Note 16 – Condensed Financial Information of DHT Holdings, Inc. (parent company only)

SEC Rule 12-04 Condensed Financial Information of Registrant requires DHT to disclose condensed financial statements of the parent company when the restricted net assets of consolidated subsidiaries exceed 25% of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations), which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party (i.e., lender, regulatory agency, foreign government, etc.).

The restricted net assets of consolidated subsidiaries exceeded 25% of the consolidated net assets of the parent company as of December 31, 2019, 2018 and 2017. The restricted assets mainly relate to assets restricted by covenants in our secured credit agreements entered into by the Company’s vessel-owning subsidiaries.

FINANCIAL POSITION

(Dollars in thousands)

ASSETS	December 31,			December 31,
Current assets	2019			2018
Cash and cash equivalents	$	22,492		$	17,783
Accounts receivable and prepaid expenses		874			374
Amounts due from related parties		62,822			36,216
Total current assets	$	86,188		$	54,372

Investments in subsidiaries	$	468,817		$	468,941
Loan to subsidiaries		526,574			563,349
Investment in associate company		201			201
Total non-current assets	$	995,593		$	1,032,491

Total assets	$	1,081,780		$	1,086,864

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	2,416		$	3,733
Current portion long term debt		-			32,009
Total current liabilities	$	2,416		$	35,742

Non-current liabilities
Long term debt		116,568			111,968
Total non-current liabilities	$	116,568		$	111,968

Total liabilities	$	118,984		$	147,710

Stockholders’ equity
Stock	$	1,468		$	1,427
Treasury shares		-			(1,364	)
Paid-in additional capital		1,121,047			1,097,099
Accumulated deficit		(159,719	)		(158,009	)
Total stockholders equity	$	962,796		$	939,154

Total liabilities and stockholders’ equity	$	1,081,780		$	1,086,864

INCOME STATEMENT

(Dollars in thousands)	Jan. 1 - Dec. 31, 2019			Jan. 1 - Dec. 31, 2018			Jan. 1 - Dec. 31, 2017

Impairment charge	$	455		$	(93,452	)	$	(4,948	)
Dividend income		25,519			9,909			25,415
General and administrative expense		(14,782	)		(13,735	)		(13,764	)
Operating income/(loss)	$	11,192		$	(97,279	)	$	6,703

Interest income	$	27,943		$	24,893		$	21,798
Interest expense		(12,177	)		(10,341	)		(9,229	)
Other financial income/(expenses)		17			(3,416	)		1,020
Profit/(loss) for the year	$	26,975		$	(86,143	)	$	20,293

Statement of Comprehensive Income

(Dollars in thousands)	Jan. 1 - Dec. 31, 2019		Jan. 1 - Dec. 31, 2018			Jan. 1 - Dec. 31, 2017
Profit/(loss) for the year	$	26,975	$	(86,143	)	$	20,293
Total comprehensive income/(loss) for the period	$	26,975	$	(86,143	)	$	20,293

Attributable to the owners	$	26,975	$	(86,143	)	$	20,293

In the condensed financial statements of the parent company, the parent company’s investments in subsidiaries were recorded at cost less any impairment. An assessment for impairment was performed when there was an indication that the investment had been impaired or the impairment losses recognized in prior years no longer existed.

CASH FLOW

(Dollars in thousands)	Jan. 1 - Dec. 31, 2019			Jan. 1 - Dec. 31, 2018			Jan. 1 - Dec. 31, 2017

Cash Flows from Operating Activities:
Profit/(loss) for the year	$	26,975		$	(86,143	)	$	20,293
Items included in net income not affecting cash flows:
Amortization		5,459			4,733			4,170
Impairment charge		(455	)		93,452			4,948
Compensation related to options and restricted stock		693			663			4,948
(Gain)/loss purchase convertible bond		-			3,589			(1,035	)
Changes in operating assets and liabilities:
Accounts receivable and prepaid expenses		(500	)		(125	)		4,305
Accounts payable and accrued expenses		(1,317	)		2,279			(291	)
Amounts due to related parties		(63,280	)		(72,365	)		11,782
Net cash provided by/(used in) operating activities	$	(32,425	)	$	(53,917	)	$	49,119

Cash flows from Investing Activities
Loan to subsidiaries	$	75,500		$	58,990		$	82,814
Investment in vessels under construction		-			(21,263	)		(86,004	)
Net cash provided by/(used in) investing activities	$	75,500		$	37,727		$	(3,191	)

Cash flows from Financing Activities
Cash dividends paid		(28,685	)		(11,487	)		(23,328	)
Purchase of treasury shares		(3,248	)		(5,026	)		-
Issuance of convertible bonds		(7	)		38,945			-
Repayment of convertible bonds		(6,426	)		-			-
Purchase of convertible bonds		-			-			(17,104	)
Net cash (used in)/provided by financing activities	$	(38,366	)	$	22,432		$	(40,431	)

Net increase/(decrease) in cash and cash equivalents	$	4,709		$	6,242		$	5,497
Cash and cash equivalents at beginning of period		17,783			11,540			6,043
Cash and cash equivalents at end of period	$	22,492		$	17,783		$	11,540

The condensed financial information of DHT Holdings Inc. has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the cost method has been used to account for investments in its subsidiaries.

A reconciliation of the profit/(loss) and equity of the parent company only between cost method of accounting and equity method of accounting for investments in its subsidiaries are as follows:

Profit/(Loss) Reconciliation

(Dollars in thousands)	Jan. 1 - Dec. 31, 2019		Jan. 1 - Dec. 31, 2018			Jan. 1 - Dec. 31, 2017

Profit/(loss) of the parent company only under cost method of accounting	$	26,975	$	(86,143	)	$	20,293
Additional profit/(loss) if subsidiaries had been accounted for using equity method of accounting as opposed to cost method of accounting		46,969		39,014			(13,664	)
Profit/(loss) of the parent company only under equity method of accounting	$	73,944	$	(47,128	)	$	6,628

Equity Reconciliation

(Dollars in thousands)	December 31, 2019		December 31, 2018

Equity of the parent company only under cost method of accounting	$	962,796	$	939,154
Additional profit if subsidiaries had been accounted for using equity method of accounting as opposed to cost method of accounting		69,731		22,762
Equity of the parent company only under equity method of accounting	$	1,032,527	$	961,915

Dividends from subsidiaries are recognized when they are authorized. During the year ended December 31, 2019, the parent company recorded dividend income from its subsidiaries of $25,007 thousand. During the year ended December 31, 2018, the parent company recorded dividend income from its subsidiaries of $9,500 thousand. During the year ended December 31, 2017, the parent company recorded dividend income from its subsidiaries of $25,000 thousand.

During the year ended December 31, 2019, the parent company was a guarantor for all of its credit facilities. Please refer to Notes 8 and 9 for a listing and summary of the credit facilities.