COMMITMENTS AND CONTINGENT LIABILITIES

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Assets Pledged



	2015
Book value of assets pledged under ship mortgages (see Note 19)	$2,087 million

Other Contractual Commitments

The Company has arranged insurance for the legal liability risks for its shipping activities with Gard P.& I. (Bermuda) Ltd, Assuranceforeningen Skuld (Gjensidig), The Steamship Mutual Underwriting Association Limited, The Korea Shipowner’s Mutual Protection & Indemnity Association, The West of England Ship Owners Mutual Insurance Association (Luxembourg), North of England P&I Association Limited, The Standard Club Europe Ltd and The United Kingdom Mutual Steam Ship Assurance Association (Europe) Limited, all of which are mutual protection and indemnity associations. The Company is subject to calls payable to the associations based on the Company’s claims record in addition to the claims records of all other members of the associations. A contingent liability exists to the extent that the claims records of the members of the associations in the aggregate show significant deterioration, which may result in additional calls on the members.

SFL Deepwater, SFL Hercules and SFL Linus are wholly-owned subsidiaries of the Company, which are accounted for using the equity method. Accordingly, their assets and liabilities are not consolidated in the Company's Consolidated Balance Sheets, but are presented on a net basis under "Investment in associated companies" - see Note 16. As at December 31, 2015, their combined borrowings amounted to $831.2 million and the Company guaranteed $250.0 million of this debt.

At December 31, 2015, the Company had commitments under contracts to acquire newbuilding vessels totaling $261.9 million (2014: $85.0 million). In addition, two subsidiaries had contractual commitments relating to the chartering-in of two 18,000-20,000 TEU container vessels on 15 year bareboat charters amounting to $406.1 million at December 31, 2015 (2014: $nil), of which $30.0 million represents initial payments due on delivery of the vessels. There are no other contractual commitments at December 31, 2015.

The Company is routinely party both as plaintiff and defendant to laws suits in various jurisdictions under charter hire obligations arising from the operation of its vessels in the ordinary course of business. The Company believes that the resolution of such claims will not have a material adverse effect on its results of operations or financial position. The Company has not recognized any contingent gains or losses arising from the pending results of any such law suits.