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 2014

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 1 is a copy of the press release of Frontline Ltd. (the "Company"), dated August 28, 2014, containing the Company's results for the second quarter and six months ended June 30, 2014.



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 28, 2014
 
By:
 /s/ Inger M. Klemp
 
 
 
Name: Inger M. Klemp
 
 
 
Title: Principal Financial Officer
 
 
 
 
 
 



EXHIBIT 1
FRONTLINE LTD.
SECOND QUARTER AND SIX MONTHS 2014 RESULTS


Highlights
· Frontline reports a net loss attributable to the Company of $78.2 million for the second quarter of 2014, equivalent to a loss per share of $0.81. 
· Frontline reports a net loss attributable to the Company of $22.1 million for the second quarter of 2014, when excluding impairment loss of $56.2 million, equivalent to a loss per share of $0.23. 
· Frontline reports a net loss attributable to the Company of $90.3 million for the six months ended June 30, 2014, equivalent to a loss per share of $0.95. 
·
Frontline reports a net loss attributable to the Company of $18.4 million for the six months ended June 30, 2014, when excluding loss on sale of vessels and impairment loss, equivalent to a loss per share of $0.19. 
 
·
Frontline has issued 2,865,511 new shares under the ATM program in the second quarter and a further 1,140,226 new shares in July 2014.
 
·
Frontline took delivery of the Suezmax newbuilding, Front Ull, in May 2014.
 
·
Frontline entered into a $60.0 million term loan facility in June 2014 to part finance its two Suezmax newbuildings.
 
· Frontline agreed with Ship Finance in July 2014 to terminate the long term charter parties for the 1999 built VLCCs Front Opalia, Front Comanche and Front Commerce and Ship Finance simultaneously sold the vessels to unrelated third parties. The charter parties are expected to terminate in the fourth quarter of 2014.
 
Second Quarter and Six Months 2014 Results

The Board of Frontline Ltd. (the "Company" or "Frontline") announces a net loss attributable to the Company of $78.2 million in the second quarter, equivalent to a loss per share of $0.81, compared with a net loss of $12.1 million for the first quarter, equivalent to a loss per share of $0.13.

The Company has recorded a vessel impairment loss of $56.2 million in the three and six months ended June 30, 2014. This loss relates to the VLCCs Front Opalia, Front Commerce and Front Comanche.  Impairment losses are taken when events or changes in circumstances occur that cause the Company to believe that future cash flows for an individual vessel will be less than its carrying value and not fully recoverable. In such instances an impairment charge is recognized if the estimate of the undiscounted cash flows expected to result from the use of the vessel and its eventual disposition is less than the vessel's carrying amount.

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 $13,900 and $12,400, respectively, compared with $32,700 and $27,700, respectively, in the preceding quarter. The spot earnings for the Company's double hull VLCCs and Suezmax vessels were $12,500 and $12,400, respectively, compared with $32,500 and $27,700, respectively, in the preceding quarter.

Contingent rental expense represents amounts accrued following changes to certain charter parties in December 2011 and decreased in the second quarter as compared to the first quarter primarily due to a decrease in actual spot market rates.

Interest expense, net of capitalized interest, was $21.2 million in the second quarter of which $5.7 million relates to the Company's subsidiary Independent Tankers Corporation Limited ("ITCL").






Frontline announces a net loss attributable to the Company of $90.3 million for the six months ended June 30, 2014, equivalent to a loss per share of $0.95. The average daily TCEs earned in the spot and period market in the six months ended June 30, 2014 by the Company's VLCCs and Suezmax tankers were $23,400 and $19,800, respectively, compared with $14,600 and $14,100, respectively, in the six months ended June 30, 2013. The spot earnings for the Company's double hull VLCCs and Suezmax vessels were $22,600 and $19,800, respectively, in the six months ended June 30, 2014 compared with $12,900 and $14,100, respectively, in the six months ended June 30, 2013.

As of June 30, 2014, the Company had total cash and cash equivalents of $62.4 million and restricted cash of $36.7 million. Restricted cash includes $35.9 million relating to deposits in ITCL.

The Company estimates average total cash cost breakeven rates for the remainder of 2014 on a TCE basis for VLCCs and Suezmax tankers of approximately $24,000 and $17,800, respectively.

 
Fleet Development

In July 2014, several of the subsidiaries and related entities in the Windsor group (the "Windsor group"), owned by ITCL, filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court in Wilmington, Delaware. In connection with the filing, the Windsor group has entered into a restructuring support agreement with bondholders. Under the restructuring and support agreement, the supporting holders of the Notes have agreed to support a plan of reorganization that would convert claims on account of the Notes for 100% of the equity in the reorganized company. On August 25th a plan of reorganization was filed the terms of which are consistent with the Plan Support Agreement. This could ‎provide for Windsor to emerge as early as November. The Company expects to de-consolidate the Windsor group in the third quarter of 2014 as a consequence of the Chapter 11 filing and the fact the group is consolidated under the variable interest entity model. The Company also expects to record an impairment loss in the third quarter of approximately $5 million. The Company will enter into a revised management agreement with the reorganized Windsor group and will continue to provide commercial management for its vessels.

In July 2014, the Company agreed with Ship Finance to terminate the long term charter parties for the 1999 built VLCCs Front Opalia, Front Comanche and Front Commerce and Ship Finance simultaneously sold the vessels to unrelated third parties. The charter parties are expected to terminate in the fourth quarter of 2014. The decision to terminate the long term charter parties was taken in view of the required investment to take the vessels through the 15 year special survey. The Company has agreed an aggregate compensation payment to Ship Finance of approximately $58.8 million for the early termination of the charter parties, of which approximately $10.5 million will be paid upon termination and the balance will be recorded as notes payable, with similar amortization profiles to the current lease obligations, with reduced rates until December 2015 and full rates from 2016.

The Company equity accounts for three wholly-owned subsidiaries, which each own one vessel currently on bareboat charter to Chevron. In July 2014, the Company received a request from Chevron to terminate the three bareboat charters early and not April 1, 2015 as scheduled. Such early termination would also result in the full redemption of all the outstanding Term Notes. The Company is currently in discussion with Chevron on this matter.

 
Newbuilding Program

In April 2014, the Company agreed with Rongsheng shipyard to swap its two Suezmax newbuildings on order with two similar Suezmax vessels from the same shipyard at a lower contract price. Installments paid to date will be allocated to the new vessels. The first vessel, the Front Ull, was delivered on May 19, 2014 following payment of the final installment of $41.5 million and the second vessel is expected to be delivered in the fourth quarter of 2014. The Company is committed to making payments of $41.5 million as of the date of this report.


 

 

 
Corporate

The Company issued 2,865,511 new ordinary shares under its ATM program in the three months ended June 30, 2014 and had an issued share capital at June 30, 2014 of $98,206,287 divided into 98,206,287 ordinary shares (December 31, 2013: $86,511,713 divided into 86,511,713 ordinary shares). The weighted average number of shares outstanding for the quarter was 96,855,462.

In June 2014, the Company entered into a $60.0 million term loan facility to part finance its two Suezmax newbuildings. No drawdowns were made in the second quarter. We intend to draw $30.0 million in the third quarter for the vessel delivered in the second quarter and the balance when the next vessel is delivered.

 
The Market

The market rate for a VLCC trading on a standard 'TD3' voyage between the Arabian Gulf and Japan in the second quarter of 2014 was WS 38, representing a decrease of WS 13 points from the first quarter of 2014 and in line with the second quarter of 2013. The flat rate decreased by 6.7 percent from 2013 to 2014.

The market rate for a Suezmax trading on a standard 'TD5' voyage between West Africa and Philadelphia in the second quarter of 2014 was WS 63, representing a decrease of WS 16 points from the first quarter of 2014 and an increase of WS 9 points from the second quarter of 2013. The flat rate decreased by 6 percent from 2013 to 2014.
Bunkers at Fujairah averaged $601/mt in the second quarter of 2014 compared to $611/mt in the first quarter of 2014. Bunker prices varied between a high of $621/mt on June 23rd and a low of $589/mt on May 8th.

The International Energy Agency's ("IEA") August 2014 report stated an OPEC crude production of 30.0 million barrels per day (mb/d) in the second quarter of 2014. This was unchanged compared to the first quarter of 2014. 

The IEA estimates that world oil demand averaged 91.7 mb/d in the second quarter of 2014, which is an increase of 0.2 mb/d compared to the previous quarter. IEA estimates that world oil demand in 2014 will be 92.7 mb/d, representing an increase of 1.2 percent or 1.1 mb/d from 2013.

The VLCC fleet totalled 629 vessels at the end of the second quarter of 2014, two vessels up from the previous quarter. Five VLCCs were delivered during the quarter, three were removed. The order book increased by 12 vessels and counted 92 vessels at the end of the second quarter, which represents 15 percent of the VLCC fleet.
The Suezmax fleet totalled 448 vessels at the end of the second quarter, down one from the end of the previous quarter. One vessel was delivered during the quarter whilst two were removed. The order book counted 55 vessels at the end of the second quarter, which represents approximately 12 percent of the Suezmax fleet.
Strategy and Outlook
Despite the improved tanker market experienced so far in the third quarter, the Company is in a challenging situation with $1,031 million in debt and lease obligations as of June 30, 2014. Based on the current outlook for the tanker market, it is doubtful if the Company can generate sufficient cash from operations to repay the $190 million convertible bond loan with maturity in April 2015. The Board is considering various financing alternatives such as raising equity or selling assets, establish new loans or refinance existing arrangements to raise sufficient cash to repay the $190 million convertible bond loan. A full restructuring of the company, including lease obligations and debt agreements might be the only alternative.





The positive development in the tanker market in the third quarter is likely to give an improved operating result (excluding one time gains and losses) in the third quarter
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 27, 2014

Questions should be directed to:
Jens Martin Jensen: Chief Executive Officer, Frontline Management AS
+47 23 11 40 99
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 76



FRONTLINE LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 
2013
Apr-Jun
    
 
2014
Apr-Jun
  
 
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands of $)
  
 
2014
Jan-Jun
    
 
2013
Jan-Jun
    
 
2013
Jan-Dec
  
 
121,222
      
118,972
  
Total operating revenues
    
288,970
      
247,125
      
517,190
  
 
521
      
-
  
(Loss) gain on sale of assets and amortization of deferred gains
    
(15,727
)
    
9,732
      
23,558
  
 
74,236
      
72,108
  
Voyage expenses and commission
    
152,809
      
144,386
      
299,741
  
 
32,787
      
23,112
  
Ship operating expenses
    
46,164
      
59,664
      
109,872
  
 
(304
)
    
118
  
Contingent rental expense (income)
    
13,141
      
(606
)
    
(7,761
)
 
203
      
-
  
Charter hire expenses
    
-
      
4,176
      
4,176
  
 
7,325
      
10,324
  
Administrative expenses
    
19,394
      
15,756
      
31,628
  
 
81,324
      
56,178
  
Impairment loss on vessels
    
56,178
      
81,324
      
103,724
  
 
26,227
      
22,680
  
Depreciation
    
45,526
      
52,339
      
99,802
  
 
221,798
      
184,520
  
Total operating expenses
    
333,212
      
357,039
      
641,182
  
 
(100,055
)
    
(65,548
)
Net operating loss
    
(59,969
)
    
(100,182
)
    
(100,434
)
 
36
      
11
  
Interest income
    
18
      
69
      
83
  
 
(22,908
)
    
(21,216
)
Interest expense
    
(42,781
)
    
(45,526
)
    
(90,718
)
 
2,298
      
7,405
  
Share of results from associated companies
    
7,967
      
6,979
      
13,539
  
 
(55
)
    
119
  
Foreign currency exchange gain (loss)
    
88
      
(110
)
    
(92
)
 
-
      
-
  
Mark to market loss on derivatives
    
-
      
(585
)
    
(585
)
 
-
      
-
  
Gain on redemption of debt
    
-
      
-
      
(12,654
)
 
324
      
381
  
Other non-operating items
    
687
      
606
      
1,267
  
 
(120,360
)
    
(78,848
)
Net loss before tax and noncontrolling interest
    
(93,990
)
    
(138,749
)
    
(189,594
)
 
(94
)
    
(98
)
Taxes
    
(168
)
    
(191
)
    
(284
)
 
(120,454
)
    
(78,946
)
Net loss from continuing operations
    
(94,158
)
    
(138,940
)
    
(189,878
)
 
(481
)
    
-
  
Net loss from discontinued operations
    
-
      
(1,030
)
    
(1,204
)
 
(120,935
)
    
(78,946
)
Net loss
    
(94,158
)
    
(139,970
)
    
(191,082
)
 
658
      
716
  
Net loss attributable to noncontrolling interest
    
3,843
      
938
      
2,573
  
 
(120,277
)
    
(78,230
)
Net loss attributable to Frontline Ltd.
    
(90,315
)
    
(139,032
)
    
(188,509
)
             
 
                        
$
(1.54
)
  
$
(0.81
)
Basic loss per share attributable to Frontline Ltd.
  
$
(0.95
)
  
$
(1.79
)
  
$
(2.36
)
             
 
                        
             
Income on time charter basis ($ per day)*
                        
 
14,100
      
13,900
  
VLCC
    
23,400
      
15,600
      
17,400
  
 
13,800
      
12,400
  
Suezmax
    
19,800
      
14,100
      
13,400
  
             
Basis = Calendar days minus off-hire. Figures after deduction of broker commission.
                        
             
 
                        
2013
Apr-Jun
    
2014
Apr-Jun
  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands of $)
  
2014
Jan-Jun
    
2013
Jan-Jun
    
2013
Jan-Dec
  
 
(120,935
)
    
(78,946
)
Net loss
    
(94,158
)
    
(139,970
)
    
(191,082
)
 
(215
)
    
598
  
Unrealized gain (loss) from marketable securities
    
867
      
(120
)
    
915
  
 
(35
)
    
(131
)
Foreign currency translation loss
    
(106
)
    
(139
)
    
(63
)
 
(250
)
    
467
  
Other comprehensive income (loss)
    
761
      
(259
)
    
852
  
 
(121,185
)
    
(78,479
)
Comprehensive loss
    
(93,397
)
    
(140,229
)
    
(190,230
)
 
(120,527
)
    
(77,763
)
Comprehensive loss attributable to Frontline Ltd.
    
(89,554
)
    
(139,291
)
    
(187,657
)
 
(658
)
    
(716
)
Comprehensive loss attributable to noncontrolling interest
    
(3,843
)
    
(938
)
    
(2,573
)
 
(121,185
)
    
(78,479
)
 
    
(93,397
)
    
(140,229
)
    
(190,230
)

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 $)
  
2014
Jun 30
    
2013
Jun 30
    
2013
Dec 31
  
ASSETS
  
   
   
 
Short term
  
   
   
 
Cash and cash equivalents
    
62,436
      
83,708
      
53,759
  
Restricted cash
    
36,651
      
75,813
      
68,363
  
Other current assets
    
140,952
      
136,699
      
138,031
  
Long term
                        
Newbuildings
    
14,860
      
28,344
      
29,668
  
Vessels and equipment, net
    
272,179
      
273,698
      
264,804
  
Vessels under capital lease, net
    
611,638
      
765,427
      
704,808
  
Investment in finance lease
    
47,381
      
50,161
      
48,819
  
Investment in unconsolidated subsidiaries and associated companies
    
65,279
      
53,371
      
58,658
  
Other long-term assets
    
426
      
968
      
695
  
Total assets
    
1,251,802
      
1,468,189
      
1,367,605
  
                       
LIABILITIES AND EQUITY
                        
Short term liabilities
                        
Short term debt and current portion of long term debt
    
208,924
      
21,551
      
22,706
  
Current portion of obligations under capital lease
    
48,237
      
52,273
      
46,930
  
Other current liabilities
    
65,979
      
56,457
      
61,136
  
Long term liabilities
                        
Long term debt
    
269,308
      
467,282
      
508,970
  
Obligations under capital lease
    
717,892
      
867,681
      
742,418
  
Other long term liabilities
    
3,250
      
11,143
      
3,496
  
Commitments and contingencies
                        
Equity
                        
Frontline Ltd. equity
    
(66,846
)
    
(18,734
)
    
(26,952
)
Noncontrolling interest
    
5,058
      
10,536
      
8,901
  
Total equity
    
(61,788
)
    
(8,198
)
    
(18,051
)
Total liabilities and equity
    
1,251,802
      
1,468,189
      
1,367,605
  


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



FRONTLINE LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 
2013
Apr-Jun
    
 
2014
Apr-Jun
  
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of $)
  
 
2014
Jan-Jun
    
 
2013
Jan-Jun
    
 
2013
Jan-Dec
  
   
 
OPERATING ACTIVITIES
  
   
   
 
 
(120,935
)
    
(78,946
 )
Net loss
    
(94,158
)
    
(139,970
)
    
(191,082
)
             
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
                        
 
26,946
      
23,357
  
Depreciation and amortization
    
46,901
      
53,215
      
102,184
  
 
48
      
(128
 )
Unrealized foreign currency exchange (gain) loss
    
(119
)
    
(33
)
    
20
  
 
(521
)
    
-
  
Loss (gain) on sale of assets and amortization of deferred gains
    
15,727
      
(8,885
)
    
(22,711
)
 
-
      
(363
  
Contingent rental income
    
(363
)
    
-
      
(8,726
)
 
(2,298
)
    
(7,405
 )
Equity earnings of associated companies
    
(7,967
)
    
(6,979
)
    
(13,539
)
 
81,324
      
56,178
  
Impairment loss on vessels
    
56,178
      
81,324
      
103,724
  
 
-
      
-
  
Debt conversion expense
    
-
      
-
      
12,654
  
 
127
      
134
  
Provision for doubtful debts
    
242
      
260
      
55
  
 
(219
)
    
(321
 )
Other, net
    
(726
)
    
(285
)
    
(529
)
 
(1,627
)
    
7,065
  
Change in operating assets and liabilities
    
5,008
      
(24,450
)
    
(24,734
)
 
(17,155
)
    
(429
 )
Net cash provided by (used in) operating activities
    
20,723
      
(45,803
)
    
(42,684
)
             
 
                        
             
INVESTING ACTIVITIES
                        
 
(4,716
)
    
38,217
  
Change in restricted cash
    
31,712
      
11,694
      
19,143
  
 
(450
)
    
(42,324
 )
Additions to newbuildings, vessels and equipment
    
(42,865
)
    
(1,172
)
    
(2,504
)
 
526
      
622
  
Finance lease payments received
    
1,213
      
1,024
      
2,156
  
 
(10,515
)
    
-
  
Net proceeds from sale of vessels and equipment
    
27,164
      
-
      
-
  
 
-
      
673
  
Net investment in associated companies
    
1,346
      
(5,509
)
    
(5,509
)
 
(15,155
)
    
(2,812
 )
Net cash provided by (used in) investing activities
    
18,570
      
6,037
      
13,286
  
             
 
                        
             
FINANCING ACTIVITIES
                        
 
729
      
7,096
  
Net proceeds from issuance of shares
    
47,653
      
729
      
4,802
  
 
9,950
      
-
  
Proceeds from long-term debt, net of fees paid
    
-
      
14,406
      
19,798
  
 
-
      
(39,720
 )
Repayment of long-term debt
    
(51,905
)
    
(10,150
)
    
(23,781
)
 
(12,599
)
    
(11,295
 )
Repayment of capital leases
    
(22,856
)
    
(25,485
)
    
(50,345
)
 
8,443
      
-
  
Lease termination receipts (payments)
    
-
      
6,371
      
(4,518
)
 
-
      
(1,633
 )
Payment of related party loan note
    
(3,508
)
    
-
      
(402
)
 
6,523
      
(45,522
 )
Net cash (used in) provided by financing activities
    
(30,616
)
    
(14,129
)
    
(54,446
)
             
 
                        
 
(25,787
)
    
(48,793
 )
Net change in cash and cash equivalents
    
8,677
      
(53,895
)
    
(83,844
)
 
109,495
      
111,229
  
Cash and cash equivalents at start of period
    
53,759
      
137,603
      
137,603
  
 
83,708
      
62,436
  
Cash and cash equivalents at end of period
    
62,436
      
83,708
      
53,759
  


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)
  
 
2014
Jan-Jun
    
 
2013
Jan-Jun
    
 
2013
Jan-Dec
  
 
  
   
   
 
NUMBER OF SHARES OUTSTANDING
  
   
   
 
Balance at beginning of period
    
86,511,713
      
77,858,502
      
77,858,502
  
Shares issued
    
11,694,574
      
655,552
      
8,653,211
  
Balance at beginning and end of period
    
98,206,287
      
78,514,054
      
86,511,713
  
 
                        
SHARE CAPITAL
                        
Balance at beginning of period
    
86,512
      
194,646
      
194,646
  
Capital reduction
    
-
      
(116,788
)
    
(116,788
)
Shares issued
    
11,694
      
656
      
8,654
  
Balance at end of period
    
98,206
      
78,514
      
86,512
  
 
                        
ADDITIONAL PAID IN CAPITAL
                        
Balance at beginning of period
    
149,985
      
821
      
821
  
Capital reduction
    
-
      
116,788
      
116,788
  
Stock option expense
    
37
      
88
      
161
  
Shares issued
    
37,929
      
138
      
3,285
  
Net share premium arising on debt conversion
    
-
      
-
      
28,930
  
Balance at end of period
    
187,951
      
117,835
      
149,985
  
 
                        
CONTRIBUTED SURPLUS
                        
Balance at beginning and end of period
    
474,129
      
474,129
      
474,129
  
 
                        
ACCUMULATED OTHER COMPREHENSIVE LOSS
                        
Balance at beginning of period
    
(3,303
)
    
(4,155
)
    
(4,155
)
Other comprehensive income (loss)
    
761
      
(259
)
    
852
  
Balance at end of period
    
(2,542
)
    
(4,414
)
    
(3,303
)
 
                        
RETAINED DEFICIT
                        
Balance at beginning of period
    
(734,275
)
    
(545,766
)
    
(545,766
)
Net loss
    
(90,315
)
    
(139,032
)
    
(188,509
)
Balance at end of period
    
(824,590
)
    
(684,798
)
    
(734,275
)
 
                        
FRONTLINE LTD. EQUITY
    
(66,846
)
    
(18,734
)
    
(26,952
)
 
                        
NONCONTROLLING INTEREST
                        
Balance at beginning of period
    
8,901
      
11,474
      
11,474
  
Net loss
    
(3,843
)
    
(938
)
    
(2,573
)
Balance at end of period
    
5,058
      
10,536
      
8,901
  
 
                        
TOTAL  EQUITY
    
(61,788
)
    
(8,198
)
    
(18,051
)


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, 2013.

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, 2013.

3.    IMPAIRMENT LOSS

The Company has recorded a vessel impairment loss of $56.2 million in the three and six months ended June 30, 2014. This loss relates to the VLCCs Front Opalia, Front Commerce and Front Comanche.  Impairment losses are taken when events or changes in circumstances occur that cause the Company to believe that future cash flows for an individual vessel will be less than its carrying value and not fully recoverable. In such instances an impairment charge is recognized if the estimate of the undiscounted cash flows expected to result from the use of the vessel and its eventual disposition is less than the vessel's carrying amount.

4. NEWBUILDINGS

In April 2014, the Company agreed with Rongsheng shipyard to swap its two Suezmax newbuildings on order with two similar Suezmax vessels from the same shipyard at a lower contract price. Installments paid to date will be allocated to the new vessels. The first vessel, the Front Ull, was delivered on May 19, 2014 following payment of the final installment of $41.5 million and the second vessel is expected to be delivered in the fourth quarter of 2014. The Company is committed to making payments of $41.5 million as of the date of this report.

5.    DEBT

In June 2014, the Company entered into a $60.0 million term loan facility to part finance its two Suezmax newbuildings. No drawdowns were made in the second quarter. We intend to draw $30.0 million in the third quarter for the vessel delivered in the second quarter and the balance when the next vessel is delivered.

The conversion price of the Company's convertible bonds at June 30, 2014 and December 31, 2013 was $36.5567.

6.    SHARE CAPITAL

The Company issued 11,694,574 new ordinary shares under its ATM program in the six months ended June 30, 2014 and had an issued share capital at June 30, 2014 of $98,206,287 divided into 98,206,287 ordinary shares (December 31, 2013: $86,511,713 divided into 86,511,713 ordinary shares). The weighted average number of shares outstanding for the six months ended June 30, 2014 was 95,348,566.






7.    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.

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.

8. COMMITMENTS AND CONTINGENCIES

As of June 30, 2014, the Company had one Suezmax newbuilding contract and was committed to make newbuilding installments of $41.5 million with expected payment in the fourth quarter of 2014.

9. SUBSEQUENT EVENTS

In July 2014, several of the subsidiaries and related entities in the Windsor group (the "Windsor group"), owned by ITCL, filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court in Wilmington, Delaware. In connection with the filing, the Windsor group has entered into a restructuring support agreement with bondholders. Under the restructuring and support agreement, the supporting holders of the Notes have agreed to support a plan of reorganization that would convert claims on account of the Notes for 100% of the equity in the reorganized company. On August 25th a plan of reorganization was filed the terms of which are consistent with the Plan Support Agreement. This could ‎provide for Windsor to emerge as early as November. The Company expects to de-consolidate the Windsor group in the third quarter of 2014 as a consequence of the Chapter 11 filing and the fact the group is consolidated under the variable interest entity model. The Company also expects to record an impairment loss in the third quarter of approximately $5 million. The Company will enter into a revised management agreement with the reorganized Windsor group and will continue to provide commercial management for its vessels.

In July 2014, the Company agreed with Ship Finance to terminate the long term charter parties for the 1999 built VLCCs Front Opalia, Front Comanche and Front Commerce and Ship Finance simultaneously sold the vessels to unrelated third parties. The charter parties are expected to terminate in the fourth quarter of 2014. The decision to terminate the long term charter parties was taken in view of the required investment to take the vessels through the 15 year special survey. The Company has agreed an aggregate compensation payment to Ship Finance of approximately $58.8 million for the early termination of the charter parties, of which approximately $10.5 million will be paid upon termination and the balance will be recorded as notes payable, with similar amortization profiles to the current lease obligations, with reduced rates until December 2015 and full rates from 2016.

The Company equity accounts for three wholly-owned subsidiaries, which each own one vessel currently on bareboat charter to Chevron. In July 2014, the Company received a request from Chevron to terminate the three bareboat charters early and not April 1, 2015 as scheduled. Such early termination would also result in the full redemption of all the outstanding Term Notes. The Company is currently in discussion with Chevron on this matter.

The Company issued 1,140,226 new ordinary shares under its ATM program during July 2014. 99,346,513 ordinary shares are outstanding as of the date of this press release.




FRONTLINE LTD.
INTERIM REPORT JANUARY – JUNE 2014


Responsibility Statement

We confirm, to the best of our knowledge, that the condensed consolidated financial statements for the period January 1 to June 30, 2014 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 27, 2014