UNITED STATES
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 September 2009
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.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 99.1 to this Report on Form 6-K is a copy of Ship Finance International Limited's (the "Company") slides from the Company's presentation of its Preliminary Second Quarter Results, held on Thursday, August 20, 2009.
Statements made in the slides which are not historical are forward-looking statements that reflect management's current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements,
which are other than statements of historical fact. Such statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See "Forward Looking Statements" in the slides.
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
(registrant)
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Dated: September 29, 2009 |
By: |
/s/ Ole B. Hjertaker |
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Name: |
Ole B. Hjertaker |
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Title: |
Chief Executive Officer |
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Ship Finance Management AS |
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SK 23153 0001 1033516
Exhibit 99.1
Ship Finance International Limited
2Q 2009 results
August 20, 2009
2Q 2009 results
August 20, 2009
2
FORWARD LOOKING STATEMENTS
This presentation 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.
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 world wide 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.
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 world wide 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.
OFFERING PURSUANT TO A PROSPECTUS SUPPLEMENT
The offering of the stock dividend will be made only pursuant to a prospectus supplement to the Company’s shelf
registration statement on Form F-3, as amended (Registration No. 333-158162), which is filed with the SEC.
This report does not constitute an offer to sell or the solicitation of an offer to buy shares of the Company’s
securities, nor will there be any sale of the securities in any state or jurisdiction in which such offer, solicitation
or sale would be unlawful. Shareholders are advised to refer to the registration statement filed with the SEC and
the prospectus supplement, which will be filed with the SEC, for additional information regarding the dividend.
registration statement on Form F-3, as amended (Registration No. 333-158162), which is filed with the SEC.
This report does not constitute an offer to sell or the solicitation of an offer to buy shares of the Company’s
securities, nor will there be any sale of the securities in any state or jurisdiction in which such offer, solicitation
or sale would be unlawful. Shareholders are advised to refer to the registration statement filed with the SEC and
the prospectus supplement, which will be filed with the SEC, for additional information regarding the dividend.
3
2Q 2009 Highlights
§ Declared a quarterly dividend of $0.30 dividend per share
• 10% dividend yield(1)
• 22 consecutive quarters with dividend payments
§ $53.5m ($0.72/share) net income
• Including gain on repurchase of bonds and
non-cash asset impairment
§ $8.0m ($0.11/share) profit share accumulated in 2Q 2009
• $22.5m accumulated in the first half of 2009
• $21.3m average profit share per quarter since
2004
• Full-year 2009 profit share payable in March
2010
(1) Announced quarterly cash dividend, annualized / SFL share price $12.15 (August 19, 2009)
4
2Q 2009 Highlights
§ Bought back one third of remaining 8.5% Senior Notes
• Bonds with face value of $148m was repurchased
at a 15.5% discount
• Previously held by banks under TRS agreements
with SFL
• Recognized a non-recurring gain of $41.7m
• Part-financed with $90m bank loans and
$16.5m sale of equity
§ Non-cash $33.9m asset impairment
• $26.8m linked to six single-hull tankers
• $7.1m relating to a financial investment
in a container vessel owner/operator
§ Jack-up rig West Ceres sold for $135m
• Seadrill exercised a pre-agreed fixed
price purchase option
• Delivered to new owner in July 2009
• Net cash proceeds to Ship Finance after
bank debt repayment was $40m
§ Sale of single hull VLCC Front Duchess
• Delivery to new owner expected in September
2009
• Only five single hull vessels remaining
on charter to Frontline
• Net cash proceeds to Ship Finance after
charter termination fee and bank debt
repayment is estimated to be $2.5m
repayment is estimated to be $2.5m
Dividend payment options
§ Dividends for 2Q 2009 to be paid in cash, or at the
shareholder’s election, in stock
shareholder’s election, in stock
§ The stock dividend alternative
• To be offered pursuant to a prospectus supplement
to be filed with
the SEC
the SEC
• Stock dividend to be based on market price
prior to ex-dividend date,
less a 5% discount
less a 5% discount
§ Our largest shareholders will take stock
• Farahead Investments Inc. and Hemen Holding
Ltd. (42.1% of
outstanding common shares)
outstanding common shares)
§ 52% of our shareholders elected to receive the 1Q-2009
dividend in shares
dividend in shares
• 1.0m new shares issued in July 2009
5
ATM equity program
§ Utilized a part of the ‘At the market’ (ATM) equity program
in 2Q 2009
in 2Q 2009
• Approximately 1.4m shares issued and sold
in the open market
• Weighted average price of $12.24 per share
• Approximately $16.5m in net proceeds, used
to part-finance the
repurchase of 8.5% Senior Notes
repurchase of 8.5% Senior Notes
§ The Company has decided to discontinue the ATM program
• Utilized less than 20% of the 7 million shares
originally registered
§ Total outstanding number of shares: 77.3m
• Including 1.0m new shares issued subsequent
to quarter-end in
connection with the 1Q 2009 dividend
connection with the 1Q 2009 dividend
6
7
Substantial charter backlog
§ Nominal values(1) as
per June 30, 2009
§ Excluding any profit sharing
§ Virtually no exposure to escalating operating expenses
$7.4 bn ($95.6/share)
Total charter payments
$6.4 bn ($83.4/share)
Net cash flow from
charters(2)
charters(2)
13.1 years
Average term of charters(3)
(1) Assuming certain call options are not exercised and excluding assets subsequently sold.
(2) Cash flow net of vessel operating expenses.
(3) Weighted by charter revenue.
8
SFL operational performance
§ Pro-forma illustration of cash flow (1)
• Not as accounted for under US GAAP
• Used as an internal guideline to assess the
Company’s performance
• Excluding extraordinary and non-cash items
(1) Including cash flow from three 100% owned subsidiaries accounted for as ‘investment in associate’
(2) Per share numbers are based on the weighted average outstanding numbers of shares in the respective quarter
(3) On this slide ‘EBITDA’ is defined as gross charter hire received less Vessel operation expenses and General & Administrative expenses
|
|
2Q 2009 |
|
1Q 2009 |
|
Change | ||
|
|
$ mill. |
$/share(2 ) |
|
$ mill. |
$/share( 2) |
|
per share |
|
Fixed charter hire |
|
|
|
|
|
|
|
|
VLCC |
63.1 |
0.84 |
|
64.0 |
0.88 |
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|
|
Suezmax |
11.2 |
0.15 |
|
11.2 |
0.15 |
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|
|
Chemical Tankers |
1.5 |
0.02 |
|
1.4 |
0.02 |
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|
|
Container |
11.2 |
0.15 |
|
12.0 |
0.16 |
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|
|
Dry bulk incl. OBOs |
15.6 |
0.21 |
|
15.5 |
0.21 |
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|
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Offshore |
113.4 |
1.52 |
|
104.0 |
1.43 |
|
|
|
Sum fixed charter hire |
216.0 |
2.88 |
|
208.1 |
2.86 |
|
0.9% |
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|
|
|
|
|
|
|
|
|
Vessel operation expenses and G&A |
(25.6) |
(0.34) |
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(26.6) |
(0.37) |
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|
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|
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|
|
|
|
|
EBITDA(3) excluding profit share |
190.4 |
2.54 |
|
181.4 |
2.49 |
|
2.0% |
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|
|
|
|
|
|
|
|
Accumulated profit share |
8.0 |
0.11 |
|
14.5 |
0.20 |
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|
|
|
|
|
|
|
|
|
|
EBITDA including accumulated profit share |
198.4 |
2.65 |
|
195.9 |
2.69 |
|
(1.6)% |
9
2Q-09 contribution from projects(1)
§ Large performing fleet and significant cash-flow in 2Q 2009
• $2.65/share EBITDA-equivalent
• $0.60/share net cash-flow from projects after interest
and debt amortization
§ Full cash flow effect on all operational units throughout 2Q 2009
(1) Not as accounted per US GAAP - used as an internal guideline to assess the Company’s core business.
(2) Ordinary installments relating to the Company’s projects.
(2)
10
Profit & Loss
Part of charter hire from
assets classified as finance
leases. Not included in ’total
operating revenues’, but
included in the cash flow
statement
assets classified as finance
leases. Not included in ’total
operating revenues’, but
included in the cash flow
statement
Net income from subsidiaries
accounted for as ’investment
in associate’
accounted for as ’investment
in associate’
Mainly derived from
settlement of bond TRS
agreements and the
repurchase of bonds
settlement of bond TRS
agreements and the
repurchase of bonds
(1) Three of our 100% owned subsidiaries, owning four of our units are accounted for as ‘Investment in associate’, and only
the net income from these subsidiaries is therefore included in our consolidated Income Statement.
the net income from these subsidiaries is therefore included in our consolidated Income Statement.
11
Balance Sheet
‘Stockholder’s equity’ in
subsidiaries accounted for as
’investment in associate’(3)
subsidiaries accounted for as
’investment in associate’(3)
(1) Three of our 100% owned subsidiaries, owning four of our units, are accounted for as ‘Investment in associate’.
(2) As of June 30, 2009 ‘Stockholders’ equity’ excludes $207.1 million of deferred equity which is being recognized over time.
(3) Plus current items arising from day-to-day operations between SFL and the subsidiaries.
12
Cash flow Statement
Net cash flow to/from our
subsidiaries accounted for as
‘Investment in associate’
subsidiaries accounted for as
‘Investment in associate’
Part of charter hire from
assets classified as finance
leases.
assets classified as finance
leases.
§ Selected 2Q 2009 income statement figures
§ Selected 2Q 2009 balance sheet figures
Investment in associates
13
Part of charter hire from
assets classified as finance
leases. Not included in ’total
operating revenues’, but
included in the cash flow
statement
assets classified as finance
leases. Not included in ’total
operating revenues’, but
included in the cash flow
statement
‘Stockholder’s equity’
included in the Company’s
balance sheet under
’investment in associate’
included in the Company’s
balance sheet under
’investment in associate’
’Net income’ included in the
Company’s P&L under ’Results
in Associate’
Company’s P&L under ’Results
in Associate’
§ Financing
• $2.4bn consolidated interest bearing debt,
including bond loan
• $2.0bn of bank loans in subsidiaries accounted
for as ‘Investment in
associate’
associate’
• No refinancing needs in the near term and
compliance with all bank
covenants
covenants
§ Limited capex commitments
• Five newbuilding container vessels (2010-2012)
• Two Suezmax vessels (4Q09/2Q10), which have
been agreed sold
§ $61.6m in available cash per June 30, 2009
14
|
|
2H 2009 |
2010 |
2011 |
2012 |
Total |
|
Scheduled investments |
$68m |
$101m |
$42m |
$35m |
$246m |
|
Contracted sale of vessels |
-$109m |
-$109m |
- |
- |
-$217m |
|
Net investments |
-$41m |
-$8m |
$42m |
$35m |
$29m |
Financing and Capital
Expenditure
Expenditure
15
Contracted cash flow (EBITDA)(1)
excluding profit share
excluding profit share
$ in millions
(1) As of June 30, 2009 assuming certain call options are not exercised.
(2) 1H 2009 actual numbers including accumulated profit share and 2H 2009 projected numbers
• Seadrill charters:
• 100% Seadrill Ltd. guarantee
• All ultra-deepwater units are sub-
chartered to major oil companies
chartered to major oil companies
• Frontloaded charter rate and loan
repayment
repayment
• Frontline charters:
• Conservative base-rates
• 20% profit split has generated on
average approx $85m incremental
cash flow per year
average approx $85m incremental
cash flow per year
• $216m charter reserve as security for
charter payments
charter payments
(2)
§ Capturing incremental cash flow in strong markets
• 20 % profit share of tankers/OBO earnings
in excess of base charter rates
• Spot tanker market exposure represents upside
for SFL shareholders
16
22 quarters of profit share
(1) The profit share is paid on an annual basis. Pro-forma accumulated profit share per quarter based on management estimate. Based
on US GAAP, the recognized amounts in the quarterly P&L statement may differ from the pro-forma management estimate.
on US GAAP, the recognized amounts in the quarterly P&L statement may differ from the pro-forma management estimate.
(2) Adjusted 1 month to compensate for estimated time between fixing and loading.
17
Summary
§ $53.5m ($0.72/share) net income
• $8.0m ($0.11/share) profit share accumulated
in 2Q 2009
§ Quarterly cash dividend of $0.30/share
• 10% dividend yield(1)
• Dividend may be paid in stock at the shareholder’s
election
§ No refinancing needs in the near term and compliance with
all bank covenants
all bank covenants
§ Charter backlog supports long-term dividend capacity
• $7.4bn ($95.6/share) fixed-rate charter backlog
• 13.1 year weighted average term of charters
(1) Announced quarterly cash dividend, annualized / SFL share price $12.15 (August 19, 2009)
Q&A