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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

Commission file number 1-7560

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 ý    No o

Indicate by check mark whether the registrant is an accelerated filer (under Rule 12b-2 of the Exchange Act). Yes ý    No o

As of October 29, 2004, 23,406,759 Class A common shares and 14,403,995 Class B common shares of Sea Containers Ltd. were outstanding including 12,900,000 Class B shares owned by a subsidiary of the registrant.

PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements

Sea Containers Ltd. and Subsidiaries

Consolidated Balance Sheets (unaudited)

See notes to condensed consolidated financial statements.

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See notes to condensed consolidated financial statements.

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Sea Containers Ltd. and Subsidiaries

Statements of Consolidated Operations (unaudited)

See notes to condensed consolidated financial statements.

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Sea Containers Ltd. and Subsidiaries

Statements of Consolidated Operations (unaudited)

See notes to condensed consolidated financial statements.

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Sea Containers Ltd. and Subsidiaries

Statements of Consolidated Cash Flows (unaudited)

See notes to condensed consolidated financial statements.

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Sea Containers Ltd. and Subsidiaries

Statement of Changes in Consolidated Shareholders' Equity and Comprehensive Loss (unaudited)

See notes to condensed consolidated financial statements.

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Sea Containers Ltd. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

1.     Basis of financial statement presentation

        For purposes of these Notes, the "Company" refers to Sea Containers Ltd., and "SCL" refers to Sea Containers Ltd. and its subsidiaries. "OEH" refers to Orient-Express Hotels Ltd., a 42% equity investment of the Company engaged in the hotel and leisure business. "GE SeaCo" refers to GE SeaCo SRL, a 50%/50% container leasing joint venture company between the Company and General Electric Capital Corporation accounted for under the equity method. "GNER" refers to Great North Eastern Railway Ltd., a wholly-owned subsidiary of the Company and operator of SCL's passenger rail franchise in Great Britain. "Silja" refers to Silja Oy Ab, a wholly-owned subsidiary of the Company based in Finland engaged in ferry operations in the Baltic Sea.

(a)    Accounting policies

        For a description of significant accounting policies, see the Notes to the consolidated financial statements in the Company's 2003 Form 10-K annual report. As of September 30, 2004, these significant accounting policies have not changed from December 31, 2003. The condensed consolidated financial statements are unaudited and have been prepared following the rules and regulations of the U.S. Securities Exchange Commission. "SFAS" means a Statement of Financial Accounting Standards and "FIN" means an accounting interpretation, both of the Financial Accounting Standards Board.

        Investments represent equity interests of 20% to 50% in unconsolidated companies. SCL exerts significant influence over these companies but does not have control and, therefore, accounts for these investments using the equity method. SCL's principal equity investees are GE SeaCo and OEH. GE SeaCo is engaged in the container leasing business. OEH is engaged in the hotel and leisure business.

        Equity in earnings of GE SeaCo is presented within earnings from operations in the statements of consolidated operations due to the integral nature of GE SeaCo's operations to SCL's consolidated operations as both companies are engaged in the container leasing business operated in a similar manner with similar management. SCL provides management and administrative services and leases containers to GE SeaCo (see Note 15). In addition, certain officers of the Company are also officers of GE SeaCo, including the Chairman and Chief Financial Officer. Equity in earnings of OEH is presented below earnings after tax in the statements of consolidated operations because OEH's operations are not considered integral to SCL's operations.

        Certain reclassifications have been made to the 2003 financial statements to conform to the classifications in the 2004 financial statements. In the opinion of management, all adjustments necessary for a fair statement of the results of operations for the nine months ended September 30, 2004 and 2003, which are all of a normal recurring nature, have been reflected in the information provided. Due to the seasonal nature of SCL's business, operating results of the interim period are not indicative of a full year's operating results.

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(b)    Earnings per share

        The number of shares used in computing basic and diluted earnings per share was as follows (in thousands):

        Options to purchase 9,069 and 33,383 class A common shares at prices greater than the average market price of these shares were excluded from the computation of diluted earnings per share for the nine months ended September 30, 2004 and 2003, respectively.

        Options to purchase 11,549 and 18,295 class A common shares at prices greater than the average market price of these shares were excluded from the computation of diluted earnings per share for the three months ended September 30, 2004 and 2003, respectively. In addition, for the nine months ended September 30, 2004, 478,622 class B common shares issuable on conversion of convertible preferred shares were excluded from the computation of diluted earnings per share because to do so would have been anti-dilutive for the period presented.

(c)    Stock-based compensation

        SCL's compensation cost for share options is measured as the excess, if any, of the quoted market price of the Company's shares at the date of the grant over the amount an employee must pay to acquire the shares, in accordance with the intrinsic value method under Accounting Principles Board Opinion No. 25. If compensation cost for the Company's stock option plans had been determined

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based on fair values as of the date of grant, SCL's net earnings and earnings per share would have been reported as follows (dollars in thousands, except per share amounts):

        The pro forma figures in the preceding tables may not be representative of pro forma amounts in future years.

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(d)    Dividends

        On January 20, April 20, July 20 and October 20, 2004, the Company declared a quarterly dividend of $0.025 per class A common share and $0.0225 per class B common share.

(e)    Recent accounting pronouncements

        In March 2004, the Emerging Issues Task Force reached consensus on Issue No. 03-06, "Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings per Share". Effective for quarters ending after March 31, 2004, this consensus clarifies the term participating security as used in SFAS No. 128. The Company has determined that its convertible preferred shares are not considered a participating security under this consensus and that its provisions had no effect on SCL's financial statements.

        In January 2003, the Financial Accounting Standards Board issued FIN No. 46 "Consolidation of Variable Interest Entities", as amended by FIN No. 46R, which applied immediately to variable interest entities created after January 31, 2003, and with respect to variable interests held before February 1, 2003, applied beginning with SCL's quarter ended March 31, 2004. SCL has evaluated all of its existing joint venture agreements and has determined that none of its joint ventures is within the scope of FIN No. 46R. The adoption of FIN No. 46R had no impact on SCL.

(f)    Pensions

        Components of net periodic pension benefit cost for SCL's four defined benefit plans are as follows (dollars in thousands):

        As reported in Note 12 to the financial statements in the 2003 Form 10-K annual report, SCL expected to contribute $7,961,000 to its pension plans in 2004. As of September 30, 2004, pension

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contributions of $5,776,000 have been made. SCL anticipates contributing an additional $2,365,000 to fund its pension plans in 2004 for a total of $8,141,000.

2.     Gains on sale of assets and non-recurring charges

(a)    Gains on sale of assets

        The gain on sale of assets in 2004 of $5,732,000 arose from the sale of the port of Folkestone in August. The sale price was approximately $20,000,000 paid in cash.

        On July 18, 2003, the Company completed the sale of its indirect wholly-owned subsidiary Sea Containers Isle of Man Ltd., which was the holding company of SCL's Isle of Man Steam Packet ferry business (collectively "Steam Packet"). The sale price was approximately $242,000,000, paid in cash, which resulted in a gain on sale of approximately $100,000,000.

        In September 2003, a gain of $5,000,000 arose on the sale of property in the port of Newhaven. The sale price was approximately $14,000,000 paid in cash.

(b)    Non-recurring charges

        As a result of the sale of Steam Packet in 2003 and SCL's concurrent restructuring of its fast ferry business, together with management's implementation of a plan to sell certain specifically identified container assets, an impairment evaluation was performed in accordance with the guidelines of SFAS No. 144. This indicated that the carrying value of certain ship and ship-related assets and certain specifically identified container assets exceeded the expected future cash flows attributable to these assets, resulting in an impairment. The impairment charge recognized during the third quarter of 2003 on ship and ship-related assets was approximately $15,000,000 and on container assets approximately $10,000,000 a total impairment in connection with this evaluation of $25,000,000. The impairment was determined by taking the excess of the carrying value over the estimated fair value of the respective assets. Fair value was determined using estimated future discounted cash flows and external valuations where applicable.

        In connection with the restructuring of some of SCL's ferry routes, SCL recorded a severance charge for about 400 employees of approximately $10,000,000, all of which was paid in 2003.

        Other non-recurring charges of approximately $5,000,000 were incurred including $3,700,000 relating to the Company's exchange offers for a portion of its publicly-traded debt. These costs consisted of legal and other professional fees.

        For additional information about these non-recurring charges, see Note 3(b) to the financial statements in the Company's Form 10-K annual report for the year ended December 31, 2003.

3.     Acquisitions and investments

(a)    Acquisitions

        On July 19, 2004, SCL completed the purchase of certain container depot, service and logistics operations based in Australia and New Zealand for an aggregate price of $7,300,000, part of which was financed by a bank loan. This purchase complements SCL's existing container activities in the region. Goodwill of $5,900,000 was recognized on these transactions on a preliminary basis as the purchase

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allocation has not been finalized. The goodwill was preliminarily assigned to container operations (see Note 5). These acquisitions have been accounted for in accordance with SFAS No. 141. The results of operations have been included in the consolidated financial results of SCL from the date of acquisition and the assets acquired and liabilities assumed of the acquired companies have been recorded at their fair value at the date of acquisition. Pro forma data has not been presented as the revenues and net earnings from these acquisitions would not have a material impact in the year of acquisition.

(b)    Investments

        Summarized financial data for SCL's unconsolidated companies for the periods during which the investments were held by SCL are as follows (dollars in thousands):

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4.     Real estate and other fixed assets

       The major classes of real estate and other fixed assets are as follows (dollars in thousands):

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5.     Intangible assets

        Intangible assets consist of the following (dollars in thousands):

        Amortization expense related to intangible assets subject to amortization was $2,573,000 and $2,483,000 for the nine months ended September 30, 2004 and 2003, respectively, and $842,000 and $923,000 for the three months ended September 30, 2004 and 2003, respectively. Amortization for the next five years is expected to be approximately $3,500,000 annually.

        The changes in the carrying amount of goodwill for the nine months ended September 30, 2004 are as follows (dollars in thousands):

6.     Long-term debt (other than senior notes and senior subordinated debentures)

        Long-term debt consists of the following (dollars in thousands):

        Several credit agreements of SCL have restrictive financial covenants. At September 30, 2004, SCL was in compliance with its covenants.

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        Included in long-term debt is a revolving credit facility with a group of banks collateralized by container equipment, a securitization facility with a nine-year term collateralized by other container equipment, and a revolving credit and term loan facility collateralized on Silja ship assets. At September 30, 2004, $106,500,000, $184,256,000 and $465,662,000, respectively, was outstanding under these facilities (December 31, 2003—$129,038,000, $223,201,000 and $397,328,000, respectively). The first facility was refinanced in October 2004 as a revolving term-loan facility of $85,000,000 that comes due in October 2007.

        The following is a summary of the aggregate maturities of long-term debt at September 30, 2004 (dollars in thousands):

        The interest rates on substantially all SCL's long-term debt are adjusted regularly to reflect current market rates. Accordingly, the carrying value of SCL's long-term debt at September 30, 2004 and December 31, 2003 was a reasonable estimate of its fair value.

        In addition, syndicates of banks have provided GE SeaCo with $217,800,000 of credit facilities to fund new container purchases. Also, a bankruptcy-remote subsidiary of GE SeaCo formed to facilitate asset securitization has a $658,500,000 container securitization facility. At September 30, 2004, GE SeaCo had borrowed $638,300,000 (December 31, 2003—$511,000,000) under these facilities, none of which is guaranteed by SCL.

        Also, SCL has guaranteed through 2010 one half of a $7,102,000 (December 31, 2003—$9,026,000) bank loan to Speedinvest Ltd., owner of the Adriatic fast ferry in which SCL has a 50% interest. This guarantee existed prior to December 31, 2002 and has not been modified.

7.     Senior notes and senior subordinated debentures

        The maturities relating to the senior notes of SCL outstanding at December 31, 2003 are disclosed in Note 11 to the financial statements in the Company's 2003 Form 10-K annual report.

        On May 4, 2004, the Company issued and sold $103,000,000 aggregate principal amount of unsecured 10¹/2% senior notes due 2012 in an underwritten public offering. The notes bear interest at 10¹/2% per annum but were sold at a discounted price of $100,290,070 to yield 11% per annum. The $2,709,930 original issue discount will be amortized over the life of the notes, which have no sinking fund requirement and come due on May 15, 2012. The notes are redeemable, in whole or in part, at the option of the Company at a price of 105.25% of the principal amount on or after May 15, 2008, 102.625% on or after May 15, 2009, and 100% on or after May 15, 2010. The notes may also be redeemed by the Company in the event of certain tax law changes. 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% of the principal amount. The proceeds of the sale of the notes were used in part to redeem on June 7, 2004 the $79,729,000 aggregate principal amount of the Company's 12¹/2% senior subordinated debentures due 2004.

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8.     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 consists of the following (dollars in thousands):

        SCL is incorporated in Bermuda which does not impose an income tax. SCL's effective tax rate is entirely due to income taxes imposed by jurisdictions in which SCL conducts business other than Bermuda.

        The net deferred tax assets recorded in other assets in the consolidated balance sheets are comprised of the following (dollars in thousands):

        The gross deferred tax assets relate primarily to operating loss carryforwards and future tax benefits of accrued pension costs. The deferred tax liabilities are temporary differences substantially caused by tax depreciation in excess of book depreciation.

9.     Supplemental cash flow information

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        In conjunction with acquisitions (see Note 3(a)), liabilities were assumed as follows (dollars in thousands):

10.   Derivative financial instruments

        At September 30, 2004, SCL had a fixed rate interest rate swap on container debt in the securitization facility described in Note 6, which has been designated as a cash flow hedge. Changes in fair value that represent the effective portion of the swap are accumulated in other comprehensive loss. Amounts accumulated in other comprehensive loss are being reclassified into earnings as the hedged interest cash flows are accrued and as a result of ineffectiveness. The fair value of the swap at September 30, 2004 was a $8,370,000 liability (December 31, 2003—$12,570,000 liability). During the nine months ended September 30, 2004, $3,400,000 was recognized in earnings as a result of ineffectiveness. SCL estimates that approximately $1,920,000 will be recognized in earnings during the next 12 months.

11.   Accumulated other comprehensive loss

        The accumulated balances for each component of other comprehensive loss are as follows (dollars in thousands):

12.   Commitments

        Outstanding contracts to purchase fixed assets were approximately $4,200,000 at September 30, 2004 (December 31, 2003—$16,000,000).

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13.   Information concerning financial reporting for segments and operations in different geographical areas

        Financial information regarding SCL's business segments is as follows (dollars in thousands):

        The identifiable assets of SCL's business segments are as follows (dollars in thousands):