Good day. And welcome to the Q2 2014 Ship Finance International Limited Earnings Conference Call. Today's conference is being recorded. At this time I would like to turn the conference over to Ole B. Hjertaker. Please go ahead, sir.

Thank you. And welcome everyone, to Ship Finance International and our second quarter conference call. With me here today, I also have our CFO, Harald Gurvin. Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates or similar expressions are intended to identify these forward-looking statements. These statements are based on our current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include conditions in the shipping, offshore and credit markets. For further information, please refer to Ship Finance's reports and filings with the Securities and Exchange Commission. The Board has declared a $0.41 dividend this quarter, in line with the previous quarter. The dividend represents $1.64 per share on an annualized basis or 8.4% dividend yield based on closing price yesterday. The Company has now paid an aggregate of nearly $18 per share since 2004. Net income for the quarter was $22 million or $0.24 per share after a $7 million negative non-cash mark-to-market on interest swaps and theoretical costs relating to a convertible note. Aggregate charter revenues recorded in the quarter, including 100% owned subsidiaries accounted for as investment in associates was nearly $160 million in the quarter. The tanker market remained at soft levels during the second quarter, but despite this there was a positive cash fleet contribution of $1.8 million on the Frontline vessels and year-to-date the accumulated cash fee per month [ph] its $13.5 million on this vessels. We also have exposure to the crude oil tanker market…

Thank you, Ole. On this slide, we have shown our pro forma illustration of cash flows for the second quarter compared to the first quarter. Please note that this is only a guideline to assess the Company's performance and is not is in accordance with U.S. GAAP. For the second quarter, total charter revenues before profits hit cash sweep were $155 million or $1.66 per share, up from $147.9 million in the previous quarter. Revenues from VLCCs are in line with the previous quarter while revenues from Suezmaxes were down in the quarter due to lower earnings on the two Suezmaxes trading in the spot market. Revenues from liners which include container vessels and car carriers were down in the quarter following CMA CGM’s exercise of purchase options for the two 13,800 TEU container vessels in the first quarter, slightly offset by the delivery of the nine container vessels on charter to MSCs during the first and second quarter. The increase in offshore revenues is due to West Linus, which was delivered in February, earning full day rate following commencement of the sub-charter to ConocoPhillips in end of May, which will have a full effect in the third quarter. Vessel operating expenses and G&A were $30.7 million, compared to $34 million in the previous quarter, mainly due to the exercise options on the two CMA CGM vessels. We recorded a cash sweep of $1.8 million from Frontline in the first quarter, down from $11.7 million in the first quarter and also a profit share of approximately $300,000 relating to the four Handysize drybulk carriers down from approximately $500,000 in the previous quarter. Income from financials investments were $2.5 million in the second quarter, slightly down from the previous quarter. So overall, this summarizes to an EBITDA of $108.9 million for…

Thank you. (Operator Instructions) We’ll now take our first question from Herman Hildan from RS Platou. Please go ahead.

Just a quick question. You highlight that your cash flows will ramp up going forward and also your strong liquidity positions looks debate [ph] in terms of the dividends. What should we expect going forward also in terms of investments and timing for that?

The board never gives specific guiding on dividends going forward but of course as we have reinvested a lot of capital and still have good investment capacity, we still believe there is room before to build the dividends, but we unfortunately cannot give you specific guidance quarter-by-quarter. But I think we have demonstrated over the last few years now that we have built the dividends stone-by-stone and we have an aim to both reinvest funds coming out of assets like the Frontline vessels where we get the lot of cash out and will then reinvest that in new projects and other financings that we have arranged that also have freed up quite a bit of liquidity for us. And as Harald Gurvin mentioned, also when we take delivery of the 9,000 TEU new buildings that -- we expect that to be a -- call it cash positive event as we have paid in more to the yard during construction, so we can draw more loans at delivery than the last installment. And that has opportunities in several sectors but of cannot be specific until we have something tangible to report to the market but I would say, for sectors I would highlight both the container space and also the offshore space as sectors where we have seen several opportunities. But that said we also look at the deals both on the tanker and bulker side and the latest deal we did was the two Kamsarmax bulkers that we just took delivery off.

[Indiscernible] mentioned the true focus [ph] on the product and crude back there portfolio at the moment. What kind of opportunities do you see there?

Well, it’s been a very interesting market development in that segment. We’ve seen significant ordering of vessels particularly last year. There could be restructures or opportunities coming out of that where call it the market participants who may wish to optimize the cost of capital, could work with us to define the interesting so call it sale leaseback transactions. If you look at what we do, we basic -- you can say that we have two call it main products in our portfolio. One is a cost of capital arbitrage where we believe that we can source capital more efficient and at lower cost than most other players in the market and therefore, we can offer very attractive terms and still make a good profit on doing deals with other players in the market. And then on the other hand we’re also able to position ourselves in market segments like we did last year on the order for containership new buildings, then turning around and chartering them up long term. So we believe [indiscernible] of those two that we can find good opportunities. But generally I would say that both on the tanker side and the bulker side, a lot of the market focus there has been ordering vessels to be employed in the spot market. Our preference is of course when we can find long term employment, which will give us more visibility on distributable cash flow going forward. So with that, of course, so we have to be careful with and with who we work with to generate that kind of visibility.

I guess you’ve also seen recently the long term charter markets in particular for tankers [ph] have been moving up. And I mean what else referring on there, particularly relevant situation at the moment, how do you feel like you're negotiating the build design in terms of finding new solutions in your current portfolio? Do you expect that -- do you see that -- do you feel like you have a good position due to the charter market picking up or how do think about that?

Absolutely, I think they call it the short term charter market. It doesn’t necessarily have a direct impact on the longer term charters rates but I think generally we see quite a few opportunities but we try to be quite selective. When we do a deal, typically you have several factors that have an implication on the deal. One is who the counterpart is, how comfortable we are with their ability to call it to service the contract also in a volatile market environment and the other is the residual value where we are particularly focused I would say, where we have seen of course with the change, we call it with the technological development, we have seen recently call it, call it equal or whatever; that will have an impact on the residual of assets. So we try to be careful. We try to be to build in relatively conservative. We see assumptions for residual value towards the end. And that of course is also question of how we finance the deals, how efficient leverage can be structured on top of the deal which drives to equity reference we can expect out of such actions.

And if you speak with your current portfolio, do you feel like, are you comfortable that, without taking into account new delivery surcharge, are you comfortable that your current portfolio will continue to support the current dividends that you’re paying? Or do you see in their term or any parts of the portfolio that you’re worried about in terms of near term ability to generate a the same amount of cash flow from the portfolio they have now?

Yes. We think the portfolio we have is quite robust. We commented briefly on Frontline and they also in their press release today, voiced some concerns about their ability to refinance the convertible loan next year. But Frontline, going from being our only client and a 100% of our backlog is now becoming our what you say relatively speaking less and less of an important factor and portfolio we do a lot of deals with other counterparts. And as I mentioned earlier, the remaining backlog with Frontline on the EBITDA basis is now actually in line with one single rig we took delivery of earlier this year. So as we continue building the portfolio, diversifying across sectors with multiple counterparts, right now I think we have 16 or 17 different chartering counterparts. I believe that itself -- the diversification, that brings support to our distribution capacity. So our board guides -- what we say, stated in the strategy and outlook section or linked to our press release, the board is quite comfortable with the portfolio and also relatively comfortable that the dividend capacity can be increased going forward but we cannot give you specific guiding on whether that is next quarter or quarter after and the specific amounts.

(Operator Instructions) We’ll now take our next question from Ariko Fukashiro [ph] from Armory Investments. Please go ahead.

Actually this is Marcello Cusack [ph]. Just quick questions trying to think about your leverage a little bit and you came to that point in the cycle that you have more ships delivered. So kind of have maximum leverage without getting most of the benefit. So if you could just help me out here, I think you have three groups of assets here are in your balance sheet that didn’t generate EBITDA yet which would be the 8,700 TEU containerships, the Kamsarmax and the MSI ships right? And if you could -- and is there something more, please let me know, and how much you already paid for those vessels and what’s the book value of those vessels so far so we can take them out from calculation?

Yes, in the press release -- let me just find that here, and we have provided our CapEx overview as of June 30 for those two investments and from that you can see that on the 8,700 TEU vessels as of June 30, we had $213 million remaining. That is of an investment in the region of $350 million in total. That’s $340 million plus of course there are cost and expenses and also some additional equipment you invest in when you build a new vessel. And that is basically in line or below what we expect to finance or what we have agreed in financing for those vessels. On the Kamsarmax bulkers, total acquisition cost there is around $62 million, of which, around $10 million was paid when we agreed the deal in the second quarter and the remaining has been paid afterwards. There we have paid -- that’s the updated [ph] cash so far but we’ve -- we are in the process of financing those vessels and based on feedback from the banks we are quite comfortable with our ability to do that. I think it also worth mentioning that we see a strengthening financing market in terms of -- when you look the terms. So we -- and we see new banks also coming in to the market. So we’re quite happy to see that their margins are coming down, which means more money of course for us and our shareholders.

Okay, and the MSC vessels, that’s also already joined into that before?

The MSC vessels, they have been financed already. They have been financed very conservatively, so with a relatively small amount but they were all delivered and paid for in the second quarter.

Okay, but they haven’t generated EBITDA, [indiscernible]?

Well, yes they are generating EBITDA and three of the vessels were delivered already at the end of the first quarter. So three of the vessels had full EBITDA contribution in the second quarter while the remaining six vessels were delivering during the second quarter, so have full cash flow effect in the third.

There are no further questions in the queue at this time.

Thanks and then I would like to thank everyone for participating in our second quarter conference call. If you do have any follow up questions, there are contact details in the press release. And with that I would wish you a nice day and enjoy the upcoming Labor Day holiday.