SFL .(US:SFL)2022-08-31 16:13FORM 6-K Filing Information This section outlines SFL Corporation Ltd.'s August 2022 Form 6-K filing, detailing unaudited interim financials and F-3ASR incorporation General Information This Form 6-K report is filed by SFL Corporation Ltd. for the month of August 2022, indicating it is a foreign private issuer submitting under Form 20-F. It contains unaudited condensed interim financial statements and Management's Discussion and Analysis for the six months ended June 30, 2022 - SFL Corporation Ltd. is filing a Form 6-K as a foreign private issuer under Form 20-F for August 202212 - The report includes unaudited condensed interim financial statements and Management's Discussion and Analysis for the six months ended June 30, 20225 Incorporation by Reference This Form 6-K report is incorporated by reference into SFL Corporation Ltd.'s Registration Statements on Form F-3ASR, specifically Registration No. 333-237971 (filed May 1, 2020) and Registration No. 333-264330 (filed April 15, 2022) - The Form 6-K is incorporated by reference into the Company's Registration Statements on Form F-3ASR (Registration No. 333-237971 and 333-264330)6 Financial Statements This section presents SFL Corporation Ltd.'s unaudited condensed consolidated financial statements, including statements of operations, comprehensive income, balance sheets, cash flows, and changes in stockholders' equity for the interim period Unaudited Condensed Consolidated Statements of Operations SFL Corporation Ltd. reported significant growth in operating revenues and net income for the six months ended June 30, 2022, primarily driven by vessel acquisitions and gains from asset sales. Basic and diluted EPS also saw substantial increases year-over-year Key Operating Results (Six Months Ended June 30) | Metric | 2022 (in thousands of $) | 2021 (in thousands of $) | Change (%) | | :----------------------------------- | :----------------------- | :----------------------- | :--------- | | Total operating revenues | 305,686 | 225,890 | 35.3% | | Gain on sale of assets and termination of charters, net | 13,228 | — | N/A | | Total operating expenses | 183,280 | 140,644 | 30.3% | | Net operating income | 135,634 | 85,246 | 59.1% | | Net income | 104,429 | 51,009 | 104.7% | | Basic earnings per share | 0.82 | 0.43 | 90.7% | | Diluted earnings per share | 0.79 | 0.43 | 83.7% | - Net income more than doubled, increasing by $53.4 million, primarily due to higher operating revenues from vessel acquisitions and a $13.2 million gain on asset disposals13197 Unaudited Condensed Consolidated Statements of Comprehensive Income The company's comprehensive income significantly increased for the six months ended June 30, 2022, driven by higher net income and positive fair value adjustments to hedging financial instruments Comprehensive Income (Six Months Ended June 30) | Metric | 2022 (in thousands of $) | 2021 (in thousands of $) | Change (%) | | :------------------------------------------ | :----------------------- | :----------------------- | :--------- | | Net income | 104,429 | 51,009 | 104.7% | | Fair value adjustments to hedging financial instruments | 13,677 | 5,497 | 148.8% | | Other comprehensive income, net of tax | 13,887 | 5,227 | 165.7% | | Comprehensive income | 118,316 | 56,236 | 110.4% | Unaudited Condensed Consolidated Balance Sheets As of June 30, 2022, SFL Corporation Ltd. experienced growth in total assets and stockholders' equity, alongside a notable increase in current liabilities, primarily due to a significant rise in short-term debt Key Balance Sheet Items (As of June 30, 2022 vs. December 31, 2021) | Metric | June 30, 2022 (in thousands of $) | December 31, 2021 (in thousands of $) | Change (%) | | :------------------------------------ | :-------------------------------- | :---------------------------------- | :--------- | | Total current assets | 330,968 | 250,316 | 32.2% | | Total assets | 3,589,799 | 3,459,297 | 3.8% | | Total current liabilities | 860,188 | 400,316 | 114.9% | | Total liabilities | 2,543,245 | 2,476,970 | 2.7% | | Total stockholders' equity | 1,046,554 | 982,327 | 6.5% | - Short-term debt and current portion of long-term debt increased significantly from $302.8 million to $760.5 million, contributing to the rise in current liabilities19 Unaudited Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2022, SFL Corporation Ltd. saw increased cash flow from operations, a substantial increase in cash used for investing activities due to vessel acquisitions, and a decrease in cash provided by financing activities Cash Flow Summary (Six Months Ended June 30) | Metric | 2022 (in thousands of $) | 2021 (in thousands of $) | Change (%) | | :------------------------------------ | :----------------------- | :----------------------- | :--------- | | Net cash provided by operating activities | 166,707 | 124,956 | 33.4% | | Net cash used in investing activities | (106,008) | (23,726) | 347.6% | | Net cash provided by financing activities | 14,871 | 52,090 | -71.5% | | Net change in cash, restricted cash and cash equivalents | 75,570 | 153,320 | -50.7% | - Investing activities outflow increased significantly due to $179.2 million for vessel acquisitions and capital improvements, partially offset by $83.3 million from vessel sales22230 - Financing activities saw a decrease in cash provided, mainly due to higher cash dividends paid and lower proceeds from shares issued, partially offset by a decrease in bond repurchases22231 Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity increased for the six months ended June 30, 2022, primarily due to net income and fair value adjustments, despite dividend declarations and an accounting adjustment related to convertible notes Stockholders' Equity Changes (Six Months Ended June 30) | Metric | 2022 (in thousands of $) | 2021 (in thousands of $) | Change | | :------------------------------------ | :----------------------- | :----------------------- | :----- | | Total stockholders' equity (end of period) | 1,046,554 | 901,320 | +145,234 | | Net income | 104,429 | 51,009 | +53,420 | | Dividends declared | (53,250) | (35,713) | -17,537 | | Fair value adjustments to hedging financial instruments | 13,677 | 5,497 | +8,180 | | Impact of adoption of ASU 2020-06 | (1,578) | — | -1,578 | - The adoption of ASU 2020-06 on January 1, 2022, resulted in a cumulative effect adjustment of a $4.3 million increase to retained earnings and a $5.9 million reduction to additional paid-in capital, a net adjustment of $1.6 million to equity26124 Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements, covering accounting policies, asset sales, EPS, financial instruments, debt, equity, related party transactions, and subsequent events [Interim Financial Data](index=9&type=section&id=Note%201:%20Interim%2