Sfl Corporation Ltd · NYSE:SFL
Sfl — Ship Finance International — Debt Investor Presentation (November 2010)
26 slides from Sfl's debt investor presentation, Nov 15, 2010
Slide 1: Ship Finance International Limited $400 Million Senior Notes Offering
Ship Finance International Limited $400 MILLION SENIOR NOTES OFFERING November 2010
Slide 2: Forward Looking Statements
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 Com
Slide 3: Summary Term Sheet Senior Unsecured Notes
Summary Term Sheet Senior Unsecured Notes Issuer: Ship Finance International Limited (the “Company”). Bookrunners: Jefferies & Company and Goldman, Sachs & Co. Issue: $400 million Senior Unsecured Notes (the “Notes”). Maturity: November 2020. Placement Type: Registered. Use of Proceeds: Fund tender
Slide 4: Presenting Team
Presenting Team Ole B. Hjertaker Chief Executive Officer Magnus T. Valeberg Vice President 5
Slide 5: Company Overview
nance tional Company Overview
Slide 6: Ship Finance Overview
Ship Finance Overview TANKERS OFFSHORE DRYBULK CONTAINER 32 Vessels in service: 32 10Vessels / Rigs: 10 21Vessels in service: 10 9Vessels in service: 8 Newbuildings: 0 Newbuildings: 0 Newbuildings: 11 Newbuildings: 1 NYSE listed and mkt. cap of ~$1.7 billion(1), one of the largest market caps in the
Slide 7: The Ship Finance Strategy
The Ship Finance Strategy Increase and Diversify Our Asset Base Maintain and Expand Customer Relationships Pursue Medium to Long-Term Fixed-Rate Charters Profitably Grow and Diversify Business 8
Slide 8: Significant growth and diversification
Significant growth and diversification 2004 Fleet Current Fleet(1) % of backlog(2) % of backlog(3) Offshore Tanker& OBO 48% 100% Drybulk 10% Container 5% Tanker 37% 47 Crude oil tankers and OBOs 72 Vessels and Rigs No real market diversification Diversified into seven sectors in four major markets O
Slide 9: Substantial Charter Backlog
Substantial Charter Backlog $6.8 bn(1) ($ millions) Total charter 800 payments 700 600 $5.9 bn 500 Locked-in 400 EBITDA(2) 300 200 100 11.7 yrs(3) Average charter 0 term 2011 2012 2013 2014 Offshore Tanker Drybulk Container (1) As of September 30, 2010 assuming certain call options are not exercised
Slide 10: Diversified Portfolio of Long-Term Charters
Diversified Portfolio of Long-Term Charters Customer Market Capitalization Remaining Charter Term(1) Private 0-5 yrs < $1bn 3% 5-10 4% 9% yrs 16% $5bn $1-5bn 49% 39% 10 yrs 80% North China Shipping 11 (1) Fixed charter backlog as of September 30, 2010 assuming certain call options are not exercised.
Slide 11: Top Two Counterparties
Top Two Counterparties Frontline Ltd. Seadrill Limited $2.2 bn. Market Cap (1) $13.2 bn. Market Cap.(1) 36 vessels 4 drilling rigs • 28 VLCCs(2) and Suezmaxes • Three ultra-deepwater (“UDW”) units • 8 Ore carriers (OBOs)(3) • One modern jack-up drilling rig Long-term charters Long-term charters • Av
Slide 12: 2Q-10 Contribution from Projects
2Q-10 Contribution from Projects(1) $184.7 million EBITDA(2) EBITDA(2) / Net Interest Coverage of 4.7x $40.8 million net cash-flow from projects after interest and debt amortization $22.4m $11.4m $39.6m EBITDA $195.7m $184.7m $104.3m $40.8m (3) Fixed-rate Profit OPEX + Net Loan Net charter share G&A
Slide 13: Access to Credit Markets
Access to Credit Markets $725 million refinancing significantly oversubscribed and upsized Demonstrated access to competitive funding even in challenging financial markets Significant capital available from U.S. and European bond markets 14
Slide 14: Industry Dynamics
Ship Finance International Industry Dynamics
Slide 15: What Happened to Competition?
What Happened to Competition? World Orderbook Listed tonnage providers* ex. SFL 800M $6 bn Dwt Market cap 600M $4 bn 400M $2 bn 200M 0M $0 bn 2H 2008 2H 2009 2H 2010 1H 2008 1H 2009 1H 2010 Source: Clarkson research services Source: Bloomberg Shipping bank loans German shipping KG market $50 bn $ $1
Slide 16: Industry Dynamics
Industry Dynamics Tanker Asset Value(1) Offshore Dayrate ($ millions) $180 $600,000 $160 $500,000 $140 $120 $400,000 $100 $300,000 $80 $60 $200,000 $40 $100,000 $20 VLCC Price Drillship Dayrate $0$ 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 17: Financial Overview
Financial Overview 18
Slide 18: Recent Developments
Recent Developments $725 million facility significantly oversubscribed and upsized Financing $85 million (NOK 500 million) Senior Unsecured Bond at 5.32% 2 Supramax bulk carriers financed at 80% of the contract price Acquisition of 5 Supramax bulk carriers for $161 million with 8 to 10 year time cha
Slide 19: Historical Operating Performance
Historical Operating Performance Gross Charter Hire(1) EBITDA incl. Profit Share(2) ($ millions) ($ millions) 1,050 900 $761m $737m $868m $837m 900 $741m 750 $629m 750 600 $459m $575m 600 450 450 300 300 150 150 0 0 2007 2008 2009 LTM 2007 2008 2009 LTM EBITDA before Profit Share Profit Share Signif
Slide 20: Quarters with Profit Share
26 Quarters with Profit Share 31 vessels generating profit share • 20% profit share of tankers/OBO earnings(1) in excess of base charter rates • More than $500 million in aggregate profit share(2) from 2004 • $80 million per year on average VLCC $/day Spot Market and Profit Share Contribution 150,00
Slide 21: Well Capitalized
Well Capitalized ($ Millions) Capitalization As Further As of June 30, 2010 Actual As Adjusted(2) Adjusted(3) Cash $54.6 $109.5 $119.1 Debt Secured Bank Debt $1,655.3 $1,655.3 $1,573.3 2013 Senior Notes 298.1 296.1 -New Senior Notes — - 400.0 NOK Senior Notes — 84.6 84.6 Total Debt $ 1,953.4 $2,036.
Slide 22: Consolidated Debt Maturity Schedule
Consolidated Debt Maturity Schedule(1) ($ millions) 500 $396m $400m 400 $311m 300 $233m $220m 200 $155m $89m $81m 100 $59m $14m $15m 0 2H 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Scheduled ordinary loan amortization Amounts to be refinanced Staggered debt maturity profile Fast delevera
Slide 23: Summary
Summary ?Long-term contracted base cash flows ?High quality, diverse customer base ?Modern, diverse and valuable assets ?Track record of successful access to bank and capital markets ?Significant potential for additional cash flow through profit sharing 24
Slide 24: Appendix
Ship Finance International Appendix
Slide 25: Historical EBITDA Reconciliation
Historical EBITDA Reconciliation ($ Millions) Year Ended 12/31 6 Months Ended 6/30 LTM 6/30 2007 2008 2009 2009 2010 2010 Reconciliation of net income to EBITDA — Consolidated and EBITDA — Group Net income $167.7 $181.6 $192.6 $96.2 $100.6 $197.0 Depreciation 20.6 28.0 30.2 15.0 16.0 31.2 Interest e
Slide 26: Ship Finance International Limited
Ship Finance International Limited 27
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