Inger Klemp - Chief Financial Officer and Chief Financial Officer of Frontline Management AS Jens Jensen - Chief Executive Officer of Frontline Management AS

Peter Kendall Joshua Katzeff - Deutsche Bank Fotis Giannakoulis - Morgan Stanley Jonathan Chappell - JPMorgan

Good day, and welcome to the Frontline Q4 Results Presentation. [Operator Instructions] At this time, I'd like to turn the call over to your host today, Mr. Jens Martin Jensen, CEO; and Ms. Inger M. Klemp, CFO. Please go ahead, gentlemen.

Thank you. Good morning, good afternoon, and welcome to our Q4 presentation. We will follow our usual program for this presentation with our CFO, Inger Klemp, going through the Q4 highlights and main transactions, financial review of the quarter, then update of our newbuilding program. Thereafter, I will talk about what happened, marketwise, in Q4 and say a few words on how we see things going forward. So if you could start, Inger, please?

Thanks, Jens, and good morning and good afternoon, ladies and gentlemen. I will guide you through the highlights and the financial review in the fourth quarter, together with a run-through of the newbuilding program. Moving then to Slide 4. November 2011, for instance, Frontline extended the time charter in agreements of Front Chief, Front Commander and Front Crown for one year from January 2011 at $26,500 per day per vessel. On January 2011, Frontline sold its 2006-built VLCC Front Shanghai. The sale proceeds were $91.2 million. And after repayment of debt, the sale generated $31.5 million in cash. Frontline has, in connection with the sale, agreed to charter back the vessel from the new owner. The duration of the time charter is approximately two years at a rate of $35,000 per day. And delivery to the new owners took place in January 26, 2011. The company expects to record a gain of approximately $6.2 million on delivery of the vessel. And in addition, a gain of $15.2 million will be recognized on a straight-line basis over the period of the time charter. Further in January 2011, Frontline sold all its shares in OSG. The sale generated approximately $46.5 million in cash, and the company expects to record a loss of approximately $3.3 million in the first quarter of 2011 in addition to a loss of $9.4 million recorded in the fourth quarter of 2010 following a market price adjustment of the shares. Further, in February 2011, Frontline has agreed with Ship Finance to terminate the long-term charter parties between the companies for the single hull VLCCs Front Highness and Front Ace. And Ship Finance has simultaneously sold the vessels to unrelated third parties. The termination of the charters is expected to take place in March 2011. Ship Finance will make a compensation payment to Frontline of approximately $5.8 million for the early termination of the charter, which will be recorded in the first quarter of 2011. Moving to Slide 5. I will then do a quick run-through of the financial highlights in the fourth quarter. Frontline reports net loss of $11.8 million, equivalent to a loss per share of $0.15 in the fourth quarter of 2010. This is a decrease compared to the third quarter of $24 million. A net loss includes a gain of $4.6 million relating to the amortization of a deferred gain on three leases. The loss in the fourth quarter also includes non-operating losses of $5.2 million, which mainly relates to a loss of $9.4 million following a market price adjustment of shares owned in Overseas Shipholding Group, OSG, partially offset by a gain of $3.6 million, for minority interest in Independent Tankers Corporation, arising on the termination of a funding agreement. The net loss, excluding these gains and losses, was $10.5 million, equivalent to loss per share of $0.13. On this basis, we have decided to announce a dividend of $0.10 per share for the fourth quarter. Moving then to Slide 6. The net income excluding gains and losses is about $15 million weaker than in the third quarter 2010. The decrease can mainly be explained by a decrease in income on time charter basis with $21 million in the fourth quarter compared to the third quarter due to a decrease in TCE per day in the fourth quarter, slightly offset by more trading days in the quarter. The profit-sharing payable to Ship Finance has decreased $3.9 million in the quarter compared to the previous quarter. Ship operating expenses increased by $4 million compared with the preceding quarter, mainly due to an increase in drydocking costs of $3.3 million. Frontline dry-docked three vessels in the fourth quarter and two vessels in the third quarter. Charter hire expenses decreased by $2.9 million in the fourth quarter compared with the preceding, primarily due to a period of off hire for one vessel due to drydocking and a decrease in loss-making voyage provisions from the previous quarter. Then depreciation has decreased about $1 million due to termination of financial leases of Front Highness and Front Ace in the third quarter, offset by a full quarter depreciation of Front Signe and Front Njord, which were delivered in the third quarter. Interest expense is also down with $1.15 million, mainly due to reduction in interest on financial leases. Moving to Slide 7. Frontline's double hull VLCC fleet, excluding the vessels on spot index charters, earned in the spot market approximately $23,300 per day. Including the vessels on spot index time charters, the VLCC fleet earned $22,600 per day for doubles and $19,600 per day for singles with an average spot earnings of $22,500 per day. The average for the whole VLCC fleet was about $24,700 per day in the quarter. The Suezmax fleet earned in the Gemini Pool $14,600 per day in the quarter. But as a consequence of that some of our Suezmax vessels trade outside the pool at somewhat higher TCE rates, we earned on average in the spot market approximately $15,200 per day. We traded no singles in the quarter. The average for the whole Suezmax fleet was about $16,500 per day in the quarter. Then the OBO earned $45,100 per day in the quarter, and these numbers do not include ITCL. The TCE numbers show that Frontline this quarter has traded better than our peers. We shall release the numbers. Moving then to Slide 8. As you can see from the slide, we have average OpEx for the quarter of approximately $11,000 per day in the fourth quarter compared to approximately $10,000 per day in the third quarter. The increase is mainly due to an increase in drydocking costs of $3.3 million in the quarter. As we have said, we have dried up three vessels in this quarter, which is one more than the last quarter, and you can see that from the graph on the upper right-hand side. Further, off hire days were 168 days in the quarter compared to 161 in the previous quarter, again, due to one additional vessel drydocked. We expect to dry-dock two vessels in the first quarter of 2011. Moving then to Slide 9. The total balance sheet is approximately $47 million lower in the third quarter, lower than in the third quarter of 2010. Main items explaining the decrease are: cash has decreased with $31 million compared to the previous quarter as generation of cash from operations had been lower than the use of cash in investing and financing activities. Short-term restricted cash is reduced with $62 million. As a consequence of that, restricted cash related to ship finance leases have been moved to long-term restricted cash. Book value in newbuildings are increased with $39 million due to newbuilding installments paid in the quarter. And book value vessels are decreased with $63 million, following the ordinary depreciation in the quarter. Short-term and long-term part and long-term debt is decreased with $11 million as a consequence of ordinary installments in the quarter. Short-term part of long term debt is increased due to the debt to be repaid as a consequence of [indiscernible] Front Shanghai has been recorded as short-term debts. Obligations on the capital leases have decreased with $33 million due to ordinary repayments. The sale is included in the balance sheet with a total of $404 million of debt and obligations on the capital lease and debt related to three other Suezmax vessels are not consolidated in the balance sheet with $48 million of debt. Moving then to Slide 10. The average cash cost breakeven rates in 2011 are approximately $30,100 per day for VLCC, $24,500 per day for Suezmaxes and $27,500 per day for OBO. These rates are the daily rates our vessels must earn to cover budgeted operating cost, estimated interest expense, scheduled loan principal repayments, [indiscernible] hire and corporate overhead costs. These day rates do not take into account capital expenditures or the loan balloon repayments of maturity. Furthermore, vessels from short-term TC-in and vessels from bareboat-out are not included in cash cost breakeven rates. Moving then to Slide 11 and 12. As for end December 2010, total number of vessels in Frontline's newbuilding program are two Suezmax tankers and five VLCCs, which constitutes a contractual cost of about $650 million. As for the end of December 2010 installments of $198.5 million have been paid on the newbuildings and remaining installments to be paid for the newbuildings amount to $451.1 million, with expected payments approximately $107 million in 2011, $169 million in 2012 and $176 million in 2013, respectively. In November 2010, the company secured pre- and post-delivery financing in the amount of $147 million representing 70% of the contract price for the first two VLCCs to be delivered from Jinhaiwan Shipyard in 2012. For the three remaining VLCCs and two Suezmax tanker newbuildings to be delivered between late 2012 and '13, the company has not yet established pre- and post-delivery financing. Based on the recently secured financing for the two VLCCs, however, we have seen a 70% financing on market value for these newbuildings. Moving to Slide 13. In this graph, we show installments to be paid under the newbuilding contracts in the period 2011 to 2013 with a total of $451.5 million in the light blue column. In the dark blue column, we show the committed financing in the period 2011-2013 with a total of $147 million. And in the gray column, we show the assumed uncommitted financing of 70% of market value of the newbuilding contract in the period 2011 to 2013 with a total of $308 million. The committed and uncommitted financing is in total $455 million. On this basis, Frontline has already made total equity investments in the newbuilding program, and remaining newbuilding installments will be fully financed with bank debt. However, since we have assumed that the uncommitted financing will not be established until delivery of the vessels, we temporary will use funds from the convertible bond offering during the period until delivery, which is shown in the blue dotted column. Moving next to Slide 14 and 15. The number of vessels in the Frontline fleet is 78 vessels, including vessels on commercial management and the RTC vessels and is compounded by 44 double hull VLCCs, five single hull VLCCs, 21 double hull Suezmaxes and eight OBOs. We have contract coverage of 22% in 2011 and 14% in 2012. In addition to this fixed rate contract coverage, we also have an additional 16% time charter covered from spot index charters in 2011 and 6% in 2012. The average net TC rate for the total fleet is about $45,400 per day in 2011 and $41,900 per day in 2012. With this, I'll leave over to Jens again.

Thank you, Inger. We are now on Slide 16. Despite a continued strong oil demand throughout the quarter and increase in ton-mile cargoes to mainly India and China, we still had a very disappointing quarter rate-wise. A few rate spikes in the quarter was absorbed by higher bunker prices, the long awaited winter market did not materialize and the slow steam effect is now only really starting to show results in the market. Very limited weather and port delays despite a extreme hard winter. Slide 17, VLCC fleet development. 54 VLCCs were delivered in 2010, which is basically a 20% slippage of the intended schedule. We expect the slippage trend to continue in 2011. 2011 is also the year with the most expensive orderbook with an average cost of around USD $140 million per vessel. We expect to see about 55 VLCCs being delivered in 2011. Amazingly, single hull VLCCs are still being traded despite a mandatory phase out in 2010. Interesting to note, rumors of a Greek shipowner converting three VLCC newbuildings into two LNG carriers. Slide 18, Suezmax Fleet. As expected and predicted, we saw almost a 40% slippage in the newbuilding deliveries. However, many vessels was ordered in 2010, and the orderbook is sizable. However, we expect the slippage trend to continue in 2011 with 20% to 25%. Positive for both the VLCC and Suezmax [indiscernible] is that the ordering has stopped for now and that the major Korean shipyards are taking orders in the other segments such as drilling rigs, mass container vessels and [indiscernible] and other LNG boom. If we go to Slide 19. Newbuilding drive rates today for decent specification VLCC is around USD $100 million and for Suezmaxes, around $65 million to $66 million. We do not see any reason why newbuilding prices should fall much from these levels near term. Time charter rates, the time charter VLCC rate for three years is around $36,000 to $37,000 per day, and we estimate that three-year time generates for Suezmaxes to be in the region of $26,000 to $27,000 per day. That said, there's not many charters out there presently for that kind of period. Slide 20. We normally have a little feature in our quarterly presentation. This time, we're looking at the refinery expansion. There’s several refinery expansion plants in both USA and China, and we have listed the major ones on the slide. 500,000 barrels per day expansion or demand growth in the U.S. means additional demand for 25 VLCCs if the crude is sourced from the Middle East. China is expected to add at least three million barrels per day in refinery expansions during the next five years. Some of these projects are mentioned here. One million-barrel per day increase in China means an additional demand for 25 VLCC if the crude is sourced from the Middle East, which is not likely a place they’d source from over a longer-term mileage. The mentioned joint venture project between PetroChina and PDVSA will cover source from Venezuela with a loan absorbed around 20 VLCCs in that dedicated freight. I'm not saying that we are having a shortage of VLCC over the next years, but with further delays or even cancellations to the orderbook and quite a healthy ton-mile increase, we could see a better balance tonnage situation and see it over the next one and two years. On Slide 21, outlook. For Frontline, we had a good turnaround in 2010 despite a disappointing fourth quarter. We increased the net profit. When we organized our newbuilding program, we turned our charter portfolio from being very negative in 2009 to a profit in 2010, and we secured additional funding to the company and could have raised more if needed. Our Suezmax activities in the Gemini Pool continued, and the pool helped to break 50 ships in 2011. And we hope we can further expand and consolidate that market, which clearly needs to be consolidated. If you look a little bit on the market outlook, I think the gaps between the demand side and the vessel supply side could be more narrow than expected for the reasons I mentioned. We believe we will see further slippage in the newbuilding program. We have seen right now a break in the ordering of VLCCs and Suezmaxes and yard space is being taken up by all the tonnage ship type. All will influence the market positively in the years ahead. We need consolidation in the business, and we hope we can participate in that during this and the coming years. With that, I think we are ready to take your questions.

[Operator Instructions] And we'll now move to our first question from Michael Webber from Wells Fargo.

We've seen a fair amount of strength recently, kind of, on the back of some stronger programs heading east or it involves geopolitical risk. And I'm just curious as to what your take is in terms of how long do you think that will last? And do you think that could be enough to maybe prop up Q1 or Q2 TC rates, enough to kind of smooth out this portion of the cycle?

I think the increase in rates we have seen over the last two, three weeks, there’s a few things adding to that, one thing is that I think the effect of the slow steaming is finally coming in. We are seeing that as less ships are coming into the Persian Gulf than anticipated so the tonnage situation is more tight than it used to be. And of course, at the same time, with the situation taking off in Egypt and rising oil prices have maybe made some charters move a little bit earlier in the lifting program, so it looks positive. And of course, what we are seeing now, we are in the March program, and that’s, of course, the last month of Q1. So there will be some positive effect in Q1. And we hope, obviously, the rate will last into Q2 and so both quarters can benefit from that.

Some of that strength, again, was kind of heading east, and I'm just curious as to your take on how sensitive you think some of those cargo programs are to the price of crude as that continues to kind of remain strong? Do you anticipate any headwinds there? Or how do you think about that?

Well, we see that the prices on the tonnage has been quite tight, especially if you look at the first half of March and, of course, the Atlantic basin is quite tight. So I think that -- I think and I hope this market will carry on.

And one more question, and forgive me, I joined the call a little late, I don't know if you touched on it already, but can you give an update on, I guess, the chartering strategy for your OBOs given the relatively weak dry ore market?

Well, we have all our eight OBOs all in the dry cargo. They’ve been there for some years. Five of them are still on long-term charters at very good levels. And then we have three on short-term time charters, which will be coming open April, May already. So of course, we're monitoring the bulk of the capesize market and, specifically, on these ships, of course, best carrying iron ore. And we hope for some strength in that market, but I think we need the market to improve a lot more to be interesting, that's for sure.

But the vessels will stay on the dry side?

They will stay on the dry side, yes.

And now move to our next question, which comes from Jon Chappell from JPMorgan. Jonathan Chappell - JPMorgan: There's been some changes. You redelivered the Desh Ujaala to the owners. And then you've also taken the Front Shanghai back on a sale and leaseback. Can you just give us an update on how many vessels you're chartering at the present and what the duration is for those charter-ins?

We talked it in the three...

Yes, we have some ships in from Knightsbridge, of course, two ships, the Kensington and the Hampstead, and we have the three -- Chief, Commander, Crown. And of course, we have the leased vessels also the other leases we have going, the Front Shanghai. So that was so much changes to our portfolio right now. I guess you can say like I said the Desh Ujaala was redelivered, and we have taken the Front Shanghai in on a sale leaseback. So I would say we have managed to get out of some of the more expensive ships we had last year, and I think we're quite comfortable with our Charter portfolio right now. Jonathan Chappell - JPMorgan: So you don't expect the charter expense to vary much from the fourth quarter levels?

Well, we would like to charter more if we can find ships around the same level as we did 3,000 ships or below 30,000. So if somebody is listening in there, we are ready to take. Jonathan Chappell - JPMorgan: And then the ownership fleet development, your owner or founder and chairman has been pretty public saying that the changing markets are going to be tough for the next couple of years. And your sale of the Front Shanghai looks like you may be taking advantage of some good prices that are still available. What are your views on second-hand prices and as we think about Frontline's fleet development over the next 18 to 24 months, would you think you'd be more of a seller in this market or do you think you'd be more of a buyer if rates bottom out?

I think that the values for modern ships will not fall so much -- I think the older ships, more than 15 years old, are coming under pressure. And I think that the values will fall quite a lot on those. We need to, we want to expand our fleet with modern ships. It could be via further newbuildings, although that is not preferred. Or it could be a block of secondhand ships or modern ships or we can also charter-in more. We want to expand and it will be with modern tonnage. Jonathan Chappell - JPMorgan: So the Front Shanghai was just taking advantage of a good opportunity or good price that was available?

Yes, we thought it was a good deal to do. Jonathan Chappell - JPMorgan: Would it be fair to say maybe you'd be kind of selling some of your 1990s-built tonnage and replacing that with newer modern tonnage?

In the ideal world, yes.

We'll now move to our next question which comes from Justin Yagerman from Deutsche Bank. Joshua Katzeff - Deutsche Bank: This is Joshua Katzeff on for Justin. Just wanted to touch up on some of the geopolitical risk issues. I guess, how much do you think the previous situation in Egypt and the kind of current situation building in Libya is affecting the spot market?

Well, right now, I don't think it has affected the spot market so much, but of course, it has affected the oil price. Some charters and some oil companies are maybe wondering where the oil price will go and if they should take more oil now. But I don't think it's actually affected the spot market so much yet. But I think there could be more in store, of course. We had the same question here this morning. And of course, people are asking about Libya. Libya, mind bearing that majority of their crude is going to European destinations. So of course, if that has to be replaced by oil from further weighted nations, that will of course have impact on the market. But I think it's too early to say something yet about the impact of the spot market. Joshua Katzeff - Deutsche Bank: I guess I didn't know if there was any sort of psychological impact that...

I think there is a psychological impact, yes. But it's just having that turn into actual activity on the shipping side. Although I don't really think we can say we have seen that yet. Joshua Katzeff - Deutsche Bank: Have you seen any disruptions in loading from Libya?

I will tell you we're going to have a ship loading in two days, and that's of course interesting to see if the ship will load. But so far, we've been told everything is normal, but I guess if you ask me again next week, I can tell you more. Joshua Katzeff - Deutsche Bank: Just wanted to touch on slow steaming. How widespread has that been? Is there any chance that the slow steaming, which will be VLCCs, can start to happen on the laden voyage and not just the ballast?

Well, of course, what we are doing and other owners are doing is, of course, try to also slow steam on the ballast leg which means speed of around nine to 10 knots in ballast. And if you look at our modern VLCCs, we can go 10 knots or 25 tops, which is of course quite fantastic for a VLCC. And the bunker price is around 600, that's a huge saving. On the laden legs, we are, of course, trying to discuss with the charterers if there's any possibility of a lower speed, but so far we have seen that they prefer to maintain the 13 or 13 1/2 knot speed, but that's, of course, a discussion, a negotiation we were having always. Joshua Katzeff - Deutsche Bank: Has there been any kind of early pushback on that? Is that something that you expect to be able to push through?

I think, normally, a ship owner gets the terms when the market is high. So we can hope for a very high shipping market. And then of course we can change some of the chartering terms. But so far, we have not really been able to push that through. Joshua Katzeff - Deutsche Bank: I guess with regard to chartering and spot and GC mix, you guys have previously mentioned kind of maybe a 30% or 40% time charter coverage target. Is that still what we should be looking for?

There was some confusion, I think it was last quarter or the quarter before, about our charter coverage. I think what we would like to have is our fixed cover which is only 22%. We have total 38% cover this year but 16% is a floating arrangement. But we would like to increase our fixed time charter cover input when the timing is right. It does not have to be up to 30%, but maybe two or three more ships, we would like to affix some time charter cover. So of course, we hope that the TC market will improve, and we can do that over the next few months.

We'll now move to our next question from Fotis Giannakoulis from Morgan Stanley. Fotis Giannakoulis - Morgan Stanley: I want to ask you, you can describe the very challenging environment for the next couple of years for timeshares. And although we haven't seen any problems with the charters in general in the Tanker market, they are considered stronger than the other sectors. Do you think that this is a topic that we should start focusing slowly? And how shall we think the charter risk among the tanker companies…

I think on the crude oil, chartering side, we have not seen, if any, VLCCs options of default on charters. I don't think that will change. I think the Crude segment is quite wealthy. And of course, you have the large oil companies kind of undersubscribing the activities. So we don't see much risk of charter default on the crude side. Of course, we have exposure in our company on the OBOs on the dry side, but five of them are also substantial state-owned Chinese companies, so we're quite confident with that. But I don't think there will be any major fallout on the crude chartering side. Fotis Giannakoulis - Morgan Stanley: Do you owe those particular companies in the private sector probably facing significant funding issues that might create defaults among owners?

Well, that's a lot of talk of, course. The last casualty, the bigger ones has, of course, been Korea line, with protection of courtship situation in Korea. They have a few VLCCs. So it's, of course, interesting to see where they will end up. I guess the banks have been quite listening to the shipowners for the last two years and see how they will tackle the crisis in 2009 and 2010. Maybe the banks will be putting their thumbscrews on a little bit more this year and trying to push some owners to do something. But then we haven't really seen any distress as I slightly mentioned before so far. Fotis Giannakoulis - Morgan Stanley: I want to ask you, given the current environment and how do you view the different segments within the asset classes, mainly between the Suezmax and VLCCs, both segments, they are facing a large growth of capacity. But what do you think in an environment which is weak in general is the best vessel to navigate the current storm?

Well, I wish I knew, but I would say if you look at the buying appetite out there, if you put a VLCC out in the market for sale at $100 million, you'll probably have very few buyers, if any. If you put the price down to $95 million, maybe you'll have one or two. If you put it down to $90 million, maybe there'll be 10. I think there's buying appetite out there. And of course there's a lot of shipowners and companies who have made money over the last 10 years, and they're willing to reinvest in shipping. So it’s just about to find the right level and you'll see people stepping in, both VLCCs and Suezmaxes. But I think it will be a modern ship. I think the older ships will have a difficult time in the years ahead. Fotis Giannakoulis - Morgan Stanley: And my last question is -- it has to do regarding the trading pattern. If you see any impact of a big spread between WTI and the other seaboard crews? And how does this impact the trading and, particularly, U.S. imports?

That's of course a big question. I think, of course, the biggest factor to the VLCC market now is, of course, the demand pickup in America. Of course, I think everybody's commenting on the big gap between the VTI and the brink, but I think it's probably better to concentrate on the more underlying demand side from America. And if we get that going again, I think the Tanker market will level up a lot better. I think it's difficult to reply to your specific question better than that.

We'll now move to our next question from Sal Vitale from Sterne Agee.

I think you said that part of the market strength of the last couple of weeks, especially on the AG East routes is the turmoil in the Middle East bumping some charters to I guess move up their oil imports. So is it possible if there's more of a stabilization in the situation in the Middle East, say, over the next few weeks that we see some of that given back, so that the market rate goes down a little bit to account for that, a reversal of that, I guess.

I guess that was part of my reply you're referring to. I said I don't think the Middle East crisis has actually spurred the market. I think what has spurred the market is, first of all, slow steaming is finally taking effect on the fleet, these ships have arrived in the Persian Gulf. Secondly, the Atlantic market was stronger than the East market, so you have seen many VLCCs [indiscernible] into the Atlantic basin and loading cargoes out of there to the East. So you suddenly see a tightness of positions in the Persian Gulf. I think that was what spurred the market first. Subsequently, of course, you have the Middle East crisis, where it's maybe more guess work, but at least that's what we hear, that maybe some oil companies have increased their lifting program a little bit to try and take some more oil right now. But I think the fundamental increase in the rate has been because that has -- the tonnage has been spread out and you have seen less ships in the Persian Gulf.

And then just shifting gears to the floating storage side. In the presentation, I don't believe there was any indication of what the current capacity that's tied up in floating storage. Do you have a guesstimate of where [indiscernible] could be right now?

Not really. We have a few ships, but I don't have an overview right now of what is tied up. We have some of our ships being used for holding brands. Of course, we have seen ships coming to loop being held back, if you can call that floating storage or just delayed discharging. But I think the distinction of what is actually floating storage or, let’s say, just waiting for only to discharge. We haven't made that distinction.

And do you think that floating storage could be a driver, given that a much lower percentage of the total global fleet is used in floating storage now? Could that be something that ramps up over the next few months?

Well, hopefully, we saw a cross-load that floating storage did in the second quarter last year where we had almost 50 VLCCs being tied up in floating storage. And of course, if that come back, if you see a more contango situation in the oil, yes, that would, of course, have a very positive impact.

I'm just looking at what the current dividend, the $0.10 is as a percentage of, say, your cash flow, and it's about under 20%, let’s call it about 18%. And I know you don't have any specific driver of what your dividend that you establish is, but if I look at historically, let’s say, third quarter 2009, I think the loss in that quarter was about $0.10 or about $0.11, and the dividend was about $0.15 at that point. So if I look at the $0.10, is there anything – I mean, are you just being extra cautious in terms of conserving cash? Or should we read into that at all? And going forward, if that loss starts to be mitigated, if you report a smaller loss or even a profit in the first quarter and second quarter, how should we be looking at what the dividend could be?

I should just refer to there is no specific rule percentage-wise of cash flow that we have no payout, if that's what you mean. So I don't think you should put too much into that kind of mathematical comparisons, which you are doing there. So, there.

But just directionally, should we think of that $0.10 coming up over the next couple of quarters?

No, I don't think you should depend anything into the future based on what we have done now. I mean, we always have to evaluate what we have earned in the cash situation at the time that we are deciding what dividend to pay. And that will, of course, be difficult for us to know what will be the future.

[Operator Instructions] We'll now move to our next question from Glenn Lodden from DnB NOR.

I was just wondering because in the report, you touched upon the background for your divestment in OSG pointing to both the lack of consolidation possibilities, as well as OSG's possible financing needs. So I was just wondering, would you look at the investment differently if there were better possibilities for consolidation talks. Or would the financial aspects of OSG still make you sell the stake?

I think you almost replied that yourself. I think, of course, had the investment turned out differently then I think we would not have been writing those seven lines in our press release. So I think what we said is pretty much how we feel about that.

We'll now move to our next question from Peter Kendall from Southwest Securities.

A rather specific question about the Antares Voyager, which is one of the two VLCCs contained in the Golden State petroleum bond deal. I know that on December 15 of last year, you obtained bondholder approval to either spot charter or sell the vessel, and I was hoping to hear a progress report on how that activity is coming along.

Yes, you're absolutely right. We had several buyers inspecting the ship end of December. Unfortunately, the offers received, we did not believe were in line with where the market should be, so the vessel was not sold. And now she's trading in the spot market. Hopefully, with the market improvement, which we are having now, we will see interest and prices firming up and we'll be, let's say, ready for a second round of selling the vessel.

Has it generated any revenue then since December 15 on the spot market?

Not a lot.

Where is the vessel right now?

She is on the way to Asia to discharge.

[Operator Instructions] And it appears we have no further questions at this time.

Okay, then I would like to say thank you for everybody for dialing in and listening to our presentation. I would like to thank everybody in the company for dedicated work in 2010. Thank you. Bye.

Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.