SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2013
Commission File Number: 001-32199
Ship Finance International Limited
(Translation of registrant's name into English)
Par-la-Ville Place
14 Par-la-Ville Road
Hamilton, HM 08, Bermuda
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): .
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): .
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Attached as Exhibit 1 is a copy of the press release of Ship Finance International Limited (the "Company"), dated February 25, 2013, announcing the preliminary financial results for the quarter ended December 31, 2012.
This report on Form 6-K is hereby incorporated by reference into the Company's Registration Statement on Form F-3 (Registration No. 333-170598), filed with the U.S. Securities and Exchange Commission on November 15, 2010.
EXHIBIT 1
Ship Finance International Limited (NYSE: SFL) - Earnings Release
|
Reports preliminary 4Q 2012 results
|
Hamilton, Bermuda, February 25, 2013. Ship Finance International Limited ("Ship Finance" or the "Company") today announced its preliminary financial results for the quarter ended December 31, 2012.
Highlights
|
|
·
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Fourth quarter dividend of $0.39 per share was prepaid in December 2012
|
|
|
·
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Acquisition of two car carriers in combination with long-term charters
|
|
|
·
|
Raised approximately $89 million in a public equity offering
|
|
|
·
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Raised the equivalent of approximately $105 million in NOK-denominated senior notes due 2017
|
|
|
·
|
Refinanced $420 million bank debt related to an ultra-deepwater drillship
|
|
|
·
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Raised $350 million senior convertible notes due 2018 subsequent to quarter-end
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|
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·
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Disposal of four older vessels in 4Q 2012 and two vessels in 1Q 2013
|
|
|
·
|
Selected key financial data:
|
|
Three Months Ended
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Twelve Months Ended
|
|||||||||||||||
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Dec 31, 2012
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Sep 30, 2012
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Dec 31, 2012
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Dec 31, 2011
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|||||||||||||
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Charter revenues(1)
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$ | 168m | $ | 179m | $ | 716m | $ | 784m | ||||||||
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EBITDA(2)
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$ | 134m | $ | 145m | $ | 585m | $ | 674m | ||||||||
|
Net income
|
$ | 51m | $ | 35m | $ | 186m | $ | 131m | ||||||||
|
Earnings per share
|
$ | 0.60 | $ | 0.44 | $ | 2.31 | $ | 1.66 | ||||||||
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Dividend per share
|
$ | 0.39 | $ | 0.39 | $ | 1.56 | $ | 1.47 | ||||||||
Dividends and Results for the Quarter Ended December 31, 2012
The Board of Directors previously declared a fourth quarter cash dividend of $0.39 per share in November 2012. The Board decided to accelerate the fourth quarter 2012 dividend payment due to uncertainties surrounding taxation on dividends for our U.S. shareholders. The accelerated dividend was paid together with the third quarter 2012 dividend payment in late December 2012.
The Company reported total U.S. GAAP operating revenues on a consolidated basis of $77.7 million, or $0.92 per share, in the fourth quarter of 2012. This number excludes $14.6 million of revenues classified as 'repayment of investments in finance lease', and also excludes $77.8 million of charter revenues earned by assets classified as 'investment in associate'.
The cash sweep agreement with Frontline had a net positive effect of $12.1 million, or $0.14 per share in the fourth quarter. For the full year 2012 a total of $52.2 million cash sweep was recorded and is payable to Ship Finance in March 2013.
The Company recorded a $21.5 million gain on sale of vessels in the quarter arising from the sale of four older vessels, including three combination carriers and one single-hull VLCC.
Reported net operating income pursuant to U.S. GAAP for the quarter was $57.9 million, or $0.68 per share, and reported net income was $51.1 million, or $0.60 per share.
1.Charter revenues includes total charter hire from all vessels and rigs, including assets in 100% owned subsidiaries classified as 'Investment in associates' and accrued cash sweep income.
2. EBITDA is a non- GAAP measure and includes assets in 100% owned subsidiaries classified as 'Investment in associates'. For more details please see Appendix 1: Reconciliation of Net Income to EBITDA.
1
Ole B. Hjertaker, Chief Executive Officer of Ship Finance Management AS said in a comment: "Since October 2012, we have successfully raised a combined amount of more than $1 billion in equity, bonds, convertible notes and bank financing. The Company has in a timely manner addressed debt maturities and refinanced both secured and unsecured debt, in addition to raising capital earmarked for growth."
Mr Hjertaker continued: "We believe that Ship Finance is well positioned with a strong balance sheet to selectively pursue new investments. We acquired two car carriers in the fourth quarter, and are actively reviewing other investment opportunities across our main market segments. At the same time we are also closely monitoring the performance of our chartering counterparties in light of the prevailing soft spot-market in some of the shipping segments."
Business Update
As of December 31, 2012, and adjusted for subsequent acquisitions and sales, the fixed-rate charter backlog from our fleet of 65 vessels and rigs was approximately $5.2 billion, with an average remaining charter term of 6.8 years, or 10.1 years if weighted by charter revenue. Some of our charters include purchase options which, if exercised, may reduce the fixed charter backlog and average remaining charter term.
Ship Finance's newbuilding program is progressing according to plan, and the Company currently has five vessels remaining under construction. This includes a 32,000 dwt Handysize drybulk carrier with expected delivery in 1Q 2013 and four eco-design 4,800 teu container vessels with expected deliveries between 3Q 2013 and 1Q 2014. The Handysize drybulk carrier has been chartered out for a period of three years, and the four container vessels have been chartered out for a period of seven years from delivery.
In October and November 2012, the Company acquired two modern 6,500 ceu car carriers, built in Japan. After delivery, the vessels commenced 5-year time charter contracts to the investment grade Korea-based logistics company Hyundai Glovis. The transaction added approximately $85 million to our fixed-rate charter backlog. We have arranged 70% financing of the purchase price at favorable terms, and the aggregate net cash flow is projected to be approximately $4.8 million per year, after estimated operating expenses and loan interest and amortization.
As part of the Company's continuing fleet renewal process, a total of six vessels built between 1991 and 1993 have been sold and delivered to new owners in the fourth quarter and so far into the first quarter. Another older vessel is due to be delivered to its new owner in the first quarter, and following that disposal, the Company will not have any single-hull tankers or combination carriers left in the fleet.
Four of these vessels were delivered to their new owners in the fourth quarter of 2012 resulting in a total book gain of $21.5 million and net proceeds of $31.1 million after debt prepayment and charter termination compensation. In the first quarter of 2013, vessel sales are expected to generate an aggregate book gain of approximately $17.7 million and net proceeds of approximately $37.3 million after debt prepayment and charter termination compensation.
According to market sources, the tanker spot market rates increased slightly in the fourth quarter compared to the third quarter, but still significantly lower than the long-term average rates. The combination of conservative base rates for most of the vessels, and two combination carriers on very profitable sub-charters in the fourth quarter generated a cash sweep contribution of $12.1 million in the quarter. The cash sweep for the full year 2012 amounts to $52.2 million, and is payable to Ship Finance in March 2013. Five vessels with higher threshold rates did not generate any cash sweep in 2012.
At year-end, there was no accrual to the 25% profit split calculation in excess of the original based rates. $50 million of profit share will need to accumulate before profit share revenues are recognized in the consolidated accounts.
The sub-charters for the combination carriers were terminated in the fourth quarter and will therefore not contribute to the cash sweep going forward. In light of the prevailing soft tanker market outlook, the Company does not currently expect a significant cash sweep contribution in 2013, unless we see a significant upswing in the spot charter rates for VLCCs and Suezmax tankers.
Frontline stated in their recent quarterly report that if the tanker market does not recover before 2015 and no additional equity can be raised or assets sold, there is a risk that Frontline will not have sufficient cash to repay its $225 million convertible bond loan at maturity in April 2015. Ship Finance currently has 22 vessels on long term charters to Frontline, and will, as Frontline's largest creditor, actively monitor this situation in order to try to minimize any potential negative effects for our Company.
The net debt on these vessels has already been reduced to a level close to prevailing scrap prices, with a significant buffer to charter free values. If Frontline should default on any payment obligations to us, we will be able to trade the vessels in the market with a very low cash breakeven rate and retain 100% of any chartering upside. Ship Finance also expects, as part of the fleet renewal strategy, to continue selling older vessels and correspondingly reduce the counterparty exposure to Frontline over time.
The Company has seven feeder-size 1,700-2,800 teu container vessels employed in the short-term charter market. Market sources are reporting prevailing charter rates only marginally above operating expenses, and there are a number of vessels currently idle and looking for new employment. This is expected to have a continued negative effect on charter rates for some time. The Company's intention is to continue employing these vessels in the short-term market until long-term charter rates recover.
Four of our Handysize drybulk carriers are also trading in the short-term market. The Baltic Exchange Handysize Index was on average approximately $6,400 per day in the fourth quarter 2012 compared to approximately $8,000 per day in the third quarter. With the long-term charter market only marginally higher than the short-term market, the Company's intention is to continue employing these four Handysize vessels in the short-term market until long-term charter rates recover.
The Company's four drilling units are on long-term fixed-rate bareboat contracts to Seadrill and Apexindo. The drilling units generated approximately $75 million of combined charter revenues in the fourth quarter. There was a scheduled reduction in the charter rate for one of the drilling rigs in the quarter, but this was matched by reduced debt service payments following the steep repayment profile during the first four years of the charter. All of our drilling units are sub-chartered to oil companies on profitable terms, and based on the fixed-rate charter structure for these assets, Ship Finance is not directly impacted by short-term fluctuations in the drilling market.
2
Ship Finance owns a number of other vessels, including offshore support vessels, container vessels, car carriers and drybulk carriers. The majority of these vessels and rigs, including newbuildings, are chartered on long-term, fixed-rate contracts that provide the Company with stability in cash-flow and earnings, irrespective of fluctuations in the short-term charter market.
Financing and Capital Expenditure
As of December 31, 2012, Ship Finance had $60.5 million in cash and cash equivalents and $57.5 million available under revolving credit facilities. In addition, the Company had $55.7 million of assets classified as available for sale securities. The Company is in compliance with all financial covenants and several of our financing arrangements are in subsidiaries with only limited guarantees from Ship Finance.
In October 2012, the Company successfully raised approximately $89 million in a public offering issuing 6 million new shares. The proceeds were partly used as payment for the two recently acquired car carriers.
In October 2012, the Company also issued a five-year senior unsecured bond in the Norwegian credit market with an interest of NIBOR + 5.00% p.a. The principal amount of the notes is NOK 600 million, or the equivalent of $105 million. The Company has swapped all payments to USD with a fixed interest rate of 6.06% p.a. and the proceeds were used to refinance other indebtedness.
In November 2012, the Company arranged a $53 million five-year secured loan facility which part-financed the acquisition of the two modern car carriers acquired in October and November.
In December 2012, the Company agreed to refinance the bank debt related to the ultra-deepwater drillship West Polaris at attractive terms. The new $420 million facility was drawn down in January 2013 and has a five-year tenor with a balloon payment of $240 million in 2018.
Subsequent to quarter end, the Company refinanced the remaining $248 million of the outstanding 8.5% senior notes due December 2013 with new $350 million convertible notes due 2018. The convertible notes have an annual coupon of 3.25% and an initial strike price of $21.945. The offering was significantly oversubscribed and therefore upsized from the originally targeted $250 million to $350 million.
To facilitate delta hedging for investors interested in the convertible notes, the Company concurrently entered into a share lending agreement for up to approximately 6 million shares with one of the underwriters of the convertible note. This did not generate any cash proceeds to the Company.
At quarter end, the Company had gross estimated remaining capital commitments of approximately $191 million relating to one drybulk carrier and four container vessels. We have secured long-term bank financing for all vessels under construction, and have paid significant amounts to the shipyards already. The remaining net capital expenditures at quarter-end relating to newbuildings were therefore limited to approximately $26 million.
| 1Q 2013 | 2Q 2013 | 3Q 2013 | 4Q 2013 | 1Q 2014 |
Total
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|||||||||||||||||
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Drybulk
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$6 mill.
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$6 mill.
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||||||||||||||||||||
| Container |
$12 mill.
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$17 mill.
|
$81 mill.
|
$40 mill.
|
$35 mill.
|
$185 mill.
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||||||||||||||||
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Total investment
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$18 mill.
|
$17 mill.
|
$81 mill.
|
$40 mill.
|
$35 mill.
|
$191 mill.
|
||||||||||||||||
| Committed financing |
$(27) mill.
|
$(14) mill.
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$(64) mill.
|
$(32) mill.
|
$(28) mill.
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$(165) mill.
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||||||||||||||||
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Net investment(1)
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$(9) mill.
|
$3 mill.
|
$17 mill.
|
$8 mill.
|
$7 mill.
|
$26 mill.
|
||||||||||||||||
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(1)
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A negative number for 'net investments' means that the transactions will be cash positive for the Company
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Strategy and Outlook
The management is committed to continue the conservative profile of the Company and the strategy is to charter out the majority of our assets on long-term charters to reputable operators in the shipping and offshore markets. Our diversified and extensive charter portfolio with more than 10 years average remaining weighted charter coverage provides the Company with a robust business platform.
While there have been situations where we have renegotiated terms or charters have been terminated, the majority of our shipping clients have performed well during the recent shipping downturn. A significant portion of our distribution capacity derives from the offshore segment which, unlike the shipping segment, has been very strong for a long period.
The Company is well positioned for further growth and we expect to develop new attractive opportunities going forward. The recent successful transactions in the debt, bond and equity markets [confirm] Ship Finance's strong position in the market.
We believe the combination of a challenging banking market for many players and low asset prices will create significant opportunities for Ship Finance in finding investment opportunities with limited downside on asset values. In this market we are also prepared to take more asset exposure in order to secure upside from potential appreciation in asset values.
3
Accounting Items
Under U.S. GAAP, subsidiaries owning the drilling units West Polaris, West Hercules and West Taurus and the subsidiaries leasing the container vessels CMA CGM Magellan and CMA CGM Corte Real have been accounted for as 'investment in associate' using the 'equity method'. These subsidiaries are wholly owned by Ship Finance, but due to the conservative structure of the transactions, Ship Finance has not been deemed 'primary beneficiary' according to U.S. GAAP.
As a result of the accounting treatment, operating revenues, operating expenses and interest expenses in these subsidiaries are not shown in Ship Finance's consolidated Income Statement. Instead, the net contribution from these subsidiaries is recognized as a combination of 'Interest income from associates and long term investments' and 'Results in associate'.
In Ship Finance's consolidated Balance Sheet, the net investments are shown as a combination of 'Investment in associate' and 'Amount due from related parties – Long term'. The reason for this treatment is that a part of the investment in these subsidiaries is in the form of intercompany loans.
Forward Looking Statements
This press release contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Ship Finance management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although Ship Finance believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Ship Finance cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies, fluctuations in currencies and interest rates, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the markets in which we operate, changes in demand resulting from changes in OPEC's petroleum production levels and worldwide oil consumption and storage, developments regarding the technologies relating to oil exploration, changes in market demand in countries which import commodities and finished goods and changes in the amount and location of the production of those commodities and finished goods, increased inspection procedures and more restrictive import and export controls, changes in our operating expenses, including bunker prices, drydocking and insurance costs, performance of our charterers and other counterparties with whom we deal, timely delivery of vessels under construction within the contracted price, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission.
February 25, 2013
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
Questions can be directed to Ship Finance Management AS:
Harald Gurvin, Chief Financial Officer: +47 23114009
Magnus T. Valeberg, Senior Vice President: +47 23114012
4
SHIP FINANCE INTERNATIONAL LIMITED
FOURTH QUARTER 2012 REPORT (UNAUDITED)
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INCOME STATEMENT
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Three months ended
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Twelve months ended
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(in thousands of $ except per share data)
|
Dec, 31
2012
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Sept, 30
2012
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Dec, 31
2012
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Dec, 31
2011
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||||||||||||
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Charter revenues - operating lease
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34,104 | 31,476 | 137,035 | 120,024 | ||||||||||||
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Charter revenues - finance lease(1)
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46,026 | 47,263 | 190,198 | 380,518 | ||||||||||||
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Revenues classified as Repayment of investment in finance leases(1)
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(14,573 | ) | (14,612 | ) | (59,717 | ) | (205,910 | ) | ||||||||
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Profit share income(2)
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- | - | - | 482 | ||||||||||||
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Cash sweep income
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12,097 | 10,162 | 52,176 | - | ||||||||||||
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Total operating revenues
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77,654 | 74,289 | 319,692 | 295,114 | ||||||||||||
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Gain on sale of assets and termination of charters
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21,537 | 1,923 | 47,386 | 8,468 | ||||||||||||
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Vessel operating expenses
|
(24,744 | ) | (25,364 | ) | (94,914 | ) | (81,063 | ) | ||||||||
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Administrative expenses
|
(2,341 | ) | (2,133 | ) | (8,942 | ) | (9,885 | ) | ||||||||
|
Depreciation
|
(14,225 | ) | (13,583 | ) | (55,602 | ) | (49,929 | ) | ||||||||
|
Total operating expenses
|
(41,310 | ) | (41,080 | ) | (159,458 | ) | (140,877 | ) | ||||||||
|
Operating income
|
57,881 | 35,132 | 207,620 | 162,705 | ||||||||||||
|
Results in associate(3)
|
10,163 | 10,669 | 43,492 | 50,902 | ||||||||||||
|
Interest income from associates and long term investments(3)
|
5,668 | 5,661 | 22,633 | 21,851 | ||||||||||||
|
Interest income, other
|
1,586 | 1,198 | 4,541 | 1,550 | ||||||||||||
|
Interest expense
|
(22,354 | ) | (22,067 | ) | (88,985 | ) | (96,247 | ) | ||||||||
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Amortization of deferred charges
|
(1,529 | ) | (1,500 | ) | (5,866 | ) | (7,131 | ) | ||||||||
|
Gain on sale of associate
|
- | - | - | 4,064 | ||||||||||||
|
Other financial items
|
(730 | ) | (710 | ) | (2,026 | ) | (2,111 | ) | ||||||||
|
Impairment adjustment to investments
|
- | - | (3,353 | ) | - | |||||||||||
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Mark to Market of Derivatives
|
414 | 6,176 | 7,780 | (4,408 | ) | |||||||||||
|
Taxes
|
- | - | - | - | ||||||||||||
|
Net income
|
51,099 | 34,559 | 185,836 | 131,175 | ||||||||||||
|
Basic earnings per share ($)
|
0.60 | 0.44 | 2.31 | 1.66 | ||||||||||||
|
Weighted average number of shares
|
84,768,478 | 79,225,000 | 80,594,399 | 79,125,000 | ||||||||||||
|
Common shares outstanding
|
85,225,000 | 79,225,000 | 85,225,000 | 79,125,000 | ||||||||||||
|
(1)
|
'Full year 2011' includes the $106 million compensation received from Frontline.
|
|
(2)
|
Frontline prepaid $50 million in profit share in December 2011. Remaining threshold before additional profit share will accrue is $50 million.
|
|
(3)
|
Four of our subsidiaries, related to five of our units, were accounted for as 'Investment in associate' during the quarter. The contribution from these subsidiaries is reflected in our consolidated Income Statement as a combination of 'Results in associate' and 'Interest income from associates and long term investments'.
|
5
SHIP FINANCE INTERNATIONAL LIMITED
FOURTH QUARTER 2012 REPORT (UNAUDITED)
|
BALANCE SHEET
(in thousands of $)
|
Dec, 31
2012
|
Sept, 30
2012
|
Dec 31,
2011 (audited)
|
|||||||||
|
ASSETS
|
||||||||||||
|
Short term
|
||||||||||||
|
Cash and cash equivalents
|
60,542 | 66,818 | 94,915 | |||||||||
|
Available for sale securities
|
55,661 | 40,359 | 23,324 | |||||||||
|
Amount due from related parties
|
54,203 | 41,195 | 9,775 | |||||||||
|
Other current assets
|
72,226 | 72,988 | 64,749 | |||||||||
|
Long term
|
||||||||||||
|
Newbuildings and vessel deposits
|
69,175 | 73,780 | 123,750 | |||||||||
|
Vessels and equipment, net
|
1,041,126 | 960,400 | 896,830 | |||||||||
|
Investment in finance leases
|
1,086,989 | 1,116,191 | 1,159,900 | |||||||||
|
Investment in associate(1)
|
232,891 | 219,907 | 169,838 | |||||||||
|
Amount due from related parties - Long term(1)
|
221,884 | 235,163 | 274,184 | |||||||||
|
Deferred charges
|
23,740 | 22,943 | 25,723 | |||||||||
|
Other long-term assets
|
54,652 | 52,259 | 53,140 | |||||||||
|
Total assets
|
2,973,089 | 2,902,003 | 2,896,128 | |||||||||
|
LIABILITIES AND STOCKHOLDERS'
|
||||||||||||
|
Short term
|
||||||||||||
|
Short term and current portion of long term interest bearing debt
|
157,689 | 220,051 | 150,342 | |||||||||
|
Other current liabilities
|
30,602 | 20,622 | 19,385 | |||||||||
|
Amount due to related parties
|
9,227 | 7,495 | 4,421 | |||||||||
|
Long term
|
||||||||||||
|
Long term interest bearing debt
|
1,673,511 | 1,630,480 | 1,760,122 | |||||||||
|
Other long term liabilities
|
107,292 | 113,975 | 104,767 | |||||||||
|
Stockholders' equity(2)
|
994,768 | 909,380 | 857,091 | |||||||||
|
Total liabilities and stockholders' equity
|
2,973,089 | 2,902,003 | 2,896,128 | |||||||||
|
(1)
|
Four of our subsidiaries, related to five of our units, were accounted for as 'Investments in associate' at quarter end. Our investment is a combination of equity classified as 'Investment in associate' and intercompany loans classified as 'Amount due from related parties, long term'.
|
|
(2)
|
As of December 31, 2012, 'Stockholders' equity' excludes $151.5 million of deferred equity which is being recognized over time. In connection with the initial and subsequent acquisitions of vessels from Frontline, Ship Finance has accounted for the difference between the historical cost of the vessels and the net investment in the lease as a deferred equity contribution. This deferred equity contribution is shown as a reduction in the net investment in finance leases in the balance sheet. This results from the related party nature of both the transfer of the vessel and the subsequent charter. This deferred equity is amortized to 'Stockholders' equity' in line with the charter payments received from Frontline.
|
6
SHIP FINANCE INTERNATIONAL LIMITED
FOURTH QUARTER 2012 REPORT (UNAUDITED)
|
STATEMENT OF CASHFLOWS
|
Three months ended
|
Twelve months ended
|
||||||||||||||
|
(in thousands of $)
|
Dec, 31
2012
|
Sept, 30
2012
|
Dec, 31
2012
|
Dec, 31
2011
|
||||||||||||
|
OPERATING ACTIVITIES
|
||||||||||||||||
|
Net income
|
51,099 | 34,559 | 185,836 | 131,175 | ||||||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
|
Depreciation and amortization
|
15,092 | 14,419 | 58,819 | 54,243 | ||||||||||||
|
Impairment adjustment to investments
|
- | - | 3,353 | - | ||||||||||||
|
Adjustment of financial derivatives to market value
|
(414 | ) | (6,176 | ) | (7,780 | ) | 4,408 | |||||||||
|
Gain on sale of assets and termination of charters
|
(21,537 | ) | (1,923 | ) | (47,386 | ) | (8,468 | ) | ||||||||
|
Gain on sale of associate
|
- | - | - | (4,064 | ) | |||||||||||
|
Result in associate
|
(10,164 | ) | (10,669 | ) | (43,492 | ) | (50,902 | ) | ||||||||
|
Stock based compensation
|
117 | 126 | 569 | 1,408 | ||||||||||||
|
Gain on re-purchase of Company Bonds
|
250 | - | 122 | (521 | ) | |||||||||||
|
Other, net
|
(579 | ) | (714 | ) | (2,184 | ) | (571 | ) | ||||||||
|
Change in operating assets and liabilities
|
(15,545 | ) | (9,530 | ) | (61,287 | ) | 36,953 | |||||||||
|
Net cash provided by operating activities
|
18,319 | 20,092 | 86,570 | 163,661 | ||||||||||||
|
INVESTING ACTIVITIES
|
||||||||||||||||
|
Repayment of investments in finance leases
|
14,279 | 14,324 | 58,571 | 204,874 | ||||||||||||
|
Restricted cash released
|
- | - | - | 5,601 | ||||||||||||
|
Proceeds from sale of vessel/new buildings
|
65,629 | 11,096 | 100,733 | 71,461 | ||||||||||||
|
Net investment in newbuildings and vessel deposits
|
(23,135 | ) | (11,815 | ) | (90,612 | ) | (156,223 | ) | ||||||||
|
Purchase of vessels
|
(76,936 | ) | - | (76,936 | ) | (151,562 | ) | |||||||||
|
Cash arising from sale of associate
|
- | - | - | 37,048 | ||||||||||||
|
Cash received from associates(1)
|
14,399 | 14,387 | 56,443 | 56,702 | ||||||||||||
|
Other assets / investments
|
(14,568 | ) | - | (13,890 | ) | (73,763 | ) | |||||||||
|
Net cash (used in)/ provided by investing activities
|
(20,332 | ) | 27,992 | 34,309 | (5,862 | ) | ||||||||||
|
FINANCING ACTIVITIES
|
||||||||||||||||
|
Proceeds from long and short term debt
|
185,475 | 4,600 | 259,097 | 408,592 | ||||||||||||
|
Expenses paid in connection with securing finance
|
(2,428 | ) | (116 | ) | (3,989 | ) | (17,822 | ) | ||||||||
|
Repayment of long and short term debt
|
(183,155 | ) | (56,302 | ) | (318,374 | ) | (394,747 | ) | ||||||||
|
Re-purchase of Company bonds
|
(26,591 | ) | - | (28,096 | ) | (23,230 | ) | |||||||||
|
Cash received from share issue
|
88,911 | 685 | 89,596 | - | ||||||||||||
|
Payments in lieu of issuing shares for exercised share options
|
- | (23 | ) | (1,478 | ) | - | ||||||||||
|
Cash dividends paid
|
(66,475 | ) | (30,898 | ) | (152,008 | ) | (122,644 | ) | ||||||||
|
Net cash used in financing activities
|
(4,263 | ) | (82,054 | ) | (155,252 | ) | (149,851 | ) | ||||||||
|
Net (decrease)/ increase in cash and cash equivalents
|
(6,276 | ) | (33,970 | ) | (34,373 | ) | 7,948 | |||||||||
|
Cash and cash equivalents at beginning of period
|
66,818 | 100,788 | 94,915 | 86,967 | ||||||||||||
|
Cash and cash equivalents at end of period
|
60,542 | 66,818 | 60,542 | 94,915 | ||||||||||||
|
(1)
|
Four of our subsidiaries, related to five of our units, were accounted for as 'Investments in associate' during the quarter. The 'Cash received from/ (Investment in) associates' is only a part of the contribution from these subsidiaries. The balance is recorded as 'Interest income from associates and long term investments' and reflected in the Company's Income Statement.
|
7
SUBSIDIARIES ACCOUNTED FOR AS INVESTMENT IN ASSOCIATES
FOURTH QUARTER 2012 (UNAUDITED)
Please note that full preliminary accounts for SFL West Polaris Limited (West Polaris), SFL Deepwater Ltd (West Hercules and West Taurus), Bluelot Shipping Company Ltd. (CMA CGM Magellan), and Corte Real Ltd (CMA CGM Corte Real) are available from the Company's website: www.shipfinance.org.
Selected income statement data for the three months ended December 31, 2012
|
(in thousands of $)
|
SFL West
Polaris
Limited
|
SFL
Deepwater
Ltd
|
CMA CGM
Magellan/
Corte Real(1)
|
Total
|
|||||||||||||
|
Charter revenues - finance lease
|
19,869 | 47,918 | - | 67,787 | |||||||||||||
|
Revenues classified as Repayment of investment in finance leases
|
(13,678 | ) | (31,183 | ) | - | (44,861 | ) | ||||||||||
|
Charter revenues - operating lease
|
- | - | 10,034 | 10,034 | |||||||||||||
|
Total operating expenses
|
(1 | ) | (10 | ) | (8,902 | ) | (8,913 | ) | |||||||||
|
Interest expense, related party(2)
|
(1,631 | ) | (3,263 | ) | - | (4,894 | ) | ||||||||||
|
Interest expense, other
|
(2,199 | ) | (6,717 | ) | - | (8,916 | ) | ||||||||||
|
Other items
|
- | (74 | ) | - | (74 | ) | |||||||||||
|
Net income(3)
|
2,360 | 6,671 | 1,132 | 10,163 | |||||||||||||
|
(1)
|
"CMA CGM Magellan / Corte Real" represents the combined financial figures from the two companies leasing the container vessels CMA CGM Magellan and CMA CGM Corte Real.
|
|
(2)
|
'Interest expense, related party' from these subsidiaries appears in the Company's consolidated income statement as 'Interest income from associate and long term investments'.
|
|
(3)
|
'Net income' from these subsidiaries appears in the Company's consolidated income statement as 'Results in associate'.
|
Selected balance sheet data as of December 31, 2012
|
(in thousands of $)
|
SFL West
Polaris
Limited
|
SFL
Deepwater
Ltd
|
CMA CGM
Magellan/
Corte Real(1)
|
Total
|
|||||||||||||
|
Cash and cash equivalents
|
- | - | 388 | 388 | |||||||||||||
|
Investment in finance leases
|
534,322 | 1,120,272 | - | 1,654,594 | |||||||||||||
|
Other assets
|
6,751 | 19,508 | 7,560 | 33,819 | |||||||||||||
|
Total assets
|
541,073 | 1,139,780 | 7,948 | 1,688,801 | |||||||||||||
|
Short term and current portion of long term interest bearing debt
|
37,500 | 821,875 | - | 859,375 | |||||||||||||
|
Other current liabilities
|
2,638 | 6,837 | - | 9,475 | |||||||||||||
|
Long term interest bearing debt
|
360,000 | - | - | 360,000 | |||||||||||||
|
Long term loans from shareholders, net
|
67,010 | 154,874 | - | 221,884 | |||||||||||||
|
Other long term liabilities
|
- | 5,176 | - | 5,176 | |||||||||||||
|
Stockholders equity(2)
|
73,925 | 151,018 | 7,948 | 232,891 | |||||||||||||
|
Total liabilities and stockholders' equity
|
541,073 | 1,139,780 | 7,948 | 1,688,801 | |||||||||||||
|
(1)
|
"CMA CGM Magellan / Corte Real" represents the combined financial figures from the two companies leasing the container vessels CMA CGM Magellan and CMA CGM Corte Real.
|
|
(2)
|
'Stockholder's equity' from these subsidiaries appears in the Company's consolidated balance sheet as 'Investment in associate'.
|
8
APPENDIX 1: RECONCILIATION OF NET INCOME TO EBITDA
FOURTH QUARTER 2012 (UNAUDITED)
|
EBITDA
(in thousands of $)
|
December, 31 2012
|
Full year
|
||||||||||
|
Three
months
ended
|
Twelve months
ended
|
2011 | ||||||||||
|
Net income
|
51,099 | 185,836 | 131,175 | |||||||||
|
Add:
|
||||||||||||
|
Mark to Market of Derivatives
|
(414 | ) | (7,780 | ) | 4,408 | |||||||
|
Other financial items
|
480 | 1,905 | 2,111 | |||||||||
|
Amortization of deferred charges
|
1,529 | 5,866 | 7,131 | |||||||||
|
Interest expense
|
22,354 | 88,985 | 96,247 | |||||||||
|
Interest income, other(1)
|
(73 | ) | (134 | ) | (188 | ) | ||||||
|
Interest income from associates
|
(4,894 | ) | (19,575 | ) | (19,575 | ) | ||||||
|
Results in associate
|
(10,163 | ) | (43,492 | ) | (50,902 | ) | ||||||
|
Depreciation
|
14,225 | 55,602 | 49,929 | |||||||||
|
Long-term investment impairment charge
|
- | 3,353 | - | |||||||||
|
Gain on sale of assets and termination of charters
|
(21,537 | ) | (47,386 | ) | (8,468 | ) | ||||||
|
Gain on sale of associate
|
- | - | (4,064 | ) | ||||||||
|
Revenues classified as Repayment of investment in finance leases
|
14,280 | 58,572 | 205,910 | |||||||||
|
Compensation payments on Frontline charters
|
- | - | (106,000 | ) | ||||||||
|
Other reconciling items
|
(1,348 | ) | (3,976 | ) | (2,633 | ) | ||||||
|
Investment in associate
|
||||||||||||
|
Charter revenues - finance lease
|
67,787 | 303,149 | 365,294 | |||||||||
|
Charter revenues - operating lease
|
10,034 | 39,334 | 28,607 | |||||||||
|
Total operating expenses
|
(8,913 | ) | (34,829 | ) | (25,199 | ) | ||||||
|
EBITDA (2)
|
134,446 | 585,430 | 673,783 | |||||||||
|
(1)
|
Interest income excludes interest income generated from financial investments.
|
|
(2)
|
Reversal of the cash sweep in respect of the five VLCC vessels chartered to Frontline Shipping II Limited which was previously recorded in the second quarter is adjusted in the period the income originally was reported, for comparison purposes.
|
|
(3)
|
'EBITDA' is not a US-GAAP figure. It is defined as aggregate charter hire from all our 100% owned assets and revenues from financial investments, less vessel operating expenses and general & administrative expenses.
|
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
SHIP FINANCE INTERNATIONAL LIMITED
|
Date: February 27, 2013
|
By:
|
/s/ Harald Gurvin
|
|
|
Name: Harald Gurvin
|
||
|
Title: Chief Financial Officer
|
||
|
Ship Finance Management AS
(Principal Financial Officer)
|
||