SeaCo, partly offset by
utilization and lease rates compared to 1998, partly offset by cost reductions on leasing operations.
increased sales revenue from SCL’s container manufacturing and Depreciation and operating expenses relating to other operations
depot facilities. In 1999, substantially all of the SCL fleet was on decreased by $380,000 in 1999 and increased by $682,000 in 1998.
lease to GE SeaCo.
The container division decrease in 1998 of $1,916,000 reflected Selling, General and Administrative Expenses
net costs incurred at the GE SeaCo level of $17,800,000 for the The decrease in these expenses of $11,041,000 in 1999 (a
period, partly offset by $19,400,000 of sales, including to GE decrease as a percent of revenue from 14% to 12%) and
SeaCo, from SCL’s container manufacturing and depot facilities. $1,126,000 in 1998 (a decrease as a percent of revenue from 15%
Previously such sales were not treated as revenue because SCL’s to 14%) included a decrease of $1,055,000 and an increase of

$9,930,000, respectively, relating to passenger transport operations, effect of change in accounting principle) were $6,299,000 higher
increases of $1,585,000 and $9,753,000, respectively, relating to than in 1998, and earnings before net finance costs increased by
leisure operations and decreases of $11,994,000 and $21,997,000, $9,069,000. The latter increase was made up of $7,564,000
respectively, relating to container operations. from passenger transport operations and $15,359,000 from
The overall decrease of $1,055,000 in passenger transport leisure activities, partly offset by reduced earnings from
operations in 1999 included an increase of $5,900,000 relating to container operations of $13,746,000. The increased profitability
the Dover-Ostend and Newhaven-Dieppe services which was of the passenger transport division in 1999 compared to 1998
more than offset by reduced costs of other transport services, mainly arose from the investment in Neptun Maritime Oyj,
including GNER (mainly the effect of the strengthening of the U.S. offset by reduced earnings on Hoverspeed's cross-Channel
dollar against the British pound). The increase of $9,930,000 in services and the Irish Sea routes. The leisure division
1998 was primarily due to GNER ($7,200,000) and the Irish Sea improvement in 1999 was mainly due to better results from
services ($3,600,000), partly offset by costs recovered from SCL’s hotel activities including the hotels acquired in 1998 and
Hoverspeed’s English Channel joint venture. 1999. The reduction from container operations in 1999
The increase in leisure expenses of $1,585,000 in 1999 mainly compared to 1998 was mainly due to the effect of lower
related to the hotels acquired in 1998 and 1999 together with the utilization and average lease rates.
North American and Italian hotels, partly offset by the Copacabana Net earnings on common shares in 1998 were $26,492,000
Palace Hotel. The increase of $9,753,000 in leisure expenses in higher than in 1997, and earnings before net finance costs
1998 included $5,628,000 for the Hôtel de la Cité, the Westcliff, increased by $24,866,000. The latter increase would have been
Hotel Quinta do Lago and Lapa Palace Hotel, all recently acquired. $31,316,000 if the 1997 earnings and sale gain from the Lodge
The decreased container expense of $11,944,000 in 1999 was at Vail were excluded, made up of $15,507,000 from passenger
mainly due to reduced costs from container leasing operations of transport operations, $9,753,000 from leisure activities and
$13,500,000 (primarily due to costs of SCL incurred in 1998 prior $8,629,000 from container operations, partly offset by reduced
to commencement of the GE SeaCo joint venture). The decreased earnings from other operations of $2,573,000. The increased
container expense of $21,997,000 in 1998 was mainly due to profitability of the passenger transport division in 1998
reduced costs in container leasing operations of $22,700,000 compared to 1997 was mainly due to improvements of GNER
(primarily due to costs of the GE SeaCo joint venture previously and Hoverspeed (including earnings from Hoverspeed's English
incurred by SCL). Channel joint venture). The leisure division improvement
Other operations increased by $373,000 in 1999 and by included $3,221,000 from tourist train and cruise operations,
$1,188,000 in 1998. with the balance from the group's hotel and restaurant
activities. The improvement from container operations in 1998
Net Finance Costs included the effect of the GE SeaCo joint venture operations.
The net finance cost increase of $6,049,000 in 1999 included the
effect of increases in debt relating to the cost of passenger Recent Accounting Pronouncements
transport and leisure asset purchases in 1998 and 1999 and the SCL’s adoption of recent accounting pronouncements is
issue of unsecured senior notes in both years, together with a described in Note 1(n) to the Financial Statements.
decrease in interest and related income of $2,095,000 (including
reduced foreign exchange gains of $1,120,000). Year 2000 Compliance
The net finance cost increase of $6,043,000 in 1998 included the As previously reported, since 1997 SCL has been working to
effect of increases in debt incurred to finance container, passenger prepare its computer systems and embedded technologies for
transport and leisure asset purchases in 1997 and 1998 and the Y2K compliance and also with outside suppliers on resolving
issue of senior unsecured notes in 1998, partly offset by lower their Y2K issues. This program is now substantially complete
interest rates on existing floating rate debt and an increase in and total costs incurred through December 31, 1999
interest and related income of $2,257,000 (including increased ($2,700,000) were not material. To date, SCL has experienced
foreign exchange gains of $3,468,000). no Y2K-related problems and believes that its systems and
technologies and those of its suppliers should continue to
Taxes on Income function properly, although this cannot be guaranteed. SCL will
The income tax charges in 1999,1998 and 1997 related to continue to monitor the potential impact of Y2K issues. An
subsidiaries in taxpaying jurisdictions. No income taxes are levied issue of SCL or one or more of its suppliers or other
in Bermuda which is the Company’s place of incorporation. organizations with which it conducts business that has not yet
been identified or anticipated, or has been identified but not
Net Earnings adequately addressed, may still adversely affect SCL’s business,
Net earnings on common shares in 1999 (before the cumulative financial condition or results of operations.

Item 7A. Quantitative and Qualitative
Disclosures about Market Risk
As noted under “Leverage; Foreign Currency Fluctuations” in the

Management’s Discussion and Analysis (Item 7 above), SCL is
exposed to market risk from changes in interest rates and foreign
currency exchange rates. These exposures are monitored and
managed by SCL as part of its overall risk-management program
which recognizes the unpredictability of financial markets and seeks
to mitigate potentially material adverse effects on SCL’s
consolidated earnings. As part of this management, SCL enters into
interest rate and foreign currency swap contracts and foreign
currency forward exchange contracts from time to time. See Note
17 to the Financial Statements (Item 8 below). SCL does not use
market risk sensitive financial instruments for trading purposes to
any material degree.
The market risk relating to interest rates arises mainly from SCL’s
financing activities. SCL’s earnings are affected by changes in
interest rates on borrowings, principally based on U.S. dollar
LIBOR, and on short-term cash investments. If interest rates
increased by ten percent, with all other variables held constant,
SCL’s annual net finance costs would have increased by
approximately $8,100,000 based on borrowings at December 31,
1999 (1998 - $7,000,000). Changes in interest rates also impact
the fair value of SCL’s fixed-rate debt. If interest rates increased by
ten percent, with all other variables held constant, the fair value of
SCL’s fixed-rate debt would have decreased by approximately
$23,000,000 based on amounts outstanding at December 31, 1999
(1998 - $13,000,000).
The market risk relating to foreign currencies arises from buying,
selling and financing in currencies other than the U.S. dollar,
principally U.K. sterling, European euro, Italian lire, Portuguese
escudos and South African rand. Certain non-U.S. subsidiaries of
SCL borrow in local foreign currencies, and SCL may enter into
forward exchange contracts relating to purchases denominated in
foreign currencies. During 1999, SCL entered into currency swap
agreements converting $115,000,000 into euro 109,630,000 as a
hedge against the euro-denominated investment in Neptun
Maritime Oyj. If relevant foreign currency exchange rates
decreased by ten percent against the U.S. dollar, with all other
variables held constant, the fair value of these foreign currency
financial instruments of SCL would have decreased by
approximately $11,000,000 based on amounts outstanding at
December 31, 1999 (1998 - $5,000,000).

Item 8. Financial Statements and Supplementary Data
Indepedent Auditors’ Report

Consolidated Balance Sheets
December 31, 1999 1998
$000 $000
Assets
Cash 103,763 104,728
Accounts receivable, net of allowances of $22,114 and $17,591 220,764 223,037
Asset sale receivables 29,952 17,957
Advances on asset purchase contracts 11,755 15,273
Containers at cost, less accumulated
depreciation of $462,390 and $424,346 673,517 743,157
Ships at cost, less accumulated depreciation of $103,032 and $87,785 327,036 252,220
Assets under capital leases 15,458 17,845
Real estate and other fixed assets at cost, less accumulated
depreciation of $155,950 and $136,599 729,369 696,659
Inventories 53,249 44,613
Investments 213,641 67,468
Other assets 136,913 131,498
2,515,417 2,314,455
Liabilities and Shareholders’ Equity
Working capital facilities 43,755 39,992
Accounts payable and accrued liabilities 245,809 258,898
Manufacturer accounts payable, notes payable, bank loans and
other purchase obligations in respect of containers 509,703 506,562
Mortgage loans in respect of ships 214,553 165,841
Obligations under capital leases 10,828 15,961
Bank loans in respect of real estate and other fixed assets 412,545 383,129
Senior notes 428,662 315,000
Senior subordinated debentures 123,994 123,785
Deferred revenue and taxes 33,652 24,710
Minority interest 6,435 6,022
2,029,936 1,839,900
Redeemable preferred shares:
Preferred shares $.01 par value (15,000,000 shares authorized):
Issued and outstanding:
150,000 $7.25 convertible cumulative preferred shares
(liquidation value of $100 per share) 15,000 15,000
Shareholders’ equity:
Class A common shares $.01 par value (60,000,000 shares authorized):
Issued - 16,556,733 shares (1998 - 15,921,194) 166 159
Class B common shares $.01 par value (60,000,000 shares authorized):
Issued - 14,706,225 shares (1998 - 15,282,790) 147 153
Paid-in capital 319,816 318,111
Retained earnings 697,721 669,429
Accumulated other comprehensive loss (156,108) (137,036)
Less: reduction due to class B common shares acquired with
voting rights by subsidiaries - 12,900,500 shares at cost (391,261) (391,261)
Total shareholders’ equity 470,481 459,555
Commitments - -
2,515,417 2,314,455
See notes to consolidated financial statements.

Statements of Consolidated Operations
Year ended December 31, 1999 1998 1997

$000 $000 $000
Revenue 1,339,069 1,266,533 1,157,461
Expenses:
Depreciation and amortization 104,706 106,203 103,623
Operating 893,396 817,391 734,639
Selling, general and administrative 159,991 171,032 172,158
Total expenses 1,158,093 1,094,626 1,010,420
Earnings from operations before
net finance costs 180,976 171,907 147,041
Interest expense (net of capitalized interest) (119,019) (115,065) (106,765)
Interest and related income 4,697 6,792 4,535
Net finance costs (114,322) (108,273) (102,230)
Earnings before income taxes and cumulative
effect of change in accounting principle 66,654 63,634 44,811
Provision for income taxes 5,002 4,950 2,793
Earnings before cumulative effect of change
in accounting principle 61,652 58,684 42,018
Cumulative effect of change in
accounting principle (12,306) - -
Net earnings 49,346 58,684 42,018
Preferred share dividends 1,088 4,419 14,245
Net earnings on class A and
class B common shares 48,258 54,265 27,773
$ $ $
Earnings per class A and class B common share:
Basic :
in accounting principle 3.30 3.34 2.07
accounting principle (0.67) - -
Net earnings 2.63 3.34 2.07
Diluted :
in accounting principle 3.27 3.11 2.07
accounting principle (0.65) - -
Net earnings 2.62 3.11 2.07
Dividends per class A common share 1.10 0.885 0.77
Dividends per class B common share 0.9945 0.8045 0.70

Statements of Consolidated Cash Flows

$000 $000 $000
Cash flows from operating activities:
Net earnings on class A and class B common shares 48,258 54,265 27,773
Add non-cash effect of change in accounting principle 12,306 - -
60,564 54,265 27,773
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 104,706 106,203 103,623
Undistributed (earnings)/losses of affiliates
and other non-cash items (20,477) 2,558 (1,623)
Change in assets and liabilities
net of effects from acquisition of subsidiaries:
(Increase)/decrease in accounts receivable (11,990) (10,220) 11,874
Increase in inventories (8,327) (3,994) (6,899)
(Decrease)/increase in accounts payable (14,958) 1,136 3,204
Total adjustments 50,042 100,102 124,424
Net cash provided by operating activities 110,606 154,367 152,197
Cash flows from investing activities:
Capital expenditures (158,423) (153,666) (234,486)
Acquisitions and investments, net of
cash acquired (159,206) (83,888) (9,533)
Proceeds from sale of fixed assets and other 21,113 6,868 15,140
Net cash used in investing activities (296,516) (230,686) (228,879)
Cash flows from financing activities:
Issuance of common shares 1,706 33,049 423
Issuance of preferred shares - 15,000 -
Issuance of long-term debt 143,717 157,009 225,537
Issuance of senior notes 110,611 146,762 -
Principal payments under long-term debt (53,913) (53,234) (57,875)
Payment of preferred share dividends (1,088) (4,419) (14,245)
Payment of common share dividends (19,966) (14,296) (10,196)
Redemption of preferred shares - (36,497) (8,400)
Redemption of debentures - (10,000) (3,000)
181,067 233,374 132,244
Working capital facilities and redrawable
loans drawn/(repaid) 7,860 (142,880) (64,868)
Net cash provided by financing activities 188,927 90,494 67,376
Total cash flows 3,017 14,175 (9,306)
Effect of exchange rate changes on cash (3,982) (88) (3,014)
Net (decrease)/increase in cash (965) 14,087 (12,320)
Cash at beginning of year 104,728 90,641 102,961
Cash at end of year 103,763 104,728 90,641

Statements of Consolidated Shareholders’ Equity
$4.00 Class A Class B

Convertible Common Common Accumulated Common
Cumulative Shares Shares Other Shares Total
Preferred at Par at Par Paid-in Retained Comprehensive Held by Comprehensive
Shares Value Value Capital Earnings Income (Loss) Subsidiaries Income
$000 $000 $000 $000 $000 $000 $000 $000
Balance, January 1, 1997 109,650 113 150 175,748 611,883 (119,657 ) (391,261 )
Issuance of class A common shares
under dividend reinvestment plan - - - 337 - - -
Issuance of common shares
under employee stock option plan - - - 86 - - -
Conversion of convertible preferred
shares to common shares - - - 87 - - -
Dividends on common shares - - - - (10,196 ) - -
Comprehensive income:
Net earnings on common shares
for the year - - - - 27,773 - - 27,773
Other comprehensive loss -
translation adjustment for the year - - - - - (17,135 ) - (17,135)
10,638
Balance, December 31, 1997 109,650 113 150 176,258 629,460 (136,792 ) (391,261 )
Issuance of class A common shares in public
offering and private placement, net
of issuance costs - 11 - 32,543 - - -
Redemption of convertible preferred shares (797 ) - - - - - -
Conversion of convertible preferred shares
to common shares (108,853 ) 28 10 108,815 - - -
Conversion of class A and B
common shares - 7 (7 ) - - - -
for the year - - - - 54,265 - - 54,265
Other comprehensive loss -
translation adjustment for the year - - - - - (244 ) - (244)
54,021
Balance, December 31, 1998 - 159 153 318,111 669,429 (137,036 ) (391,261 )
Issuance of class A common shares in
public offering, net of issuance costs - 1 - 1,302 - - -
Conversion of class A and B
common shares - 6 (6 ) - - - -
for the year - - - - 48,258 - - 48,258
Other comprehensive income -
translation adjustment for the year - - - - - (19,072 ) - (19,072)
29,186
Balance, December 31, 1999 - 166 147 319,816 697,721 (156,108 ) (391,261 )

Notes to Consolidated Financial Statements (f) Government subsidy
Included in operating expenses is an amount received from the
1. Summary of significant accounting policies British government in respect of the passenger rail franchise. In
1999 this amounted to $36,000,000 (1998 - $69,000,000, 1997 -
(a) Principles of consolidation $95,000,000).
The consolidated financial statements include the accounts of (g) Inventories
Sea Containers Ltd. and all majority-owned subsidiaries. All Inventories are valued at the lower of cost or market value under
significant intercompany balances and transactions have been the first-in, first-out method.
eliminated. Unconsolidated companies that are 20 to 50 percent (h) Earnings per share
owned are accounted for on an equity basis. Basic earnings per Class A and Class B common share for each
For purposes of these Notes, the “Company” refers to year are computed by dividing net earnings on Class A and Class B
Sea Containers Ltd., “SCL” refers to Sea Containers Ltd. and its common shares by the weighted average number of common
subsidiaries, and “GE SeaCo” refers to GE SeaCo SRL. shares outstanding (excluding voting shares owned by subsidiaries).
Certain items in 1998 and 1997 have been reclassified to Diluted earnings per Class A and Class B common share for each
conform with the current year’s presentation. The reclassifications year are computed by dividing net earnings reduced for the non-
have no effect on net earnings as previously reported. convertible preferred share dividend requirements by the sum of
(b) Containers, ships, real estate and other fixed assets the weighted average number of common shares outstanding
Containers and ships are recorded at cost and, after allowance for (excluding voting shares owned by subsidiaries), the weighted
salvage value, are depreciated over their estimated useful lives by average number of shares reserved for conversion of outstanding
the straight-line method. The estimated useful life and salvage convertible preferred shares (if dilutive) and the dilutive effect of
value for containers are generally 20 years and 20 percent, and for stock options. Diluted earnings per Class A and Class B common
ships generally 20 to 25 years and 15 to 5 percent. share were the same as basic for 1997 as the conversion of
Substantially all container assets are revenue-earning under convertible securities was antidilutive.
operating leases. The financial statements reflect rentals as revenue. The number of shares used in computing basic and diluted
When a gain on the sale of container or ship assets is recognized earnings per share at December 31 was as follows (in thousands):
and payment is deferred, such gain is recorded after applying the
present value to any receivables beyond one year’s maturity. 1999 1998 1997
Real estate, tourist trains and other fixed assets are recorded at Basic 18,334 16,244 13,435
cost and are depreciated over their estimated useful lives by the Diluted 18,832 18,384 17,243
straight-line method. The depreciation rates on freehold buildings
and tourist train assets range from 35 to 60 years and on (i) Capitalized interest
machinery and other remaining assets from 5 to 25 years. SCL capitalizes interest during the construction of assets. Interest
Leasehold property is depreciated over the lease periods. has been capitalized in the amount of $1,928,000 in 1999 (1998 -
(c) Foreign currency translation $1,392,000, 1997 - $1,391,000).
The translation adjustment included in accumulated other (j) Interest and related income
comprehensive income/(loss) represents principally the effect of Interest and related income includes foreign exchange gains of
changes in the rate of exchange at the beginning and end of each $2,959,000 in 1999 (1998 - $4,079,000, 1997 - $611,000). Also
year in translating net assets, excluding certain intercompany included is interest on receivables related to sales-type leases.
liabilities, of foreign subsidiaries. No income taxes are provided on (k) Estimates
the translation adjustments as SCL management does not expect The preparation of financial statements in conformity with
that such gains or losses will be realized. generally accepted accounting principles requires management to
(d) Other assets make estimates and assumptions that affect the reported amounts
Other assets include goodwill of $35,590,000 (1998 - $33,474,000) of assets and liabilities and the disclosure of contingent assets and
arising upon the purchase of subsidiaries which is written off over liabilities at the date of the financial statements and the reported
periods up to 40 years by the straight-line method. amounts of revenues and expenses during the reporting period.
(e) Revenue recognition Actual results could differ from those estimates.
Revenues are recognized when a service is performed or a product (l) Stock-based compensation
is shipped. With respect to sales-type leases, a gain or loss is Statement No. 123, Accounting for Stock-Based Compensation, of
calculated in accordance with Statement No. 13 of the Financial the Financial Accounting Standards Board encourages, but does not
Accounting Standards Board and included in revenue. Revenue require, companies to record compensation cost for stock-based
also includes the equity in the earnings/(losses) of unconsolidated employee compensation plans at fair value. SCL has chosen to
companies (see Note 2(b)). continue to account for stock-based compensation using the

Notes to Consolidated Financial Statements continued
intrinsic value method prescribed in Opinion No. 25, Accounting On May 6, 1999, SCL acquired Ashley House Inc., owner of
for Stock Issued to Employees, of the Accounting Principles Board Keswick Hall Hotel near Charlottesville,Virginia, and Inn at Perry
and related interpretations. Accordingly, compensation cost for Cabin in St Michaels, Maryland. The $25,500,000 purchase price
share options is measured as the excess, if any, of the quoted was paid in cash and funded in part by a bank loan to SCL.
market price of the Company’s shares at the date of the grant over On July 29, 1998, SCL acquired the Lapa Palace Hotel in Lisbon,
the amount an employee must pay to acquire the shares. Portugal, at a purchase price of $25,000,000 paid in cash and notes
Compensation expense for stock appreciation rights is recorded payable to the seller. On June 23, 1998, SCL acquired the Hotel
annually based on the quoted market price of the Company’s Quinta do Lago near Faro, Portugal, at a purchase price of
shares at the end of the period. See Note 13. $27,000,000 paid in cash and notes payable to the seller.
(m) Impairment of long-lived assets On April 30, 1997, SCL acquired Hôtel de la Cité in Carcassonne,
Long-lived assets and certain identifiable intangible assets are reviewed France. The purchase price of $6,000,000 was paid in cash and by
by SCL whenever events or changes in circumstances indicate that assumption of existing debt.
the carrying amount of the assets may not be recoverable. In the All of the above acquisitions have been accounted for as
event that an impairment seems likely, the fair value of the related purchases and, accordingly, the assets and liabilities of the acquired
asset is estimated, and SCL records a charge to income calculated companies have been recorded at their fair value at the date of
by comparing the asset’s carrying value to the estimated fair value. acquisition. The operating results of the acquired companies have
(n) Recent accounting pronouncements been included in SCL’s consolidated statements of operations from
In 1998, SCL adopted Statement No. 130, Reporting Comprehensive the effective dates of acquisition.
Income, Statement No. 131, Disclosure about Segments of an Enterprise (b) Investments
and Related Information, and Statement No. 132, Employers’ Disclosures Investments represent equity interests of 20 to 50 percent in any
about Pensions and Other Post-retirement Benefits, all issued by the unconsolidated companies.
Financial Accounting Standards Board. Prior periods have been restated On September 21, 1999, SCL acquired a 50% interest in a joint
to conform to these statements. SCL’s only component of other venture company to which the Peruvian government awarded long-
comprehensive income is the foreign currency translation adjustment. term concessions to operate the Southern and Machu Picchu lines
In 1999, SCL adopted Statement of Position No. 98-5, Reporting on of the state-owned railway system in Peru. SCL has been appointed
the Costs of Start-Up Activities, of the American Institute of Certified manager of the concessions and rail services which operate under
Public Accountants. This required SCL to write-off $12,306,000 in the the name PeruRail. No payment was required to acquire the
first quarter of 1999 representing mainly deferred start-up costs concessions other than the purchase of spare parts and office
of container manufacturing facilities and cruise operations which equipment of which SCL’s share amounted to $1,750,000.
may no longer be carried forward under this statement. During the second quarter of 1999, SCL purchased a 50% interest
In 2000, SCL plans to adopt Statement No. 133, Accounting for in Neptun Maritime Oyj, a ferry company based in Finland and listed
Derivative Instruments and Hedging Activities, of the Financial on the Helsinki Exchanges. The cash purchase price was
Accounting Standards Board. It will require that all derivative $102,800,000 funded initially by a bank loan to SCL, which was
instruments be recorded on the balance sheet at fair value. refinanced by the issue of 103/4% senior notes due 2006 (see Note
Changes in the fair value of derivatives will be recorded each period 8). The shareholders from whom SCL acquired this investment have
in current earnings or other comprehensive income, depending on the right to sell the balance of their shares in Neptun Maritime to
whether a derivative is designated as part of a hedge transaction SCL in April 2002, representing up to an additional 26% of shares
and the type of hedge transaction. The ineffective portion of all outstanding, at a total price of approximately $41,000,000 payable at
hedges will be recognized in earnings. It is expected that the SCL's option in cash or Class A common shares of the Company.
adoption of this Statement will not have a material impact upon On March 31, 1999, SCL acquired for $10,000,000 a 50% interest
SCL’s results of operations and financial position. in a joint venture company that bought two hotels in Peru, the
Hotel Monasterio del Cusco and the Machu Picchu Sanctuary
2. Acquisitions and investments Lodge. SCL is managing these properties.
(a) Acquisitions As previously reported, the GE SeaCo joint venture between SCL
Effective July 1, 1999, SCL acquired the 50% interest in the joint and General Electric Capital Corporation relating to marine
venture company which it did not already own that operates the container leasing began operations with effect from May 1, 1998.
Dover-Ostend ferry service using two SeaCats on charter from SCL contributed approximately $12,300,000 of GE SeaCo's initial
Holyman Ltd. The purchase price was nominal, but the purchase equity capital of approximately $27,500,000, and provided 30% of
agreement obligates SCL to acquire the two SeaCats at a cost of the initial $35,000,000 principal amount of loans to GE SeaCo from
$25,800,000 each by April 2000. the joint venture partners.

3. Real estate and other fixed assets
The major classes of real estate and other fixed assets are as follows:
Year ending December 31, 1999 1998
$000 $000
Freehold and leased land and buildings 626,938 588,702

Machinery and equipment 161,861 155,324
Fixtures, fittings and office equipment 96,520 89,232
885,319 833,258
Less: accumulated depreciation 155,950 136,599
729,369 696,659
4. Asset sale receivables

Asset sale receivables of $29,952,000 at December 31, 1999, at present value discounted at an average rate of 8.39 percent per annum, are
collectible as follows:
Year ending December 31, $000
2000 13,113
2001 7,560
2002 3,479
2003 1,475
2004 2,189
2005 and thereafter 2,136
29,952
5. Capital leases
The following is an analysis of assets leased under capital leases by major classes:
Year ending December 31, 1999 1998
$000 $000
Containers 8,819 12,940

Machinery and equipment 10,594 10,855
Real estate and other fixed assets 16,895 14,386
36,308 38,181
Less: accumulated depreciation 20,850 20,336
15,458 17,845

The following is a schedule of future minimum lease payments under capital leases together with the present value of the minimum lease
payments at December 31, 1999:
2000 3,887
2001 2,473
2002 2,312
2003 2,118
2004 1,363
2005 and thereafter 554
Minimum lease payments 12,707
Less: amount of interest contained in above payments (1) 1,879
Present value of minimum lease payments 10,828
(1) The amount of interest deducted from minimum lease payments to arrive at the present value is the interest contained in each of the leases.
6. Working capital facilities

Working capital facilities at December 31 are comprised of the following, all repayable within one year:
1999 1998
$000 $000
Working capital facility secured on certain assets,
with an interest rate of 6.50 and 8.00 percent, respectively 362 2,060
Unsecured working capital facilities, with a weighted
average interest rate of 7.40 and 7.20 percent, respectively 43,393 37,932
43,755 39,992
There are additional working capital lines of credit, currently in place but not drawn, amounting to $72,000,000 (1998 - $140,000,000), of
which $34,000,000 (1998 - $88,000,000) is undrawn under secured revolving credit facilities (see Note 7).

7. Long-term debt
Long-term debt at December 31 consists of the following:
1999 1998
$000 $000
Container purchase notes and bank loans payable
over periods of 5 to 10 years, with a weighted average
interest rate of 7.24 and 6.25 percent, respectively 509,703 506,562
Ship mortgage loans payable over periods of 5 to 10 years, with
a weighted average interest rate of 6.04 and 7.05 percent, respectively 214,553 165,841
Loans from banks secured by real estate and other fixed assets
payable over periods of 2 to 14 years, with a weighted average
interest rate of 6.46 and 7.24 percent, respectively 412,545 383,129
1,136,801 1,055,532
Most containers are secured to financial institutions as collateral for debt obligations. The ship mortgage loans are secured by first or
second mortgages on the vessels and are shown net of cash totalling $1,122,500 (1998 - $5,400,000) which is held as security for, or
otherwise allocated to, repayment of obligations in respect of certain cargoships.
Included in long-term debt is a revolving credit facility with a group of banks amounting to $239,600,000 secured by container equipment
and a hotel. SCL may borrow on a revolving basis until October 25, 2004 and must repay the balance outstanding at that date. Interest
on the facility ranges from 1.25 to 1.70 percent over LIBOR. At December 31, 1999, $193,546,000 (1998 - $186,500,000) was outstanding
under this facility.
Also included in long-term debt is a $350,000,000 securitization facility with a ten-year term secured by container equipment. An SCL
subsidiary issued a senior note in the principal amount of $291,700,000 which is non-recourse to the Company and its other subsidiaries,
bears interest only until October 20, 2001 and thereafter amortizes over eight years. The Company has issued an effectively subordinated
$58,300,000 revolving credit note for the balance of the facility. The overall interest rate is approximately 0.85 to 1.04 percent over
LIBOR. At December 31, 1999, $350,000,000 (1998 - $291,700,000) was outstanding under this facility.
The following is a summary of the aggregate maturities of long-term debt at December 31, 1999:

2000 104,020
2001 120,569
2002 120,176
2003 100,924
2004 343,346
1,136,801
At December 31, 1999 and 1998, SCL was in full compliance with the requirements of the credit/financing agreements evidencing its long-
term debt, and the carrying value of the long-term debt was approximately its fair value.
In addition, a syndicate of banks has provided GE SeaCo with a $200,000,000 credit facility to fund new container purchases guaranteed
50% by the Company and 50% by General Electric Capital Corporation. At December 31, 1999, GE SeaCo had borrowed $128,800,000
(1998 - $52,000,000) under this facility. Also SCL has guaranteed a $7,500,000 bank loan to Charleston Center LLC, owner of Charleston
Place Hotel, in which SCL owns a minority interest.

8. Senior notes and subordinated debentures (d) 7 7/8% senior notes due 2008
On February 19, 1998, the Company issued and sold an aggregate
(a) 91/2% senior notes due 2003 principal amount of $150,000,000 of these notes at par. They bear
The aggregate principal amount of these notes is $100,000,000 and interest at 77/8% per annum, payable semi-annually. They are
they bear interest at 91/2% per annum, payable semi-annually. They redeemable, in whole or in part, at the option of the Company at
are redeemable, in whole or in part, at the option of the Company an initial price of 103.938 percent of the principal amount
at a price of 102.375 percent of the principal amount, declining to commencing on February 15, 2003, and thereafter declining to 100
100 percent of the principal amount on and after July 1, 2000. The percent of the principal amount on and after February 15, 2005.
notes may also be redeemed by the Company in the event of The notes may also be redeemed by the Company in the event of
certain tax law changes. The notes have no sinking fund certain tax law changes. The notes have no sinking fund
requirement and come due on July 1, 2003. In the event a change requirement and come due on February 15, 2008. In the event a
in control of the Company occurs, it is obligated to make an offer change in control of the Company occurs, it is obligated to make
to purchase the notes at a price of 101 percent of the principal an offer to purchase the notes at a price of 101 percent of the
amount. The fair value of these notes as of December 31, 1999 principal amount. The fair value of these notes at December 31,
was approximately $95,000,000 (1998 - $103,000,000) based upon 1999 was approximately $131,000,000 (1998 - $144,000,000)
available market quotes. based upon available market quotes.
(b) 101/2% senior notes due 2003 (e) 121/2% senior subordinated debentures due 2004
The aggregate principal amount of these notes is $65,000,000 and The aggregate principal amount of these debentures is
they bear interest at 101/2% per annum, payable semi-annually. They $125,000,000 and they bear interest at 121/2% per annum, payable
are redeemable, in whole or in part, at the option of the Company semi-annually. The Company issued these debentures in two
at an initial price of 105.25 percent of the principal amount tranches. The first tranche ($100,000,000 principal amount
commencing on July 1, 2000, and thereafter declining to 100 designated series A) was sold at a discount while the second
percent of the principal amount on and after July 1, 2002. The ($25,000,000 principal amount designated series B) was sold at a
notes may also be redeemed by the Company in the event of premium, both of which are being amortized over the life of the
certain tax law changes. The notes have no sinking fund debentures. The effective annual interest rate on the total principal
requirement and come due on July 1, 2003. In the event a change amount is 12.75%. The debentures are subordinated to all existing
in control of the Company occurs, it is obligated to make an offer and future superior indebtedness, but rank senior to certain
to purchase the notes at a price of 101 percent of the principal subordinated indebtedness, and are redeemable, in whole or in
amount. The fair value of these notes as of December 31, 1999 part, at the option of the Company at a price of 106.25 percent of
was approximately $62,000,000 (1998 - $69,000,000) based upon the principal amount, declining to 100 percent of the principal
available market quotes. amount on and after December 1, 2001. The debentures may also
(c) 10 3/4% senior notes due 2006 be redeemed by the Company in the event of certain tax law
On October 18, 1999, the Company issued and sold an aggregate changes. The debentures have no sinking fund requirement and
principal amount of $115,000,000 of these notes at a discount to come due on December 1, 2004. In the event a change in control
yield 11% per annum. They bear interest (accruing from the date of the Company occurs, it is obligated to make an offer to
of issue) at 103/4% per annum, payable semi-annually. They are purchase the debentures at a price of 101 percent of the principal
redeemable, in whole or in part, at the option of the Company, at amount. The fair value of these debentures as of December 31,
an initial price of 105.375 percent of the principal amount at 1999 was approximately $128,000,000 (1998 - $137,000,000)
October 15, 2003, declining to 100 percent of the principal amount based upon available market quotes.
on and after October 15, 2005. The notes may also be redeemed (f) 101/4% subordinated debentures due 1998
by the Company in the event of certain tax law changes. The notes These debentures came due in accordance with their terms on
have no sinking fund requirement and come due on October 15, September 1, 1998 and were paid on that date at par.
2006. In the event a change in control of the Company occurs, it is
obligated to make an offer to purchase the notes at a price of 101
percent of the principal amount. The fair value of these notes on
December 31, 1999 was approximately $114,000,000 based upon
available market quotes.

9. Pension plans
SCL has pension plans covering substantially all of its employees. The significant plans are three defined benefit plans in which the benefits
are based primarily on years of service and employee compensation near retirement. It is SCL's policy to fund its plans in accordance
with applicable laws and income tax regulations. Plan assets consist primarily of common stocks, common trust funds, government
securities and corporate debt securities held through separate trustee-administered funds.
The significant weighted-average assumptions for these plans during 1999, 1998 and 1997 consisted of the following:
1999 1998 1997

% % %
Discount rate (1) 6.0 5.5 7.0
Assumed rates of compensation increases 3.5 3.5 4.5
Expected long-term rate of return on plan assets 6.5 6.5 8.0
(1) Represents the essentially risk-free rate of return at the end of the year in the country in which the assets are held.
The changes in the benefit obligation, the plan assets and the funded status for the three plans during the years ended December 31, 1999 and
1998 were as follows :
1999 1998
$000 $000
Change in benefit obligation:
Benefit obligation at beginning of year 134,835 114,508
Service cost 3,757 3,531
Interest cost 7,138 8,023
Plan participants’ contributions 1,620 1,313
Actuarial gain 12,568 11,456
Benefits paid (5,383) (4,690)
Foreign currency translation (4,183) 694
Benefit obligation at end of year 150,352 134,835
Change in plan assets:
Fair value of plan assets at beginning of year 139,320 122,067
Actual return on plan assets 36,737 15,159
Employer contributions 4,037 4,731
Plan participants’ contributions 1,620 1,313
Benefits paid (5,383) (4,690)
Foreign currency translation (4,425) 740
Fair value of plan assets at end of year 171,906 139,320
Funded status 21,554 4,485
Unrecognized net actuarial gain (16,335) (1,056)

Unrecognized prior service cost 1,799 2,241
Unrecognized transition amount 541 608
Prepaid benefit cost 7,559 6,278

The components of net periodic benefit cost during 1999, 1998 and 1997 consisted of the following:
1999 1998 1997

$000 $000 $000
Service cost 3,757 3,531 3,027
Interest cost on projected benefit obligation 7,138 8,023 7,293
Expected return on assets (8,879) (9,879) (8,562)
Net amortization and deferrals 543 418 430
Net periodic benefit cost 2,559 2,093 2,188
While SCL operates its present passenger rail franchise in Britain, it is responsible for providing pension benefits for the relevant
employees who participate in a plan covering many franchises. SCL’s projected benefit obligation, accumulated benefit obligation and fair
value of plan assets under this pension plan were $163,840,000, $157,841,000 and $286,087,000, respectively, as of December 31, 1999.
SCL’s net periodic benefit cost under this pension plan for 1999 was $4,265,000. These amounts are excluded from the amounts disclosed
above relating to three significant defined benefit plans.
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for another pension plan with accumulated
benefit obligations in excess of plan assets were $24,437,000, $23,247,000 and $20,763,000, respectively, as of December 31, 1998.
10. Income taxes

Income taxes provided by SCL relate principally to its foreign subsidiaries as pre-tax income is primarily foreign. The provision for income taxes
consisted of the following:
Year ended December 31, 1999 Year ended December 31, 1998 Year ended December 31, 1997
Current Deferred Total Current Deferred Total Current Deferred Total
$000 $000 $000 $000 $000 $000 $000 $000 $000
United States 2,472 500 2,972 1,068 - 1,068 764 - 764
Other foreign 2,877 (847) 2,030 2,816 1,066 3,882 1,650 379 2,029
5,349 (347) 5,002 3,884 1,066 4,950 2,414 379 2,793
The net deferred tax liabilities recognized in the consolidated balance sheets at December 31, 1999 and 1998 are comprised of the following:
1999 1998
$000 $000
Gross deferred tax assets (operating loss carry forwards) 35,317 24,567
Less: Valuation allowance (13,536) (10,892)
Net deferred tax assets 21,781 13,675
Deferred tax liabilities (28,636) (21,002)
Net deferred tax liabilities (6,855) (7,327)
The gross deferred tax assets relate primarily to tax loss carry forwards. The deferred tax liabilities are temporary differences
substantially caused by tax depreciation in excess of book depreciation.
The difference in the effective tax rate and the U.S. statutory rate (35%) results principally from different tax rates in other jurisdictions
and from earnings outside the U.S. that are not subject to taxation.

11. Supplemental cash flow information

$000 $000 $000
Cash paid for:
Interest 116,336 110,307 107,407
Income taxes 2,620 3,498 1,797
Non-cash investing and financing activities:

In conjunction with the acquisitions in 1999, 1998 and 1997 (see Note 2(a)), liabilities were assumed as follows:

$000 $000 $000
Fair value of assets acquired 27,319 57,936 8,562
Cash paid (25,036) (49,016) (594)
Liabilities assumed 2,283 8,920 7,968
12. Redeemable preferred shares
Out of authorized preferred shares, 300,000 have been reserved for issuance as series A junior participating preferred shares upon
exercise of preferred share purchase rights held by class A and B common shareholders (see Note 14(c)).
(a) $7.25 convertible cumulative preferred shares
These preferred shares were issued on May 6, 1998. They are convertible at the option of the holder at any time, unless previously
redeemed, into class B common shares of the Company at a conversion price of $31.34 per share (equivalent to a conversion rate of
approximately 3.19 class B common shares for each preferred share), subject to adjustment under certain conditions. They provide for
cumulative dividends at the annual rate of $7.25 per share payable quarterly and are redeemable at the option of the Company, in whole
or in part, at any time at a per share redemption price of $102.90 during the 12 months beginning May 6, 2001, $101.45 during the 12
months beginning May 6, 2002, and thereafter at $100.00 per share. Any preferred shares outstanding on May 6, 2005 must be redeemed
at $100.00 per share plus any accrued and unpaid dividends.
(b) $1.4625 cumulative preferred shares and $2.10 cumulative preferred shares, series 1982
The Company redeemed all of these outstanding preferred shares for cash at $15 per share on May 29, 1998, plus accrued and unpaid
dividends to the redemption date.

13. Employee stock option and stock appreciation rights plans
Under the Company’s 1997 stock option plan, options to purchase up to 500,000 Class A or B common shares may be awarded to
employees of SCL at fair market value at the date of grant. Options are exercisable three years after award and must be exercised ten
years from the date of grant. At December 31, 1999, 112,000 Class A common shares were reserved for issuance pursuant to options
awarded to 20 persons. The 1986 stock option plan of the Company terminated in 1996. At December 31, 1999, 22,000 Class A common
shares and 10,000 class B common shares were reserved for issuance pursuant to options awarded to six persons.
No charges or credits are made to income with respect to options awarded or exercised under the plans since all options to employees
are awarded at market value at date of grant. Transactions under the plans have been as follows:
Year ended December 31, 1999 Shares Option Price
Outstanding at beginning of period 89,834 $4.50 - $28.00

Granted 62,000 $30.00
Terminated -
Exercised (7,834) $4.50 - $17.50
Outstanding at end of period 144,000 $16.00 - $30.00
Exercisable at end of period 32,000 $16.00 - $21.75

Granted 50,000 $25.125 - $28.00
Terminated -
Exercised (19,890) $4.50 - $17.50

Granted -
Terminated -
Exercised (8,000) $1.00 - $17.50
The options outstanding at December 31, 1999 were as follows:

Dates of Number of Average Option
Dates of Grant Expiration Shares Price
January 30, 1991 January 29, 2001
to August 20, 1999 to August 19, 2009 144.000 $25.98
There is no material effect of the options granted after the effective date of Statement No. 123, Accounting for Stock-Based
Compensation, of the Financial Accounting Standards Board. Accordingly, disclosure of pro forma information is not required.

The 1991 stock appreciation rights plan of the Company, as of such junior preferred share, subject to adjustment in certain
amended, provides that SCL may grant to its employees stock events. From and after the date on which any person acquires
appreciation rights (“SARs”) with respect to up to an aggregate of beneficial ownership of shares carrying 20% or more of the total
600,000 Class A common shares. SARs entitle the holder to a cash voting rights which may be cast at any general meeting of the
amount equal in value to the excess of the fair market value of the Company, each holder of a right (other than the acquiring person)
common shares at the time of exercise of the SARs over the fair will be entitled upon exercise to receive, at the then current
market value of the common shares at the time the SARs were Purchase Price and in lieu of the junior preferred shares, that
granted. SARs become exercisable three years after grant and number of class A or class B common shares (depending on
must be exercised ten years from the date of grant. At December whether the right was previously attached to a class A or B share)
31, 1999, 153,100 SARs (1998 - 156,100, 1997 - 269,200) were having a market value of twice the Purchase Price. If the Company
outstanding. In 1999, a net charge to income arising from SARs is acquired or 50% or more of its consolidated assets or earning
amounted to $nil (1998 - $893,000, 1997 - $3,274,000). power is sold, each holder of a right will be entitled to receive,
upon exercise at the then current Purchase Price, that amount of
14. Shareholders’ equity common equity of the acquiring company which at the time of
such transaction would have a market value of two times the
(a) $4.00 convertible cumulative preferred shares Purchase Price. The rights will expire on June 19, 2008 but may be
On June 2, 1998, the Company called for redemption all of its redeemed at a price of $0.025 per right at any time prior to the
outstanding $4.00 convertible cumulative preferred shares, tenth day following the date on which a person acquires beneficial
including dividends accrued and unpaid to the redemption date. ownership of shares carrying 20% or more of the total voting
Holders of substantially all of the preferred shares elected to rights which may be cast at any general meeting of the Company.
convert them prior to the redemption date into class A or class B (d) Reserved shares
common shares of the Company in accordance with the terms of At December 31, 1999, in addition to the 532,000 common shares
the preferred shares. This redemption and the effect of the reserved for options granted or available under the 1986 and 1997
conversion have been accounted for as at June 30, 1998. stock option plans (see Note 13), a further 478,622 class B
(b) Dual common share capitalization common shares were reserved for issuance upon conversion of
Effective June 23, 1992, following shareholder approval, the existing the $7.25 convertible cumulative preferred shares.
common shares of the Company were classified as class B common (e) Acquired shares
shares, each of which is convertible at any time into one class A A total of 12,900,500 Class B common shares were owned by
common share of the Company. Cash dividends on the class A certain SCL subsidiaries at December 31, 1999. Under applicable
common shares must be at least 10 percent higher than any cash law, these shares are outstanding and may be voted by the
dividends on the class B common shares. In general, holders of subsidiaries, although in computing earnings per share these shares
class A and class B common shares vote together as a single class, are treated as a reduction to outstanding shares.
with holders of class B shares having one vote per share and (f) Certain restrictions on payment of dividends
holders of class A shares having one-tenth of one vote per share. SCL is party to certain credit agreements which restrict the
In all other substantial respects, the class A and B shares are the payment of dividends and the purchase of common shares. Under
same. these agreements, approximately $65,000,000 was available at
(c) Shareholder rights agreement December 31, 1999 (1998 - $63,000,000) for the payment of cash
The Company has in place a shareholder rights agreement, as dividends and the purchase of shares.
amended and restated as of June 1, 1998, which will be
implemented not earlier than the tenth day following the first to
occur of (i) the public announcement of the acquisition by a
person (other than a subsidiary of the Company) of shares
carrying 20% or more of the total voting rights which may be cast
at any general meeting of the Company and (ii) the
commencement or announcement of a tender offer or exchange
offer by a person for shares carrying 30% or more of the total
voting rights which may be cast at any general meeting of the
Company. At that time, the rights detach from the class A and class
B common shares, and the holders of the rights will be entitled to
purchase, for each right held, one two-hundredth of a series A
junior participating preferred share of the Company at an exercise
price of $180 (the “Purchase Price”) for each one two-hundredth

15. Rental income under operating leases and charters

The following are the minimum future rentals at December 31, 1999 under operating leases of containers and leases of property and other
fixed assets:
2000 84,741
2001 74,549
2002 64,947
2003 57,030
2004 49,614
447,147
Of the total above, related party rental payments due from GE SeaCo amounted to $378,684,000 (1998 - $691,252,000).
16. Commitments
Outstanding contracts to purchase fixed assets were approximately $116,000,000 at December 31, 1999 (1998 - $74,000,000).
Future rental payments under operating leases in respect of equipment rentals and leased premises are payable as follows:
2000 334,864
2001 347,263
2002 340,123
2003 85,096
2004 2,769
1,126,322
Of the total above, $1,070,638,000 relates to rental payments by the present passenger rail franchise in respect of leases of rolling stock
and access charges for railway infrastructure. These commitments are payable only while the franchise continues.
Where the agreements provide for rental payments calculated on a factor varying with interest rates, the factors applicable to the
interest rates ruling at December 31, 1999 have been used. Rental expense for the year ended December 31, 1999 amounted to
$229,233,000 (1998 - $262,504,000, 1997 - $254,403,000).

17. Financial instruments with off-balance sheet risk 18. Information concerning financial reporting for
and concentrations of credit risk segments and operations in different
geographical areas
(a) Interest rate and currency swap agreements
SCL has outstanding two interest rate swap agreements under SCL’s business activities are grouped into three main reporting
which U.S. dollar fixed-rate debt has been effectively converted to segments.The first is the operation of passenger and vehicle
floating U.S. dollar rate debt. At December 31, 1999, the aggregate transport services using ferries and trains and the services which
notional amount of the two swap agreements was approximately support these transport activities. Ferries operate between Great
$20,400,000, both maturing in the first quarter of 2001. The Britain and France, Belgium, Ireland and the Isle of Man and in
approximate cost to SCL to terminate these agreements at Scandinavia and New York harbor, trains operate in Britain and
December 31, 1999 would not have been material. three ports are also located in Britain. This business is referred to
On November 3, 1999, SCL entered into four interest rate and as “Passenger transport operations”. The second is the ownership
currency swap agreements converting $115,000,000 into euro and/or management of hotels and other leisure activities. Hotels
109,630,000 (equivalent to $109,900,000 at December 31, 1999) are located in the United States, the Caribbean, Europe, southern
as a hedge against the euro-denominated investment in Neptun Africa, Brazil, Peru, Australia and the South Pacific, tourist trains
Maritime Oyj. At the date of entering into the agreements, operate in Europe, Southeast Asia, Australia and Peru, restaurants
$57,500,000 was swapped into fixed interest payments at rates are located in London and New York, and a cruiseship operates in
averaging 9.06 percent per annum and $57,500,000 was swapped Myanmar. This business is referred to as “Leisure operations”. The
into floating interest payments with an average spread of 4.00 third is leasing of cargo containers (principally through the
percent above EURIBOR. One of the agreements matures on GE SeaCo joint venture) to liner ship operators, road and rail
October 15, 2004, with the other three maturing on October 16, operators, forwarders and exporters located throughout the world
2006. At these dates, SCL will repay euro 47,678,000 and euro and the services which support these activities, including the
61,952,000, respectively. The fair value of these agreements at manufacture and repair of container equipment. This business is
December 31, 1999 was $111,700,000. referred to as “Container operations”. “Other operations”
The above agreements are not held for trading purposes and SCL includes SCL’s real estate development, perishable commodity
has no current intention to terminate the agreements. At production and trading, and publishing activities. Transactions
December 31, 1999, SCL believes that there was no significant between reportable segments are not material. The main factor
credit risk of non-performance by counterparties. SCL uses to identify its three main segments is the similarity of the
b) Off-balance sheet risk products and services provided.
From time to time, SCL utilizes foreign currency forward contracts Financial information regarding these business segments is as
to reduce exposure to exchange rate risks primarily associated follows overleaf:
with SCL’s international transactions. These contracts establish the
exchange rates at which SCL will purchase or sell at a future date
the contracted amount of currencies for specified foreign
currencies. SCL utilizes forward contracts which are short-term in
nature and receives or pays the difference between the contracted
forward rate and the exchange rate at the settlement date. No
contracts were outstanding at December 31, 1999. At December
31, 1998, there were two contracts outstanding relating to the
forward purchase of Italian lire in respect of the purchase of ferry
assets. The contract amount of the foreign currency at December
31, 1998 was approximately $54,029,000 and the fair value of the
foreign currency at that date approximated $53,000,000.
(c) Concentration of credit risk
Concentration of credit risk with respect to trade receivables is
limited because of the large number of customers comprising SCL’s
customer base and their dispersion across different businesses and
geographic areas. Also, SCL routinely assesses the financial strength
of its customers.

$000 $000 $000
Revenue:
Passenger transport operations 918,636 837,324 754,048
Leisure operations 252,882 230,883 203,716
Container operations 154,853 185,533 186,201
Other operations 12,698 12,793 13,496
1,339,069 1,266,533 1,157,461
Depreciation and amortization:
104,706 106,203 103,623
Earnings from operations before
net finance costs:
Other operations 150 76 1,234
196,079 186,846 160,565
Corporate costs (15,103) (14,939) (13,524)
180,976 171,907 147,041
Net finance costs (1) (114,322) (108,273) (102,230)
Earnings before income taxes and cumulative effect
of change in accounting principle 66,654 63,634 44,811
Provision for income taxes 5,002 4,950 2,793
Net earnings before cumulative effect of change
in accounting principle 61,652 58,684 42,018
Net earnings on class A and class B common shares before
cumulative effect of change in accounting principle 60,564 54,265 27,773
Identifiable assets:
Container operations 958,892 1,027,147 997,601
2,515,417 2,314,455 2,126,100
Capital expenditure:
158,423 153,666 234,486
(1) Net of capitalized interest and interest and related income.
Non-U.S. domestic operations accounted for more than 93 percent of revenue and 89 percent of earnings before net finance costs in
1999 (1998 - 95 percent and 91 percent, 1997 - 94 percent and 85 percent). Containers are regularly moving between countries in
international commerce over hundreds of trade routes. SCL has no knowledge of, or control over, the movement of containers under
lease or the location of leased containers at any moment in time. Based on container leases in force at December 31, 1999, containers
may touch ports in more than 100 different countries worldwide. It is therefore impossible to assign revenues or earnings of container
operations by geographical areas.

Passenger transport operations and identifiable assets are mainly
carried on and held in Europe, principally in and around Great
Britain. Leisure operations are spread throughout the world with
no one country representing more than 10 percent of the revenue
or identifiable assets.
19. Related party transactions
For the year ended December 31, 1999 and the eight months
ended December 31, 1998 (see Note 2(b)), GE SeaCo paid SCL
net amounts of $69,906,000 (1998 - $71,702,000) under the lease
and management agreements relating to SCL-owned containers
provided to the joint venture, $32,278,000 (1998 - $19,677,000)
under the services agreement with GE SeaCo by which SCL
provides management and administration services to the joint
venture, $17,600,000 (1998 - $19,152,000) in connection with
purchases of containers from SCL’s factories, use of SCL’s depots
for container repair and storage services and employment of an
SCL containership to reposition containers, and $584,000 (1998 -
$30,000) of interest on loans from SCL.
20. Subsequent event (unaudited)
On March 24, 2000, SCL acquired the Observatory and Lilianfels

Hotels in Australia for an aggregate purchase price of
approximately $42,000,000. The purchase has been substantially
financed by a bank loan.

Summary of quarterly earnings (unaudited)
Quarter ended
December September June March
Total 31 30 30 31
$000 $000 $000 $000 $000
1999
Revenue:
Passenger transport operations 918,636 222,305 292,844 223,233 180,254
Leisure operations 252,882 66,967 65,248 70,441 50,226
Container operations 154,853 36,888 35,566 40,015 42,384
Other operations 12,698 4,268 2,010 3,352 3,068
1,339,069 330,428 395,668 337,041 275,932
Earnings/(losses) before net finance costs:
Other operations 150 708 (603) 370 (325)
196,079 39,605 67,570 57,510 31,394
Corporate costs (15,103) (3,766) (3,676) (3,798) (3,863)
Net finance costs (114,322) (27,451) (29,478) (29,514) (27,879)
Earnings/(losses) before tax and cumulative
effect of change in accounting principle 66,654 8,388 34,416 24,198 (348)
Provision for/(benefit from) income taxes 5,002 152 8,297 753 (4,200)
Net earnings before cumulative effect of
change in accounting principle 61,652 8,236 26,119 23,445 3,852
Preferred share dividends 1,088 272 272 272 272
Net earnings on class A and class B common
shares before cumulative effect of
change in accounting principle 60,564 7,964 25,847 23,173 3,580
accounting principle (12,306) - - - (12,306)
Net earnings/(losses) on class A and class B
common shares 48,258 7,964 25,847 23,173 (8,726)
$ $ $ $ $
Net earnings/(losses) per class A and class B
common share:
Basic:
Net earnings before cumulative effect
of change in accounting principle 3.30 0.43 1.41 1.27 0.20
accounting principle (0.67) - - - (0.68)
Net earnings/(losses) 2.63 0.43 1.41 1.27 (0.48)
Diluted:
Net earnings before cumulative effect
of change in accounting principle 3.27 0.44 1.39 1.25 0.20
accounting principle (0.65) - - - (0.68)
Net earnings/(losses) 2.62 0.44 1.39 1.25 (0.48)

Summary of quarterly earnings (unaudited)
Quarter ended
December September June March
Total 31 30 30 31
$000 $000 $000 $000 $000
1998
Revenue:
Other operations 12,793 3,082 3,081 3,409 3,221
1,266,533 346,755 332,375 326,087 261,316
Earnings/(losses) before net finance costs:
Other operations 76 53 (62) 241 (156)
186,846 47,147 58,388 49,228 32,083
Corporate costs (14,939) (4,055) (3,657) (3,620) (3,607)
Net finance costs (108,273) (26,779) (26,822) (27,161) (27,511)
Earnings before income taxes 63,634 16,313 27,909 18,447 965
Provision for/(benefit from) income taxes 4,950 400 6,850 500 (2,800)
Net earnings 58,684 15,913 21,059 17,947 3,765
Preferred share dividends 4,419 272 276 588 3,283
Net earnings on class A and class B
common shares 54,265 15,641 20,783 17,359 482
$ $ $ $ $
Net earnings per class A and class B
common share:
Basic 3.34 0.85 1.14 1.19 0.04
Diluted 3.11 0.85 1.12 0.95 0.04
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

Part III
Item 10. Directors and Executive Officers of the Registrant
Directors
Information regarding directors may be found in the Company's Proxy Statement for the 2000 annual general meeting under the caption
“Election of Directors”. It is substantially the same information as that included in Item 10 of the Form 10-K filed with the Securities and
Exchange Commission.
Executive Officers
The executive officers of the Company are as follows:
Name, Age Position
James B. Sherwood, 66 President since 1974
David G. Benson, 56 Senior Vice President - Passenger Transport since 1997
Daniel J. O'Sullivan, 61 Senior Vice President - Finance and Chief Financial Officer since 1997
Simon M.C. Sherwood, 39 Senior Vice President - Leisure since 1997
Robert S.Ward, 61 Senior Vice President - Containers since 1986
James A. Beveridge, 51 Vice President - Administration and Property since 1997
John D. Campbell, 57 Vice President - Bermuda since 1990
Christopher W.M. Garnett, 54 Vice President - Rail since 1997
Edwin S. Hetherington, 50 Vice President, General Counsel and Secretary since 1997
Nicholas J. Novasic, 48 Vice President - Funding, North America since 1987
Michael V. Scawn, 60 Vice President - Funding since 1981
James G. Struthers, 36 Vice President - Controller since 1999
Stephen O.Whittam, 59 Vice President - Management Information Systems since 1984
The principal occupation of each person during the last five years is shown in the table except as follows. Messrs. Benson and Simon
Sherwood were Vice Presidents from 1992 and 1991, respectively. Mr. O’Sullivan was Senior Vice President - Finance and Treasurer from
1986. Mr. Beveridge was Group Finance Director of MEPC Plc, a property company listed on the London Stock Exchange. Before joining
SCL in 1995, Mr. Garnett was Commercial Director of Eurotunnel Plc in charge of sales and marketing. Mr. Hetherington was General
Counsel and Secretary of the Company from 1984. Mr. Struthers was Finance Director of Eurostar (UK) Ltd., operator of the high speed
passenger train services between Britain and Continental Europe and, until mid-1997, was the Group Financial Controller of SCL.
Mr. Simon Sherwood is the stepson of Mr. James Sherwood.
Item 11. Executive Compensation the information included in Item 12 of the Form 10-K filed with
the Securities and Exchange Commission.
Information regarding executive compensation may be found in the
Company’s Proxy Statement for the 2000 annual general meeting Item 13. Certain Relationships and Related
under the captions “Election of Directors -- Executive Transactions
Compensation”, “-- Pension Plans”, “-- 1997 Stock Option Plan”, “--
1986 Stock Option Plan” and “-- 1991 Stock Appreciation Rights Information regarding these relationships and transactions may be
Plan”. It is substantially the same information as that included in found in the Company’s Proxy Statement for the 2000 annual
Item 11 of the Form 10-K filed with the Securities and Exchange general meeting under the caption “Election of Directors -- Other
Commission. Agreements”. It is substantially the same information as that
included in Item 13 of the Form 10-K filed with the Securities and
Item 12. Security Ownership of Certain Exchange Commission.
Beneficial Owners and Management
Information regarding security ownership may be found in the

Company’s Proxy Statement for the 2000 annual general meeting
under the caption “Shareholding Information”. It is a summary of

Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Documents filed as a part of this report. 3. Reports on Form 8-K.

No report on Form 8-K was filed during the fourth quarter of
1. Financial Statements. 1999.
The Financial Statements are included in Item 8 above.
2. Financial Statement Schedules and Exhibits.

The applicable Financial Statement Schedule and Exhibits are
included only in the Form 10-K filed with the Securities and
Exchange Commission.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Pursuant to the requirements of the Securities Exchange Act of
Securities Exchange Act of 1934, the registrant has duly caused this 1934, this report has been signed below by the following persons
report to be signed on its behalf by the undersigned, thereunto on behalf of the registrant and in the capacities and on the date
duly authorized. indicated.
Dated: March 29, 2000 Dated: March 29, 2000

Sea Containers Ltd. Signature Title
/s/ J.D. Campbell Director

John D. Campbell
By: /s/ J.B. Sherwood /s/ I. Hilton Director

James B. Sherwood Ian Hilton
President
(Principal Executive Officer) /s/ W.M. Grindrod Director
W. Murray Grindrod
/s/ R.M. Riggs Director

By: /s/ D.J. O’Sullivan Robert M. Riggs
Daniel J. O’Sullivan
Senior Vice President - Finance /s/ P. J.R. Schlee Director
and Chief Financial Officer Philip J.R. Schlee
(Principal Accounting Officer)
/s/ C.N.C. Sherwood Director
Charles N.C. Sherwood
/s/ J.B. Sherwood Director

James B. Sherwood
/s/ M.J.L. Stracey Director

Michael J.L. Stracey

Principal subsidiaries and other investments
Bermuda Sea Containers Ferries Scotland Ltd.

The Marine Container Insurance Co. Ltd. Stranraer, Scotland
Sea Containers House Ltd.
The Isle of Man Steam Packet Company Ltd.
Sea Containers Holdings Ltd.
Isle of Man
Sea Containers Properties Ltd.
Sea Containers SPC Ltd. Yorkshire Marine Containers Ltd.
Orient-Express Hotels Ltd. Beverley,Yorkshire, England
Leisure Holdings Asia Ltd. Great North Eastern Railway Ltd.
Hamilton, Bermuda York, England
United Kingdom and Isle of Man Continental Europe

Sea Containers Ferries Ltd. Sea Containers Estonia OU
Sea Containers Ports Ltd. Tallinn, Estonia
Sea Containers Chartering Ltd.
Sea Containers Services Ltd. Silja Line Oyj
Sea Containers Property Services Ltd. Helsinki, Finland
Fairways and Swinford (Travel) Ltd. Société de la Cité S.A.
Silja Holdings Ltd. Carcassonne, France
The Illustrated London News
Sea Containers Italia S.r.l.
Orient-Express Services Ltd.
Genoa, Italy
Venice Simplon-Orient-Express Ltd.
Northern Belle Ltd. Hotel Cipriani S.p.A.
Collection Venice Simplon-Orient-Express Ltd. Venice, Italy
Harry’s Bar Ltd.
Alberghiera Fiesolana S.p.A.
London, England
Florence, Italy
Folkestone Properties Ltd.
Società Gestione Esercizi S.p.A.
Folkestone, England
Portofino, Italy
Heysham Port Ltd.
Hotelapa Investimento Hoteleiro S.A.
Heysham, England
Lisbon, Portugal
Newhaven Port & Properties Ltd.
Island Hotel (Madeira) Ltd.
Newhaven, England
Madeira, Portugal
Hart, Fenton & Co. Ltd.
Grampiam Investimentos Hoteleiros S.A.
Portsmouth, England
Faro, Portugal
Hoverspeed Ltd.
SeaCat AB
Dover, England
Gothenburg, Sweden

U.S.A. Australia
Sea Containers America Inc. Sea Containers Australia Ltd.
New York, New York and Washington D.C. Observatory Hotel Pty. Ltd..
Sydney, Australia
Orient-Express Hotels Inc.
‘21’ Club Inc. Lilianfels Blue Mountains Pty. Ltd.
SeaStreak America Inc. Katoomba, Australia
New York, New York
Heritage Train Company Pty. Ltd.
Charleston Marine Containers Inc. Brisbane, Australia
Charleston Container Shops Inc.
International Reefer Services Pty. Ltd.
Charleston Place Holdings Inc.
Melbourne, Australia
Charleston, South Carolina
SeaCo Texas Properties Inc. Caribbean and Latin America

Houston Marine Containers Inc. GE SeaCo SRL
Houston, Texas Bridgetown, Barbados
Sea Containers West Inc. Société Hôtelière de Baie Longue S.A.

San Francisco, California St. Martin, French West Indies
Windsor Court Hotel L.P. Paulista Containers Maritimos Ltda.

New Orleans, Louisiana Santos, Brazil
Keswick Hall Inc. Sea Containers Brasil Ltda.

Montecello, Virginia Companhia Hoteis Palace.
Rio de Janeiro, Brazil
Inn at Perry Cabin Corp.
St. Michaels, Maryland Brasiluvas Agricola Ltda.
Juazseiro, Bahia, Brazil
Far East
Perú OEH S.A.
Sea Containers Asia Ltd.
PeruRail S.A.
Hong Kong
Lima, Peru
Sea Containers Asia Pte. Ltd.
Pacifica Ship Management Pte. Ltd. Africa
Eastern and Oriental Express Ltd. Eighty Westcliff (Pty.) Ltd.
Singapore Johannesburg, South Africa
Myanmar Hotels and Cruises Ltd. Mount Nelson Hotel Ltd.

Myanmar Cape Town, South Africa
Société Bananière de Motobé S.A.

Motobé, Ivory Coast
Gametrackers (Botswana) Pty. Ltd.

Gaborone, Botswana

Shareholder and investor information
Registered office Annual general meeting

Sea Containers Ltd. The annual general meeting of shareholders will be held at the
41 Cedar Avenue ‘21’ Club, 21 West 52nd Street, New York, New York on June 6, 2000
P.O. Box HM 1179 at 2.00 p.m.
Hamilton HM EX
Bermuda Shareholder information
Tel: (441) 295-2244 Copies of SEC Form 10-K annual reports, SEC Form 10-Q
Fax: (441) 292-8666 quarterly reports and other published financial information may be
obtained upon request to:
Correspondence Sea Containers America Inc.
Sea Containers Services Ltd. 1155 Avenue of the Americas
Sea Containers House New York, New York 10036
20 Upper Ground Tel: (212) 302-5066
London SE1 9PF Fax: (212) 302-5073
England
Tel: (44) 020 7805 5000 Investor relations
Fax: (44) 020 7805 5900 Shareholders, securities analysts, portfolio managers and
representatives of financial institutions seeking financial information
Internet address may contact:
http://www.seacontainers.com William W. Galvin III
The Galvin Partnership
Stock exchange listings 67 Mason Street
Sea Containers Ltd. Class A and Class B common shares are listed Greenwich, Connecticut 06830
on the New York, Pacific and London Stock Exchanges. Tel: (203) 618-9800
On the U.S. exchanges the trading symbols are SCRA and SCRB. Fax: (203) 618-1010
E-mail: [email protected]
Share transfer agent and registrar
Fleet National Bank Dividend reinvestment and share purchase plan
Produced by The Illustrated London News Group. Printed in England by Greenshires Group Ltd.
c/o EquiServe L.P. Sea Containers Ltd. offers this plan to owners of its common
P.O. Box 8040 shares as a convenient and economical method of investing their
Boston, Massachusetts 02266-8040 cash dividends in Class A common shares at a discount from the
Tel: (800) 730-4001 market price and without payment of any brokerage commission
Fax: (781) 828-8813 or service charge. A common shareholder under the plan may also
Internet: http://www.equiserve.com make optional cash deposits to purchase Class A common shares
at market price without payment of commissions or other charges.
Shareholders are encouraged to contact the Transfer Agent directly For further information about the plan, please contact the share
regarding any change in certificate registration, change of mailing address, transfer agent and registrar, EquiServe L.P., at the address at left.
lost or stolen certificates, replacement of dividend checks, consolidation
of multiple accounts, elimination of duplicate mailings, replacement
of Form 1099-DIV and related shareholder service matters.
Co-registrar of shares Opposite: A 40ft. GE SeaCo high cube refrigerated

The Bank of Bermuda
container leaves the factory near Shanghai, China.
6 Front Street
China now produces most of the world’s standard dry
Hamilton HM 11
cargo and refrigerated containers because their prices
Bermuda
are the lowest and there is strong demand for the
Auditors units to carry Chinese exports, allowing the
Deloitte & Touche LLP containers to go onto lease right out of the factory.
Two World Financial Center GE SeaCo is the world’s largest lessor of refrigerated
New York, New York 10281 containers, having a fleet of 90,000 Units.

Sea Containers Ltd.
41 Cedar Avenue
P.O.Box HM 1179
Hamilton HM EX
Bermuda
Tel: (441) 295-2244

Fax: (441) 292-8666
Correspondence:
Sea Containers Services Ltd.
Sea Containers House
20 Upper Ground
London SE1 9PF
Tel: (44) 020 7805 5000

Fax: (44) 020 7805 5900
www.seacontainers.com
2860-AR-99

Sea Cotainers Annual Report 1999

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Sea Containers Ltd.

Annual Report 1999

Company description 2 Marine container leasing is conducted primarily through

2 SEA CONTAINERS LTD.

Revenue 1,339,069 1,266,533 5.7

Earnings before corporate and finance costs:

Passenger transport operations 69,486 61,919 12.2

Leisure operations 64,804 49,465 31.0

Container operations 61,639 75,386 (18.2 )

Other operations 150 76 97.4

Total 196,079 186,846 4.9

Net earnings 61,652 * 58,684 5.1

Total assets at book value 2,515,417 2,314,455 8.7

Long-term obligations 1,700,285 1,510,278 12.6

Net earnings per class A and class B common share

- basic 3.30* 3.34 (1.2 )

- diluted 3.27* 3.11 5.1

Cash dividends per class A

common share 1.10 0.885 24.3

Cash dividends per class B

common share 0.9945 0.8045 23.6

* Before cumulative effect of change in accounting principle.

4 SEA CONTAINERS LTD.

Franco Chresten A. Ian Robin Lynch Toby G.Grey

May 1, 2000 also suffered losses on Gothenburg/ Frederikshavn

8 SEA CONTAINERS LTD.

GNER. While PeruRail is managed by our Leisure

10 SEA CONTAINERS LTD.

Finance. In 1999 we sold $115 million of 10.75%

12 SEA CONTAINERS LTD.

14 SEA CONTAINERS LTD.

16 SEA CONTAINERS LTD.

departures per day. Over 90% of the fleet was in

the Algarve. Both turned in solid results, as did our

Southern Africa offset some of these achievements.

Mandalay river cruiser in Myanmar. Early in 1999, the

20 SEA CONTAINERS LTD.

24 SEA CONTAINERS LTD.

Property, Publishing and Plantations

26 SEA CONTAINERS LTD.

54 acres of land remaining. We 1999 on the Tortington

28 SEA CONTAINERS LTD.

This report contains, in addition to historical Contents

30 SEA CONTAINERS LTD.

Sea Containers Ltd.

41 CEDAR AVENUE, P.O. BOX HM 1179

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None.

DOCUMENTS INCORPORATED BY REFERENCE: None.*

32 SEA CONTAINERS LTD. & SUBSIDIARIES

SEA CONTAINERS LTD. & SUBSIDIARIES 33

Irish Sea Services Baltic Sea Services

34 SEA CONTAINERS LTD. & SUBSIDIARIES

SEA CONTAINERS LTD. & SUBSIDIARIES 35

36 SEA CONTAINERS LTD. & SUBSIDIARIES

Other Ship-Related Activities

SEA CONTAINERS LTD. & SUBSIDIARIES 37

38 SEA CONTAINERS LTD. & SUBSIDIARIES

SEA CONTAINERS LTD. & SUBSIDIARIES 39