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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SFL Corporation Ltd | NYSE:SFL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.01 | 0.07% | 13.64 | 13.70 | 13.50 | 13.64 | 449,313 | 01:00:00 |
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Unaudited Condensed Consolidated Statements of Operations for the six months ended June 30, 2017 and June 30, 2016 and the year ended December 31, 2016
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Page
4
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Unaudited Condensed Consolidated Statements of Comprehensive Income for the six months ended June 30, 2017 and June 30, 2016 and the year ended December 31, 2016
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Page
5
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Unaudited Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016
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Page
6
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Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and June 30, 2016 and the year ended December 31, 2016
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Page
7
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Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2017 and June 30, 2016 and the year ended December 31, 2016
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Page
8
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Notes to the Unaudited Condensed Consolidated Financial Statements
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Page
9
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Page
35
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Cautionary Statement Regarding Forward-Looking Statement
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Page
45
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Signatures
|
Page
47
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Six months ended
|
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Year ended
|
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|||||||
|
June 30,
|
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December 31,
|
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|||||||
|
2017
|
|
|
2016
|
|
|
2016
|
|
|||
Operating revenues
|
|
|
|
|
|
||||||
Direct financing lease interest income - related parties
|
9,385
|
|
|
12,208
|
|
|
22,850
|
|
|||
Direct financing and sales-type lease interest income - other
|
9,604
|
|
|
—
|
|
|
331
|
|
|||
Finance lease service revenues - related parties
|
19,827
|
|
|
22,932
|
|
|
44,523
|
|
|||
Profit sharing revenues - related parties
|
5,591
|
|
|
38,937
|
|
|
51,470
|
|
|||
Profit sharing revenues - other
|
61
|
|
|
74
|
|
|
74
|
|
|||
Time charter revenues - related parties
|
25,717
|
|
|
28,755
|
|
|
55,265
|
|
|||
Time charter revenues - other
|
90,862
|
|
|
80,956
|
|
|
171,483
|
|
|||
Bareboat charter revenues - related parties
|
3,823
|
|
|
6,188
|
|
|
10,075
|
|
|||
Bareboat charter revenues - other
|
15,523
|
|
|
19,287
|
|
|
34,964
|
|
|||
Voyage charter revenues - other
|
9,701
|
|
|
9,022
|
|
|
19,329
|
|
|||
Other operating income
|
1,009
|
|
|
3,215
|
|
|
2,587
|
|
|||
Total operating revenues
|
191,103
|
|
|
221,574
|
|
|
412,951
|
|
|||
Gain/(loss) on sale of assets and termination of charters, net
|
779
|
|
|
14
|
|
|
(167
|
)
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Vessel operating expenses - related parties
|
31,013
|
|
|
34,224
|
|
|
67,221
|
|
|||
Vessel operating expenses - other
|
35,097
|
|
|
34,590
|
|
|
68,795
|
|
|||
Depreciation
|
43,364
|
|
|
46,304
|
|
|
94,293
|
|
|||
Vessel impairment charge
|
—
|
|
|
—
|
|
|
5,314
|
|
|||
Administrative expenses - related parties
|
405
|
|
|
730
|
|
|
1,443
|
|
|||
Administrative expenses - other
|
3,601
|
|
|
4,058
|
|
|
7,629
|
|
|||
Total operating expenses
|
113,480
|
|
|
119,906
|
|
|
244,695
|
|
|||
Net operating income
|
78,402
|
|
|
101,682
|
|
|
168,089
|
|
|||
Non-operating income/(expense)
|
|
|
|
|
|
||||||
Interest income - related parties, long term loans to associated companies
|
8,200
|
|
|
9,338
|
|
|
18,675
|
|
|||
Interest income - related parties, other
|
1,372
|
|
|
383
|
|
|
897
|
|
|||
Interest income - other
|
1,017
|
|
|
666
|
|
|
2,164
|
|
|||
Interest expense - other
|
(44,307
|
)
|
|
(35,274
|
)
|
|
(71,843
|
)
|
|||
(Loss)/gain on repurchase of bonds
|
(756
|
)
|
|
(38
|
)
|
|
(8,802
|
)
|
|||
Dividend income - related parties
|
3,300
|
|
|
8,250
|
|
|
11,550
|
|
|||
Other financial items, net
|
(8,690
|
)
|
|
(13,718
|
)
|
|
(2,089
|
)
|
|||
Net income before equity in earnings of associated companies
|
38,538
|
|
|
71,289
|
|
|
118,641
|
|
|||
Equity in earnings of associated companies
|
13,855
|
|
|
14,322
|
|
|
27,765
|
|
|||
Net income
|
52,393
|
|
|
85,611
|
|
|
146,406
|
|
|||
Per share information:
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
0.56
|
|
|
$
|
0.92
|
|
|
$
|
1.57
|
|
Diluted earnings per share
|
$
|
0.54
|
|
|
$
|
0.78
|
|
|
$
|
1.50
|
|
|
Six months ended
|
|
Year ended
|
|
||||
|
June 30,
|
|
December 31,
|
|
||||
|
2017
|
|
|
2016
|
|
|
2016
|
|
Net income
|
52,393
|
|
|
85,611
|
|
|
146,406
|
|
Fair value adjustments to hedging financial instruments
|
3,221
|
|
|
(14,540
|
)
|
|
9,702
|
|
Fair value adjustments to hedging financial instruments in associated companies
|
505
|
|
|
(1,767
|
)
|
|
1,150
|
|
Fair value adjustments to available for sale securities
|
(8,806
|
)
|
|
(92,077
|
)
|
|
(93,406
|
)
|
Other comprehensive income/(loss)
|
39
|
|
|
11
|
|
|
(38
|
)
|
Reclassification into net income of previous fair value adjustments to hedging financial instruments
|
708
|
|
|
—
|
|
|
—
|
|
Other comprehensive income/(loss), net of tax
|
(4,333
|
)
|
|
(108,373
|
)
|
|
(82,592
|
)
|
|
|
|
|
|
|
|||
Comprehensive income/(loss)
|
48,060
|
|
|
(22,762
|
)
|
|
63,814
|
|
|
June 30,
2017 |
|
|
December 31,
2016 |
|
ASSETS
|
|
|
|
||
Current assets
|
|
|
|
||
Cash and cash equivalents
|
248,999
|
|
|
62,382
|
|
Restricted cash
|
9,000
|
|
|
—
|
|
Available-for-sale securities
|
110,802
|
|
|
118,489
|
|
Trade accounts receivable
|
6,309
|
|
|
3,549
|
|
Other receivables
|
12,682
|
|
|
11,370
|
|
Due from related parties
|
16,933
|
|
|
17,519
|
|
Inventories
|
5,034
|
|
|
5,083
|
|
Prepaid expenses and accrued income
|
4,692
|
|
|
3,608
|
|
Investment in direct financing and sales-type leases, current portion
|
33,083
|
|
|
32,220
|
|
Assets held for sale
|
—
|
|
|
24,097
|
|
Financial instruments (short-term): at fair value
|
79
|
|
|
110
|
|
Total current assets
|
447,613
|
|
|
278,427
|
|
Vessels and equipment, net
|
1,691,530
|
|
|
1,737,169
|
|
Newbuildings and vessel purchase deposits
|
45,907
|
|
|
33,447
|
|
Investment in direct financing and sales-type leases, long-term portion
|
612,390
|
|
|
523,815
|
|
Investment in associated companies
|
91
|
|
|
130
|
|
Loans to related parties - associated companies, long-term
|
314,000
|
|
|
330,087
|
|
Long-term receivables from related parties
|
8,171
|
|
|
9,268
|
|
Other long-term assets
|
14,559
|
|
|
18,992
|
|
Financial instruments (long-term): at fair value
|
4,652
|
|
|
6,042
|
|
Total assets
|
3,138,913
|
|
|
2,937,377
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||
Current liabilities
|
|
|
|
||
Short-term debt and current portion of long-term debt
|
487,859
|
|
|
174,900
|
|
Trade accounts payable
|
1,132
|
|
|
1,229
|
|
Due to related parties
|
3,479
|
|
|
850
|
|
Financial instruments (short-term): at fair value
|
39,366
|
|
|
39,309
|
|
Accrued expenses
|
13,066
|
|
|
13,800
|
|
Other current liabilities
|
16,762
|
|
|
8,882
|
|
Total current liabilities
|
561,664
|
|
|
238,970
|
|
Long-term liabilities
|
|
|
|
||
Long-term debt
|
1,183,733
|
|
|
1,377,974
|
|
Financial instruments (long-term): at fair value
|
55,709
|
|
|
61,456
|
|
Other long-term liabilities
|
239,625
|
|
|
124,882
|
|
Total liabilities
|
2,040,731
|
|
|
1,803,282
|
|
|
|
|
|
||
Commitments and contingent liabilities
|
|
|
|
||
Stockholders’ equity
|
|
|
|
||
Share capital ($0.01 par value; 150,000,000 shares authorized; 101,504,575 shares issued and outstanding at June 30, 2017 and at December 31, 2016)
|
1,015
|
|
|
1,015
|
|
Additional paid-in capital
|
282,683
|
|
|
282,502
|
|
Contributed surplus
|
680,703
|
|
|
680,703
|
|
Accumulated other comprehensive loss
|
(89,617
|
)
|
|
(84,779
|
)
|
Accumulated other comprehensive loss - associated companies
|
(471
|
)
|
|
(976
|
)
|
Retained earnings
|
223,869
|
|
|
255,630
|
|
Total stockholders’ equity
|
1,098,182
|
|
|
1,134,095
|
|
Total liabilities and stockholders’ equity
|
3,138,913
|
|
|
2,937,377
|
|
|
Six months ended
|
|
Year ended
|
|
||||
|
June 30,
|
|
December 31,
|
|
||||
|
2017
|
|
|
2016
|
|
|
2016
|
|
Operating activities
|
|
|
|
|
|
|||
Net income
|
52,393
|
|
|
85,611
|
|
|
146,406
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||
Depreciation
|
43,364
|
|
|
46,304
|
|
|
94,293
|
|
Vessel impairment charge
|
—
|
|
|
—
|
|
|
5,314
|
|
Amortization of deferred charges
|
4,694
|
|
|
5,663
|
|
|
10,972
|
|
Amortization of seller’s credit
|
(619
|
)
|
|
(694
|
)
|
|
(1,324
|
)
|
Equity in earnings of associated companies
|
(13,855
|
)
|
|
(14,322
|
)
|
|
(27,765
|
)
|
(Gain)/loss on sale of assets and termination of charters
|
(779
|
)
|
|
(14
|
)
|
|
167
|
|
Adjustment of derivatives to fair value recognized in net income
|
4,159
|
|
|
10,408
|
|
|
(4,399
|
)
|
Loss/(gain) on repurchase of bonds
|
756
|
|
|
38
|
|
|
8,802
|
|
Interest receivable in form of notes
|
(635
|
)
|
|
(633
|
)
|
|
(633
|
)
|
Other, net
|
932
|
|
|
157
|
|
|
365
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|||
Trade accounts receivable
|
(2,760
|
)
|
|
6,197
|
|
|
(1,492
|
)
|
Due from related parties
|
16,382
|
|
|
(3,182
|
)
|
|
8,433
|
|
Other receivables
|
(4,073
|
)
|
|
1,307
|
|
|
(856
|
)
|
Inventories
|
49
|
|
|
6
|
|
|
(27
|
)
|
Prepaid expenses and accrued income
|
(1,084
|
)
|
|
2,878
|
|
|
2,181
|
|
Trade accounts payable
|
(97
|
)
|
|
235
|
|
|
394
|
|
Accrued expenses
|
(735
|
)
|
|
(1,426
|
)
|
|
1,046
|
|
Other current liabilities
|
3,055
|
|
|
(14,812
|
)
|
|
(11,804
|
)
|
Net cash provided by operating activities
|
101,147
|
|
|
123,721
|
|
|
230,073
|
|
Investing activities
|
|
|
|
|
|
|||
Net maturities/(deposits) of restricted cash
|
(9,000
|
)
|
|
—
|
|
|
—
|
|
Repayments from investments in direct financing and sales-type leases
|
16,669
|
|
|
16,309
|
|
|
30,410
|
|
Additions to newbuildings
|
(12,460
|
)
|
|
(176,686
|
)
|
|
(188,142
|
)
|
Proceeds/(payments) from sales of vessels and termination of charters
|
62,762
|
|
|
4,932
|
|
|
29,102
|
|
Net amounts received from/(paid to) associated companies
|
21,241
|
|
|
170,866
|
|
|
193,517
|
|
Other investments and long term assets, net
|
(15,736
|
)
|
|
(12,072
|
)
|
|
(25,488
|
)
|
Net cash provided by/(used in) investing activities
|
63,476
|
|
|
3,349
|
|
|
39,399
|
|
Financing activities
|
|
|
|
|
|
|||
Shares issued, net of issuance costs
|
—
|
|
|
243
|
|
|
323
|
|
(Repurchase)/resale of bonds, net
|
(50,128
|
)
|
|
(117,509
|
)
|
|
(296,800
|
)
|
Proceeds from issuance of long-term debt
|
226,104
|
|
|
277,000
|
|
|
522,000
|
|
Repayments of long-term debt
|
(67,274
|
)
|
|
(190,612
|
)
|
|
(329,303
|
)
|
Debt fees paid
|
(700
|
)
|
|
(217
|
)
|
|
(5,099
|
)
|
Repayment of lease obligation liability
|
(1,854
|
)
|
|
—
|
|
|
(97
|
)
|
Cash dividends paid
|
(84,154
|
)
|
|
(84,134
|
)
|
|
(168,289
|
)
|
Net cash provided by/(used in) financing activities
|
21,994
|
|
|
(115,229
|
)
|
|
(277,265
|
)
|
|
|
|
|
|
|
|||
Net change in cash and cash equivalents
|
186,617
|
|
|
11,841
|
|
|
(7,793
|
)
|
Cash and cash equivalents at start of the period
|
62,382
|
|
|
70,175
|
|
|
70,175
|
|
Cash and cash equivalents at end of the period
|
248,999
|
|
|
82,016
|
|
|
62,382
|
|
|
|
|
|
|
|
|||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|||
Interest paid, net of capitalized interest
|
42,694
|
|
|
33,521
|
|
|
65,184
|
|
|
Six months ended
|
|
Year ended
|
|
||||
|
June 30,
|
|
December 31,
|
|
||||
|
2017
|
|
|
2016
|
|
|
2016
|
|
Number of shares outstanding
|
|
|
|
|
|
|||
At beginning of period
|
101,504,575
|
|
|
93,468,000
|
|
|
93,468,000
|
|
Shares issued
|
—
|
|
|
36,575
|
|
|
8,036,575
|
|
At end of period
|
101,504,575
|
|
|
93,504,575
|
|
|
101,504,575
|
|
Share capital
|
|
|
|
|
|
|||
At beginning of period
|
1,015
|
|
|
93,468
|
|
|
93,468
|
|
Shares issued
|
—
|
|
|
37
|
|
|
117
|
|
Transfer to contributed surplus - reduction in par value
|
—
|
|
|
—
|
|
|
(92,570
|
)
|
At end of period
|
1,015
|
|
|
93,505
|
|
|
1,015
|
|
Additional paid-in capital
|
|
|
|
|
|
|||
At beginning of period
|
282,502
|
|
|
285,859
|
|
|
285,859
|
|
Amortization of stock based compensation
|
181
|
|
|
139
|
|
|
403
|
|
Shares issued
|
—
|
|
|
206
|
|
|
206
|
|
Equity component from issuance of convertible bond due 2021
|
—
|
|
|
—
|
|
|
4,551
|
|
Adjustment to equity component arising from partial reacquisition of convertible bond due 2018
|
—
|
|
|
—
|
|
|
(8,517
|
)
|
At end of period
|
282,683
|
|
|
286,204
|
|
|
282,502
|
|
Contributed surplus
|
|
|
|
|
|
|||
At beginning of period
|
680,703
|
|
|
588,133
|
|
|
588,133
|
|
Transfer from share capital - reduction in par value
|
—
|
|
|
—
|
|
|
92,570
|
|
At end of period
|
680,703
|
|
|
588,133
|
|
|
680,703
|
|
Accumulated other comprehensive loss
|
|
|
|
|
|
|||
At beginning of period
|
(84,779
|
)
|
|
(1,037
|
)
|
|
(1,037
|
)
|
Gain/(loss) on hedging financial instruments reclassified into earnings
|
708
|
|
|
—
|
|
|
—
|
|
Fair value adjustments to hedging financial instruments
|
3,221
|
|
|
(14,540
|
)
|
|
9,702
|
|
Fair value adjustments to available-for-sale securities
|
(8,806
|
)
|
|
(92,077
|
)
|
|
(93,406
|
)
|
Other comprehensive income/(loss)
|
39
|
|
|
11
|
|
|
(38
|
)
|
At end of period
|
(89,617
|
)
|
|
(107,643
|
)
|
|
(84,779
|
)
|
Accumulated other comprehensive loss - associated companies
|
|
|
|
|
|
|||
At beginning of period
|
(976
|
)
|
|
(2,126
|
)
|
|
(2,126
|
)
|
Fair value adjustments to hedging financial instruments
|
505
|
|
|
(1,767
|
)
|
|
1,150
|
|
At end of period
|
(471
|
)
|
|
(3,893
|
)
|
|
(976
|
)
|
Retained earnings
|
|
|
|
|
|
|||
At beginning of period
|
255,630
|
|
|
277,513
|
|
|
277,513
|
|
Net income
|
52,393
|
|
|
85,611
|
|
|
146,406
|
|
Dividends declared
|
(84,154
|
)
|
|
(84,135
|
)
|
|
(168,289
|
)
|
At end of period
|
223,869
|
|
|
278,989
|
|
|
255,630
|
|
Total stockholders’ equity
|
1,098,182
|
|
|
1,135,295
|
|
|
1,134,095
|
|
1.
|
INTERIM FINANCIAL DATA
|
2.
|
GAIN ON SALE OF ASSETS AND TERMINATION OF CHARTERS
|
3.
|
EARNINGS PER SHARE
|
|
Six months ended
|
|
Year ended
|
|
||||
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
Basic:
|
|
|
|
|
|
|||
Net income available to stockholders
|
52,393
|
|
|
85,611
|
|
|
146,406
|
|
Diluted:
|
|
|
|
|
|
|||
Net income available to stockholders
|
52,393
|
|
|
85,611
|
|
|
146,406
|
|
Interest and other expenses attributable to convertible bonds
|
4,571
|
|
|
9,151
|
|
|
15,310
|
|
Net income assuming dilution
|
56,964
|
|
|
94,762
|
|
|
161,716
|
|
|
Six months ended
|
|
Year ended
|
|
||||
(in thousands)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
Basic earnings per share:
|
|
|
|
|
|
|||
Weighted average number of common shares outstanding
|
93,505
|
|
|
93,489
|
|
|
93,497
|
|
Diluted earnings per share:
|
|
|
|
|
|
|||
Weighted average number of common shares outstanding
|
93,505
|
|
|
93,489
|
|
|
93,497
|
|
Effect of dilutive share options
|
15
|
|
|
—
|
|
|
—
|
|
Effect of dilutive convertible debt
|
12,410
|
|
|
27,935
|
|
|
14,543
|
|
Weighted average number of common shares outstanding assuming dilution
|
105,930
|
|
|
121,424
|
|
|
108,040
|
|
4.
|
OTHER FINANCIAL ITEMS, NET
|
|
Six months ended
|
|
Year ended
|
|
||||
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
Fair value gain/(loss) of designated derivatives (ineffective portion)
|
138
|
|
|
(840
|
)
|
|
482
|
|
Fair value gain/(loss) on non-designated derivatives, net
|
(4,297
|
)
|
|
(9,568
|
)
|
|
3,917
|
|
Net cash payments on non-designated derivatives
|
(2,779
|
)
|
|
(2,641
|
)
|
|
(4,913
|
)
|
Other items
|
(1,752
|
)
|
|
(669
|
)
|
|
(1,575
|
)
|
Other financial items, net
|
(8,690
|
)
|
|
(13,718
|
)
|
|
(2,089
|
)
|
5.
|
AVAILABLE-FOR-SALE SECURITIES
|
(in thousands of $)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Amortized cost
|
198,568
|
|
|
197,449
|
|
Accumulated net unrealized (loss)/gain
|
(87,766
|
)
|
|
(78,960
|
)
|
Available-for-sale securities
|
110,802
|
|
|
118,489
|
|
6.
|
VESSELS AND EQUIPMENT, NET
|
(in thousands of $)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Cost
|
2,140,898
|
|
|
2,154,994
|
|
Accumulated depreciation
|
(449,368
|
)
|
|
(417,825
|
)
|
Vessels and equipment, net
|
1,691,530
|
|
|
1,737,169
|
|
7.
|
NEWBUILDINGS AND VESSEL PURCHASE DEPOSITS
|
8.
|
INVESTMENTS IN DIRECT FINANCING AND SALES-TYPE LEASES
|
(in thousands of $)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Total minimum lease payments to be received
|
979,992
|
|
|
862,083
|
|
Less
: amounts representing estimated executory costs including profit thereon, included in total minimum lease payments
|
(237,278
|
)
|
|
(287,168
|
)
|
Net minimum lease payments receivable
|
742,714
|
|
|
574,915
|
|
Estimated residual values of leased property (un-guaranteed)
|
243,974
|
|
|
213,901
|
|
Less
: unearned income
|
(341,215
|
)
|
|
(232,781
|
)
|
Total investment in direct financing and sales-type leases
|
645,473
|
|
|
556,035
|
|
|
|
|
|
||
Current portion
|
33,083
|
|
|
32,220
|
|
Long-term portion
|
612,390
|
|
|
523,815
|
|
Total investment in direct financing and sales-type leases
|
645,473
|
|
|
556,035
|
|
9.
|
INVESTMENT IN ASSOCIATED COMPANIES
|
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
SFL Deepwater Ltd (“SFL Deepwater”)
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
SFL Hercules Ltd (“SFL Hercules”)
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
SFL Linus Ltd (“SFL Linus”)
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
As of June 30, 2017
|
||||||||||
(in thousands of $)
|
TOTAL
|
|
|
SFL Deepwater
|
|
|
SFL Hercules
|
|
|
SFL Linus
|
|
Current assets
|
126,227
|
|
|
34,296
|
|
|
39,690
|
|
|
52,241
|
|
Non-current assets
|
1,035,580
|
|
|
320,093
|
|
|
308,941
|
|
|
406,546
|
|
Total assets
|
1,161,807
|
|
|
354,389
|
|
|
348,631
|
|
|
458,787
|
|
Current liabilities
|
112,524
|
|
|
28,020
|
|
|
32,373
|
|
|
52,131
|
|
Non-current liabilities
|
1,049,192
|
|
|
326,333
|
|
|
316,248
|
|
|
406,611
|
|
Total liabilities
|
1,161,716
|
|
|
354,353
|
|
|
348,621
|
|
|
458,742
|
|
Total stockholders’ equity
|
91
|
|
|
36
|
|
|
10
|
|
|
45
|
|
|
As of December 31, 2016
|
||||||||||
(in thousands of $)
|
TOTAL
|
|
|
SFL Deepwater
|
|
|
SFL Hercules
|
|
|
SFL Linus
|
|
Current assets
|
122,675
|
|
|
33,763
|
|
|
38,351
|
|
|
50,561
|
|
Non-current assets
|
1,094,442
|
|
|
335,229
|
|
|
326,562
|
|
|
432,651
|
|
Total assets
|
1,217,117
|
|
|
368,992
|
|
|
364,913
|
|
|
483,212
|
|
Current liabilities
|
107,026
|
|
|
25,512
|
|
|
29,280
|
|
|
52,234
|
|
Non-current liabilities
|
1,109,961
|
|
|
343,426
|
|
|
335,603
|
|
|
430,932
|
|
Total liabilities
|
1,216,987
|
|
|
368,938
|
|
|
364,883
|
|
|
483,166
|
|
Total stockholders’ equity
|
130
|
|
|
54
|
|
|
30
|
|
|
46
|
|
|
Six months ended June 30, 2017
|
||||||||||
(in thousands of $)
|
TOTAL
|
|
|
SFL Deepwater
|
|
|
SFL Hercules
|
|
|
SFL Linus
|
|
Operating revenues
|
38,987
|
|
|
10,879
|
|
|
11,614
|
|
|
16,494
|
|
Net operating revenues
|
38,987
|
|
|
10,879
|
|
|
11,614
|
|
|
16,494
|
|
Net income
|
13,855
|
|
|
3,382
|
|
|
3,730
|
|
|
6,743
|
|
|
Six months ended June 30, 2016
|
||||||||||
(in thousands of $)
|
TOTAL
|
|
|
SFL Deepwater
|
|
|
SFL Hercules
|
|
|
SFL Linus
|
|
Operating revenues
|
40,565
|
|
|
11,112
|
|
|
11,738
|
|
|
17,715
|
|
Net operating revenues
|
40,565
|
|
|
11,112
|
|
|
11,738
|
|
|
17,715
|
|
Net income
|
14,322
|
|
|
3,520
|
|
|
3,350
|
|
|
7,452
|
|
|
Year ended December 31, 2016
|
||||||||||
(in thousands of $)
|
TOTAL
|
|
|
SFL Deepwater
|
|
|
SFL Hercules
|
|
|
SFL Linus
|
|
Operating revenues
|
80,269
|
|
|
22,088
|
|
|
23,292
|
|
|
34,889
|
|
Net operating revenues
|
80,269
|
|
|
22,088
|
|
|
23,292
|
|
|
34,889
|
|
Net income
|
27,765
|
|
|
6,778
|
|
|
6,424
|
|
|
14,563
|
|
10.
|
SHORT-TERM AND LONG-TERM DEBT
|
(in thousands of $)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Long-term debt:
|
|
|
|
||
NOK600 million senior unsecured floating rate bonds due 2017
|
17,482
|
|
|
65,445
|
|
3.25% senior unsecured convertible bonds due 2018
|
184,202
|
|
|
184,202
|
|
NOK900 million senior unsecured floating rate bonds due 2019
|
90,764
|
|
|
87,801
|
|
5.75% senior unsecured convertible bonds due 2021
|
225,000
|
|
|
225,000
|
|
NOK500 million senior unsecured floating rate bonds due 2020
|
59,871
|
|
|
—
|
|
U.S. dollar denominated floating rate debt (LIBOR plus margin) due through 2023
|
1,117,284
|
|
|
1,017,558
|
|
Total debt principal
|
1,694,603
|
|
|
1,580,006
|
|
Less: Unamortized debt issuance costs
|
(23,011
|
)
|
|
(27,132
|
)
|
Less: Current portion of long-term debt
|
(487,859
|
)
|
|
(174,900
|
)
|
Total long-term debt
|
1,183,733
|
|
|
1,377,974
|
|
11.
|
FINANCIAL INSTRUMENTS
|
(in thousands of $)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Designated derivative instruments - short-term assets:
|
|
|
|
||
Interest rate swaps
|
79
|
|
|
110
|
|
Total derivative instruments - short-term assets
|
79
|
|
|
110
|
|
|
|
|
|
||
Designated derivative instruments - long-term assets:
|
|
|
|
||
Interest rate swaps
|
3,809
|
|
|
4,540
|
|
Non-designated derivative instruments - long-term assets:
|
|
|
|
||
Interest rate swaps
|
843
|
|
|
1,502
|
|
Total derivative instruments - long-term assets
|
4,652
|
|
|
6,042
|
|
|
|
|
|
||
(in thousands of $)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Designated derivative instruments -short-term liabilities:
|
|
|
|
||
Interest rate swaps
|
—
|
|
|
—
|
|
Cross currency interest rate swaps
|
13,396
|
|
|
37,101
|
|
Non-designated derivative instruments -short-term liabilities:
|
|
|
|
||
Interest rate swaps
|
238
|
|
|
—
|
|
Cross currency interest rate swaps
|
25,732
|
|
|
2,208
|
|
Total derivative instruments - short-term liabilities
|
39,366
|
|
|
39,309
|
|
|
|
|
|
||
Designated derivative instruments - long-term liabilities:
|
|
|
|
||
Interest rate swaps
|
9,115
|
|
|
10,134
|
|
Cross currency interest rate swaps
|
37,605
|
|
|
41,716
|
|
Non-designated derivative instruments - long-term liabilities:
|
|
|
|
||
Interest rate swaps
|
1,544
|
|
|
1,388
|
|
Cross currency interest rate swaps
|
7,445
|
|
|
8,218
|
|
Total derivative instruments - long-term liabilities
|
55,709
|
|
|
61,456
|
|
Notional Principal
(in thousands of $)
|
Inception date
|
|
Maturity date
|
|
Fixed interest rate
|
|
|
|
|
|
|
|
|
$27,155 (reducing to $24,794)
|
March 2008
|
|
August 2018
|
|
4.05% - 4.15%
|
|
$28,279 (reducing to $23,394)
|
April 2011
|
|
December 2018
|
|
2.13% - 2.80%
|
|
$41,929 (reducing to $34,044)
|
May 2011
|
|
January 2019
|
|
0.80% - 2.58%
|
|
$100,000 (remaining at $100,000)
|
August 2011
|
|
August 2021
|
|
2.50% - 2.93%
|
|
$139,533 (reducing to $79,733)
|
May 2012
|
|
August 2022
|
|
1.76% - 1.85%
|
|
$105,436 (equivalent to NOK600 million)
|
October 2012
|
|
October 2017
|
|
5.92% - 6.23%
|
*
|
$33,250 (reducing to $32,142)
|
February 2013
|
|
December 2017
|
|
0.81% - 0.82%
|
|
$100,000 (remaining at $100,000)
|
March 2013
|
|
April 2023
|
|
1.85% - 1.97%
|
|
$151,008 (equivalent to NOK900 million)
|
March 2014
|
|
March 2019
|
|
6.03%
|
*
|
$105,188 (reducing to $70,125)
|
December 2016
|
|
December 2021
|
|
1.86% - 3.33%
|
|
$108,375 (reducing to $70,125)
|
January 2017
|
|
January 2022
|
|
1.56% - 3.09%
|
|
$30,333 (reducing to $19,413)
|
September 2015
|
|
March 2022
|
|
1.67%
|
|
$193,594 (reducing to $149,844)
|
February 2016
|
|
February 2021
|
|
1.07% - 1.26%
|
|
Principal Receivable
|
Principal Payable
|
|
|
Inception date
|
|
Maturity date
|
|
NOK600 million
|
$
|
105.4
|
million
|
|
October 2012
|
|
October 2017
|
NOK900 million
|
$
|
151.0
|
million
|
|
March 2014
|
|
March 2019
|
|
June 30, 2017
|
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2016
|
|
(in thousands of $)
|
Carrying value
|
|
|
Fair value
|
|
|
Carrying value
|
|
|
Fair value
|
|
Non-derivatives:
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
110,802
|
|
|
110,802
|
|
|
118,489
|
|
|
118,489
|
|
Floating rate NOK bonds due 2017
|
17,482
|
|
|
17,701
|
|
|
65,445
|
|
|
65,955
|
|
Floating rate NOK bonds due 2019
|
90,764
|
|
|
90,310
|
|
|
87,801
|
|
|
86,026
|
|
Floating rate NOK bonds due 2020
|
59,871
|
|
|
59,871
|
|
|
—
|
|
|
—
|
|
3.25% unsecured convertible bonds due 2018
|
184,202
|
|
|
192,924
|
|
|
184,202
|
|
|
201,206
|
|
5.75% unsecured convertible bonds due 2021
|
225,000
|
|
|
217,717
|
|
|
225,000
|
|
|
224,366
|
|
Derivatives:
|
|
|
|
|
|
|
|
||||
Interest rate/ currency swap contracts - short-term receivables
|
79
|
|
|
79
|
|
|
110
|
|
|
110
|
|
Interest rate/ currency swap contracts - long-term receivables
|
4,652
|
|
|
4,652
|
|
|
6,042
|
|
|
6,042
|
|
Interest rate/ currency swap contracts - short-term payables
|
39,366
|
|
|
39,366
|
|
|
39,309
|
|
|
39,309
|
|
Interest rate/ currency swap contracts - long-term payables
|
55,709
|
|
|
55,709
|
|
|
61,456
|
|
|
61,456
|
|
|
|
|
Fair value measurements using,
|
||||||||
(in thousands of $)
|
June 30, 2017
|
|
|
Quoted Prices in
Active Markets
for identical Assets/Liabilities
(Level 1)
|
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
110,802
|
|
|
110,802
|
|
|
|
|
—
|
|
|
Interest rate/ currency swap contracts – short-term receivables
|
79
|
|
|
|
|
79
|
|
|
|
||
Interest rate/ currency swap contracts - long-term receivables
|
4,652
|
|
|
|
|
|
4,652
|
|
|
|
|
Total assets
|
115,533
|
|
|
110,802
|
|
|
4,731
|
|
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||
Floating rate NOK bonds due 2017
|
17,701
|
|
|
17,701
|
|
|
|
|
|
||
Floating rate NOK bonds due 2019
|
90,310
|
|
|
90,310
|
|
|
|
|
|
||
Floating rate NOK bonds due 2020
|
59,871
|
|
|
59,871
|
|
|
|
|
|
||
3.25% unsecured convertible bonds due 2018
|
192,924
|
|
|
192,924
|
|
|
|
|
|
||
5.75% unsecured convertible bonds due 2021
|
217,717
|
|
|
217,717
|
|
|
|
|
|
||
Interest rate/ currency swap contracts – short-term payables
|
39,366
|
|
|
|
|
39,366
|
|
|
|
||
Interest rate/ currency swap contracts – long-term payables
|
55,709
|
|
|
|
|
55,709
|
|
|
|
||
Total liabilities
|
673,598
|
|
|
578,523
|
|
|
95,075
|
|
|
—
|
|
12.
|
SHARE CAPITAL, ADDITIONAL PAID-IN CAPITAL AND CONTRIBUTED SURPLUS
|
(in thousands of $, except share data)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
150,000,000 common shares of $0.01 par value each (December 31, 2016: 150,000,000 shares of $0.01 par value each)
|
1,500
|
|
|
1,500
|
|
(in thousands of $, except share data)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
101,504,575 common shares of $0.01 par value each (December 31, 2016: 101,504,575 shares of $0.01 par value each)
|
1,015
|
|
|
1,015
|
|
13.
|
SHARE OPTION PLAN
|
14.
|
OTHER LONG-TERM LIABILITIES
|
(in thousands of $)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Unamortized sellers' credit
|
5,046
|
|
|
6,124
|
|
Obligations under capital leases - long-term portion
|
234,573
|
|
|
118,754
|
|
Other items
|
6
|
|
|
4
|
|
|
239,625
|
|
|
124,882
|
|
15.
|
RELATED PARTY TRANSACTIONS
|
(in thousands of $)
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Amounts due from:
|
|
|
|
||
Frontline Shipping
|
—
|
|
|
11,906
|
|
Frontline
|
5,183
|
|
|
3,008
|
|
Deep Sea
|
1,843
|
|
|
1,945
|
|
SFL Deepwater
|
2,594
|
|
|
—
|
|
SFL Hercules
|
3,078
|
|
|
—
|
|
SFL Linus
|
4,235
|
|
|
660
|
|
Total amount due from related parties
|
16,933
|
|
|
17,519
|
|
Loans to related parties - associated companies, long-term
|
|
|
|
||
SFL Deepwater
|
113,000
|
|
|
119,167
|
|
SFL Hercules
|
80,000
|
|
|
85,920
|
|
SFL Linus
|
121,000
|
|
|
125,000
|
|
Total loans to related parties - associated companies, long-term
|
314,000
|
|
|
330,087
|
|
Long-term receivables from related parties
|
|
|
|
||
Deep Sea
|
8,171
|
|
|
9,268
|
|
Total long-term receivables from related parties
|
8,171
|
|
|
9,268
|
|
Amounts due to:
|
|
|
|
||
Frontline Shipping
|
1,968
|
|
|
229
|
|
Frontline
|
848
|
|
|
493
|
|
Golden Ocean
|
369
|
|
|
—
|
|
Deep Sea
|
200
|
|
|
—
|
|
Seatankers
|
45
|
|
|
79
|
|
Other related parties
|
49
|
|
|
49
|
|
Total amount due to related parties
|
3,479
|
|
|
850
|
|
|
Six months ended
|
|
Year ended
|
|
||||
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
Operating lease income
|
29,540
|
|
|
34,943
|
|
|
65,340
|
|
Direct financing lease interest income
|
9,385
|
|
|
12,208
|
|
|
22,850
|
|
Finance lease service revenue
|
19,827
|
|
|
22,932
|
|
|
44,523
|
|
Direct financing lease repayments
|
14,064
|
|
|
16,309
|
|
|
30,321
|
|
Profit share and cash sweep income
|
5,591
|
|
|
38,937
|
|
|
51,470
|
|
|
Six months ended
|
|
Year ended
|
|
||||
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
|
December 31, 2016
|
|
Frontline:
|
|
|
|
|
|
|||
Vessel Management Fees
|
20,506
|
|
|
23,629
|
|
|
45,931
|
|
Commissions and Brokerage
|
112
|
|
|
204
|
|
|
390
|
|
Administration Services Fees
|
172
|
|
|
180
|
|
|
576
|
|
Golden Ocean:
|
|
|
|
|
|
|||
Vessel Management Fees
|
10,136
|
|
|
10,192
|
|
|
20,496
|
|
Operating Management Fees
|
370
|
|
|
404
|
|
|
795
|
|
Seatankers:
|
|
|
|
|
|
|||
Administration Services Fees
|
22
|
|
|
157
|
|
|
315
|
|
Office Facilities:
|
|
|
|
|
|
|||
Seatankers Management Norway AS
|
80
|
|
|
155
|
|
|
317
|
|
Frontline Corporate Services Ltd
|
131
|
|
|
238
|
|
|
235
|
|
16.
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
(in millions of $)
|
June 30, 2017
|
|
December 31, 2016
|
Book value of consolidated assets pledged under ship mortgages
|
$1,914
|
|
$2,009
|
17.
|
CONSOLIDATED VARIABLE INTEREST ENTITIES
|
18.
|
SUBSEQUENT EVENTS
|
|
Six months ended
|
|
|
Six months ended
|
|
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
Total operating revenues
|
191,103
|
|
|
221,574
|
|
(Loss)/ gain on sale of assets and termination of charters, net
|
779
|
|
|
14
|
|
Total operating expenses
|
(113,480
|
)
|
|
(119,906
|
)
|
Net operating income
|
78,402
|
|
|
101,682
|
|
Interest income
|
10,589
|
|
|
10,387
|
|
Interest expense
|
(44,307
|
)
|
|
(35,274
|
)
|
Other non-operating items, net
|
(6,146
|
)
|
|
(5,506
|
)
|
Equity in earnings of associated companies
|
13,855
|
|
|
14,322
|
|
Net income
|
52,393
|
|
|
85,611
|
|
|
Six months ended
|
|
|
Six months ended
|
|
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
Direct financing and sales-type lease interest income
|
18,989
|
|
|
12,208
|
|
Finance lease service revenues
|
19,827
|
|
|
22,932
|
|
Profit sharing revenues
|
5,652
|
|
|
39,011
|
|
Time charter revenues
|
116,579
|
|
|
109,711
|
|
Bareboat charter revenues
|
19,346
|
|
|
25,475
|
|
Voyage charter revenues
|
9,701
|
|
|
9,022
|
|
Other operating income
|
1,009
|
|
|
3,215
|
|
Total operating revenues
|
191,103
|
|
|
221,574
|
|
|
Six months ended
|
|
|
Six months ended
|
|
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
Charter hire payments accounted for as:
|
|
|
|
||
Direct financing and sales-type lease interest income
|
18,989
|
|
|
12,208
|
|
Finance lease service revenues
|
19,827
|
|
|
22,932
|
|
Direct financing and sales-type lease repayments
|
16,669
|
|
|
16,309
|
|
Total direct financing and sales-type lease payments received
|
55,485
|
|
|
51,449
|
|
|
Six months ended
|
|
|
Six months ended
|
|
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
Vessel operating expenses
|
66,110
|
|
|
68,814
|
|
Depreciation
|
43,364
|
|
|
46,304
|
|
Administrative expenses
|
4,006
|
|
|
4,788
|
|
Total operating expenses
|
113,480
|
|
|
119,906
|
|
|
Six months ended
|
|
|
Six months ended
|
|
(in thousands of $)
|
June 30, 2017
|
|
|
June 30, 2016
|
|
Interest on US$ floating rate loans
|
15,141
|
|
|
14,531
|
|
Interest on NOK600 million senior unsecured floating rate bonds due 2017
|
2,000
|
|
|
2,059
|
|
Interest on NOK900 million senior unsecured floating rate bonds due 2019
|
2,290
|
|
|
2,341
|
|
Interest on NOK500 million senior unsecured floating rate bonds due 2020
|
75
|
|
|
—
|
|
Interest on 3.75% senior unsecured convertible bonds due 2016
|
—
|
|
|
329
|
|
Interest on 3.25% senior unsecured convertible bonds due 2018
|
2,993
|
|
|
5,688
|
|
Interest on 5.75% senior unsecured convertible bonds due 2021
|
6,397
|
|
|
—
|
|
Swap interest
|
3,622
|
|
|
4,642
|
|
Interest on capital lease obligations
|
7,069
|
|
|
—
|
|
Other interest
|
26
|
|
|
21
|
|
Amortization of deferred charges
|
4,694
|
|
|
5,663
|
|
Total interest expense
|
44,307
|
|
|
35,274
|
|
|
As at June 30, 2017
|
||||
(in millions of $)
|
Outstanding balance
|
|
|
Net amount available to draw
|
|
Loan facilities secured with mortgages on vessels and rig including newbuildings
|
1,117.3
|
|
|
29.0
|
|
Unsecured borrowings:
|
|
|
|
||
NOK600 million senior unsecured floating rate bonds due 2017
|
17.5
|
|
|
—
|
|
3.25% senior unsecured convertible bonds due 2018
|
184.2
|
|
|
—
|
|
NOK900 million senior unsecured floating rate bonds due 2019
|
90.8
|
|
|
—
|
|
5.75% senior unsecured convertible bonds due 2021
|
225.0
|
|
|
—
|
|
NOK500 million senior unsecured floating rate bonds due 2020
|
59.9
|
|
|
—
|
|
Total
|
1,694.6
|
|
|
29.0
|
|
▪
|
the strength of world economies;
|
▪
|
the Company’s ability to generate cash to service its indebtedness;
|
▪
|
the impact on the Company of a potential comprehensive restructuring by Seadrill Limited or Seadrill;
|
▪
|
the Company’s ability to continue to satisfy its financial and other covenants, or obtain waivers relating to such covenants from its lenders under its credit facilities;
|
▪
|
the Company’s ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
|
▪
|
the Company’s counterparties’ ability or willingness to honor their obligations under agreements with it;
|
▪
|
fluctuations in currencies and interest rates;
|
▪
|
general market conditions including fluctuations in charter hire rates and vessel values;
|
▪
|
changes in supply and generally the number, size and form of providers of goods and services in the markets in which the Company operates;
|
▪
|
changes in demand in the markets in which the Company operates;
|
▪
|
changes in demand resulting from changes in the Organization of the Petroleum Exporting Countries’ petroleum production levels and worldwide oil consumption and storage;
|
▪
|
developments regarding the technologies relating to oil exploration;
|
▪
|
changes in market demand in countries which import commodities and finished goods and changes in the amount and location of the production of those commodities and finished goods;
|
▪
|
increased inspection procedures and more restrictive import and export controls;
|
▪
|
the imposition of sanctions by the Office of Foreign Assets Control of the Department of the U.S. Treasury or pursuant to other applicable laws or regulations against the Company or any of its subsidiaries;
|
▪
|
changes in the Company’s operating expenses, including bunker prices, drydocking and insurance costs;
|
▪
|
performance of the Company’s charterers and other counterparties with whom the Company deals;
|
▪
|
timely delivery of vessels under construction within the contracted price;
|
▪
|
changes in governmental rules and regulations or actions taken by regulatory authorities;
|
▪
|
potential liability from pending or future litigation;
|
▪
|
general domestic and international political conditions;
|
▪
|
potential disruption of shipping routes due to accidents; and
|
▪
|
piracy or political events; and
|
▪
|
other important factors described under the heading “Risk Factors” in the Company’s Annual Report on Form 20-F for the year ended
December 31, 2016
, as well as those described from time to time in the reports filed by the Company with the Commission.
|
|
SHIP FINANCE INTERNATIONAL LIMITED
|
|
By:
|
/s/ Harald Gurvin
|
|
Name: Harald Gurvin
|
|
|
Title: Chief Financial Officer
|
|
|
Ship Finance Management AS
|
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