EX-99 2 a05-19999_1ex99.htm EXHIBIT 99

EXHIBIT 99

 

[Sea Containers News Release]

 

SEA CONTAINERS LTD. REPORTS THIRD QUARTER AND NINE MONTHS RESULTS

 

Hamilton, Bermuda, November 9, 2005.  Sea Containers Ltd. (NYSE: SCRA and SCRB, www.seacontainers.com), marine container lessor and rail and ferries operator, today announced its results for the third quarter and nine months ended September 30, 2005.

 

For the quarter, the net loss was $34.4 million ($1.25 per common share diluted) on revenue of $456 million, compared with net earnings of $18.4 million ($0.77 per common share diluted) on revenue of $492 million in the third quarter of 2004.  Non-recurring charges in the third quarter of 2005, almost entirely related to the restructuring of the ferries business announced on November 3, 2005, accounted for $19.5 million of this loss.

 

For the nine months, the net loss was $58.5 million ($2.16 per common share diluted) on revenue of $1.3 billion, compared with net earnings of $8.9 million ($0.35 per common share

 

1



 

diluted) on revenue of $1.3 billion in the year earlier period.  Non-recurring charges account for $38.5 million of the loss in 2005.  The nine month period benefited from a $41.1 million gain in March 2005 on the sale of shares in Orient-Express Hotels.

 

The London Underground bombings and attempted bombings in July 2005 were responsible for a decline in passenger carryings and earnings from rail operations in the quarter, causing GNER to incur a loss of $7.6 million compared with a profit before non-recurring charges of $14.0 million in the prior year period.  Passenger volumes and revenue have recovered following the summer holidays but have yet to return to levels anticipated before the bombings.

 

Earnings from the company’s GE SeaCo investment declined to $6.0 million in the quarter from $8.6 million in the prior year period due to the acceleration of depreciation of containers in the first lease.  This change impacted Sea Containers’ share of earnings by $1.0 million and higher interest rates on GE SeaCo’s floating rate debt caused a decline of $2.9 million on Sea Containers’ share.  At September 30, 2005 GE SeaCo had acquired $126 million of new containers in the year and utilization of its owned fleet was 98%.

 

The company’s other container businesses reported operating income of $5.0 million in the period compared with $4.5 million in the prior year third quarter.

 

Excluding vessel write-downs, ferry operations had operating income of $9.7 million in the quarter, compared with $17.1 million in the year earlier period.  Silja incurred a $7.3 million fuel cost increase compared with the prior year

 

2



 

period.  However, excluding fuel Silja’s operating income increased $6.1 million due to higher revenues.  Operating income from other ferry businesses declined by $6.1 million compared with the prior year period, due to higher fuel costs, increased pension costs and provision for past tax costs and lease termination.

 

Mr. James B. Sherwood, President, said “2005 has regrettably been a ‘Perfect Storm’ for the company.  All three of our main business segments have encountered unanticipated difficulties.  The company is engaged in a dispute with our partners in GE SeaCo, GE Capital.  The issues have led to arbitration and a decision is expected in January.

 

The ferries business has been hit with a huge increase in fuel costs, losses from the m.v. Finnjet operation (which has now been withdrawn and is on profitable charter in connection with the Louisiana hurricane relief), a further deterioration of yield on Hoverspeed’s Dover-Calais route, and other reasons outlined in the November 3rd restructuring announcement.  The company’s response to these events is to entertain offers to sell Silja and SeaStreak, reduce its involvement in car-carrying fast ferries, and sell or charter out to third parties Silja’s non-core vessels.  A restructuring charge totalling $157 million will be taken this year in respect of write-downs of certain vessels, redundancy and other exit costs.  This includes an impairment charge of $19.2 million recognized in the third quarter.”

 

“It is difficult to predict how long it will take to dispose of the businesses and assets as planned, but we hope to have made substantial progress within six months,” he said.

 

3



 

“We announced on November 8th the offering for sale through underwriters of our remaining 9.9 million shares in Orient-Express Hotels.  The share price has been around $30 in recent days.  Proceeds will be used to reduce debt and increase working capital.  The book value of the shares being sold is approximately $18.50 per share so a large profit is expected to arise on sale.”

 

“While it is impossible to predict the sales prices for the various ferry assets being sold, it is anticipated that they will exceed underlying debt.  This will allow the company to reduce consolidated debt.”

 

Mr. Sherwood concluded by saying “The board is taking meaningful steps to rectify the company’s poor operating performance.  We will be sorry to see businesses and long serving employees depart in the process, but we feel we have no other choice and ask for the understanding of all interested parties.”

 

***

 

Management believes that EBITDA (net earnings adjusted for net finance costs, tax, depreciation, amortization and the investment in equity investees other than GE SeaCo) is a useful measure of operating performance, to help determine the ability to incur capital expenditure or service indebtedness, because it is not affected by non-operating factors such as leverage and the historic cost of assets.  However, EBITDA does not represent cash flow from operations as defined by U.S. generally accepted accounting principles, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to earnings from operations under U.S. generally accepted accounting principles for purposes of evaluating results of operations.

 

This news release contains, in addition to historical information, forward-looking statements that involve risks and uncertainties.  These include statements regarding reorganization plans, earnings improvements and similar matters that are not historical facts.  These statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements.  Factors that may cause a difference include, but are not limited to, those mentioned in the news release, unknown effects on the transport, leasing and leisure markets in which the company operates of terrorist activity and any police or military response, varying customer demand and competitive

 

4



 

considerations, inability to sustain price increases or to reduce costs, fluctuations in interest rates, currency values and public securities prices, variable fuel prices, variable container prices and container lease and utilization rates, uncertainty of negotiating and completing proposed sale, chartering and disposal transactions, realization of asset sales proceeds less than related mortgage debt, inadequate sources of capital and unacceptability of proposed finance terms and inability to reduce debt, global, regional and industry economic conditions, shifting patterns and levels of world trade and regional passenger travel, seasonality and adverse weather conditions, changes in ferry service and ship deployment plans, possible start-up losses on new ferry services, possible lay-up of ships that cannot be sold, chartered out or redeployed and incurrence of lay-up costs, potential incurrence of disposal losses, restructuring charges and asset write-offs greater than currently estimated, uncertainty of the outcome of GE SeaCo disputes with GE Capital and their possible adverse financial effects on the company, and legislative, regulatory and political developments including the uncertainty obtaining other U.K. rail franchises.  Further information regarding these and other factors is included in the filings by the company and Orient-Express Hotels Ltd. with the U.S. Securities and Exchange Commission.

 

***

 

Sea Containers Ltd. will conduct a conference call on Thursday, November 10, 2005 at 10.00 AM (EST) which is accessible at 212-346-6390.  A re-play of the conference call will be available until 5.00 PM (EST) Friday, November 18, 2005 and can be accessed by calling 800-633-8284 (International dial-in #: 402-977-9140) and entering reservation number 21266960.  The call will be broadcast live and a re-play will be available on the company’s website: www.seacontainers.com.

 

5



 

SEA CONTAINERS LTD. AND SUBSIDIARIES (SCL)

SUMMARY OF OPERATING RESULTS (UNAUDITED)

 

 

 

For the Three Months Ended
September 30, 2005

 

For the Nine Months Ended
September 30, 2005

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

Revenue:

 

 

 

 

 

 

 

 

 

Ferry operations - Silja

 

187,197

 

181,940

 

467,930

 

481,010

 

Ferry operations - Other

 

25,934

 

44,003

 

49,935

 

78,774

 

Rail operations

 

203,917

 

224,945

 

653,676

 

633,411

 

Container operations

 

33,464

 

36,041

 

106,628

 

88,335

 

Other

 

5,455

 

5,307

 

17,395

 

16,373

 

Total Revenue

 

455,967

 

492,236

 

1,295,564

 

1,297,903

 

 

 

 

 

 

 

 

 

 

 

Operating income / (losses) before non-recurring charges:

 

 

 

 

 

 

 

 

 

Ferry operations:

 

 

 

 

 

 

 

 

 

Silja

 

20,037

 

21,243

 

(313

)

28,232

 

Other

 

(10,298

)

(4,178

)

(38,022

)

(21,735

)

 

 

9,739

 

17,065

 

(38,335

)

6,497

 

 

 

 

 

 

 

 

 

 

 

Rail operations

 

(7,578

)

13,957

 

22,194

 

40,759

 

 

 

 

 

 

 

 

 

 

 

Container operations:

 

 

 

 

 

 

 

 

 

Investment in GE SeaCo*

 

6,021

 

8,573

 

19,891

 

23,696

 

Other

 

5,039

 

4,462

 

10,690

 

9,829

 

 

 

11,060

 

13,035

 

30,581

 

33,525

 

 

 

 

 

 

 

 

 

 

 

Other, including property, publishing and plantations

 

(689

)

(630

)

(2,302

)

(1,607

)

 

 

 

 

 

 

 

 

 

 

(Losses) / gains on sale of assets

 

(1,671

)

5,732

 

(3,633

)

5,732

 

Non-recurring charges

 

(19,486

)

(3,369

)

(38,511

)

(6,738

)

Corporate costs

 

(5,493

)

(5,102

)

(15,122

)

(13,471

)

Operating income / (loss)

 

(14,118

)

40,688

 

(45,128

)

64,697

 

Net finance charges

 

(19,125

)

(19,303

)

(61,478

)

(59,906

)

(Losses) / earnings from income taxes

 

(33,243

)

21,385

 

(106,606

)

4,791

 

(Provision for) / benefit from income taxes

 

(5,573

)

(8,393

)

(1,230

)

(4,893

)

(Losses) / earnings before earnings from investments in Orient-Express Hotels Ltd.

 

(38,816

)

12,992

 

(107,836

)

(102

)

Investments in Orient-Express Hotels Ltd.

 

4,910

 

4,834

 

8,657

 

8,326

 

Gain on sale of OEH shares

 

 

 

41,099

 

 

Earnings from other equity investments

 

(468

)

568

 

(468

)

655

 

Net (losses) / earnings

 

(34,374

)

18,394

 

(58,548

)

8,879

 

Preferred share dividends

 

 

(272

)

(377

)

(816

)

 

 

 

 

 

 

 

 

 

 

Net (losses) / earnings on class A and class B common shares

 

(34,374

)

18,122

 

(58,925

)

8,063

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

$

 

$

 

$

 

Net (losses) / earnings per class A and class B common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A:

 

 

 

 

 

 

 

 

 

Basic

 

(1.25

)

0.78

 

(2.16

)

0.35

 

Diluted

 

(1.25

)

0.77

 

(2.16

)

0.35

 

Class B:

 

 

 

 

 

 

 

 

 

Basic

 

(1.25

)

0.70

 

(2.16

)

0.32

 

Diluted

 

(1.25

)

0.69

 

(2.16

)

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

‘000

 

‘000

 

‘000

 

‘000

 

Weighted average number of class A and class B common shares:

 

 

 

 

 

 

 

 

 

Class A:

 

 

 

 

 

 

 

 

 

Basic

 

26,136

 

21,967

 

25,815

 

21,613

 

Diluted

 

26,136

 

22,080

 

25,815

 

21,748

 

Class B:

 

 

 

 

 

 

 

 

 

Basic

 

1,430

 

1,512

 

1,461

 

1,513

 

Diluted

 

1,430

 

1,991

 

1,461

 

1,513

 

 


* After finance costs

 

6



 

SEA CONTAINERS LTD. AND SUBSIDIARIES (SCL)

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

September 30,
2005

 

December 31,
2004

 

 

 

$000

 

$000

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

83,059

 

129,079

 

Restricted cash

 

23,285

 

17,056

 

Accounts receivable

 

132,915

 

125,938

 

Due from related parties

 

30,581

 

38,030

 

Prepaid expenses and other current assets

 

24,144

 

27,507

 

Inventories

 

40,904

 

43,000

 

Assets held for sale

 

9,018

 

8,440

 

Total current assets

 

343,906

 

389,050

 

 

 

 

 

 

 

Property plant & equipment, net book value

 

1,611,032

 

1,820,812

 

Investments

 

363,459

 

397,755

 

Goodwill

 

19,542

 

18,725

 

Other Assets

 

109,824

 

109,758

 

 

 

 

 

 

 

 

 

2,447,763

 

2,736,100

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Working capital facilities

 

4,447

 

305

 

Accounts payable

 

115,302

 

145,733

 

Accrued liabilities

 

235,095

 

254,533

 

Deferred revenue

 

14,266

 

14,389

 

Liabilities of assets held for sale

 

4,951

 

5,277

 

Current portion of long-term debt and capital leases

 

143,286

 

165,825

 

Total current liabilities

 

517,347

 

586,062

 

 

 

 

 

 

 

Long-term debt and obligations under capital leases

 

1,206,988

 

1,359,629

 

Minority interest

 

1,822

 

1,646

 

 

 

 

 

 

 

Redeemable preferred shares

 

 

15,000

 

 

 

 

 

 

 

Shareholders’ equity

 

1,112,867

 

1,165,024

 

Class B common shares with voting rights owned by a subsidiary

 

(391,261

)

(391,261

)

 

 

 

 

 

 

 

 

2,447,763

 

2,736,100

 

 

7



 

SEA CONTAINERS LTD. AND SUBSIDIARIES (SCL)

SUPPLEMENTARY INFORMATION

 

1. Sea Containers Ltd. EBITDA Summary

 

 

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

EBITDA from operations before non-recurring charges:

 

 

 

 

 

 

 

 

 

Silja operations

 

31,486

 

32,632

 

35,366

 

61,659

 

Other ferry operations

 

(8,128

)

(1,441

)

(30,972

)

(14,041

)

Rail operations

 

(4,389

)

17,199

 

34,480

 

51,993

 

Investment in GE SeaCo *

 

6,021

 

8,573

 

19,891

 

23,696

 

Other container operations

 

15,909

 

15,622

 

44,088

 

43,321

 

Property, plantations and publishing

 

(359

)

(269

)

(1,374

)

(626

)

 

 

 

 

 

 

 

 

 

 

Total EBITDA from operations before non-recurring charges

 

40,540

 

72,316

 

101,479

 

166,002

 

 

 

 

 

 

 

 

 

 

 

(Losses) / gains on sale of assets

 

(1,671

)

5,732

 

(3,633

)

5,732

 

Non-recurring charges

 

(19,486

)

(3,369

)

(38,511

)

(6,738

)

Corporate costs

 

(5,493

)

(5,102

)

(15,122

)

(13,471

)

Investments in OEH and other equity investments

 

4,442

 

5,402

 

8,189

 

8,981

 

Gain on sale of OEH shares

 

 

 

41,099

 

 

Total EBITDA

 

18,332

 

74,979

 

93,501

 

160,506

 

Depreciation and amortization

 

(28,008

)

(28,889

)

(89,341

)

(86,828

)

Net finance costs

 

(19,125

)

(19,303

)

(61,478

)

(59,906

)

Taxation

 

(5,573

)

(8,393

)

(1,230

)

(4,893

)

Net (losses) / earnings

 

(34,374

)

18,394

 

(58,548

)

8,879

 

 


* Investment in GE SeaCo represents SCL’s 50% share of GE SeaCo earnings before tax. Including SCL’s 50% share of GE SeaCo EBITDA rather than 50% share of earnings before tax would increase SCL’s EBITDA to $31.3 million and $129.4 million in the three months and nine months ended September 30, 2005, respectively, ($82.6 million and $181.3 million for the equivalent 2004 periods).

 

2. Non-Recurring Charges

 

 

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

 

 

 

 

 

 

 

 

 

 

Belfast-Troon closure costs (Other Ferries)

 

 

 

(3,000

)

 

Ferry asset write-downs (Other Ferries)

 

(19,216

)

 

(19,216

)

 

SRA franchise costs (Rail)

 

 

(3,369

)

(12,000

)

(6,738

)

GE Capital dispute charge (Corporate costs)

 

(270

)

 

(4,295

)

 

Total non-recurring charges

 

(19,486

)

(3,369

)

(38,511

)

(6,738

)

 

8



 

Silja Operations

 

 

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

187,197

 

181,940

 

467,930

 

481,010

 

Operating and SG & A expenses

 

(155,711

)

(149,308

)

(432,564

)

(419,351

)

EBITDA

 

31,486

 

32,632

 

35,366

 

61,659

 

Depreciation and amortization

 

(11,449

)

(11,389

)

(35,679

)

(33,427

)

 

 

 

 

 

 

 

 

 

 

Operating income / (loss) before non-recurring charges

 

20,037

 

21,243

 

(313

)

28,232

 

 

Other Ferry Operations

 

 

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

25,934

 

44,003

 

49,935

 

78,774

 

Operating and SG & A expenses

 

(34,062

)

(45,444

)

(80,907

)

(92,815

)

EBITDA

 

(8,128

)

(1,441

)

(30,972

)

(14,041

)

Depreciation and amortization

 

(2,170

)

(2,737

)

(7,050

)

(7,694

)

 

 

 

 

 

 

 

 

 

 

Operating loss before non-recurring charges

 

(10,298

)

(4,178

)

(38,022

)

(21,735

)

 

Rail Operations

 

 

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

203,917

 

224,945

 

653,676

 

633,411

 

Operating and SG & A expenses

 

(208,306

)

(207,746

)

(619,196

)

(581,418

)

EBITDA

 

(4,389

)

17,199

 

34,480

 

51,993

 

Depreciation and amortization

 

(3,189

)

(3,242

)

(12,286

)

(11,234

)

 

 

 

 

 

 

 

 

 

 

Operating (loss) / income before non-recurring charges

 

(7,578

)

13,957

 

22,194

 

40,759

 

 

GE SeaCo

GE SEaCo Owned Fleet (100%)

 

 

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

47,695

 

39,436

 

139,452

 

108,137

 

Operating and SG & A expenses

 

(9,772

)

(6,988

)

(27,834

)

(19,133

)

EBITDA

 

37,923

 

32,448

 

111,618

 

89,004

 

Depreciation and amortization

 

(14,670

)

(9,866

)

(44,529

)

(29,195

)

Operating income

 

23,253

 

22,582

 

67,089

 

59,809

 

Finance costs

 

(11,211

)

(5,435

)

(27,307

)

(12,416

)

Earnings before tax

 

12,042

 

17,147

 

39,782

 

47,393

 

SCL’s 50% share

 

6,021

 

8,573

 

19,891

 

23,696

 

 

9



 

Other Container Operations

 

 

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

33,464

 

36,041

 

106,628

 

88,335

 

Operating and SG & A expenses

 

(17,555

)

(20,419

)

(62,540

)

(45,014

)

EBITDA

 

15,909

 

15,622

 

44,088

 

43,321

 

Depreciation and amortization

 

(10,870

)

(11,160

)

(33,398

)

(33,492

)

 

 

 

 

 

 

 

 

 

 

Operating income before non-recurring charges

 

5,039

 

4,462

 

10,690

 

9,829

 

 

Property, Plantations and Publishing

 

 

 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

$000

 

$000

 

$000

 

$000

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

5,455

 

5,307

 

17,395

 

16,373

 

Operating and SG & A expenses

 

(5,814

)

(5,576

)

(18,769

)

(16,999

)

EBITDA

 

(359

)

(269

)

(1,374

)

(626

)

Depreciation and amortization

 

(330

)

(361

)

(928

)

(981

)

 

 

 

 

 

 

 

 

 

 

Operating loss before non-recurring charges

 

(689

)

(630

)

(2,302

)

(1,607

)

 

10