Filed by Frontline Ltd.
Commission File No. 001-16601
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Frontline 2012 Ltd.

Commission File No. for Registration Statement
on Form F-4 filed by Frontline Ltd.: 333-206542


The following is a copy of the press release issued by Frontline Ltd. on August 26, 2015, announcing Frontline Ltd.'s second quarter and six months 2015 results.


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 $)
  
 
2015
Jan-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
  
 
 
(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
    
 
2014
Jan-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