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 August 2015

Commission File Number:  001-16601

FRONTLINE LTD.
(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 hereto as Exhibit 99.1 is a copy of the press release of Frontline Ltd. (the "Company"), dated August 26, 2015, announcing the Company's second quarter and six months 2015 results.







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.


 
 
FRONTLINE LTD.
(registrant)
 
 
 
Dated: August 27, 2015
 
By:
 /s/ Inger M. Klemp
 
 
 
Name: Inger M. Klemp
 
 
 
Title: Principal Financial Officer
 
 
 
 
 
 



 
Exhibit 99.1
FRONTLINE LTD.
SECOND QUARTER AND SIX MONTHS 2015 RESULTS

Highlights

· Frontline reports net income attributable to the Company of $17.4 million for the second quarter of 2015, equivalent to earnings per share of $0.11.
· Frontline reports net income attributable to the Company of $48.5 million for the six months ended June 30, 2015, equivalent to earnings per share of $0.35. 
· The Company issued 18.8 million new shares in the second quarter under its ATM program and this program is fully utilized.
· In April 2015, the remaining outstanding balance on the convertible bond of $93.4 million was repaid in full upon maturity.
· In June 2015, the Company agreed with Ship Finance to amend the long term charter parties relating to 17 vessels such that the fixed charter payments to Ship Finance are expected to decrease by approximately $283 million.
· In July 2015, the Company and Frontline 2012 entered into an agreement and plan of merger.
Second Quarter and Six Months 2015 Results
The Board of Frontline Ltd. (the "Company" or "Frontline") announces net income attributable to the Company of $17.4 million in the second quarter, equivalent to earnings per share of $0.11, compared with net income of $31.1 million for the previous quarter, equivalent to earnings per share of $0.25.
The average daily time charter equivalents ("TCEs") earned in the spot and period market in the second quarter by the Company's VLCCs and Suezmax tankers were $50,600 and $33,800 compared with $49,400 and $33,100 in the previous quarter. The spot earnings for the Company's VLCCs and Suezmax vessels were $53,600 and $38,000 compared with $52,200 and $35,000 in the preceding quarter.

Operating expenses in the second quarter were $5.0 million higher than the previous quarter. An increase in dry docking costs accounted for $5.9 million in the quarter, as four vessels were dry docked in the second quarter compared with no vessels in the previous quarter.

Contingent rental expense represents amounts accrued following changes to certain charter parties in December 2011 and was in line with the first quarter.

Frontline announces a net income attributable to the Company of $48.5 million for the six months ended June 30, 2015, equivalent to earnings per share of $0.35. The average daily TCEs earned in the spot and period market in the six months ended June 30, 2015 by the Company's VLCCs and Suezmax tankers were $50,000 and $33,400, respectively, compared with $23,400 and $19,800, respectively, in the six months ended June 30, 2014. The spot earnings for the Company's VLCCs and Suezmax vessels were $52,800 and $36,400, respectively, in the six months ended June 30, 2015 compared with $22,600 and $19,800, respectively, in the six months ended June 30, 2014.

In August 2015, the Company estimates average daily total cash cost breakeven rates for the remainder of 2015 on a TCE basis for its VLCCs and Suezmax tankers of approximately $24,500 and $21,000 respectively.


Fleet Development

In August 2015, the Company agreed with Ship Finance to terminate the long term charter for the 1995 built Suezmax tanker Front Glory. Ship Finance has simultaneously sold the vessel to an unrelated third party. The charter with Ship Finance is expected to terminate during the third quarter of 2015. The Company will receive a compensation payment of approximately $2.2 million from Ship Finance. The number of vessels on charter from Ship Finance will then be reduced to 16 vessels, including 12 VLCCs and four Suezmax tankers.


Corporate

In February 2015, the Company bought $33.3 million notional principal of its 4.50% Convertible Bond Issue 2010/2015 at a purchase price of 99% and recorded a gain of $0.3 million in the first quarter of 2015.

In April 2015, Frontline issued 12,900,323 new shares under the ATM program and in May 2015, Frontline issued 5,941,251 new shares under the ATM program and the existing ATM program is fully utilized.

In April 2015, the remaining outstanding balance on the convertible bond of $93.4 million was repaid in full upon maturity.

In June 2015, the Company and Ship Finance agreed to amend the terms of the long term charter agreements for 17 vessels on charter from Ship Finance with an average remaining charter period of 7.7 years. The new agreement took effect from July 1, 2015. The general terms of the agreement are the following: new time charter rates for the VLCCs of $20,000 per day; new time charter rates for Suezmax tankers of $15,000 per day; new operating expenses for all vessels of $9,000 per day payable by Ship Finance; a new profit split of 50%/50% above the new time charter rates; and in connection with entering into the agreement the Company issued 55.0 million of its common shares to Ship Finance. The chartering counterparty will continue to be a subsidiary of the Company, and in exchange for releasing the Company from its current guarantee obligation, a cash buffer of $34.0 million ($2.0 million per vessel) will be built up in the chartering counterparty. The new profit split arrangement started accruing from July 1, 2015 and will be calculated and payable on a quarterly basis. Going forward, profit split payments will not be subject to the previous $50.0 million threshold. The shares issued to Ship Finance as a result of the new agreement represented approximately 27.7% of the Company's shares and votes. The Company has registered those common shares for resale with the Securities and Exchange Commission.

Reference is made to the announcement dated July 2, 2015, that Frontline and Frontline 2012 Ltd. ("Frontline 2012") have entered into an agreement and plan of merger (the "Merger Agreement"), pursuant to which the two companies have agreed to enter into a merger transaction, with Frontline as the surviving legal entity ("the "Surviving Company") and Frontline 2012 becoming a wholly-owned subsidiary of Frontline. Frontline has on August 24, 2015, filed a registration statement with the United States Securities and Exchange Commission ("SEC") covering the common shares to be issued by Frontline to Frontline 2012's shareholders in the merger.  The shareholders' meetings of each of Frontline and Frontline 2012 will be held after the registration statement is declared effective. The effectiveness of the registration statement is subject, among other things, to SEC review. This transaction will be accounted for as a business combination using the acquisition method of accounting under the provisions of ASC 805, with Frontline 2012 selected as the accounting acquirer under this guidance.

The Company had an issued share capital at June 30, 2015 of $198,375,854 divided into 198,375,854 ordinary shares (December 31, 2014: $112,342,989 divided into 112,342,989 ordinary shares). The weighted average number of shares outstanding for the second quarter was 153,281,991.



The Market

The average rate for a VLCC trading on a standard 'TD3' voyage between the Arabian Gulf and Japan in the second quarter of 2015 was WS 64, representing an increase of 5 WS points from the first quarter of 2015. The market rate for a Suezmax trading on a standard 'TD20' voyage between West Africa and Rotterdam in the second quarter of 2015 was WS 88, representing a decrease of 2 WS points from the first quarter of 2015. The VLCC fleet totalled 639 vessels at the end of the quarter, whilst the Suezmax fleet counted 449 vessels at the end of the quarter.

The order book for tankers represented about 16% of the overall tanker fleet.

Bunkers in Rotterdam averaged $326/mt in the second quarter of 2015 compared to $280/mt in the first quarter of 2015.


Strategy and Outlook
The Board of Directors is very pleased with the merger agreement entered into between Frontline and Frontline 2012. With a large modern fleet, a strong balance sheet and attractive cash break even rates, the combined companies should be well positioned to generate significant free cash in a strong market, and sustain a weak market.
Despite the slowdown seen in the market the last weeks, the Board of Directors hopes the combined companies will be in a position to start returning cash to shareholders as quarterly dividends as soon as the merger is completed. The intention is to pay out excess cash as dividends at the Board's discretion.
The Board believes the combined companies will be well positioned to grow through acquisition and consolidation opportunities.
 

Important Information For Investors And Shareholders

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction between Frontline and Frontline 2012, Frontline has filed relevant materials with the Securities and Exchange Commission (the "SEC"), including a registration statement of Frontline on Form F-4 (File No. 333-206542) , filed on August 24, 2015, that includes a joint proxy statement of Frontline 2012 and Frontline that also constitutes a prospectus of Frontline.  The registration statement has not yet become effective.  After the registration statement is declared effective by the SEC, a definitive joint proxy statement/prospectus will be mailed to shareholders of Frontline 2012 and Frontline. INVESTORS AND SECURITY HOLDERS OF FRONTLINE 2012 AND FRONTLINE ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Investors and security holders will be able to obtain free copies of the registration statement and the joint proxy statement/prospectus (when available) and other documents filed with or furnished to the SEC by Frontline through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with or furnished to the SEC by Frontline will be available free of charge on Frontline's website at http://www.Frontline.bm. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with or furnished to the SEC when they become available.


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 Frontline management's examination of historical operating trends. Although Frontline 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, Frontline cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.

Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in this press release include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC's petroleum production levels and world wide oil consumption and storage, changes in the Company's operating expenses including bunker prices, dry-docking and insurance costs, 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 United States Securities and Exchange Commission.


The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
August 25, 2015

Questions should be directed to:

Robert Hvide Macleod: Chief Executive Officer, Frontline Management AS
+47 23 11 40 84

Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 76


FRONTLINE LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
2014
Apr-Jun
 
2015
Apr-Jun
   
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands of $)
2015J
an-Jun
 
2014
Jan-Jun
 
2014
Jan-Dec
                     
118,972
 
134,777
   
Total operating revenues
279,154
 
288,970
 
559,688
                     
-
 
-
   
(Loss) gain on sale of assets and amortization of deferred gains
-
 
(15,727)
 
24,620
                     
72,108
 
32,487
   
Voyage expenses and commission
75,719
 
152,809
 
286,367
23,112
 
23,526
   
Ship operating expenses
42,047
 
46,164
 
89,674
118
 
18,258
   
Contingent rental expense
34,470
 
13,141
 
36,900
10,324
 
10,368
   
Administrative expenses
20,363
 
19,394
 
40,787
56,178
 
-
   
Impairment loss on vessels
-
 
56,178
 
97,709
22,680
 
17,131
   
Depreciation
34,064
 
45,526
 
81,471
184,520
 
101,770
   
Total operating expenses
206,663
 
333,212
 
632,908
(65,548)
 
33,007
   
Net operating income (loss)
72,491
 
(59,969)
 
(48,600)
11
 
14
   
Interest income
25
 
18
 
47
(21,216)
 
(12,199)
   
Interest expense
(26,882)
 
(42,781)
 
(75,825)
7,405
 
(3,477)
   
Share of results from associated companies
2,271
 
7,967
 
3,866
119
 
(8)
   
Foreign currency exchange gain (loss)
57
 
88
 
(179)
-
 
-
   
Debt conversion expense
-
 
-
 
(41,067)
-
 
-
   
Gain on bond buy back
333
 
-
 
1,486
-
 
-
   
Loss from de-consolidation of subsidiaries
-
 
-
 
(12,415)
381
 
159
   
Other non-operating items
422
 
687
 
1,486
(78,848)
 
17,496
   
Net income (loss) before tax and noncontrolling interest
48,717
 
(93,990)
 
(171,201)
(98)
 
51
   
Taxes
(2)
 
(168)
 
(459)
(78,946)
 
17,547
   
Net income (loss)
48,715
 
(94,158)
 
(171,660)
716
 
(177)
   
Net (income) loss attributable to noncontrolling interest
(221)
 
3,843
 
8,722
(78,230)
 
17,370
   
Net income (loss) attributable to Frontline Ltd.
48,494
 
(90,315)
 
(162,938)
                     
$(0.81)
 
$0.11
   
Basic earnings (loss) per share attributable to Frontline Ltd.
$0.35
 
$(0.95)
 
$(1.63)
                     
         
Income on time charter basis ($ per day)*
         
13,900
 
50,600
   
VLCC
50,000
 
23,400
 
24,800
12,400
 
33,800
   
Suezmax
33,400
 
19,800
 
21,100
         
*Basis = Calendar days minus off-hire. Figures after deduction of broker commission.
         
                     
2014
Apr-Jun
 
2015
Apr-Jun
   
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(in thousands of $)
2015
Jan-Jun
 
2014
Jan-Jun
 
2014
Jan-Dec
(78,946)
 
17,547
   
Net income (loss)
48,715
 
(94,158)
 
(171,660)
598
 
(357)
   
Unrealized (loss) gain from marketable securities
(421)
 
867
 
(980)
(131)
 
(10)
   
Foreign currency translation (loss) gain
(70)
 
(106)
 
25
467
 
(367)
   
Other comprehensive (loss) gain
(491)
 
761
 
(955)
(78,479)
 
17,180
   
Comprehensive income (loss)
48,224
 
(93,397)
 
(172,615)
(716)
 
177
   
Comprehensive income (loss) attributable to noncontrolling interest
221
 
(3,843)
 
(8,722)
(77,763)
 
17,003
   
Comprehensive income (loss) attributable to Frontline Ltd.
48,003
 
(89,554)
 
(163,893)
(78,479)
 
17,180
     
48,224
 
(93,397)
 
(172,615)
 

 
See accompanying notes that are an integral part of these condensed consolidated financial statements.


 
FRONTLINE LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of $)
2015
Jun 30
 
2014
Jun 30
 
2014
Dec 31
 
ASSETS
           
Short term
           
Cash and cash equivalents
78,159
 
62,436
 
64,080
 
Restricted cash
411
 
36,651
 
42,074
 
Other current assets
145,995
 
140,952
 
127,089
 
Long term
           
Newbuildings
-
 
14,860
 
15,469
 
Vessels and equipment, net
111,382
 
272,179
 
56,624
 
Vessels under capital lease, net
450,952
 
611,638
 
550,345
 
Investment in finance lease
44,077
 
47,381
 
45,790
 
Investment in unconsolidated subsidiaries and associated companies
41,168
 
65,279
 
60,000
 
Other long-term assets
442
 
426
 
708
 
Total assets
872,586
 
1,251,802
 
962,179
 
             
LIABILITIES AND EQUITY
           
Short term liabilities
           
Short term debt and current portion of long term debt
4,006
 
208,924
 
165,357
 
Current portion of obligations under capital lease
79,588
 
48,237
 
78,989
 
Other current liabilities
88,766
 
65,979
 
84,242
 
Long term liabilities
           
Long term debt
157,597
 
269,308
 
137,452
 
Obligations under capital lease
324,994
 
717,892
 
564,692
 
Other long term liabilities
2,042
 
3,250
 
2,096
 
Equity
           
Frontline Ltd. equity (deficit)
215,190
 
(66,846)
 
(70,981)
 
Noncontrolling interest
403
 
5,058
 
332
 
Total equity (deficit)
215,593
 
(61,788)
 
(70,649)
 
Total liabilities and equity
872,586
 
1,251,802
 
962,179
 

See accompanying notes that are an integral part of these condensed consolidated financial statements.






 
FRONTLINE LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2014
Apr-Jun
 
2015
Apr-Jun
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of $)
2015
Jan-Jun
 
2014
Jan-Jun
 
2014
Jan-Dec
 
       
OPERATING ACTIVITIES
           
(78,946)
 
17,547
 
Net income (loss)
48,715
 
(94,158)
 
(171,660)
 
       
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
           
23,357
 
17,201
 
Depreciation and amortization
34,318
 
46,901
 
83,727
 
(128)
 
(34)
 
Unrealized foreign currency exchange loss (gain)
78
 
(119)
 
113
 
-
 
-
 
Loss (gain) on sale of assets and amortization of deferred gains
-
 
15,727
 
(24,620)
 
(363)
 
-
 
Contingent rental income (expense)
6,267
 
(363)
 
4,237
 
(7,405)
 
3,477
 
Equity earnings of associated companies
(2,271)
 
(7,967)
 
(3,866)
 
56,178
 
-
 
Impairment losses
-
 
56,178
 
97,709
 
-
 
-
 
Loss from de-consolidation of subsidiaries
-
 
-
 
12,415
 
-
 
-
 
Debt conversion expense
-
 
-
 
41,067
 
134
 
(20)
 
Provision for doubtful debts
486
 
242
 
68
 
-
 
-
 
Gain on bond buy back
(333)
 
-
 
(1,486)
 
(321)
 
(121)
 
Other, net
(438)
 
(726)
 
(1,375)
 
7,065
 
7,648
 
Change in operating assets and liabilities
1,848
 
5,008
 
17,065
 
(429)
 
45,698
 
Net cash provided by operating activities
88,670
 
20,723
 
53,394
 
                     
       
INVESTING ACTIVITIES
           
38,217
 
(48)
 
Change in restricted cash
41,663
 
31,712
 
8,396
 
(42,324)
 
(7)
 
Additions to newbuildings, vessels and equipment
(41,288)
 
(42,865)
 
(44,990)
 
622
 
739
 
Finance lease payments received
1,438
 
1,213
 
2,555
 
-
 
-
 
Impact of reconsolidation of subsidiaries
-
 
-
 
638
 
-
 
-
 
Net proceeds from sale of vessels and equipment and shares in subsidiary
-
 
27,164
 
53,136
 
673
 
-
 
Net investment in associated companies
-
 
1,346
 
2,019
 
(2,812)
 
684
 
Net cash provided by (used in) investing activities
1,813
 
18,570
 
21,754
 
                     
       
FINANCING ACTIVITIES
           
7,096
 
48,970
 
Net proceeds from issuance of shares
88,018
 
47,653
 
52,934
 
-
 
-
 
Proceeds from long-term debt, net of fees paid
30,023
 
-
 
29,372
 
(39,720)
 
(94,401)
 
Repayment of long-term debt
(164,523)
 
(51,905)
 
(90,612)
 
(11,295)
 
(10,803)
 
Repayment of capital leases
(27,892)
 
(22,856)
 
(39,918)
 
-
 
-
 
Lease termination payments
-
 
-
 
(10,500)
 
-
 
(150)
 
Dividends paid
(150)
 
-
 
-
 
(1,633)
 
-
 
Payment of related party loan note
(1,880)
 
(3,508)
 
(6,103)
 
(45,522)
 
(56,384)
 
Net cash used in financing activities
(76,404)
 
(30,616)
 
(64,827)
 
                     
(48,793)
 
(10,002)
 
Net change in cash and cash equivalents
14,079
 
8,677
 
10,321
 
111,229
 
88,161
 
Cash and cash equivalents at start of period
64,080
 
53,759
 
53,759
 
62,436
 
78,159
 
Cash and cash equivalents at end of period
78,159
 
62,436
 
64,080
 
 
 
See accompanying notes that are an integral part of these condensed consolidated financial statements.



FRONTLINE LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of $ except number of shares)
2015
Jan-Jun
 
2014
Jan-Jun
 
2014J
an-Dec
 
             
NUMBER OF SHARES OUTSTANDING
           
Balance at beginning of period
112,342,989
 
86,511,713
 
86,511,713
 
Shares issued
86,032,865
 
11,694,574
 
25,831,276
 
Balance at beginning and end of period
198,375,854
 
98,206,287
 
112,342,989
 
             
SHARE CAPITAL
           
Balance at beginning of period
112,343
 
86,512
 
86,512
 
Shares issued
86,033
 
11,694
 
25,831
 
Balance at end of period
198,376
 
98,206
 
112,343
 
             
ADDITIONAL PAID IN CAPITAL
           
Balance at beginning of period
244,018
 
149,985
 
149,985
 
Stock option expense
-
 
37
 
37
 
Shares issued
152,135
 
37,929
 
40,091
 
Debt-for-equity exchange
-
 
-
 
54,008
 
Loss on sale of subsidiary
-
 
-
 
(103)
 
Balance at end of period
396,153
 
187,951
 
244,018
 
             
CONTRIBUTED SURPLUS
           
Balance at beginning and end of period
474,129
 
474,129
 
474,129
 
             
ACCUMULATED OTHER COMPREHENSIVE LOSS
           
Balance at beginning of period
(4,258)
 
(3,303)
 
(3,303)
 
Other comprehensive (loss) income
(491)
 
761
 
(955)
 
Balance at end of period
(4,749)
 
(2,542)
 
(4,258)
 
             
RETAINED DEFICIT
           
Balance at beginning of period
(897,213)
 
(734,275)
 
(734,275)
 
Net income (loss)
48,494
 
(90,315)
 
(162,938)
 
Balance at end of period
(848,719)
 
(824,590)
 
(897,213)
 
             
FRONTLINE LTD. EQUITY (DEFICIT)
215,190
 
(66,846)
 
(70,981)
 
             
NONCONTROLLING INTEREST
           
Balance at beginning of period
332
 
8,901
 
8,901
 
Impact of sale of shares in subsidiary
-
 
-
 
153
 
Dividend paid
(150)
 
-
 
-
 
Net income (loss)
221
 
(3,843)
 
(8,722)
 
Balance at end of period
403
 
5,058
 
332
 
             
TOTAL EQUITY (DEFICIT)
215,593
 
(61,788)
 
(70,649)
 


See accompanying notes that are an integral part of these condensed consolidated financial statements.


FRONTLINE LTD.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

1.   GENERAL

Frontline Ltd. (the "Company" or "Frontline") is a Bermuda based shipping company engaged primarily in the ownership and operation of oil tankers. The Company's ordinary shares are listed on the New York Stock Exchange, the Oslo Stock Exchange and the London Stock Exchange.
 
2.   ACCOUNTING POLICIES

Basis of accounting
The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The condensed consolidated financial statements do not include all of the disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Company's annual financial statements as at December 31, 2014.

Significant accounting policies
The accounting policies adopted in the preparation of the condensed consolidated financial statements are consistent with those followed in the preparation of the Company's annual consolidated financial statements for the year ended December 31, 2014.

3.    NEWBUILDINGS

The Company took delivery of Front Idun in January 2015 and drew down the remaining $30.0 million balance on its $60.0 million term loan facility in order to part finance this vessel. The Company had no newbuildings under construction as of June 30, 2015.

4.    DEBT

In February 2015, the Company bought $33.3 million notional principal of its 4.50% Convertible Bond Issue 2010/2015 at a purchase price of 99% and recorded a gain of $0.3 million in the first quarter of 2015.

In April 2015, the remaining outstanding balance on the convertible bond of $93.4 million was repaid in full upon maturity.

5.    SHARE CAPITAL

The Company issued 12,191,291 new ordinary shares under the ATM program during the first quarter. In April 2015, the Company issued 12,900,323 new shares under the ATM program and in May 2015, the Company issued 5,941,251 new shares under the ATM program and the existing ATM program is fully utilized.

In June 2015, the Company issued 55.0 new million shares to Ship Finance in connection with the agreement to amend the terms of the current charter parties with Ship Finance.

The Company had an issued share capital at June 30, 2015 of $198,375,854 divided into 198,375,854 ordinary shares (December 31, 2014: $112,342,989 divided into 112,342,989 ordinary shares).

6.    RELATED PARTY TRANSACTIONS

The Company's most significant related party transactions are with Ship Finance International Limited ("Ship Finance"), a company under the significant influence of our principal shareholder, as the Company leases the majority of its vessels from Ship Finance and pays Ship Finance contingent rental expense and profit share based on the earnings of these vessels.

In June 2015, the Company and Ship Finance agreed to amend the terms of the long term charter agreements for 17 vessels on charter from Ship Finance with an average remaining charter period of 7.7 years. The new agreement took effect from July 1, 2015. The general terms of the agreement are the following: new time charter rates for the VLCCs of $20,000 per day; new time charter rates for Suezmax tankers of $15,000 per day; new operating expenses for all vessels of $9,000 per day payable by Ship Finance; a new profit split of 50%/50% above the new time charter rates; and in connection with entering into the agreement the Company issued 55.0 million of its common shares to Ship Finance. The chartering counterparty will continue to be a subsidiary of the Company, and in exchange for releasing the Company from its current guarantee obligation, a cash buffer of $34.0 million ($2.0 million per vessel) will be built up in the chartering counterparty. The new profit split arrangement started accruing from July 1, 2015 and will be calculated and payable on a quarterly basis. Going forward, profit split payments will not be subject to the previous $50.0 million threshold. The shares issued to Ship Finance as a result of the new agreement represented approximately 27.7% of the Company's shares and votes. The Company has registered those common shares for resale with the Securities and Exchange Commission.

Amounts earned from other related parties comprise office rental income, technical and commercial management fees, newbuilding supervision fees, freights, corporate and administrative services income and interest income. Amounts paid to related parties comprise primarily rental for office space and guarantee fees.
 
 

 
7.   COMMITMENTS AND CONTINGENCIES
 
As of June 30, 2014, the Company had no newbuilding contracts and had no outstanding newbuilding installments.

8.    SUBSEQUENT EVENTS

Reference is made to the announcement dated July 2, 2015, that Frontline and Frontline 2012 Ltd. ("Frontline 2012") have entered into an agreement and plan of merger (the "Merger Agreement"), pursuant to which the two companies have agreed to enter into a merger transaction, with Frontline as the surviving legal entity ("the "Surviving Company") and Frontline 2012 becoming a wholly-owned subsidiary of Frontline. Frontline has on August 24, 2015, filed a registration statement with the United States Securities and Exchange Commission ("SEC") covering the common shares to be issued by Frontline to Frontline 2012's shareholders in the merger.  The shareholders' meetings of each of Frontline and Frontline 2012 are scheduled to be held after the registration statement is declared effective. The effectiveness of the registration statement is subject, among other things, to SEC review. This transaction will be accounted for as a business combination using the acquisition method of accounting under the provisions of ASC 805, with Frontline 2012 selected as the accounting acquirer under this guidance.

In August 2015, the Company agreed with Ship Finance to terminate the long term charter for the 1995 built Suezmax tanker Front Glory. Ship Finance has simultaneously sold the vessel to an unrelated third party. The charter with Ship Finance is expected to terminate at the end of the third quarter of 2015. The Company will receive a compensation payment of approximately $2.2 million from Ship Finance for the termination of the current charter. Following this termination, the number of vessels on charter from Ship Finance will be reduced to 16 vessels, including 12 VLCCs and four Suezmax tankers.


FRONTLINE LTD.
INTERIM REPORT JANUARY – JUNE 2015


Responsibility Statement

We confirm, to the best of our knowledge, that the condensed consolidated financial statements for the period January 1 to June 30, 2015 have been prepared in accordance with U.S generally accepted accounting principles, and give a true and fair view of the Company's assets, liabilities, financial position and profit or loss as a whole. We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties transactions.


The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
August 25, 2015