-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O5fT8u4/ZT/FN9g6xz3jVPfQfuaiJlV89gyefWrPVF5IF7bj4/hwSZPcVkRVnxcJ X7JxYJELalGD6cOoy0CznQ== 0000919574-02-001077.txt : 20020522 0000919574-02-001077.hdr.sgml : 20020522 20020522161152 ACCESSION NUMBER: 0000919574-02-001077 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020522 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNIGHTSBRIDGE TANKERS LTD CENTRAL INDEX KEY: 0001029145 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-29106 FILM NUMBER: 02659955 BUSINESS ADDRESS: STREET 1: 41 CEDAR HOUSE STREET 2: HAMILTON HM 12 CITY: HAMILTON HM 12 BERMU STATE: D0 ZIP: 10004 BUSINESS PHONE: 4412952244 MAIL ADDRESS: STREET 1: 41 CEDAR HOUSE STREET 2: HAMILTON HM 12 CITY: NEW YORK STATE: D0 ZIP: 10004 6-K 1 d325808_6-k.txt KNIGHTSBRIDGE TANKERS FORM 6-K 1ST QUARTER 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of May, 2002 Knightsbridge Tankers Limited --------------------------------------------------------------- (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 Form 20-F or Form 40-F Form 20-F X Form 40-F --- --- Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X --- --- If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_______ Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT Attached hereto is a copy of the quarterly report of Knightsbridge Tankers Limited (the "Company") for the period ended March 31, 2002. Item 2. ADDITIONAL INFORMATION Royal Dutch Petroleum Company and The Shell Transport and Trading Company, Public Limited Company file annual reports on Form 20-F (File Nos. 1-3788 and 1-4039) and periodic reports on Form 6-K with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Such annual reports contain the financial statements of the Royal Dutch/Shell [Logo Omitted] KNIGHTSBRIDGE TANKERS LIMITED FIRST QUARTER 2002 REPORT TO SHAREHOLDERS Knightsbridge Tankers Limited Registered Office Par-la-Ville Place, 14 Par-la-Ville Road Hamilton, Bermuda Bermuda, May 10, 2002 TO THE SHAREHOLDERS OF KNIGHTSBRIDGE TANKERS LIMITED: Enclosed is our report for the first quarter of 2002. The report contains selected unaudited financial information accompanied by a Management's Discussion and Analysis of Financial Condition and Results of Operations for the period ended March 31, 2002. On February 27, 1997, the Company's ship owning subsidiaries purchased five very large crude carriers ("VLCC's") from their previous owners and delivered them to Shell International Petroleum Company Limited ("Shell International"), as charterer, under separate "hell and high water" bareboat charters. Under those charters, the Company's ship owning subsidiaries receive the greater of a Base Rate of hire in the amount of $22,069 per day per VLCC or a spot market related rate. After inclusion of a component for operating expenses of $10,500 per day, the spot market related rate must exceed $32,569 per day for the Company's subsidiaries to receive any Additional Hire over the Base Rate. Based upon the determination by the London Tanker Brokers Panel the spot market related rate, after inclusion of the component for operating expenses, totaled $16,327 per day for the period January 1 through March 31, 2002. (The corresponding spot market related rate for the period January 1 through March 31, 2001, was determined to be $68,506). Accordingly, on April 15, 2002, Shell International paid to the Company's vessel owning subsidiaries charter hire at the Base Rate in the aggregate amount of $9,931,050 for the period January 1 through March 31, 2002. (For the period January 1 through March 31, 2001, Shell International paid charter hire at the Base Rate of $9,931,050 plus Additional Hire of $16,171,650). On April 15, 2002, the Board of Directors of the Company declared a distribution to shareholders of record as of April 25, 2002, payable on or about May 8, 2002, in the amount of $0.45 per share for the period January 1 through March 31, 2002. (For the period January 1 through March 31, 2001, the distribution was $1.39 per share.) The Company has agreed to provide information to shareholders that are United States income tax payers by February 15, 2003, so that they may make the appropriate tax reporting and elections with the United States tax authorities with respect to the Company's status as a "Passive Foreign Investment Company". Under present United States tax rules, the amount of income reported by a shareholder is based on the Company's income on an annual basis. Therefore, the Company will provide information enabling shareholders to determine the tax consequences of their investment in the Company, including the treatment of distributions received from the Company, for the entire year ending December 31, 2002. Please visit our website at www.knightsbridgetankers.com. We are pleased to answer any inquiries that shareholders may have. Our investor relations contacts are: Ola Lorentzon in Oslo, Norway (Tel: 47 23 11 40 00, Fax: 47 23 11 40 44) and Kate Blankenship in Hamilton, Bermuda (Tel: 441-295-0182, Fax: 441-295-3494). The NASDAQ National Market symbol for the Company's Common Shares is "VLCCF". Very truly yours, Ola Lorentzon Chairman and Chief Executive Officer MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Knightsbridge Tankers Limited (the "Company") was incorporated in Bermuda on September 18, 1996. In February 1997, the Company offered and sold to the public 16,100,000 common shares at an initial offering price of $20 per share. Simultaneously, the Company sold 1,000,000 common shares at a price of $20 per share to ICB International Limited, an indirect wholly-owned subsidiary of ICB Shipping Aktiebolag (publ) ("ICB"), a Swedish publicly traded ship owning and operating company. The Company used the proceeds of these offerings, together with advances under a $145.6 million credit facility from an international syndicate of lenders, primarily to fund the purchase by the Company's subsidiaries of five recently constructed very large crude carrier oil tankers ("VLCC's"). Upon their purchase from their previous owners, the VLCC's were delivered on February 27, 1997, to Shell International Petroleum Company Limited ("Shell International"), a company of the Royal Dutch/Shell Group of Companies, under separate "hell and high water" bareboat charters. The term of these charters is a minimum of seven years, with an option for Shell International to extend the period for each VLCC for an additional seven-year term, to a maximum of 14 years per VLCC. Under the charters, Shell pays the greater of a Base Rate of hire of $22,069 per day or a spot market related rate, determined quarterly by the London Tankers Brokers Panel. After taking into account a component for operating costs of $10,500 per day, Shell International pays the higher rate if the award exceeds $32,569 per day. RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2002 Revenues The Company's revenues consisted of charter hire of $9.9 million for the quarter ending March 31, 2002 compared with $26.1 million for the first quarter of 2001. This decrease is principally due to the fact that no additional hire was paid in the first quarter of 2002 while additional hire of $16.2 million was paid in the first quarter of 2001. Operating Expenses The Company's operating expenses consist of (i) fees due to the Company's manager, ICB Shipping (Bermuda) Ltd (the "Manager"), (ii) depreciation of the vessels and (iii) administration expenses consisting of payments of insurance premiums for directors and officers liability insurance. There can be no assurance, however, that the Company will not have other expenses or contingent liabilities for which reserves will be required. Interest Income and Expense Interest income of $7,999 was earned during the three months ended March 31, 2002 compared with $103,138 in the comparable period of 2001, a decrease due to the decreased cash balances arising from the decreased charter hire received in the first half of 2002. The Company's borrowings under its primary credit facility have been effectively converted to a fixed rate pursuant to a swap arrangement to which the Company is a party. Interest on the primary credit facility has effectively been fixed at 7.14 %, which resulted in interest expenses of $2,189,915 for the three months ended March 31, 2002. On January 1, 2001 the Company adopted SFAS No. 133, "Accounting for Derivatives and Hedging Activities". SFAS No. 133 requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of each derivative is recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. Upon the adoption of SFAS No. 133 the Company recorded the fair value of its interest rate swap which is designated as a hedge against interest paid on the Company's debt. The amount recorded as a liability was $3,496,905 and an equal charge was made to other comprehensive income, which is a component of shareholders' equity. At March 31, 2002 the interest rate swap had a negative value of $8,035,673. A separate statement for consolidated comprehensive income is included in the enclosed financial statements. Liquidity and Capital Resources Total shareholders' equity of the Company at March 31, 2002 was $225.8 million compared to $229.1 million at December 31, 2001. The decrease was due to net income of $3.1 million for the period January 1 through March 31, 2001 less distribution to shareholders for the first three months of 2002 in the aggregate amount of $7.9 million and the recording of the fair value of the swap in other comprehensive income/loss. The Company's long-term debt as of March 31, 2002 and 2001, consists of $125.4 million borrowed under its credit facility. The balance of the credit facility matures seven years and six months from February 27, 1997. Interest on this balance is payable quarterly in arrears. Currency Exchange Rates The international shipping industry's functional currency is the United States Dollar and virtually all of the Company's operating revenues and expenses are expected to be denominated in United States Dollar. Accordingly, the company's operating results, following expiration or termination of the charters with Shell International, are not expected to be significantly affected by movements in currency exchange rates. KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED BALANCE SHEETS (in U.S. Dollars) ASSETS CURRENT ASSETS MARCH 31, 2002 DECEMBER 31, 2001 - -------------- -------------- ----------------- (Unaudited) Cash 387,465 278,268 Charter hire receivable 9,931,050 10,515,600 Prepaid expenses 95,493 15,342 ----------- ----------- Total current assets 10,414,008 10,809,210 Vessels under capital lease, net 350,195,697 354,593,912 Capitalized financing fees and expenses, net 707,996 800,882 ----------- ----------- TOTAL ASSETS 361,317,701 366,204,004 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accrued expenses and other current liabilities 2,111,451 2,176,885 ----------- ----------- Total current liabilities 2,111,451 2,176,885 Credit facility 125,397,399 125,397,399 Interest rate swap agreement at fair value 8,035,673 9,552,504 SHAREHOLDERS' EQUITY Common shares, par value $0.01 per share: Authorized and outstanding 17,100,000 171,000 171,000 Contributed capital surplus account 233,637,851 238,458,720 Retained earnings - - Accumulated other comprehensive income (8,035,673) (9,552,504) ----------- ----------- Total shareholders' equity 225,773,178 229,077,216 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 361,317,701 366,204,004 =========== =========== KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in U.S. Dollars) Jan 1, 2002 Jan 1, 2001 to Mar 31, 2002 to Mar 31, 2001 ---------------- --------------- Charter hire revenue 9,931,050 26,102,700 Operating expenses: Depreciation of vessels under capital leases 4,398,215 4,398,215 Management fee 187,500 187,500 Administration expenses 13,209 12,711 ---------- ---------- 4,598,924 4,598,426 Net operating income 5,332,126 21,504,274 Interest income 7,998 103,138 Interest expense (2,189,915) (2,232,453) Other financial costs (105,078) (105,330) ---------- ---------- (2,286,995) (2,234,645) Net income 3,045,131 19,269,629 ========== ========== KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED) (in U.S. Dollars) Jan 1, 2002 -Mar 31, 2002 ------------- Net income 3,045,131 Other comprehensive loss Loss on derivative cash flow hedging instrument (8,035,673) ----------- Comprehensive income (4,990,542) =========== KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in U.S. Dollars) Jan 1, 2002 Jan 1, 2001 to Mar 31, 2002 to Mar 31, 2001 --------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income 3,045,131 19,269,629 Items to reconcile net income to net cash provided by operating activities: Depreciation 4,398,215 4,398,215 Amortization of capitalized fees and expenses 92,886 92,886 Changes in operating assets and liabilities: Charter hire receivable and prepaid expenses 504,399 4,984,244 Accrued expenses and other current liabilities (65,434) (8,439) ---------- ---------- Net cash provided by operating activities 7,975,197 28,736,535 CASH FLOWS FROM FINANCING ACTIVITIES Repayments of loan - - Distribution to shareholders (7,866,000) (28,728,000) --------- ---------- Net cash used in financing activities (7,866,000) (28,728,000) Net increase (decrease) in cash and cash equivalents 109,197 8,535 Cash and cash equivalents at beginning of period 278,268 247,370 --------- ---------- Cash and cash equivalents at end of period 387,465 255,905 ========= ========== KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) (in U.S. Dollars) Contributed Accumulated Capital Other Share Surplus Retained Comprehensive Capital Account earnings Income Total Balance at December 31, 2000 171,000 273,809,543 3,237,745 - 277,218,288 Net income - - 33,915,432 - 33,915,432 Other comprehensive - - - (9,552,504) (9,552,504) Loss Distribution to shareholders - (35,350,823) (37,153,177) - (72,504,000) - -------------------------------------------------------------------------------- Balance at December 31, 2001 171,000 238,458,720 - (9,552,504) 229,077,216 Net income - - 3,045,131 - 3,045,131 Other comprehensive Income 1,516,831 1,516,831 Distribution to shareholders - (4,820,869) (3,045,131) - (7,866,000) - -------------------------------------------------------------------------------- Balance at Mar 31, 2002 171,000 233,637,851 - (8,035,673) 225,773,178 ================================================================================ 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 authorised. Knightsbridge Tankers Limited ------------------------------- (Registrant) Date May 22, 2002 By /s/ Kate Blankenship ---------------- ------------------------------- Kate Blankenship Secretary 01655.0002 #325808 -----END PRIVACY-ENHANCED MESSAGE-----