o
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
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|
|
OF THE SECURITIES EXCHANGE ACT OF 1934
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
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December 31, 2010
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|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report
_______________________________
For the transition period from _________________ to _________________
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Commission file number
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001-16601
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|
Frontline Ltd.
|
(Exact name of Registrant as specified in its charter)
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|
|
(Translation of Registrant's name into English)
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Bermuda
|
(Jurisdiction of incorporation or organization)
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|
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
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(Address of principal executive offices)
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Georgina Sousa, Telephone: (1) 441 295 6935, Facsimile: (1) 441 295 3494,
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
|
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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Title of each class
|
Name of each exchange on which registered
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|
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|
Ordinary Shares, $2.50 Par Value
|
New York Stock Exchange
|
|
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None
|
(Title of Class)
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|
Ordinary Shares, $2.50 Par Value
|
(Title of Class)
|
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Large accelerated filer
x
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Accelerated filer
o
|
Non-accelerated filer
o
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U.S. GAAP
x
|
International Financial Reporting Standards
as issued by the
International Accounting Standards Board
o
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Other
o
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Item 17
o
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Item 18
o
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PART I
|
|
|
Item 1.
|
Identity of Directors, Senior Management and Advisers
|
2
|
Item 2.
|
Offer Statistics and Expected Timetable
|
2
|
Item 3.
|
Key Information
|
2
|
Item 4.
|
Information on the Company
|
20
|
Item 4A.
|
Unresolved Staff Comments
|
35
|
Item 5.
|
Operating and Financial Review and Prospects
|
35
|
Item 6.
|
Directors, Senior Management and Employees
|
56
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
59
|
Item 8.
|
Financial Information
|
61
|
Item 9.
|
The Offer and Listing
|
62
|
Item 10.
|
Additional Information
|
63
|
Item 11.
|
Quantitative and Qualitative Disclosures about Market Risk
|
72
|
Item 12.
|
Description of Securities other than Equity Securities
|
72
|
|
|
|
PART II
|
|
|
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
72
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
72
|
Item 15.
|
Controls and Procedures
|
72
|
Item 16.
|
Reserved
|
73
|
Item 16A.
|
Audit Committee Financial Expert
|
73
|
Item 16B.
|
Code of Ethics
|
74
|
Item 16C.
|
Principal Accountant Fees and Services
|
74
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
74
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
74
|
Item 16F.
|
Change in Registrant's Certifying Accountant
|
74
|
Item 16G.
|
Corporate Governance
|
75
|
|
|
|
PART III
|
|
|
Item 17.
|
Financial Statements
|
76
|
Item 18.
|
Financial Statements
|
76
|
Item 19.
|
Exhibits
|
77
|
ITEM 1.
|
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
ITEM 2.
|
OFFER STATISTICS AND EXPECTED TIMETABLE
|
ITEM 3.
|
KEY INFORMATION
|
|
|
Fiscal year ended December 31,
|
|
|||||||||||||||||
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|||||
(in thousands of $, except ordinary shares, per share data and ratios)
|
|
|||||||||||||||||||
Statement of Operations Data
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total operating revenues
|
|
|
1,165,215
|
|
|
|
1,133,286
|
|
|
|
2,104,018
|
|
|
|
1,299,927
|
|
|
|
1,558,369
|
|
Total operating expenses
|
|
|
888,238
|
|
|
|
896,237
|
|
|
|
1,395,831
|
|
|
|
898,904
|
|
|
|
850,623
|
|
Net operating income
|
|
|
307,912
|
|
|
|
240,110
|
|
|
|
850,480
|
|
|
|
519,191
|
|
|
|
803,401
|
|
Net income from continuing operations before income taxes and noncontrolling interest
|
|
|
164,222
|
|
|
|
105,833
|
|
|
|
701,264
|
|
|
|
503,991
|
|
|
|
661,330
|
|
Net income from continuing operations
|
|
|
164,004
|
|
|
|
105,472
|
|
|
|
700,954
|
|
|
|
587,138
|
|
|
|
661,168
|
|
Discontinued operations (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,442
|
|
|
|
13,514
|
|
Net income attributable to Frontline Ltd.
|
|
|
161,407
|
|
|
|
102,701
|
|
|
|
698,770
|
|
|
|
570,418
|
|
|
|
516,000
|
|
Earnings from continuing operations per ordinary share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- basic
|
|
$
|
2.07
|
|
|
$
|
1.32
|
|
|
$
|
9.15
|
|
|
$
|
7.55
|
|
|
$
|
6.72
|
|
- diluted
|
|
$
|
2.07
|
|
|
$
|
1.32
|
|
|
$
|
9.14
|
|
|
$
|
7.55
|
|
|
$
|
6.72
|
|
Net income per ordinary share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- basic
|
|
$
|
2.07
|
|
|
$
|
1.32
|
|
|
$
|
9.15
|
|
|
$
|
7.62
|
|
|
$
|
6.90
|
|
- diluted
|
|
$
|
2.07
|
|
|
$
|
1.32
|
|
|
$
|
9.14
|
|
|
$
|
7.62
|
|
|
$
|
6.90
|
|
Cash dividends declared per share
|
|
$
|
2.00
|
|
|
$
|
0.90
|
|
|
$
|
8.25
|
|
|
$
|
8.30
|
|
|
$
|
7.00
|
|
|
|
Fiscal year ended December 31,
|
|
|||||||||||||||||
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|||||
(in thousands of $, except ordinary shares and ratios)
|
|
|||||||||||||||||||
Balance Sheet Data (at end of year)
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
176,639
|
|
|
|
82,575
|
|
|
|
190,819
|
|
|
|
168,432
|
|
|
|
197,181
|
|
Newbuildings
|
|
|
224,319
|
|
|
|
413,968
|
|
|
|
454,227
|
|
|
|
160,298
|
|
|
|
166,851
|
|
Vessels and equipment, net
|
|
|
1,430,124
|
|
|
|
678,694
|
|
|
|
438,161
|
|
|
|
208,516
|
|
|
|
2,446,278
|
|
Vessels and equipment under capital lease, net
|
|
|
1,427,526
|
|
|
|
1,740,666
|
|
|
|
2,100,717
|
|
|
|
2,324,789
|
|
|
|
626,374
|
|
Investments in unconsolidated subsidiaries and associated companies
|
|
|
3,408
|
|
|
|
3,923
|
|
|
|
4,467
|
|
|
|
5,633
|
|
|
|
17,825
|
|
Total assets
|
|
|
3,797,920
|
|
|
|
3,715,218
|
|
|
|
4,027,728
|
|
|
|
3,762,091
|
|
|
|
4,589,937
|
|
Short-term debt and current portion of long-term debt
|
|
|
173,595
|
|
|
|
123,884
|
|
|
|
293,471
|
|
|
|
96,811
|
|
|
|
281,409
|
|
Current portion of obligations under capital lease
|
|
|
193,379
|
|
|
|
285,753
|
|
|
|
243,293
|
|
|
|
179,604
|
|
|
|
28,857
|
|
Long-term debt
|
|
|
1,190,763
|
|
|
|
760,698
|
|
|
|
614,676
|
|
|
|
376,723
|
|
|
|
2,181,885
|
|
Obligations under capital leases
|
|
|
1,336,908
|
|
|
|
1,579,708
|
|
|
|
1,969,919
|
|
|
|
2,318,794
|
|
|
|
723,073
|
|
Share capital
|
|
|
194,646
|
|
|
|
194,646
|
|
|
|
194,646
|
|
|
|
187,063
|
|
|
|
187,063
|
|
Total stockholders' equity
|
|
|
747,133
|
|
|
|
741,340
|
|
|
|
702,217
|
|
|
|
445,969
|
|
|
|
668,560
|
|
Ordinary shares outstanding
|
|
|
77,858,502
|
|
|
|
77,858,502
|
|
|
|
77,858,502
|
|
|
|
74,825,169
|
|
|
|
74,825,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average ordinary shares outstanding
|
|
|
77,858,502
|
|
|
|
77,858,502
|
|
|
|
76,352,673
|
|
|
|
74,825,169
|
|
|
|
74,825,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio (percentage) (3)
|
|
|
19.7
|
%
|
|
|
20.0
|
%
|
|
|
17.4
|
%
|
|
|
11.8
|
%
|
|
|
14.6
|
%
|
Debt to equity ratio (4)
|
|
|
3.9
|
|
|
|
3.7
|
|
|
|
4.4
|
|
|
|
6.7
|
|
|
|
4.8
|
|
Price earnings ratio (5)
|
|
|
12.3
|
|
|
|
20.7
|
|
|
|
3.2
|
|
|
|
6.3
|
|
|
|
4.6
|
|
Time charter equivalent revenue (6)
|
|
|
861,829
|
|
|
|
896,843
|
|
|
|
1,493,912
|
|
|
|
938,960
|
|
|
|
1,154,029
|
|
|
1.
|
The Company distributed the majority of its remaining shareholding in Ship Finance International Limited ("Ship Finance") in March 2007 and no longer consolidates Ship Finance as of March 31, 2007. A summary of the major changes to the financial statements is as follows;
|
|
a.
|
Vessels leased from Ship Finance, which were previously reported as wholly owned, are reported as vessels held under capital lease.
|
|
b.
|
Capital lease obligations with Ship Finance, which were previously eliminated on consolidation are reported as liabilities with the related interest recorded in the income statement.
|
c.
|
Debt incurred by Ship Finance, which was previously reported as debt of the Company, is no longer reported.
|
|
|
d.
|
Derivative instruments held by Ship Finance are no longer reported.
|
|
e.
|
Noncontrolling interest expense relating to Ship Finance is no longer reported.
|
|
f.
|
Profit share expense relating to amounts due to Ship Finance is shown in the income statement.
|
|
g.
|
Results from Ship Finance's container ships, jack-up rigs and Panamax vessels are no longer reported in the Company's consolidated results.
|
|
2.
|
The Company disposed of the container vessel and rig operations of Ship Finance in the first quarter of 2007 as a result of the spin off of Ship Finance. These operations have been recorded as discontinued operations in 2007 and 2006.
|
|
3.
|
Equity-to-assets ratio is calculated as total stockholders' equity divided by total assets.
|
|
4.
|
Debt-to-equity ratio is calculated as total interest bearing current and long-term liabilities, including obligations under capital leases, divided by stockholders' equity.
|
|
5.
|
Price earnings ratio is calculated by dividing the closing year end share price by basic earnings per share.
|
|
6.
|
A reconciliation of time charter equivalent revenues to total operating revenues as reflected in the consolidated statements of operations is as follows:
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|||||
(in thousands of $)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total operating revenues
|
|
|
1,165,215
|
|
|
|
1,133,286
|
|
|
|
2,104,018
|
|
|
|
1,299,927
|
|
|
|
1,558,369
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
(20,678
|
)
|
|
|
(17,068
|
)
|
|
|
(17,918
|
)
|
|
|
(8,516
|
)
|
|
|
(5,294
|
)
|
Voyage expense
|
|
|
(282,708
|
)
|
|
|
(219,375
|
)
|
|
|
(592,188
|
)
|
|
|
(352,451
|
)
|
|
|
(399,046
|
)
|
Time charter equivalent revenue
|
|
|
861,829
|
|
|
|
896,843
|
|
|
|
1,493,912
|
|
|
|
938,960
|
|
|
|
1,154,029
|
|
|
·
|
supply and demand for oil and oil products;
|
|
·
|
global and regional economic and political conditions, including developments in international trade and fluctuations in industrial and agricultural production;
|
|
·
|
regional availability of refining capacity;
|
|
·
|
environmental and other legal and regulatory developments;
|
|
·
|
the distance oil and oil products are to be moved by sea;
|
|
·
|
changes in seaborne and other transportation patterns, including changes in the distances over which tanker cargoes are transported by sea;
|
|
·
|
currency exchange rates;
|
|
·
|
weather and acts of God and natural disasters, including hurricanes and typhoons;
|
|
·
|
competition from alternative sources of energy and from other shipping companies and other modes of transport; and
|
|
·
|
international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars.
|
|
·
|
current and expected purchase orders for tankers;
|
|
·
|
the number of tanker newbuilding deliveries;
|
|
·
|
the scrapping rate of older tankers;
|
|
·
|
the successful implementation of the phase-out of single-hull tankers;
|
|
·
|
technological advances in tanker design and capacity;
|
|
·
|
tanker freight rates, which are affected by factors that may effect the rate of newbuilding, swapping and laying up of tankers;
|
|
·
|
price of steel and vessel equipment;
|
|
·
|
conversion of tankers to other uses or conversion of other vessels to tankers;
|
|
·
|
the number of tankers that are out of service; and
|
|
·
|
changes in environmental and other regulations that may limit the useful lives of tankers.
|
|
·
|
increased crude oil production from other areas;
|
|
·
|
increased refining capacity in the Arabian Gulf or West Africa;
|
|
·
|
increased use of existing and future crude oil pipelines in the Arabian Gulf or West Africa;
|
|
·
|
a decision by Arabian Gulf or West African oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production;
|
|
·
|
armed conflict in the Arabian Gulf and West Africa and political or other factors; and
|
|
·
|
the development and the relative costs of nuclear power, natural gas, coal and other alternative sources of energy.
|
|
·
|
supply and demand for energy resources, commodities, semi-finished and finished consumer and industrial products;
|
|
·
|
changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products;
|
|
·
|
the location of regional and global exploration, production and manufacturing facilities;
|
|
·
|
the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;
|
|
·
|
the globalization of production and manufacturing;
|
|
·
|
global and regional economic and political conditions, including armed conflicts and terrorist activities; embargoes and strikes;
|
|
·
|
developments in international trade;
|
|
·
|
changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;
|
|
·
|
environmental and other regulatory developments;
|
|
·
|
currency exchange rates; and
|
|
·
|
weather.
|
|
·
|
number of newbuilding deliveries;
|
|
·
|
scrapping of older vessels;
|
|
·
|
vessel casualties; and
|
|
·
|
number of vessels that are out of service.
|
|
·
|
an absence of financing for vessels;
|
|
·
|
no active second-hand market for the sale of vessels;
|
|
·
|
extremely low charter rates, particularly for vessels employed in the spot market;
|
|
·
|
widespread loan covenant defaults in the dry bulk shipping industry; and
|
|
·
|
declaration of bankruptcy by some operators and ship owners as well as charterers.
|
|
·
|
a marine disaster;
|
|
·
|
terrorism;
|
|
·
|
environmental accidents;
|
|
·
|
cargo and property losses or damage; and
|
|
·
|
business interruptions caused by mechanical failure, human error, war, terrorism, piracy, political action in various countries, labor strikes, or adverse weather conditions.
|
|
·
|
we may not be able to employ our vessels at charter rates as favorable to us as historical rates or operate our vessels profitably; and
|
|
·
|
the market value of our vessels could decrease, which may cause us to recognize losses if any of our vessels are sold or if their values are impaired.
|
|
·
|
general economic and market conditions affecting the shipping industry;
|
|
·
|
competition from other shipping companies;
|
|
·
|
types and sizes of vessels;
|
|
·
|
other modes of transportation;
|
|
·
|
cost of newbuildings;
|
|
·
|
shipyard capacity;
|
|
·
|
governmental or other regulations;
|
|
·
|
age of vessels;
|
|
·
|
prevailing level of charter rates; and
|
|
·
|
technological advances.
|
ITEM 4.
|
INFORMATION ON THE COMPANY
|
(in thousands of $)
|
2010
|
2009
|
2008
|
|||||||||
Total operating revenues – tanker market
|
1,023,733 | 989,773 | 1,955,427 | |||||||||
Total operating revenues – drybulk carrier market
|
136,912 | 124,983 | 130,228 |
|
·
|
emphasizing operational safety and quality maintenance for all of our vessels;
|
|
·
|
complying with all current and proposed environmental regulations;
|
|
·
|
outsourcing technical operations and crewing;
|
|
·
|
continuing to achieve competitive operational costs;
|
|
·
|
operating a modern and homogeneous fleet of tankers;
|
|
·
|
achieving high utilization of our vessels;
|
|
·
|
achieving competitive financing arrangements;
|
|
·
|
achieving a satisfactory mix of term charters, contracts of affreightment and spot voyages; and
|
|
·
|
developing and maintaining relationships with major oil companies and industrial charterers.
|
Category of Oil Tankers
|
|
Date or Year for Phase Out
|
Category 1 oil tankers of 20,000 dwt and above carrying crude oil, fuel oil, heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above carrying other oils, which do not comply with the requirements for protectively located segregated ballast tanks
|
|
April 5, 2005 for ships delivered on April 5, 1982 or earlier; or
2005 for ships delivered after April 5, 1982
|
Category 2 - oil tankers of 20,000 dwt and above carrying crude oil, fuel oil, heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above carrying other oils, which do comply with the protectively located segregated ballast tank requirements
and
Category 3 - oil tankers of 5,000 dwt and above but less than the tonnage specified for Category 1 and 2 tankers.
|
|
April 5, 2005 for ships delivered on April 5, 1977 or earlier
2005 for ships delivered after April 5, 1977 but before
January 1, 1978
2006 for ships delivered in 1978 and 1979
2007 for ships delivered in 1980 and 1981
2008 for ships delivered in 1982
2009 for ships delivered in 1983
2010 for ships delivered in 1984 or later
|
Vessel Name
|
Vessel type
|
Vessel
Category
|
|
Year
Built
|
|
IMO
phase out
|
|
Flag state
Exemption
|
|
||
|
|
|
|
|
|
|
|
|
|
||
Titan Aries (ex-Edinburgh)
|
VLCC
|
DS
|
|
1993
|
|
2018
|
|
n/a
|
|
||
Front Ace (1)
|
VLCC
|
SH
|
|
1993
|
|
2010
|
|
2015
|
|
||
Titan Orion (ex-Front Duke)
|
VLCC
|
SH
|
|
1992
|
|
2010
|
|
2015
|
|
||
Ticen Sun
|
VLCC
|
SH
|
|
1991
|
|
2010
|
|
2015
|
|
||
Ticen Ocean
|
VLCC
|
SH
|
|
1991
|
|
2010
|
|
2015
|
|
|
·
|
crude oils having
a density at 15єC higher than 900 kg/m3;
|
|
·
|
fuel oils having either a density at 15єC higher than 900 kg/m3 or a kinematic viscosity at 50
ºC higher than 180 mm2/s; or
|
|
·
|
bitumen, tar and their emulsions.
|
Vessel
|
Built
|
Approximate Dwt.
|
Construction
|
Flag
|
Type of Employment
|
|
|
|
|
|
|
Tonnage Owned Directly
|
|
|
|
|
|
|
|
|
|
|
|
VLCCs
|
|
|
|
|
|
Antares Voyager
|
1998
|
310,000
|
Double-hull
|
BA
|
Spot market
|
Phoenix Voyager
|
1999
|
308,500
|
Double-hull
|
BA
|
Bareboat charter
|
British Pioneer
|
1999
|
307,000
|
Double-hull
|
IoM
|
Bareboat charter
|
British Progress
|
2000
|
307,000
|
Double-hull
|
IoM
|
Bareboat charter
|
British Purpose
|
2000
|
307,000
|
Double-hull
|
IoM
|
Bareboat charter
|
Front Shanghai
(1)
|
2006
|
298,500
|
Double-hull
|
HK
|
Spot market
|
Front Kathrine
|
2009
|
297,974
|
Double-hull
|
MI
|
Spot market
|
Front Queen
|
2009
|
297,000
|
Double-hull
|
MI
|
Time charter
|
Front Eminence
|
2009
|
321,300
|
Double-hull
|
MI
|
Time charter
|
Front Endurance
|
2009
|
321,300
|
Double-hull
|
MI
|
Spot market
|
Front Cecilie
|
2010
|
297,000
|
Double-hull
|
HK
|
Spot market
|
Front Signe
|
2010
|
297,000
|
Double-hull
|
HK
|
Spot market
|
Hull J0025 (Newbuilding)
|
2011
|
320,000
|
Double-hull
|
n/a
|
n/a
|
Hull J0026 (Newbuilding)
|
2011
|
320,000
|
Double-hull
|
n/a
|
n/a
|
Hull J0027 (Newbuilding)
|
2012
|
320,000
|
Double-hull
|
n/a
|
n/a
|
Hull J0028 (Newbuilding)
|
2012
|
320,000
|
Double-hull
|
n/a
|
n/a
|
Hull J0106 (Newbuilding)
|
2013
|
320,000
|
Double-hull
|
n/a
|
n/a
|
|
|
|
|
|
|
Suezmax Tankers
|
|
|
|
|
|
Front Fighter
|
1994
|
147,048
|
Double-hull
|
MI
|
Spot market
|
Front Hunter
|
1996
|
146,286
|
Double-hull
|
MI
|
Spot market
|
Front Alfa
|
1993
|
150,038
|
Double-hull
|
MI
|
Spot market
|
Front Beta
|
1992
|
135,915
|
Double-hull
|
MI
|
Spot market
|
Front Delta
|
1993
|
136,055
|
Double-hull
|
MI
|
Spot market
|
Northia
|
2010
|
156,000
|
Double-hull
|
MI
|
Time charter
|
Naticina
|
2010
|
156,000
|
Double-hull
|
MI
|
Time charter
|
Front Odin
|
2010
|
156,000
|
Double-hull
|
MI
|
Spot market
|
Front Njord
|
2010
|
156,000
|
Double-hull
|
HK
|
Spot market
|
Cygnus Voyager
|
1993
|
157,000
|
Double-hull
|
BA
|
Bareboat charter
|
Altair Voyager
|
1993
|
136,000
|
Double-hull
|
BA
|
Bareboat charter
|
Sirius Voyager
|
1994
|
156,000
|
Double-hull
|
BA
|
Bareboat charter
|
Hull 1161 (Newbuilding)
|
2013
|
157,000
|
Double-hull
|
n/a
|
n/a
|
Hull 1162 (Newbuilding)
|
2013
|
157,000
|
Double-hull
|
n/a
|
n/a
|
Tonnage Chartered in from Ship Finance
|
|
|
|||
|
|
|
|
|
|
VLCCs
|
|
|
|
|
|
Ticen Sun
(2)
|
1991
|
284,000
|
Single-hull
|
SG
|
Bareboat charter
|
Ticen Ocean
|
1991
|
284,000
|
Single-hull
|
PAN
|
Bareboat charter
|
Titan Orion (ex-Front Duke)
|
1992
|
284,000
|
Single-hull
|
SG
|
Bareboat charter
|
Titan Aries (ex-Edinburgh)
|
1993
|
302,000
|
Double-side
|
LIB
|
Bareboat charter
|
Front Ace
(2)
|
1993
|
276,000
|
Single-hull
|
LIB
|
Time charter
|
Front Vanguard
|
1998
|
300,000
|
Double-hull
|
MI
|
Spot market
|
Front Century
|
1998
|
311,000
|
Double-hull
|
MI
|
Spot market
|
Front Champion
|
1998
|
311,000
|
Double-hull
|
BA
|
Spot market
|
Ovatella (ex-Front Comanche)
|
1999
|
300,000
|
Double-hull
|
FRA
|
Time charter
|
Golden Victory
|
1999
|
300,000
|
Double-hull
|
MI
|
Time charter
|
Front Circassia
|
1999
|
306,000
|
Double-hull
|
MI
|
Spot market
|
Front Opalia
|
1999
|
302,000
|
Double-hull
|
MI
|
Spot market
|
Ocana
|
1999
|
300,000
|
Double-hull
|
IoM
|
Time charter
|
Front Scilla
|
2000
|
303,000
|
Double-hull
|
MI
|
Spot market
|
Oliva
|
2001
|
299,000
|
Double-hull
|
IoM
|
Time charter
|
Front Serenade
|
2002
|
299,000
|
Double-hull
|
LIB
|
Time charter
|
Otina
|
2002
|
298,000
|
Double-hull
|
IoM
|
Time charter
|
Ondina
|
2002
|
299,000
|
Double-hull
|
IoM
|
Time charter
|
Front Falcon
|
2002
|
309,000
|
Double-hull
|
BA
|
Spot market
|
Front Page
|
2002
|
299,000
|
Double-hull
|
LIB
|
Time charter
|
Front Energy
|
2004
|
305,000
|
Double-hull
|
CYP
|
Time charter
|
Onoba (ex-Front Force)
|
2004
|
305,000
|
Double-hull
|
CYP
|
Time charter
|
|
|
|
|
|
|
Suezmax OBO Carriers
|
|
|
|
|
|
Front Breaker
|
1991
|
169,000
|
Double-hull
|
MI
|
Time charter
|
Front Climber
|
1991
|
169,000
|
Double-hull
|
SG
|
Time charter
|
Front Driver
|
1991
|
169,000
|
Double-hull
|
MI
|
Time charter
|
Front Guider
|
1991
|
169,000
|
Double-hull
|
SG
|
Time charter
|
Front Leader (3)
|
1991
|
169,000
|
Double-hull
|
SG
|
Time charter
|
Front Rider
|
1992
|
169,000
|
Double-hull
|
SG
|
Time charter
|
Front Striver
|
1992
|
169,000
|
Double-hull
|
SG
|
Time charter
|
Front Viewer
|
1992
|
169,000
|
Double-hull
|
SG
|
Time charter
|
|
|
|
|
|
|
Suezmax Tankers
|
|
|
|
|
|
Front Pride
|
1993
|
150,000
|
Double-hull
|
MI
|
Spot market
|
Suezmax Tankers
|
|
|
|
|
|
|
Front Warrior
|
1998
|
153,000
|
Double-hull
|
BA
|
Spot market
|
|
Front Melody
|
2001
|
150,000
|
Double-hull
|
LIB
|
Spot market
|
|
Front Symphony
|
2001
|
150,000
|
Double-hull
|
LIB
|
Spot charter
|
Tonnage under Commercial Management
VLCCs
|
|
|
|
|
|
|
Saga Chelsea
|
1995
|
298,432
|
Double-hull
|
MI
|
Spot market
|
|
Saga Julie
|
2000
|
299,089
|
Double-hull
|
MI
|
Spot market
|
|
Saga Unity
|
2000
|
300,000
|
Double-hull
|
MI
|
Spot market
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|||
VLCCs
|
|
|
|
|
|
|
|
|
|
|||
At start of period
|
|
|
41
|
|
|
|
40
|
|
|
|
42
|
|
Acquisitions
|
|
|
4
|
|
|
|
2
|
|
|
|
—
|
|
Dispositions
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
Chartered In
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
At end of period
|
|
|
44
|
|
|
|
41
|
|
|
|
40
|
|
Suezmax
|
|
|
|
|
|
|
|
|
|
|||
At start of period
|
|
|
27
|
|
|
|
29
|
|
|
|
16
|
|
Acquisitions
|
|
|
4
|
|
|
|
—
|
|
|
|
5
|
|
Dispositions
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
Chartered In
|
|
|
(9
|
)
|
|
|
(2
|
)
|
|
|
11
|
|
At end of period
|
|
|
21
|
|
|
|
27
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suezmax OBOs
|
|
|
|
|
|
|
|
|
|
|
|
|
At start and end of period
|
|
|
8
|
|
|
|
8
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fleet
|
|
|
|
|
|
|
|
|
|
|
|
|
At start of period
|
|
|
76
|
|
|
|
77
|
|
|
|
66
|
|
Acquisitions
|
|
|
8
|
|
|
|
2
|
|
|
|
5
|
|
Dispositions
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
(5
|
)
|
Chartered In
|
|
|
(8
|
)
|
|
|
(2
|
)
|
|
|
11
|
|
At end of period
|
|
|
73
|
|
|
|
76
|
|
|
|
77
|
|
As of December 31,
|
|||||||||||||||
2010
|
2009
|
2008
|
|||||||||||||
|
|
Number of vessels
|
|
Percentage of fleet
|
|
|
Number of vessels
|
|
Percentage
of fleet
|
|
|
Number of vessels
|
|
Percentage of fleet
|
|
VLCCs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spot or pool
|
|
22
|
|
50
|
%
|
|
15
|
|
37
|
%
|
|
15
|
|
38
|
%
|
Time charter
|
|
13
|
|
30
|
%
|
|
14
|
|
34
|
%
|
|
15
|
|
38
|
%
|
Bareboat charter
|
|
9
|
|
20
|
%
|
|
12
|
|
29
|
%
|
|
10
|
|
25
|
%
|
Total
|
|
44
|
|
100
|
%
|
|
41
|
|
100
|
%
|
|
40
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suezmax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spot or pool
|
|
15
|
|
72
|
%
|
|
19
|
|
70
|
%
|
|
21
|
|
73
|
%
|
Time charter
|
|
3
|
|
14
|
%
|
|
5
|
|
19
|
%
|
|
5
|
|
17
|
%
|
Bareboat charter
|
|
3
|
|
14
|
%
|
|
3
|
|
11
|
%
|
|
3
|
|
10
|
%
|
Total
|
|
21
|
|
100
|
%
|
|
27
|
|
100
|
%
|
|
29
|
|
100
|
%
|
Suezmax OBOs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time charter
|
|
8
|
|
100
|
%
|
|
8
|
|
100
|
%
|
|
8
|
|
100
|
%
|
Total
|
|
8
|
|
100
|
%
|
|
8
|
|
100
|
%
|
|
8
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fleet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spot or pool
|
|
37
|
|
51
|
%
|
|
34
|
|
45
|
%
|
|
36
|
|
47
|
%
|
Time charter
|
|
24
|
|
33
|
%
|
|
27
|
|
35
|
%
|
|
28
|
|
36
|
%
|
Bareboat charter
|
|
12
|
|
16
|
%
|
|
15
|
|
20
|
%
|
|
13
|
|
17
|
%
|
Total
|
|
73
|
|
100
|
%
|
|
76
|
|
100
|
%
|
|
77
|
|
100
|
%
|
|
·
|
Chinese coastal trade is growing fast and may account for as much as 6% of total dry bulk trade
|
|
·
|
Waiting time at load and discharge ports was tying up between 5 and 9% of the total fleet during 2010.
|
|
·
|
There was inefficient utilization of the fleet due to the fact that a continuously larger portion of the dry bulk fleet discharges in Asia and must sail without cargo back to loading areas in the Western hemisphere. In addition piracy in Gulf of Aden and Indian Ocean is adding waiting time for military convoys, slower steaming during convoy passages and deviations in general.
|
Vessel
|
Built
|
Approximate
Dwt.
|
Carrying
Value
($ millions)
|
VLCCs
|
|||
Antares Voyager
|
1998
|
310,000
|
49.4
|
Phoenix Voyager
|
1999
|
308,500
|
50.6
|
British Pioneer
|
1999
|
307,000
|
52.3
|
British Progress
|
2000
|
307,000
|
53.9
|
British Purpose
|
2000
|
307,000
|
54.5
|
Front Shanghai
(1)
|
2006
|
298,500
|
69.7
|
Front Kathrine
|
2009
|
297,974
|
102.5
|
Front Queen
(2)
|
2009
|
297,000
|
104.0
|
Front Eminence
|
2009
|
321,300
|
101.3
|
Front Endurance
|
2009
|
321,300
|
101.7
|
Front Cecilie
(2)
|
2010
|
297,000
|
111.9
|
Front Signe
(2)
|
2010
|
297,000
|
113.0
|
Suezmax Tankers
|
|||
Front Fighter
(2)
|
1994
|
147,048
|
42.4
|
Front Hunter
(2)
|
1996
|
146,286
|
50.3
|
Front Alfa
(2)
|
1993
|
150,038
|
40.4
|
Front Beta
(2)
|
1992
|
135,915
|
34.5
|
Front Delta
(2)
|
1993
|
136,055
|
31.9
|
Northia
|
2010
|
156,000
|
65.4
|
Naticina
|
2010
|
156,000
|
65.3
|
Front Odin
|
2010
|
156,000
|
66.4
|
Front Njord
|
2010
|
156,000
|
66.4
|
|
(1)
|
Vessel was sold in January 2011 for net sale proceeds of $91.2 million. In connection with the sale, we agreed to charter back the vessel from the new owner for approximately two years at a rate of $35,000 per day.
|
|
(2)
|
Indicates tanker vessels for which we believe, as of December 31, 2010, the basic charter-free market value is lower than the vessel's carrying value. We believe that the aggregate carrying value of these vessels exceeds their aggregate basic charter-free market value by approximately $97.9 million.
|
|
(3)
|
The Cygnus Voyager, Altair Voyager and Sirius Voyager have not been included in the table as we have determined that we are not the primary beneficiary of the subsidiaries, which own these vessels and these subsidiaries are accounted for under the equity method.
|
|
·
|
the earnings of our vessels in the charter market;
|
|
·
|
gains from the sale of assets;
|
|
·
|
vessel operating expenses;
|
|
·
|
profit share expense;
|
|
·
|
administrative expenses;
|
|
·
|
depreciation;
|
|
·
|
interest expense;
|
|
·
|
impairment of securities.
|
|
·
|
obtain the charterer's consent to us as the new owner;
|
|
·
|
obtain the charterer's consent to a new technical manager;
|
|
·
|
in some cases, obtain the charterer's consent to a new flag for the vessel;
|
|
·
|
arrange for a new crew for the vessel;
|
|
·
|
replace all hired equipment on board, such as gas cylinders and communication equipment;
|
|
·
|
negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;
|
|
·
|
register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;
|
|
·
|
implement a new planned maintenance program for the vessel; and
|
|
·
|
ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
Voyage charter revenues
|
|
|
708,008
|
|
|
|
565,331
|
|
|
|
142,677
|
|
|
|
25.2
|
|
Time charter revenues
|
|
|
365,159
|
|
|
|
486,361
|
|
|
|
(121,202
|
)
|
|
|
(24.9)
|
|
Bareboat charter revenues
|
|
|
71,370
|
|
|
|
64,526
|
|
|
|
6,844
|
|
|
|
10.6
|
|
Other income
|
|
|
20,678
|
|
|
|
17,068
|
|
|
|
3,610
|
|
|
|
21.2
|
|
Total operating revenues
|
|
|
1,165,215
|
|
|
|
1,133,286
|
|
|
|
31,929
|
|
|
|
2.8
|
|
|
·
|
In 2009, three Suezmaxes were chartered in under floating rate charters, bringing the total under such agreements to nine in 2009. Trading days increased in 2010 as a result of newly delivered vessels and the transfer of vessels from time charters to voyage charters. Two Suezmaxes and four VLCCs were delivered onto voyage charters during 2010, which increased revenues by $37.7 million.
|
|
·
|
14 vessels moved from time charters to voyage charters in 2010, which together with market conditions, increased voyage charter revenues by $180.1 million.
|
|
·
|
The Desh Ujaala was chartered in during 2010, generating $25.6 million in voyage charter revenues.
|
|
·
|
Demurrage income, which is classified as voyage charter income, increased by $17.1 million higher compared to 2009 primarily due to an increase in the number of vessels trading on the spot market during 2010 offset by a fall in TCE rates during 2010.
|
|
·
|
A decrease in the average TCE rates for double hull VLCCs and double hull Suezmaxes from approximately $38,000 and $23,200 in 2009, respectively, to approximately $36,800 and $24,300 in 2010, respectively.
|
|
·
|
A decrease in the average TCE rates for single hull VLCCs and single hull Suezmaxes from approximately $23,800 and $9,100 in 2009, respectively, to approximately $22,500 and $7,300 in 2010, respectively.
|
|
·
|
The last remaining single hull Suezmax was sold in April 2010 thereby reducing voyage charter revenues by $7.7 million compared to 2009.
|
|
·
|
The lease for the Front Duchess was terminated in September 2009, resulting in a reduction in revenues of $7.6 million in 2010 compared to 2009.
|
|
·
|
Revenues generated from relets were $47.4 million lower in 2010.
|
|
·
|
In 2009, nine vessels were chartered-in on floating rate charters and traded in the Gemini pool. The number of vessels was increased to 15 in the first half of 2010, but all vessels were redelivered with effect from
June 30, 2010 resulting in a net reduction in voyage charter revenues of $12.7 million in 2010 when compared to the prior year. This reduction in revenues was matched by an equal reduction in charterhire expenses.
|
|
·
|
Eight vessels that had not traded exclusively in the Gemini pool in 2009 traded solely in the Gemini pool in 2010, resulting in a reduction in revenues of $10.8 million.
|
|
·
|
Five vessels, which were chartered in on fixed rate charters and traded on the spot market were redelivered to their owners in late 2009 and early 2010 giving rise to a $31.6 million reduction in voyage charter revenues.
|
|
·
|
The lease on a single hull VLCC, Golden River, was terminated in March 2010 resulting in a decrease in time charter revenues of $11.2 million compared with 2009.
|
|
·
|
Two chartered in Suezmaxes were redelivered in the final quarter of 2009, thereby resulting in a $5.6 million decrease in time charter revenues in 2010.
|
|
·
|
Two vessels that moved from time charters to bareboat charters during 2009, resulted in a decrease in time charter revenues of $9.5 million. In 2010, movements in the market combined with 14 vessels moving from time charters to voyage charters led to a net reduction of $121.9 million in revenues.
|
|
·
|
In 2009, six OBOs were drydocked compared to two in 2010 and five vessels changed to time charters, which resulted in an $11.9 million increase in revenues.
|
|
·
|
Two Suezmax newbuildings and one VLCC were delivered onto time charters during 2010 resulting in a $15.1 million increase in revenue.
|
|
·
|
Two additional single hull VLCCs were traded on bareboat charters in the year resulting in a $4.9 million increase in bareboat revenues. The redelivery of the Antares Voyager together with the change in charter rates on the Windsor vessels contributed to a $2.8 million reduction in bareboat revenues in 2010.
|
|
·
|
Two single hull VLCCs transferred onto bareboat charters in 2009 continued to trade on bareboat throughout 2010 and thus resulted in increased bareboat revenues of $4.7 million.
|
(in $ per day)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||
VLCC
|
35,900 | 38,300 | 74,500 | 45,700 | 56,800 | |||||||||||||||
Suezmax
|
25,800 | 25,300 | 55,200 | 33,000 | 37,800 | |||||||||||||||
Suezmax OBO
|
47,400 | 43,000 | 43,500 | 39,700 | 31,700 |
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
Gain on sale of assets and amortization of deferred gains
|
|
|
30,935
|
|
|
|
3,061
|
|
|
|
27,874
|
|
|
|
910.6
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
VLCC
|
|
|
100,645
|
|
|
|
124,357
|
|
|
|
(23,712
|
)
|
|
|
(19.1
|
)
|
Suezmax
|
|
|
63,314
|
|
|
|
49,980
|
|
|
|
13,334
|
|
|
|
26.7
|
|
Suezmax OBO
|
|
|
31,720
|
|
|
|
32,044
|
|
|
|
(324
|
)
|
|
|
(1.0
|
)
|
Total ship operating expenses
|
|
|
195,679
|
|
|
|
206,381
|
|
|
|
(10,702)
|
|
|
|
(5.2
|
)
|
|
·
|
Three double hull vessels were drydocked in 2010 compared with eight double hull and one single hull vessels in 2009, which resulted in a decrease of $13.2 million in drydocking expenses.
|
|
·
|
The lease for the Front Duchess and Golden River were terminated in September 2009 and April 2010, respectively. This reduced operating expenditure in 2010 by $4.6 million.
|
|
·
|
Four single hull vessels have moved onto bareboat charters throughout 2009 and 2010. Operating costs incurred on these vessels has fallen by $7.0 million.
|
|
·
|
Three double hull vessels moved from finance leases to operating leases at the end of 2009, the decrease in operating expenditure on these vessels in 2010 was $9.7 million
|
|
·
|
Five double hull Suezmaxes were drydocked in 2010 compared with one double hull Suezmax in 2009, which resulted in an increase of $6.4 million in drydocking expenses.
|
|
·
|
The Company's final single hull Suezmax was sold in April 2010, reducing operating expenditure by $2.4 million.
|
|
·
|
Four new Suezmaxes were delivered during 2010, increasing operating costs by $8.0 million in 2010.
|
|
·
|
Higher insurance and services costs increased operating costs by $1.3 million.
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
Profit share expense
|
|
|
30,566
|
|
|
|
33,018
|
|
|
|
(2,452
|
)
|
|
|
(7.4)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
Charterhire expenses
|
|
|
134,551
|
|
|
|
169,503
|
|
|
|
(34,952
|
)
|
|
|
(20.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of vessels chartered in and accounted for
as operating leases:
|
|
|
2010
|
|
|
|
2009
|
|
|
|
|
|
|
|
||
VLCC
|
|
|
12
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
Suezmax
|
|
|
17
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
29
|
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
Administrative expenses
|
|
|
31,883
|
|
|
|
30,647
|
|
|
|
1,236
|
|
|
|
(4.0)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
Interest income
|
|
|
13,432
|
|
|
|
22,969
|
|
|
|
(9,537
|
)
|
|
|
(41.5)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
Interest expense
|
|
|
149,918
|
|
|
|
160,988
|
|
|
|
(11,070
|
)
|
|
|
(6.9)
|
|
|
|
|
|
Change
|
||||
(in thousands of $)
|
|
2010
|
|
2009
|
|
$
|
%
|
|
Share of results of associated companies
|
|
|
(515
|
)
|
(544)
|
|
29
|
5.3
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
|
|
%
|
|
|||
Foreign currency exchange gains (losses)
|
|
|
622
|
|
|
|
(346
|
)
|
|
|
968
|
|
|
|
(279.8)
|
|
Mark to market of derivatives
|
|
|
(19
|
)
|
|
|
-
|
|
|
|
(19
|
)
|
|
|
-
|
|
Impairment of securities
|
|
|
(9,425
|
)
|
|
|
-
|
|
|
|
(9,425
|
)
|
|
|
-
|
|
Dividends received, net
|
|
|
(278
|
)
|
|
|
3,087
|
|
|
|
(3,365
|
)
|
|
|
(109.0)
|
|
Other non-operating items, net
|
|
|
2,411
|
|
|
|
1,545
|
|
|
|
866
|
|
|
|
(56.1)
|
|
|
|
|
|
|
Change
|
|
|||||||
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
|
$
|
|
%
|
|
||
Net income attributable to noncontrolling interest
|
|
|
2,597
|
|
|
|
2,771
|
|
|
(174)
|
|
(6.3)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Voyage charter revenues
|
|
|
565,331
|
|
|
|
1,425,968
|
|
|
|
(860,637)
|
|
|
|
(60.3)
|
|
Time charter revenues
|
|
|
486,361
|
|
|
|
602,980
|
|
|
|
(116,619)
|
|
|
|
(19.3)
|
|
Bareboat charter revenues
|
|
|
64,526
|
|
|
|
57,152
|
|
|
|
7,374
|
|
|
|
12.9
|
|
Other income
|
|
|
17,068
|
|
|
|
17,918
|
|
|
|
(850)
|
|
|
|
(4.7)
|
|
Total operating revenues
|
|
|
1,133,286
|
|
|
|
2,104,018
|
|
|
|
(970,732)
|
|
|
|
(46.1)
|
|
|
·
|
The average TCE rates for double hull VLCCs and double hull Suezmaxes decreased from approximately $90,000 and $58,400, respectively, in 2008 to approximately $38,000 and $23,200, respectively, in 2009.
|
|
·
|
The average TCE rates for single hull VLCCs and single hull Suezmaxes decreased from approximately $40,500 and $39,900, respectively, in 2008 to approximately $23,800 and $9,100, respectively, in 2009.
|
|
·
|
The lease on a single hull VLCC, Front Duchess, was terminated in September 2009 resulting in a decrease in voyage charter revenues of $14.4 million compared with 2008.
|
|
·
|
Demurrage income was lower in 2009 than in the prior year, resulting in a $82.2 million reduction in voyage charter revenues. These rates are determined by the market rates which were also lower in the year.
|
|
·
|
Revenues generated from relets were $69.2 million lower in 2009. This was largely matched by a $68.9 million reduction in voyage expenses in the year.
|
|
·
|
A decrease in trading days in 2009 due mainly to the redelivery of a vessel chartered in for 2008, which reduced income by $52.6 million, and the transfer of three double hull VLCCs and one double hull Suezmax to time charters from voyage charters for the majority of 2009. There was a reduction of $166.5 million in voyage charter revenues for these vessels.
|
|
·
|
Eighteen double hull Suezmax vessels entered the Gemini Pool during the first quarter of the year. Earnings on the vessels traded in the pool were $277.3 million lower in 2009 than in 2008 as a result of the weaker spot market.
|
|
·
|
Six OBOs were drydocked in the year compared with one in 2008. As a result these vessels incurred much larger periods of offhire, which reduced income by $7.9 million.
|
|
·
|
Two single hull VLCCs, Front Sabang and Front Duchess, did not trade on time charter in 2009 decreasing revenue by $6.2 million. Two other vessels were transferred onto bareboat charters from time charters. The impact on revenue was a decrease of $37.5 million from the prior year. Two other vessels were chartered out at rates linked to the Baltic Exchange Index which fell in 2009 from 2008, resulting in reported revenues decreasing by $17.0 million.
|
|
·
|
Six double hull VLCCs are chartered out under floating rate time charters. In 2009, revenues from these vessels was $121.4 million lower than 2008.
|
|
·
|
Movement of double hull VLCCs between spot and time charters gave rise to a $20.7 million increase in time charter revenues in 2009 on 2008.
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Gain on sale of assets and amortization of deferred gains
|
|
|
3,061
|
|
|
|
142,293
|
|
|
|
(139,232)
|
|
|
|
(97.8)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
VLCC
|
|
|
124,357
|
|
|
|
141,565
|
|
|
|
(17,208)
|
|
|
|
(12.2)
|
|
Suezmax
|
|
|
49,980
|
|
|
|
45,210
|
|
|
|
4,770
|
|
|
|
10.6
|
|
Suezmax OBO
|
|
|
32,044
|
|
|
|
26,991
|
|
|
|
5,053
|
|
|
|
18.7
|
|
Total ship operating expenses
|
|
|
206,381
|
|
|
|
213,766
|
|
|
|
(7,385)
|
|
|
|
(3.5)
|
|
|
·
|
Eight double hull and one single hull vessel were drydocked in 2009 compared with six double hull and three single hull vessels in 2008. Drydocking expenditure in 2009 was $14.6 million lower than in 2008 due to fewer single hull vessels being drydocked and more vessels being drydocked in China, which proved to be cost effective.
|
|
·
|
Two single hull vessels were delivered onto bareboat charters in April and May 2009. Operating costs incurred on these vessels was $7.0 million lower in 2009 when compared to 2008.
|
|
·
|
The Front Sabang which had previously reported operating expenditure in 2008 but was sold in the first half of the year led to a decrease of $1.3 million in 2009. The Front Duchess was sold in 2009 and resulted in decreased operating expenditure of $1.7 million.
|
|
·
|
One double hull Suezmax was drydocked in 2009 compared with three double hull Suezmaxes in 2008, which resulted in a decrease of $4.6 million in drydocking expenses.
|
|
·
|
Operating expenditure for single hull Suezmax vessels for the whole of 2009 related to one single hull Suezmax. As a result of the disposal of other single hull Suezmaxes in the prior year, operating expenditure fell by $1.7 million.
|
|
·
|
Five double hull Suezmax vessels were acquired and delivered during the period from June to August 2008 and consequently a full year of operating expenditure was incurred in 2009 resulting in an increase of $10.0 million.
|
Change
|
||||||||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Profit share expense
|
|
|
33,018
|
|
|
|
110,962
|
|
|
|
(77,944)
|
|
|
|
(70.2)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Charterhire expenses
|
|
|
169,503
|
|
|
|
220,170
|
|
|
|
(50,667)
|
|
|
|
(23.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of vessels chartered in and accounted for
as operating leases:
|
|
|
2009
|
|
|
|
2008
|
|
|
|
|
|
|
|
||
VLCC
|
|
|
2
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
Suezmax
|
|
|
15
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
17
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Administrative expenses
|
|
|
30,647
|
|
|
|
35,226
|
|
|
|
(4,579)
|
|
|
|
(13.0)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Interest income
|
|
|
22,969
|
|
|
|
41,204
|
|
|
|
(18,235)
|
|
|
|
(44.3)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Interest expense
|
|
|
160,988
|
|
|
|
183,925
|
|
|
|
(22,937)
|
|
|
|
(12.5)
|
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Share of results of associated companies
|
|
|
(544
|
)
|
|
|
(901
|
)
|
|
|
(357
|
)
|
|
|
(39.6
|
)
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Foreign currency exchange (losses) gains
|
|
|
(346
|
)
|
|
|
1,565
|
|
|
|
(1,911
|
)
|
|
|
(122.1
|
)
|
Mark to market of derivatives
|
|
|
-
|
|
|
|
(17,399
|
)
|
|
|
17,399
|
|
|
|
100.0
|
|
Impairment of securities
|
|
|
-
|
|
|
|
(25,134
|
)
|
|
|
25,134
|
|
|
|
100.0
|
|
Dividends received, net
|
|
|
3,087
|
|
|
|
1,552
|
|
|
|
1,535
|
|
|
|
98.9
|
|
Loss on sale of securities
|
|
|
-
|
|
|
|
(221
|
)
|
|
|
221
|
|
|
|
100.0
|
|
Other non-operating items, net
|
|
|
1,545
|
|
|
|
34,043
|
|
|
|
(32,498
|
)
|
|
|
(95.5
|
)
|
|
|
|
|
|
Change
|
|
||||||||||
(in thousands of $)
|
|
2009
|
|
|
2008
|
|
|
$
|
|
|
|
%
|
|
|||
Net income attributable to noncontrolling interest
|
|
|
2,771
|
|
|
|
2,184
|
|
|
|
587
|
|
|
|
26.9
|
|
|
|
Payment due by period
|
|
|||||||||||||||||
(In thousands of $)
|
|
Less than
1 year
|
|
|
1 – 3 years
|
|
|
3 – 5 years
|
|
|
After 5 years
|
|
|
Total
|
|
|||||
Fixed rate long-term debt
|
|
|
15,152
|
|
|
|
39,845
|
|
|
|
271,550
|
|
|
|
201,742
|
|
|
|
528,289
|
|
Floating rate long-term debt
|
|
|
158,443
|
|
|
|
165,389
|
|
|
|
179,649
|
|
|
|
332,588
|
|
|
|
836,069
|
|
Fixed rate long-term debt in unconsolidated subsidiaries
|
|
|
9,526
|
|
|
|
19,052
|
|
|
|
19,051
|
|
|
|
-
|
|
|
|
47,629
|
|
Operating lease obligations
|
|
|
69,301
|
|
|
|
21,400
|
|
|
|
3,029
|
|
|
|
-
|
|
|
|
93,730
|
|
Capital lease obligations
|
|
|
193,379
|
|
|
|
259,404
|
|
|
|
321,867
|
|
|
|
755,637
|
|
|
|
1,530,287
|
|
Newbuilding commitments
|
|
|
106,868
|
|
|
|
344,548
|
|
|
|
-
|
|
|
|
-
|
|
|
|
451,416
|
|
Interest on fixed rate long-term debt
|
|
|
33,822
|
|
|
|
63,538
|
|
|
|
54,307
|
|
|
|
54,377
|
|
|
|
206,044
|
|
Interest on floating rate long-term debt
|
|
|
38,041
|
|
|
|
58,216
|
|
|
|
43,524
|
|
|
|
34,678
|
|
|
|
174,459
|
|
Interest on fixed rate long-term debt in unconsolidated subsidiaries
|
|
|
3,652
|
|
|
|
4,870
|
|
|
|
1,623
|
|
|
|
-
|
|
|
|
10,145
|
|
Interest on capital lease obligations
|
|
|
97,913
|
|
|
|
159,453
|
|
|
|
121,287
|
|
|
|
192,356
|
|
|
|
571,009
|
|
Total
|
|
|
726,097
|
|
|
|
1,135,715
|
|
|
|
1,015,887
|
|
|
|
1,571,378
|
|
|
|
4,449,076
|
|
Name
|
Age
|
Position
|
John Fredriksen
|
66
|
Chairman, Chief Executive Officer, President and Director
|
Cecilie Fredriksen
|
27
|
Director
|
Kate Blankenship
|
46
|
Director and Audit Committee Chairman
|
Tony Curry
|
60
|
Director
|
Jens Martin Jensen
|
47
|
Chief Executive Officer of Frontline Management AS
|
Inger M. Klemp
|
48
|
Chief Financial Officer of Frontline Management AS
|
Director or Officer
|
|
Ordinary Shares of $2.50 each
|
|
|
% of
Ordinary
Shares
Outstanding
|
|
|
Options for Ordinary Shares of $2.50 each
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
John Fredriksen*
|
|
|
*
|
|
|
|
*
|
|
|
|
100,000
|
|
Cecilie Fredriksen
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Kate Blankenship
|
|
|
2,000
|
|
|
|
**
|
|
|
|
30,000
|
|
Tony Curry
|
|
|
-
|
|
|
|
-
|
|
|
|
30,000
|
|
Jens Martin Jensen
|
|
|
-
|
|
|
|
-
|
|
|
|
50,000
|
|
Inger M. Klemp
|
|
|
16,000
|
|
|
|
**
|
|
|
|
50,000
|
|
*
|
Hemen Holding Ltd, or Hemen, is a Cyprus holding company, which is indirectly controlled by trusts established by Mr. John Fredriksen for the benefit of his immediate family. Mr. Fredriksen disclaims beneficial ownership of the 26,304,053 Ordinary Shares held by Hemen, except to the extent of his voting and dispositive interest in such shares of common stock. Mr. Fredriksen has no pecuniary interest in the shares held by Hemen.
|
**
|
Less than one per cent.
|
Owner
|
Ordinary
Shares Amount
|
|
%
|
|
||||
Hemen Holding Ltd. (1)
|
26,304,053
|
|
|
33.78
|
%
|
|||
Allianz Global Investors Capital LLC
|
4,575,500
|
5.90
|
% |
(1)
|
Hemen Holding Ltd, or Hemen, is a Cyprus holding company, which is indirectly controlled by trusts established by Mr. John Fredriksen for the benefit of his immediate family. Mr. Fredriksen disclaims beneficial ownership of the 26,304,053 Ordinary Shares held by Hemen, except to the extent of his voting and dispositive interest in such shares of common stock. Mr. Fredriksen has no pecuniary interest in the shares held by Hemen.
|
(in thousands of $)
|
2010
|
2009
|
2008
|
|||||||||
Charterhire paid (principal and interest)
|
289,578 | 331,534 | 345,551 | |||||||||
Payments received for termination of leases
|
2,435 | 2,386 | 43,510 | |||||||||
Profit share expense
|
30,566 | 33,018 | 110,962 | |||||||||
Remaining lease obligation
|
1,289,897 | 1,462,753 | 1,609,987 |
(in thousands of $)
|
2010
|
2009
|
2008
|
|||||||||
Seatankers Management Co. Ltd
|
1,092 | 1,126 | 1,175 | |||||||||
Golar LNG Limited
|
1,310 | 156 | 17 | |||||||||
Golar LNG Energy Limited
|
88 | - | - | |||||||||
Ship Finance International Limited
|
2,490 | 2,347 | 3,430 | |||||||||
Golden Ocean Group Limited
|
6,138 | 4,253 | 6,714 | |||||||||
Geveran Trading Co Ltd
|
- | (405 | ) | (366 | ) | |||||||
Bryggegata AS
|
(1,368 | ) | (1,300 | ) | (1,395 | ) | ||||||
Arcadia Petroleum Limited
|
34,211 | 42,264 | 64,784 | |||||||||
Seadrill Limited
|
426 | 322 | 25 | |||||||||
Seawell Limited
|
166 | 126 | - |
Deep Sea Supply Plc
|
132 | 32 | - | |||||||||
Aktiv Kapital ASA
|
83 | 63 | - | |||||||||
CalPetro Tankers (Bahamas I) Limited
|
47 | 45 | 43 | |||||||||
Calpetro Tanker (Bahamas II) Limited
|
47 | 45 | 43 | |||||||||
Calpetro Tankers (IOM) Limited
|
47 | 45 | 43 |
(in thousands of $)
|
2010
|
2009
|
Receivables
|
|
|
Ship Finance International Limited
|
1,947
|
26,944
|
Seatankers Management Co. Ltd
|
-
|
214
|
Seawell Ltd
|
51
|
-
|
Golar LNG Limited
|
404
|
247
|
Golar LNG Energy Limited
|
11
|
-
|
Northern Offshore Ltd
|
13
|
13
|
Golden Ocean Group Limited
|
1,075
|
1,119
|
Seadrill Limited
|
109
|
160
|
CalPetro Tankers (Bahamas I) Limited
|
20
|
11
|
CalPetro Tankers (Bahamas II) Limited
|
20
|
11
|
CalPetro Tankers (IOM) Limited
|
20
|
11
|
Deep Sea Supply Plc
|
2
|
2
|
Arcadia Petroleum Limited
|
3,553
|
11
|
|
7,225
|
28,743
|
Payment Date
|
|
Amount per Share
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
March 10, 2008
|
|
$
|
2.00
|
|
June 25, 2008
|
|
$
|
2.75
|
|
September 19, 2008
|
|
$
|
3.00
|
|
December 22, 2008
|
|
$
|
0.50
|
|
|
|
|
|
|
2009
|
|
|
|
|
March 27, 2009
|
|
$
|
0.25
|
|
June 23, 2009
|
|
$
|
0.25
|
|
September 24, 2009
|
|
$
|
0.25
|
|
December 22, 2009
|
|
$
|
0.15
|
|
|
|
|
|
|
2010
|
|
|
|
|
March 30, 2010
|
|
$
|
0.25
|
|
June 21, 2010
|
|
$
|
0.75
|
|
September 24, 2010
|
|
$
|
0.75
|
|
December 21, 2010
|
|
$
|
0.25
|
|
|
NYSE
|
OSE
|
||||||
|
High
|
|
Low
|
High
|
Low
|
|||
Fiscal year ended December 31,
|
|
|
|
|
|
|||
2010
|
$
|
38.85
|
|
$
|
24.98
|
NOK 236.70
|
NOK 146.40
|
|
2009
|
$
|
33.29
|
|
$
|
15.78
|
NOK 235.00
|
NOK 107.00
|
|
2008
|
$
|
72.36
|
|
$
|
25.00
|
NOK 376.50
|
NOK 165.25
|
|
2007
|
$
|
53.09
|
|
$
|
29.35
|
NOK 306.00
|
NOK 183.75
|
|
2006
|
$
|
44.65
|
|
$
|
28.80
|
NOK 280.00
|
NOK 184.00
|
|
NYSE
|
OSE
|
||||||
|
High
|
|
Low
|
High
|
Low
|
|||
Fiscal year ended December 31, 2010
|
|
|
|
|
|
|||
First quarter
|
$
|
34.15
|
|
$
|
25.02
|
NOK 194.00
|
NOK 146.40
|
|
Second quarter
|
$
|
38.85
|
|
$
|
28.19
|
NOK 236.70
|
NOK 185.30
|
|
Third quarter
|
$
|
33.95
|
|
$
|
25.74
|
NOK 209.20
|
NOK 160.50
|
|
Fourth quarter
|
$
|
29.17
|
|
$
|
24.98
|
NOK 174.60
|
NOK 147.40
|
|
NYSE
|
OSE
|
||||||
|
High
|
|
Low
|
High
|
Low
|
|||
Fiscal year ended December 31, 2009
|
|
|
|
|
|
|||
First quarter
|
$
|
33.29
|
|
$
|
15.78
|
NOK 235.00
|
NOK 112.00
|
|
Second quarter
|
$
|
28.59
|
|
$
|
17.00
|
NOK 186.50
|
NOK 107.00
|
|
Third quarter
|
$
|
25.28
|
|
$
|
19.76
|
NOK 164.00
|
NOK 125.70
|
|
Fourth quarter
|
$
|
29.88
|
|
$
|
21.50
|
NOK 175.90
|
NOK 124.20
|
|
NYSE
|
OSE
|
||||||
|
High
|
|
Low
|
High
|
Low
|
|||
February 2011
|
$
|
27.45
|
|
$
|
25.56
|
NOK 159.00
|
NOK 140.20
|
January 2011
|
$
|
27.76
|
|
$
|
24.41
|
NOK 169.50
|
NOK 140.90
|
|
December 2010
|
$
|
26.37
|
|
$
|
24.98
|
NOK 163.60
|
NOK 147.40
|
|
November 2010
|
$
|
29.15
|
|
$
|
25.53
|
NOK 174.60
|
NOK 156.20
|
|
October 2010
|
$
|
29.17
|
|
$
|
26.15
|
NOK 170.80
|
NOK 151.50
|
|
September 2010
|
$
|
29.47
|
|
$
|
26.37
|
NOK 179.10
|
NOK 161.20
|
|
(i)
|
It is organized in a qualified foreign country which is one that grants an equivalent exemption from taxation to corporations organized in the United States in respect of the shipping income for which exemption is being claimed under Section 883 and which the Company refers to as the "country of organization requirement"; and
|
|
(ii)
|
It can satisfy any one of the following two stock ownership requirements for more than half the days during the taxable year:
|
|
●
|
the Company's stock is "primarily and regularly" traded on an established securities market located in the United States or a qualified foreign country, which the Company refers to as the "Publicly-Traded Test"; or
|
|
●
|
more than 50% of the Company's stock, in terms of value, is beneficially owned by any combination of one or more individuals who are residents of a qualified foreign country or foreign corporations that satisfy the country of organization requirement and the Publicly-Traded Test, which the Company refers to as the "50% Ownership Test."
|
|
·
|
at least 75% of the Company's gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business), or
|
|
·
|
at least 50% of the average value of the assets held by the Company during such taxable year produce, or are held for the production of, passive income.
|
|
·
|
the excess distribution or gain would be allocated ratably over the Non-Electing United States Holders' aggregate holding period for the Ordinary Shares;
|
|
·
|
the amount allocated to the current taxable year and any taxable years before the Company became a PFIC would be taxed as ordinary income; and
|
|
·
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
|
·
|
fails to provide an accurate taxpayer identification number;
|
|
·
|
is notified by the IRS that he has failed to report all interest or dividends required to be shown on his United States federal income tax returns; or
|
|
·
|
in certain circumstances, fails to comply with applicable certification requirements.
|
|
·
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of Company's management and directors; and
|
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
(in thousands of $)
|
|
2010
|
|
|
2009
|
|
||
Audit Fees (a)
|
|
|
1,020
|
|
|
|
1,457
|
|
Audit-Related Fees (b)
|
|
|
—
|
|
|
|
—
|
|
Tax Fees (c)
|
|
|
—
|
|
|
|
—
|
|
All Other Fees (d)
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
|
1,020
|
|
|
|
1,457
|
|
·
|
Executive Sessions.
The NYSE
requires that non-management directors meet regularly in executive sessions without management. The NYSE
also requires that all independent directors meet in an executive session at least once a year. As permitted under Bermuda law and our bye-laws, our non-management directors do not regularly hold executive sessions without management and we do not expect them to do so in the future.
|
·
|
Nominating/Corporate Governance Committee
. The NYSE
requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Bermuda law and our bye-laws, we do not currently have a nominating or corporate governance committee.
|
·
|
Audit Committee
. The NYSE
requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members. As permitted by Rule 10A-3 under the Securities Exchange Act of 1934, our audit committee consists of one independent member of our Board.
|
·
|
Corporate Governance Guidelines
. The NYSE
requires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. We are not required to adopt such guidelines under Bermuda law and we have not adopted such guidelines.
|
Consolidated Financial Statements of Frontline Ltd.
|
|
|
|
Index to Consolidated Financial Statements of Frontline Ltd.
|
F-1
|
|
|
Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers AS
|
F-2
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008
|
F-3
|
|
|
Consolidated Balance Sheets as of December 31, 2010 and 2009
|
F-4
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008
|
F-5
|
|
|
Consolidated Statements of Changes in Equity for the years ended December 31, 2010, 2009 and 2008
|
F-6
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008
|
F-7
|
|
|
Notes to Consolidated Financial Statements
|
F-8
|
Number
|
Description of Exhibit
|
|
|
1.1
|
Memorandum of Association of the Company, incorporated by reference to Exhibit 3.1 of the Company's Registration Statement on Form F-1, Registration No. 33-70158 filed on October 12, 1993 (the "Original Registration Statement").
|
|
|
1.2
|
Amended and Restated Bye-Laws of the Company as adopted by shareholders on September 28, 2007 incorporated by reference to Exhibit 1.2 of the Company's annual Report on form 20-F for the fiscal year ended December 31, 2007.
|
|
|
2.1
|
Form of Ordinary Share Certificate, incorporated by reference to Exhibit 4.1 of the Original Registration Statement.
|
|
|
2.2
|
Form of Deposit Agreement dated as of November 24, 1993, among Frontline Ltd. (F/K/A London & Overseas Freighters Limited), The Bank of New York as Depositary, and all Holders from time to time of American Depositary Receipts issued there under, including form of ADR, incorporated by reference to Exhibit 4.2 of the Original Registration Statement.
|
|
|
2.3
|
Form of Deposit Agreement dated as of November 24, 1993, as amended and restated as of May 29, 2001, among Frontline Ltd. (F/K/A London & Overseas Freighters Limited), The Bank of New York as Depositary, and all Holders from time to time of American Depositary Receipts issued there under, including form of ADR, incorporated by reference to Exhibit 2 of the Company's Annual Report on Form 20-F, filed on June 13, 2001 for the fiscal year ended December 31, 2000.
|
|
|
2.4
|
Amendment No. 1 to the Rights Agreement incorporated by reference to Exhibit 4.3 of the Amalgamation Registration Statement.
|
|
|
2.5
|
The Subregistrar Agreement related to the registration of certain securities issued by Frontline Ltd. in the Norwegian Registry of Securities between Frontline Ltd. and Christiania Bank og Kreditkasse ASA together with the Form of Warrant Certificate and Conditions attaching thereto, incorporated by reference to Exhibit 1.1 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 1998.
|
|
|
4.4
|
Master Agreement, dated September 22, 1999, among Frontline AB and Frontline Ltd (collectively "FL"), Acol Tankers Ltd. ("Tankers"), ICB Shipping AB ("ICB"), and Ola Lorentzon (the "Agent"), incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 1999.
|
|
|
4.6
|
Charter Ancillary Agreement between Frontline Ltd and Ship Finance International Limited dated January 1, 2004 incorporated by reference to Exhibit 10.2 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
|
|
|
4.7
|
Addendum to Charter Ancillary Agreement between Frontline Ltd and Ship Finance International Limited dated June 15, 2004 incorporated by reference to Exhibit 10.3 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
|
|
|
4.8
|
Form of Performance Guarantee issued by the Company incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
|
|
|
4.9
|
Form of Time Charter incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
|
|
|
4.10
|
Form of Vessel Management Agreements incorporated by reference to Exhibit 10.6 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
|
|
|
4.11
|
Administrative Services Agreement incorporated by reference to Exhibit 10.7 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
|
|
|
4.12
|
Contribution Agreement between Frontline Ltd and Golden Ocean Group Limited dated November 29, 2004 incorporated by reference to Exhibit 10.8 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
|
|
|
4.13
|
Second Supplemental Purchase Agreement between Sealift Ltd., Southwest Tankers Inc., Front Target Inc., Front Traveller Inc., West Tankers Inc., Granite Shipping Ltd., Quadrant Marine Inc. and Frontline Ltd. dated April 27, 2007 incorporated by reference to Exhibit 4.13 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
|
|
|
4.14
|
Shareholder's Agreement Relating to Sealift Ltd dated April 27, 2007 incorporated by reference to Exhibit 4.14 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
|
|
|
4.15
|
Merger Agreement between Dockwise Limited and Sealift Ltd dated April 27, 2007 incorporated by reference to Exhibit 4.15 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
|
|
|
4.16
|
Frontline Ltd Share Option Scheme dated September 25, 2009.
|
|
|
4.17
|
Management Agreement between Ship Finance International Limited and its subsidiaries and Frontline Management (Bermuda) Ltd, dated November 29, 2007. (Replaces Administrative Services Agreement dated December 31, 2004) incorporated by reference to Exhibit 4.17 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
|
|
|
4.18
|
Addendum No. 3 to Charter Ancillary Agreement between Frontline Ltd, Ship Finance International Limited and Frontline Shipping Ltd, dated August 21, 2007 incorporated by reference to Exhibit 4.18 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
|
|
|
4.19
|
Addendum No. 1 to Charter Ancillary Agreement between Frontline Ltd., Ship Finance International Limited and Frontline Shipping II Ltd., dated August 21, 2007 incorporated by reference to Exhibit 4.19 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
|
|
|
4.20
|
Amended and Restated Gemini Suezmax Pool Agreement dated January 1, 2009 incorporated by reference to Exhibit 4.20 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2008.
|
|
|
4.21 | Addendum No. 2 to Charter Ancillary Agreement between Frontline Ltd., Ship Finance International Limited and Frontline Shipping II Ltd., dated March 25, 2010. |
8.1
|
Subsidiaries of the Company.
|
|
|
12.1
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
|
|
|
12.2
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
|
|
|
13.1
|
Certification of the Principal Executive Officer pursuant to 18 USC Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
13.2
|
Certification of the Principal Financial Officer pursuant to 18 USC Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.
|
INS*
|
XBRL
|
Instance Dcoument
|
101.
|
SCH*
|
XBRL
|
Taxonomy Extension Schema
|
101.
|
CAL*
|
XBRL
|
Taxonomy Extension Schema Calculation Linkbase
|
101.
|
DEF*
|
XBRL
|
Taxonomy Extension Schema Definition Linkbase
|
101.
|
LAB*
|
XBRL
|
Taxonomy Extension Schema Label Linkbase
|
101.
|
PRE*
|
XBRL
|
Taxonomy Extension Schema Presentation Linkbase
|
*
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under such sections. |
|
|
Frontline Ltd.
|
|||
|
|
(Registrant)
|
|||
|
|
|
|||
Date: April 4, 2011
|
|
By:
|
/s/ Inger M. Klemp
|
|
|
|
|
|
Name:
|
Inger M. Klemp
|
|
|
|
|
Title:
|
Principal Financial Officer
|
|
Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers AS
|
F-2
|
Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008
|
F-3
|
Consolidated Balance Sheets as of December 31, 2010 and 2009
|
F-4
|
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008
|
F-5
|
Consolidated Statements of Changes in Equity for the years ended December 31, 2010, 2009 and 2008
|
F-6
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008
|
F-7
|
Notes to Consolidated Financial Statements
|
F-8
|
2010 | 2009 | 2008 | |||||||||
Operating revenues
|
|||||||||||
Time charter revenues
|
365,159 | 486,361 | 602,980 | ||||||||
Bareboat charter revenues
|
71,370 | 64,526 | 57,152 | ||||||||
Voyage charter revenues
|
708,008 | 565,331 | 1,425,968 | ||||||||
Other income
|
20,678 | 17,068 | 17,918 | ||||||||
Total operating revenues
|
1,165,215 | 1,133,286 | 2,104,018 | ||||||||
Gain on sale of assets and amortization of deferred gains
|
30,935 | 3,061 | 142,293 | ||||||||
Operating expenses
|
|||||||||||
Voyage expenses and commission
|
282,708 | 219,375 | 592,188 | ||||||||
Ship operating expenses
|
195,679 | 206,381 | 213,766 | ||||||||
Profit share expense
|
30,566 | 33,018 | 110,962 | ||||||||
Charterhire expenses
|
134,551 | 169,503 | 220,170 | ||||||||
Administrative expenses
|
31,883 | 30,647 | 35,226 | ||||||||
Depreciation
|
212,851 | 237,313 | 223,519 | ||||||||
Total operating expenses
|
888,238 | 896,237 | 1,395,831 | ||||||||
Net operating income
|
307,912 | 240,110 | 850,480 | ||||||||
Other income (expenses)
|
|||||||||||
Interest income
|
13,432 | 22,969 | 41,204 | ||||||||
Interest expense
|
(149,918 | ) | (160,988 | ) | (183,925 | ) | |||||
Equity losses of unconsolidated subsidiaries and associated companies
|
(515 | ) | (544 | ) | (901 | ) | |||||
Foreign currency exchange gain (loss)
|
622 | (346 | ) | 1,565 | |||||||
Mark to market of derivatives
|
(19 | ) | - | (17,399 | ) | ||||||
Impairment of securities
|
(9,425 | ) | - | (25,134 | ) | ||||||
Loss on sale of securities
|
- | - | (221 | ) | |||||||
Dividends received, net
|
(278 | ) | 3,087 | 1,552 | |||||||
Other non-operating items, net
|
2,411 | 1,545 | 34,043 | ||||||||
Net other expenses
|
(143,690 | ) | (134,277 | ) | (149,216 | ) | |||||
Net income before income taxes and noncontrolling interest
|
164,222 | 105,883 | 701,264 | ||||||||
Income tax expense
|
(218 | ) | (361 | ) | (310 | ) | |||||
Net income
|
164,004 | 105,472 | 700,954 | ||||||||
Net income attributable to noncontrolling interest
|
(2,597 | ) | (2,771 | ) | (2,184 | ) | |||||
Net income attributable to Frontline Ltd.
|
161,407 | 102,701 | 698,770 | ||||||||
Earnings per share attributable to Frontline Ltd. stockholders:
|
|||||||||||
Basic earnings per share
|
$ | 2.07 | $ | 1.32 | $ | 9.15 | |||||
Diluted earnings per share
|
$ | 2.07 | $ | 1.32 | $ | 9.14 | |||||
Weighted average shares outstanding, basic
|
77,859 | 77,859 | 76,353 | ||||||||
Weighted average shares outstanding, diluted
|
78,034 | 77,867 | 76,442 | ||||||||
Cash dividends per share declared
|
$ | 2.00 | $ | 0.90 | $ | 8.25 |
|
2010
|
2009
|
|||||
ASSETS
|
|
|
|||||
Current Assets
|
|
|
|||||
Cash and cash equivalents
|
176,639 | 82,575 | |||||
Restricted cash and investments
|
182,091 | 429,946 | |||||
Marketable securities
|
51,481 | 62,920 | |||||
Trade accounts receivable, net
|
56,316 | 44,598 | |||||
Related party receivables
|
7,225 | 28,743 | |||||
Other receivables
|
17,200 | 52,135 | |||||
Inventories
|
60,115 | 35,093 | |||||
Voyages in progress
|
27,087 | 32,358 | |||||
Prepaid expenses and accrued income
|
8,073 | 14,675 | |||||
Investment in finance lease
|
1,535 | - | |||||
Other current assets
|
- | 139 | |||||
Total current assets
|
587,762 | 783,182 | |||||
Long term assets
|
|||||||
Restricted cash
|
62,000 | 70,075 | |||||
Newbuildings
|
224,319 | 413,968 | |||||
Vessels and equipment, net
|
1,430,124 | 678,694 | |||||
Vessels and equipment under capital lease, net
|
1,427,526 | 1,740,666 | |||||
Investment in unconsolidated subsidiaries and associated companies
|
3,408 | 3,923 | |||||
Deferred charges
|
7,426 | 4,670 | |||||
Long term investments
|
- | 20,020 | |||||
Investment in finance lease
|
55,355 | - | |||||
Other long-term assets
|
- | 20 | |||||
Total assets
|
3,797,920 | 3,715,218 | |||||
|
|||||||
LIABILITIES AND EQUITY
|
|||||||
Current liabilities
|
|||||||
Short-term debt and current portion of long-term debt
|
173,595 | 123,884 | |||||
Current portion of obligations under capital leases
|
193,379 | 285,753 | |||||
Related party payables
|
33,278 | 33,803 | |||||
Trade accounts payable
|
13,423 | 36,574 | |||||
Accrued expenses
|
72,200 | 65,579 | |||||
Deferred charter revenue
|
6,860 | 15,442 | |||||
Other current liabilities
|
10,842 | 44,327 | |||||
Total current liabilities
|
503,577 | 605,362 | |||||
Long-term liabilities
|
|||||||
Long-term debt
|
1,190,763 | 760,698 | |||||
Obligations under capital leases
|
1,336,908 | 1,579,708 | |||||
Deferred gains on sales of vessels
|
6,440 | 12,649 | |||||
Other long-term liabilities
|
1,195 | 6,053 | |||||
Total liabilities
|
3,038,883 | 2,964,470 | |||||
Commitments and contingencies
|
|||||||
Stockholders' equity
|
|||||||
Share capital (77,858,502 shares outstanding, par value $2.50)
|
194,646 | 194,646 | |||||
Additional paid in capital
|
224,245 | 221,991 | |||||
Contributed surplus
|
248,360 | 248,360 | |||||
Accumulated other comprehensive loss
|
(3,836 | ) | (1,686 | ) | |||
Retained earnings
|
83,718 | 78,029 | |||||
Total stockholders' equity
|
747,133 | 741,340 | |||||
Noncontrolling interest
|
11,904 | 9,408 | |||||
Total equity
|
759,037 | 750,748 | |||||
Total liabilities and equity
|
3,797,920 | 3,715,218 |
|
2010
|
2009
|
2008
|
||||||||
|
|
|
|
||||||||
Net income
|
164,004 | 105,472 | 700,954 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||||||
Depreciation
|
212,851 | 237,313 | 223,519 | ||||||||
Amortization of deferred charges
|
1,436 | 1,282 | 550 | ||||||||
Gain from sale of assets (including securities)
|
(30,935 | ) | (3,061 | ) | (160,031 | ) | |||||
Equity losses of unconsolidated subsidiaries and associated companies
|
515 | 544 | 901 | ||||||||
Unrealized foreign exchange (gain) loss
|
(138 | ) | 686 | (2,172 | ) | ||||||
Adjustment of derivatives and securities to market value
|
9,425 | - | 41,379 | ||||||||
Other, net
|
(4,846 | ) | (2,612 | ) | 2,223 | ||||||
Changes in operating assets and liabilities:
|
|||||||||||
Trade accounts receivable
|
(7,777 | ) | 15,689 | (764 | ) | ||||||
Other receivables
|
32,690 | (33,441 | ) | 11,746 | |||||||
Inventories
|
(25,021 | ) | 7,131 | 13,212 | |||||||
Voyages in progress
|
5,271 | 25,673 | 2,447 | ||||||||
Prepaid expenses and accrued income
|
6,543 | (4,516 | ) | (1,683 | ) | ||||||
Trade accounts payable
|
(23,149 | ) | 9,541 | 10,990 | |||||||
Accrued expenses
|
6,786 | (6,895 | ) | (12,852 | ) | ||||||
Deferred charter revenue
|
(16,929 | ) | (3,382 | ) | 3,432 | ||||||
Related party balances
|
(5,873 | ) | (30,658 | ) | (466 | ) | |||||
Other, net
|
(7,210 | ) | 2,754 | (6,582 | ) | ||||||
Net cash provided by operating activities
|
317,643 | 321,520 | 826,803 | ||||||||
Investing activities
|
|||||||||||
Change in restricted cash
|
256,535 | 75,620 | (2,579 | ) | |||||||
Additions to newbuildings, vessels and equipment
|
(548,946 | ) | (170,049 | ) | (657,443 | ) | |||||
Proceeds from sale of vessels and equipment
|
11,061 | 2,390 | 128,264 | ||||||||
Dividends received from associated companies
|
- | - | 265 | ||||||||
Receipts from finance leases and loans receivable
|
1,277 | - | - | ||||||||
Purchases of other assets
|
- | - | (109,360 | ) | |||||||
Proceeds from sale of other assets
|
19,839 | - | 3,286 | ||||||||
Proceeds from issuance of shares in subsidiary
|
- | - | 10,941 | ||||||||
Proceeds from sale of shares in subsidiary
|
100 | - | - | ||||||||
Net cash used in investing activities
|
(260,134 | ) | (92,039 | ) | (626,626 | ) | |||||
Financing activities
|
|||||||||||
Proceeds from long-term debt
|
649,729 | 243,771 | 520,178 | ||||||||
Repayments of long-term debt
|
(169,953 | ) | (267,336 | ) | (87,370 | ) | |||||
Payment of obligations under finance leases
|
(280,579 | ) | (241,198 | ) | (171,900 | ) | |||||
Debt fees paid
|
(4,192 | ) | (2,888 | ) | (4,928 | ) | |||||
Fees paid on early redemption of debt
|
(2,732 | ) | - | - | |||||||
Net proceeds from share issuances
|
- | - | 208,123 | ||||||||
Cash dividends paid (including payments to noncontrolling interest)
|
(155,718 | ) | (70,074 | ) | (641,893 | ) | |||||
Net cash provided by (used in) financing activities
|
36,555 | (337,725 | ) | (177,790 | ) | ||||||
Net increase (decrease) in cash and cash equivalents
|
94,064 | (108,244 | ) | 22,387 | |||||||
Cash and cash equivalents at beginning of year
|
82,575 | 190,819 | 168,432 | ||||||||
Cash and cash equivalents at end of year
|
176,639 | 82,575 | 190,819 | ||||||||
Supplemental disclosure of cash flow information:
|
|||||||||||
Interest paid, net of interest capitalized
|
165,951 | 186,873 | 202,840 | ||||||||
Income taxes paid
|
563 | 383 | 372 |
2010
|
2009
|
2008
|
|||||||||
NUMBER OF SHARES OUTSTANDING
|
|||||||||||
Balance at beginning of year
|
77,858,502 | 77,858,502 | 74,825,169 | ||||||||
Shares issued
|
- | - | 3,033,333 | ||||||||
Balance at the end of the year
|
77,858,502 | 77,858,502 | 77,858,502 | ||||||||
|
|||||||||||
SHARE CAPITAL
|
|||||||||||
Balance at beginning of year
|
194,646 | 194,646 | 187,063 | ||||||||
Shares issued
|
- | - | 7,583 | ||||||||
Balance at end of year
|
194,646 | 194,646 | 194,646 | ||||||||
|
|||||||||||
ADDITIONAL PAID IN CAPITAL
|
|||||||||||
Balance at beginning of year
|
221,991 | 219,036 | 14,242 | ||||||||
Shares issued
|
- | - | 200,539 | ||||||||
Stock option expense
|
2,053 | 2,955 | 4,255 | ||||||||
Gain on sale of shares in subsidiary
|
201 | - | - | ||||||||
Balance at end of year
|
224,245 | 221,991 | 219,036 | ||||||||
|
|||||||||||
CONTRIBUTED SURPLUS
|
|||||||||||
Balance at beginning and end of year
|
248,360 | 248,360 | 248,360 | ||||||||
|
|||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|||||||||||
Balance at beginning of year
|
(1,686 | ) | (5,227 | ) | (3,696 | ) | |||||
Other comprehensive (loss) income
|
(2,150 | ) | 3,541 | (1,531 | ) | ||||||
Balance at end of year
|
(3,836 | ) | (1,686 | ) | (5,227 | ) | |||||
|
|||||||||||
RETAINED EARNINGS
|
|||||||||||
Balance at beginning of year
|
78,029 | 45,402 | - | ||||||||
Net income
|
161,407 | 102,701 | 698,770 | ||||||||
Cash dividends
|
(155,718 | ) | (70,074 | ) | (641,893 | ) | |||||
Stock dividends
|
- | - | (11,475 | ) | |||||||
Balance at end of year
|
83,718 | 78,029 | 45,402 | ||||||||
|
|||||||||||
TOTAL EQUITY ATTRIBUTABLE TO FRONTLINE LTD.
|
747,133 | 741,340 | 702,217 | ||||||||
NONCONTROLLING INTEREST
|
|||||||||||
Balance at beginning of year
|
9,408 | 6,637 | - | ||||||||
Net income
|
2,597 | 2,771 | 2,184 | ||||||||
Net liabilities assumed on purchase of noncontrolling interest
|
(101 | ) | - | - | |||||||
Partial spin-off of ITCL
|
- | - | 4,453 | ||||||||
Balance at end of year
|
11,904 | 9,408 | 6,637 | ||||||||
|
|||||||||||
TOTAL EQUITY
|
759,037 | 750,748 | 708,854 |
|
2010
|
2009
|
2008
|
||||||||
|
|
|
|
||||||||
COMPREHENSIVE INCOME, NET OF TAX
|
|
|
|
||||||||
Net income
|
164,004 | 105,472 | 700,954 | ||||||||
Unrealised (losses) gains from marketable securities
|
(2,013 | ) | 2,782 | (219 | ) | ||||||
Foreign currency translation
|
(137 | ) | 759 | (1,312 | ) | ||||||
Other comprehensive (loss) income, net of tax
|
(2,150 | ) | 3,541 | (1,531 | ) | ||||||
Comprehensive Income
|
161,854 | 109,013 | 699,423 | ||||||||
|
|||||||||||
Comprehensive income attributable to stockholders of Frontline Ltd.
|
159,257 | 106,242 | 697,239 | ||||||||
Comprehensive income attributable to noncontrolling interest
|
2,597 | 2,771 | 2,184 | ||||||||
|
161,854 | 109,013 | 699,423 |
1.
|
GENERAL
|
2.
|
ACCOUNTING POLICIES
|
Basis of accounting
|
Cash and cash equivalents
|
Restricted cash and investments
|
Marketable securities
|
Long-term investments
|
Inventories
|
Share-based payments
|
3.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
4.
|
SEGMENT INFORMATION
|
(in thousands of $)
|
2010
|
2009
|
2008
|
|||
Total operating revenues – tanker market
|
1,023,733 | 989,773 | 1,955,427 | |||
Total operating revenues – drybulk carrier market
|
136,912 | 124,983 | 130,228 |
5.
|
INCOME TAXES
|
6.
|
EARNINGS PER SHARE
|
(in thousands)
|
2010
|
2009
|
2008
|
|||
Weighted average number of ordinary shares outstanding - basic
|
77,859 | 77,859 | 76,353 | |||
Stock options
|
175 | 8 | 89 | |||
Weighted average number of ordinary shares outstanding – diluted
|
78,034 | 77,867 | 76,442 |
7.
|
LEASES
|
(in thousands of $)
|
|
||
Year ending December 31,
|
|
||
2011
|
69,301 | ||
2012
|
19,593 | ||
2013
|
1,807 | ||
2014
|
1,601 | ||
2015
|
1,428 | ||
Thereafter
|
- | ||
Total minimum lease payments
|
93,730 |
Vessel Type
|
Expiry of
Mandatory
Lease Period
|
Extended
Lease
Periods at
Lessor's Option
|
Extended
Lease
Periods
at
Company's
Option
|
Company's
Purchase
Option Periods
|
Lessor's
Put Option
Exercise Date
|
Front Warrior (Suezmax)
|
2007
|
2008-2011
|
2010-2011
|
2007-2011
|
2011
|
Hampstead (VLCC)
|
2012
|
none
|
none
|
none
|
none
|
Kensington (VLCC)
|
2011
|
none
|
none
|
none
|
none
|
Desh Ujaala (VLCC)
|
2011
|
none
|
2012
|
none
|
none
|
(in thousands of $)
|
2010
|
2009
|
2008
|
|||||
Repayments of principal obligations under capital leases
|
20,579 | 35,215 | 32,599 | |||||
Interest expense for capital leases
|
14,862 | 27,202 | 29,807 | |||||
Charterhire expense for operating leases
|
37,471 | 5,963 | 6,064 |
(in thousands of $)
|
|
||
2011 | 254,057 | ||
2012
|
148,338 | ||
2013
|
73,725 | ||
2014
|
18,881 | ||
2015
|
11,487 | ||
Thereafter
|
- | ||
Total minimum lease revenues
|
506,488 |
(in thousands of $)
|
2010
|
2009
|
|||||
Net minimum lease payments receivable
|
112,404 | - | |||||
Estimated residual values of leased property (unguaranteed)
|
20,320 | - | |||||
Less:
unearned income
|
(75,834 | ) | - | ||||
Total investment in sales-type lease
|
56,890 | - | |||||
|
|||||||
Current portion
|
1,535 | - | |||||
Long-term portion
|
55,355 | - | |||||
|
56,890 | - |
(in thousands of $)
|
|
||
2011 | 11,307 | ||
2012
|
11,338 | ||
2013
|
11,307 | ||
2014
|
11,307 | ||
2015
|
11,307 | ||
Thereafter
|
55,838 | ||
Total minimum lease revenues
|
112,404 |
8.
|
MARKETABLE SECURITIES
|
(in thousands of $)
|
2010
|
2009
|
||||||
Cost
|
85,815 | 85,815 | ||||||
Accumulated other-than-temporary impairment
|
(34,560 | ) | (25,134 | ) | ||||
Accumulated net unrealized gain
|
226 | 2,239 | ||||||
Fair value
|
51,481 | 62,920 |
(in thousands of $)
|
2010
|
2009
|
2008
|
||||||||
Proceeds from sale of available-for-sale securities
|
- | - | 3,286 | ||||||||
Realized loss
|
- | - | (221 | ) |
9.
|
TRADE ACCOUNTS RECEIVABLE, NET
|
10.
|
OTHER RECEIVABLES
|
(in thousands of $)
|
2010
|
2009
|
|||||
Agent receivables
|
1,585 | 3,074 | |||||
Claims receivables
|
6,248 | 6,740 | |||||
Deposit for newbuilding installment
|
- | 27,986 | |||||
Other receivables
|
9,367 | 14,335 | |||||
|
17,200 | 52,135 |
11.
|
LONG-TERM INVESTMENTS
|
12.
|
NEWBUILDINGS
|
13.
|
VESSELS AND EQUIPMENT, NET
|
(in thousands of $)
|
2010
|
2009
|
|||||
Cost
|
1,608,840 | 799,023 | |||||
Accumulated depreciation
|
(178,716 | ) | (120,329 | ) | |||
Net book value at end of year
|
1,430,124 | 678,694 |
14.
|
VESSELS UNDER CAPITAL LEASE, NET
|
(in thousands of $)
|
2010
|
2009
|
|||||
Cost
|
2,314,915 | 2,763,382 | |||||
Accumulated depreciation
|
(887,389 | ) | (1,022,716 | ) | |||
Net book value at end of year
|
1,427,526 | 1,740,666 |
(in thousands of $)
|
|
||
Year ending December 31,
|
|
||
2011
|
291,292 | ||
2012
|
210,794 | ||
2013
|
208,062 | ||
2014
|
206,105 | ||
2015
|
237,049 | ||
Thereafter
|
947,994 | ||
Minimum lease payments
|
2,101,296 | ||
Less: imputed interest
|
(571,009 | ) | |
Present value of obligations under capital leases
|
1,530,287 |
Vessel Type
|
Expiry of
Mandatory
Lease Period
|
Extended Lease
Periods at
Lessor's Option
|
Company's
Purchase
Option Periods
|
Lessor's
Put Option
Exercise Date
|
Front Eagle (VLCC)
|
2013
|
2014-2015
|
2010 to 2015
|
2015
|
Front Melody (Suezmax)
|
2013
|
2014-2015
|
2011 to 2015
|
2015
|
Front Symphony (Suezmax)
|
2013
|
2014-2015
|
2011 to 2015
|
2015
|
Front Tina (VLCC)
|
2013
|
2014-2015
|
2011 to 2015
|
2015
|
Front Commodore (VLCC)
|
2013
|
2014-2015
|
2011 to 2015
|
2015
|
British Pride (VLCC)
|
2011
|
none
|
note (1)(2)
|
none
|
|
(1)
|
The Company does not have an option to purchase the vessel but it has first refusal if the vessel's owner offers the vessel for sale.
|
|
(2)
|
The lessor has the right to terminate the lease for the British Pride at the end of the fixed period being July 30, 2011.
|
Vessel Type
|
Expiry of Mandatory Lease Period
|
Company's Optional Termination Date
|
Company's Purchase Option Periods
|
Lessor's Put Option Exercise Date
|
OBO (8 vessels)
|
2015
|
none
|
none
|
none
|
Double hull Suezmax (6 vessels)
|
2017-2021
|
none
|
none
|
none
|
Double hull VLCC (17 vessels)
|
2021-2027
|
none
|
none
|
none
|
15.
|
EQUITY METHOD INVESTMENTS
|
|
2010
|
2009
|
|||||
Front Tobago Shipping Corporation
|
40 | % | 40 | % | |||
CalPetro Tankers (Bahamas I) Limited
|
100 | % | 100 | % | |||
CalPetro Tankers (Bahamas II) Limited
|
100 | % | 100 | % | |||
CalPetro Tankers (IOM) Limited
|
100 | % | 100 | % |
(in thousands of $)
|
2010
|
2009
|
|||||
Current assets
|
17,792 | 18,137 | |||||
Non current assets
|
34,975 | 44,904 | |||||
Current liabilities
|
10,611 | 10,843 | |||||
Non current liabilities
|
38,103 | 47,629 |
(in thousands of $)
|
2010
|
2009
|
2008
|
||||||||
Net operating revenues
|
4,115 | 5,047 | 5,836 | ||||||||
Net operating income
|
3,811 | 4,694 | 5,493 | ||||||||
Net loss
|
(515 | ) | (544 | ) | (483 | ) |
16.
|
DEFERRED CHARGES
|
(in thousands of $)
|
2010
|
2009
|
|||||
Debt arrangement fees
|
10,560 | 6,837 | |||||
Accumulated amortization
|
(3,134 | ) | (2,167 | ) | |||
7,426
|
4,670
|
(in thousands of $)
|
2010
|
2009
|
|||||
Voyage expenses
|
33,569 | 14,392 | |||||
Ship operating expenses
|
11,423 | 20,966 | |||||
Administrative expenses
|
4,799 | 4,068 | |||||
Interest expense
|
18,554 | 22,456 | |||||
Taxes
|
81 | 376 | |||||
Other
|
3,774 | 3,321 | |||||
|
72,200 | 65,579 |
(in thousands of $)
|
2010
|
2009
|
|||||
Accrued charterhire
|
51 | 724 | |||||
Deferred gain on termination of finance leases
|
- | 24,917 | |||||
Newbuilding installment payable
|
- | 10,460 | |||||
Other
|
10,791 | 8,226 | |||||
|
10,842 | 44,327 |
(in thousands of $)
|
2010
|
2009
|
|||||
US Dollar denominated floating rate debt due through 2020
|
834,659 | 558,121 | |||||
US Dollar denominated fixed rate debt:
|
|||||||
6.68% First Preferred Mortgage Serial Notes due 2010
|
- | 1,200 | |||||
4.25% Convertible bond due 2015
|
225,000 | - | |||||
8.52% First Preferred Mortgage Term Notes due 2015
|
- | 10,884 | |||||
7.84% to 8.04% First Preferred Mortgage Term Notes due 2019 and 2021
|
303,289 | 313,711 | |||||
Total US Dollar floating rate and fixed rate debt
|
1,362,948 | 883,916 | |||||
Credit facilities
|
1,410 | 666 | |||||
Total debt
|
1,364,358 | 884,582 | |||||
Less current portion of long-term debt
|
(173,595 | ) | (123,884 | ) | |||
|
1,190,763 | 760,698 |
(in thousands of $)
|
|
||
Year ending December 31,
|
|
||
2011
|
173,595 | ||
2012
|
82,497 | ||
2013
|
122,737 | ||
2014
|
65,612 | ||
2015
|
385,587 | ||
Thereafter
|
534,330 | ||
|
1,364,358 |
(in thousands of $)
|
|
||
Year ending December 31,
|
|
||
2011
|
15,152 | ||
2012
|
19,145 | ||
2013
|
20,700 | ||
2014
|
22,376 | ||
2015
|
24,174 | ||
Thereafter
|
201,742 | ||
303,289 |
(in thousands of $)
|
2010
|
2009
|
|||||
Vessels and newbuildings
|
1,652,205 | 1,090,310 | |||||
Marketable securities
|
- | 61,920 | |||||
Restricted cash and investments (excluding amounts held in charter service reserve)
|
182,091 | 315,721 |
(in thousands of $, except share data)
|
2010
|
2009
|
|||||
125,000,000 ordinary shares of $2.50 each
|
312,500 | 312,500 |
(in thousands of $, except per share data)
|
2010
|
2009
|
|||||
77,858,502 ordinary shares of $2.50 each (2009: 77,858,502)
|
194,646 | 194,646 |
(in thousands of $)
|
Unrealized investment gains (losses)
|
Translation adjustments
|
Total
|
||||||||
Balance at December 31, 2007
|
(324 | ) | (3,372 | ) | (3,696 | ) | |||||
Translation adjustment for the year
|
- | (1,312 | ) | (1,312 | ) | ||||||
Net unrealized losses for the year
|
(25,574 | ) | - | (25,574 | ) | ||||||
Other-than-temporary impairment
|
25,134 | - | 25,134 | ||||||||
Realized losses reclassified to net income
|
221 | - | 221 | ||||||||
Balance at December 31, 2008
|
(543 | ) | (4,684 | ) | (5,227 | ) | |||||
Translation adjustment for year
|
- | 759 | 759 | ||||||||
Net unrealized gains for the year
|
2,782 | - | 2,782 | ||||||||
Balance at December 31, 2009
|
2,239 | (3,925 | ) | (1,686 | ) | ||||||
Translation adjustment for year
|
- | (137 | ) | (137 | ) | ||||||
Net unrealized losses for the year
|
(11,438 | ) | - | (11,438 | ) | ||||||
Other-than-temporary impairment
|
9,425 | - | 9,425 | ||||||||
Balance at December 31, 2010
|
226 | (4,062 | ) | (3,836 | ) |
|
|
2009
|
Risk free interest rate
|
|
1.35%
|
Expected life
|
|
3.5 years
|
Expected volatility
|
|
61%
|
Expected dividend yield
|
|
0%
|
(in thousands except per share data)
|
Number of Options
|
|
Weighted Average Exercise Price
|
Options outstanding as of December 31, 2007
|
100.0
|
|
NOK 162.36
|
Granted
|
760.0
|
|
NOK 243.00
|
Exercised
|
(33.3)
|
|
NOK 135.90
|
Forfeited
|
(201.7)
|
|
NOK 198.49
|
Options outstanding as of December 31, 2008
|
625.0
|
|
NOK 208.78
|
Granted
|
663.0
|
|
NOK 145.00
|
Exercised
|
-
|
|
-
|
Forfeited
|
(7.0)
|
|
NOK 205.42
|
Cancelled
|
(618.0)
|
|
NOK 203.94
|
Options outstanding as of December 31, 2009
|
663.0
|
|
NOK 144.16
|
Granted
|
-
|
|
-
|
Exercised
|
(2.0)
|
|
NOK 131.65
|
Forfeited
|
(10.0)
|
|
NOK 133.71
|
Options outstanding as of December 31, 2010
|
651.0
|
|
NOK 131.65
|
|
|
|
|
Exercisable options as at:
|
|
|
|
December 31, 2010
|
219.0
|
|
NOK 131.65
|
December 31, 2009
|
Nil
|
|
Nil
|
December 31, 2008
|
Nil
|
|
Nil
|
|
·
|
a transaction risk, that is, the risk that currency fluctuations will have a negative effect on the value of the Company's cash flows;
|
|
·
|
a translation risk, that is, the impact of adverse currency fluctuations in the translation of foreign operations and foreign assets and liabilities into U.S. dollars for the Company's consolidated financial statements.
|
|
2010
|
2009
|
|||||||||||||
(in thousands of $)
|
Carrying Value
|
Fair
Value
|
Carrying Value
|
Fair
Value
|
|||||||||||
Non-Derivatives:
|
|
|
|
|
|||||||||||
Cash and cash equivalents
|
176,639 | 176,639 | 82,575 | 82,575 | |||||||||||
Restricted cash and investments
|
244,091 | 252,891 | 500,021 | 500,021 | |||||||||||
Marketable securities
|
51,481 | 51,481 | 62,920 | 62,920 | |||||||||||
Long-term investments
|
- | - | 20,020 | 20,020 | |||||||||||
Floating rate debt and credit facilities
|
836,069 | 836,069 | 558,787 | 558,787 | |||||||||||
6.68% First Preferred Mortgage Serial Notes
|
- | - | 1,200 | 1,200 | |||||||||||
8.52% First Preferred Mortgage Term Notes
|
- | - | 10,884 | 11,036 | |||||||||||
7.84% to 8.04% First Preferred Mortgage Term Notes
|
303,289 | 291,368 | 313,711 | 301,403 | |||||||||||
4.5% Convertible bond
|
225,000 | 214,103 | - | - |
(in thousands of $)
|
2010
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||
Non-Derivatives:
|
|
|
|
|
|||||||||||
Cash and cash equivalents
|
176,639 | 176,639 | - | - | |||||||||||
Restricted cash and investments
|
252,891 | 252,891 | - | - | |||||||||||
Marketable securities
|
51,481 | 51,481 | - | - | |||||||||||
Floating rate debt and credit facilities
|
836,069 | 836,069 | - | - | |||||||||||
7.84% to 8.04% First Preferred Mortgage Term Notes
|
291,368 | 108,819 | 182,549 | - | |||||||||||
4.5% Convertible bond
|
214,103 | - | 214,103 | - |
Concentrations of risk
|
(in thousands of $)
|
2010
|
2009
|
2008
|
||||||||
Charterhire paid (principal and interest)
|
289,578 | 331,534 | 345,551 | ||||||||
Payments received for termination of leases
|
2,435 | 2,386 | 43,510 | ||||||||
Profit share expense
|
30,566 | 33,018 | 110,962 | ||||||||
Remaining lease obligation
|
1,289,897 | 1,462,753 | 1,609,987 |
(in thousands of $)
|
2010
|
2009
|
2008
|
||||||||
Seatankers Management Co. Ltd
|
1,092 | 1,126 | 1,175 | ||||||||
Golar LNG Limited
|
1,310 | 156 | 17 | ||||||||
Golar LNG Energy Limited
|
88 | - | - | ||||||||
Ship Finance International Limited
|
2,490 | 2,347 | 3,430 | ||||||||
Golden Ocean Group Limited
|
6,138 | 4,253 | 6,714 | ||||||||
Geveran Trading Co Ltd
|
- | (405 | ) | (366 | ) | ||||||
Bryggegata AS
|
(1,368 | ) | (1,300 | ) | (1,395 | ) | |||||
Arcadia Petroleum Limited
|
34,211 | 42,264 | 64,784 | ||||||||
Seadrill Limited
|
426 | 322 | 25 | ||||||||
Seawell Limited
|
166 | 126 | - | ||||||||
Deep Sea Supply Plc
|
132 | 32 | - | ||||||||
Aktiv Kapital ASA
|
83 | 63 | - | ||||||||
CalPetro Tankers (Bahamas I) Limited
|
47 | 45 | 43 | ||||||||
Calpetro Tanker (Bahamas II) Limited
|
47 | 45 | 43 | ||||||||
Calpetro Tankers (IOM) Limited
|
47 | 45 | 43 |
(in thousands of $)
|
2010
|
2009
|
|||||
Receivables
|
|
|
|||||
Ship Finance International Limited
|
1,947 | 26,944 | |||||
Seatankers Management Co. Ltd
|
- | 214 | |||||
Seawell Ltd
|
51 | - | |||||
Golar LNG Limited
|
404 | 247 | |||||
Golar LNG Energy Limited
|
11 | - | |||||
Northern Offshore Ltd
|
13 | 13 | |||||
Golden Ocean Group Limited
|
1,075 | 1,119 | |||||
Seadrill Limited
|
109 | 160 | |||||
CalPetro Tankers (Bahamas I) Limited
|
20 | 11 | |||||
CalPetro Tankers (Bahamas II) Limited
|
20 | 11 | |||||
CalPetro Tankers (IOM) Limited
|
20 | 11 | |||||
Deep Sea Supply Plc
|
2 | 2 | |||||
Arcadia Petroleum Limited
|
3,553 | 11 | |||||
|
7,225 | 28,743 |
(in thousands of $)
|
2010
|
2009
|
|||||
Payables
|
|
|
|||||
Ship Finance International Limited
|
(31,448 | ) | (33,158 | ) | |||
Seatankers Management Co. Ltd
|
(676 | ) | (96 | ) | |||
Golar LNG Limited
|
(97 | ) | (519 | ) | |||
Golden Ocean Group Limited
|
(1,057 | ) | (30 | ) | |||
|
(33,278 | ) | (33,803 | ) |
|
|
(in thousands of $)
|
2010
|
2009
|
2008
|
||||||||
Dividends in kind:
|
|
|
|
||||||||
Spin-off of ITCL
|
- | - | 11,475 | ||||||||
|
(in thousands of $)
|
2010
|
2009
|
2008
|
||||||||
Pool earnings allocated on a gross basis
|
- | - | 373 | ||||||||
Pool earnings allocated on a net basis
|
125,561 | 120,904 | - | ||||||||
|
125,561 | 120,904 | 373 |
|
a.
|
words denoting the singular number shall include the plural number and words denoting the masculine gender shall include the feminine gender;
|
|
b.
|
any reference herein to any enactment or statutory provision shall be construed as a reference to that Bermudian enactment or provision as from time to time amended extended or re-enacted; and
|
c.
|
references to the exercise of an Option shall include the exercise of an Option in part.
|
2.1
|
At any time after the Adoption Date, and not later than the tenth anniversary thereof, the Board may, in its absolute discretion, resolve to grant an Option or Options to an Eligible Person or to Eligible Persons on the terms and conditions set out in the Rules and in its resolution.
|
2.2
|
Immediately following the Date of Grant the Board shall notify the relevant Eligible Persons
that they have been granted Options.
|
2.3
|
The notice given by the Board pursuant to Clause 2.2 shall be in such form, not inconsistent with these Rules, as the Board may determine and shall specify the number of Shares comprised in the Option, any terms applicable thereto other than as set out herein, the Date of Grant and the Subscription Price.
|
2.4
|
Not later than twelve weeks following the Date of Grant, the Option Holder may, by a notice given in writing, renounce his rights to any Option granted pursuant to Clause 2.1 in which event such Option shall be deemed for all purposes never to have been granted.
|
2.5
|
As soon as possible after the expiry of the twelve week notice period referred to in Clause 2.4, the Board shall issue an Option Certificate in respect of each Option in such form, not inconsistent with these Rules, as the Board may determine.
|
4.2
|
The Option shall entitle the Option Holder to subscribe for Shares at a price per Share equal to the Subscription Price at the date the Option is exercised.
|
4.3
|
Any Option which has not lapsed may be exercised in whole or in part at any time provided the earliest of the following events has occurred:
|
|
a.
|
such date as the Board in its discretion may prescribe at the date the Option is granted, provided that such date cannot be later than the tenth anniversary of the Date of Grant;
|
|
b.
|
the first anniversary of the Option Holder's death;
|
|
c.
|
the first anniversary of the Option Holder's retirement;
|
|
d.
|
three months following the Option Holder's ceasing to be an Eligible Person, other than by reason of his death or retirement;
|
|
e.
|
six months after the Option has become exercisable in accordance with Clause 7.1;
|
|
a.
|
the date of an Option Holder's retirement; and
|
|
b.
|
the date an Option Holder ceasing to be an Eligible Person other than by reason of his death or retirement.
|
5.2
|
Subject to any necessary consents under regulations or enactments for the time being in force, compliance by the Option Holder with the Rules and receipt by the Company of the Subscription Cost, the Company shall, not later than thirty days after receipt of the notice referred to in Clause 5.1 above, allot and issue to the Option Holder the number of Shares specified in the notice. If the number of Shares over which the Option is exercised is less than that specified in the relevant Option Certificate then the Company will issue a balance Option Certificate in respect of the remainder of such Shares over which the Option is still capable of exercise.
|
a. |
the aggregate number of Shares subject to any Option;
|
b. |
the Subscription Price subject to any Option; or
|
c |
the terms of any Option.
|
PROVIDED THAT: |
|
|
d.
|
any such adjustment has been confirmed in writing by an Independent Expert to be in their opinion fair and reasonable; and
|
|
e.
|
the aggregate Subscription Cost payable by an Option Holder on the exercise of all his Options is not increased; and
|
|
f.
|
the amount payable to subscribe for any Share subject to any Option shall not be reduced below its nominal value.
|
6.2
|
The Board shall give notice in writing to each Option Holder affected by any adjustment made pursuant to Clause 6.1 and may, at its discretion, deliver to him a revised Option Certificate in respect of his Option.
|
7.1
|
If notice is given by the Board to the shareholders in the Company of a members' resolution for the voluntary winding-up of the Company, notice of the same shall forthwith be given by the Board to the Option Holders.
|
7.2
|
Option rights shall lapse immediately in the event of the Company being wound-up otherwise than in the event of a voluntary winding-up.
|
8.1
|
Subject to Clause 9.2 the Board may at any time alter or add to the Rules in any respect, provided that:
|
|
a.
|
the Board may not cancel an Option except where (i) the Option Holder has breached the provisions of Clause 9.5 or (ii) the Option Holder has previously agreed; and
|
|
b.
|
(subject as herein provided) the Board may not modify the terms of an Option already granted otherwise than with the consent of the Option Holder.
|
9.2
|
The Board may from time to time make and vary such regulations and establish such procedures for the administration and implementation of the Scheme as it thinks fit. In the event of any dispute or disagreement as to the interpretation of the Rules or as to the question of rights arising from or related to the Scheme, the decision of the Board shall (except as regards any matter required to be determined by the Auditors hereunder) be final and binding upon all persons.
|
9.3
|
The cost of the administration and implementation of the Scheme shall be borne by the Company.
|
9.4
|
The rights and obligations of an Eligible Person under the terms on which the Eligible Person holds his office or employment with a Participating Company shall not be affected by his participation in the Scheme or by any right he may have to participate therein, and the Scheme shall afford an Eligible Person no rights to compensation or damages in connection with the termination of such office or employment for any reason whatsoever.
|
9.5
|
The rights and obligations of an Option Holder shall be personal to the Option Holder and no Option nor the benefit thereof may be transferred, assigned, charged or otherwise alienated save that nothing in this sub-clause shall prohibit the transmission of an Option or the benefit thereof by operation of law.
|
9.6
|
For so long as the Shares are listed on the Oslo Stock Exchange or any other stock exchange, the Company shall apply to the appropriate authorities of such stock exchange(s) for all Shares subscribed for under the Scheme to be admitted for trading thereon on par with the other Shares.
|
9.7
|
Any notice or other document to be served by the Company under the Scheme on an Eligible Person or Option Holder may be served personally or by e-mail or by sending it through the post in a prepaid letter addressed to him at his address as last known to the Company.
|
9.8
|
The Insider Trading Regulations of the Company are applicable to the Shares received as a consequence of the exercise of Options.
|
|
a.
|
the date (if any) determined by the Board to be the date of termination of the Scheme; and
|
|
b.
|
the tenth anniversary of the Adoption Date.
|
10.2
|
Following termination of the Scheme pursuant to Clause 10.1 above, no further Options shall be granted but the subsisting rights and obligations of existing Option Holders will continue in force as if the Scheme had not terminated.
|
(1)
|
SHIP FINANCE INTERNATIONAL LIMITED
(the
“Company”);
|
(2)
|
THE VESSEL OWNING SUBSIDIARIES LISTED IN SCHEDULE A HERETO
(the
“Owners”);
|
(3)
|
FRONTLINE LTD. (“Frontline”);
and
|
(4)
|
FRONTLINE SHIPPING II LIMITED
(the
“Charterer”);
(each a
“Party”
and together the
“Parties”.)
|
(A)
|
The Parties are parties to a charter ancillary agreement dated 20
th
June, 2005 as amended by an addendum no. 1 thereto dated 21 August 2007 (together, the
“Agreement”),
setting forth, inter alia, the terms of certain arrangements supporting and securing the Charterer’s ability to pay charter hire under separate charterparties between the Charterer and each of the Owners.
|
(B)
|
Under the terms of the Agreement, the Charterer has established a Charter Service Reserve.
|
(C)
|
The Parties have subsequently agreed to make certain changes to the Agreement and the Performance Guarantee notably by reducing the Minimum Reserve (and thus allowing the Charterer to return funds to Frontline), expanding Frontline’s obligations under the Performance Guarantee to include a guarantee for the Charterer’s obligations to pay Charter Hire and reducing Frontline’s obligations under the Performance Guarantee by removing Frontline Management’s obligations under the Management Agreements and the Administrative Service Agreement from the guaranteed obligations.
|
(D)
|
This Addendum No. 2 is entered into in order to document the changes to the Agreement.
|
For and on behalf of
|
For and on behalf of
|
|
SHIP FINANCE INTERNATIONAL LIMITED
|
FRONTLINE LTD.
|
|
/s/ Harald Gurvin
|
/s/ Margnus Vaaler
|
|
Signature
|
Signature
|
|
HARALD GURVIN
ATTORNEY-IN-FACT
|
Magnus Vaaler
Attorney-in-fact
|
|
Name with block letters
|
Name with block letters
|
|
For and on behalf of
|
for and on behalf of
|
|
ULTIMATE SHIPPING LIMITED
MILLCROFT MARITIME SA
GOLDEN NARROW CORPORATION
HUDSON BAY MARINE COMPANY LIMITED
NEWBOND SHIPPING COMPANY LIMITED
|
FRONTLINE SHIPPING II LIMITED
|
|
/s/ Harald Gurvin
|
/s/ Margnus Vaaler
|
|
Signature
|
Signature
|
|
HARALD GURVIN
ATTORNEY-IN-FACT
|
Magnus Vaaler
Attorney-in-fact
|
|
Name with block letters
|
Name with block letters
|
|
Name
|
Country of
Incorporation
|
Ownership and
Voting Percentage
|
|
|
|
Frontline Shipping Limited
|
Bermuda
|
100%
|
Frontline Shipping II Limited
|
Bermuda
|
100%
|
Frontline Shipping III Limited
|
Bermuda
|
100%
|
Key Chartering Inc
|
Liberia
|
100%
|
Frontline Chartering Services Inc
|
Liberia
|
100%
|
Frontline Management (Bermuda) Ltd
|
Bermuda
|
100%
|
ICB Shipping (Bermuda) Limited
|
Bermuda
|
100%
|
Frontline Tankers Limited
|
Bermuda
|
100%
|
Frontline Corporate Services Ltd
|
United Kingdom
|
100%
|
Independent Tankers Corporation Limited
|
Bermuda
|
82.47%
|
Independent Tankers Corporation
|
Cayman Islands
|
100%
|
Buckingham Shipping Plc
|
Isle of Man
|
100%
|
Buckingham Petro Limited
|
Isle of Man
|
100%
|
Caernarfon Shipping Plc
|
Isle of Man
|
100%
|
Caernarfon Petro Limited
|
Isle of Man
|
100%
|
CalPetro Tankers (IOM) Ltd
|
Isle of Man
|
100%
|
CalPetro Tankers (Bahamas I) Ltd
|
Bahamas
|
100%
|
CalPetro Tankers (Bahamas II) Ltd
|
Bahamas
|
100%
|
CalPetro Tankers (Bahamas III) Ltd
|
Bahamas
|
100%
|
Golden State Petro (IOM I-A) PLC
|
Isle of Man
|
100%
|
Golden State Petro (IOM I-B) PLC
|
Isle of Man
|
100%
|
Holyrood Shipping Plc
|
Isle of Man
|
100%
|
Sandringham Shipping Plc
|
Isle of Man
|
100%
|
Sandringham Petro Limited
|
Isle of Man
|
100%
|
Front Sovereign Inc.
|
Liberia
|
100%
|
Front Monarch Inc.
|
Liberia
|
100%
|
Front Destiny Inc
|
Liberia
|
100%
|
Front Dragon Inc
|
Liberia
|
100%
|
Front Dynamic Inc
|
Liberia
|
100%
|
Front Dynasty Inc
|
Liberia
|
100%
|
Front Dream Inc
|
Liberia
|
100%
|
Front King Inc
|
Liberia
|
100%
|
Front Loki Inc
|
Liberia
|
100%
|
Front Njord Inc
|
Liberia
|
100%
|
Front Odin Inc
|
Liberia
|
100%
|
Front Queen Inc
|
Liberia
|
100%
|
Front Thor Inc
|
Liberia
|
100%
|
Front Hermod Inc
|
Liberia
|
100%
|
Front Ran Inc
|
Liberia
|
100%
|
Front Alfa Inc
|
Liberia
|
100%
|
Front Beta Inc
|
Liberia
|
100%
|
Front Delta Inc
|
Liberia
|
100%
|
Front Fighter Inc
|
Liberia
|
100%
|
Front Hunter Inc
|
Liberia
|
100%
|
Front Eminence Inc.
|
Liberia
|
100%
|
Front Endurance Inc.
|
Liberia
|
100%
|
Front Eagle Corporation
|
Liberia
|
100%
|
Golden Channel Corporation
|
Liberia
|
100%
|
Kea Navigation Ltd
|
Liberia
|
100%
|
Otina Inc.
|
Liberia
|
100%
|
Optimal Shipping SA
|
Liberia
|
100%
|
Pablo Navigation SA
|
Liberia
|
100%
|
Ryan Shipping Corporation
|
Liberia
|
100%
|
Saffron Rose Shipping Limited
|
Liberia
|
100%
|
Tidebrook Maritime Corporation
|
Liberia
|
100%
|
Bandama Investment Ltd
|
Liberia
|
100%
|
Sea Team Management Pte. Ltd
|
Singapore
|
75%
|
Sea Team Management (India) Pvt. Ltd
|
India
|
99%
|
Vista International Finance, Inc.
|
Liberia
|
100%
|
Chatham Ship Management, Inc.
|
Liberia
|
100%
|
Frontline Management AS
|
Norway
|
100%
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the
Report
fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|