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, 2020, 2019 and 2018. 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	2020			2019
Cash and cash equivalents	$	5,310		$	22,492
Accounts receivable and prepaid expenses		1,679			874
Amounts due from related parties		84,725			62,822
Total current assets	$	91,713		$	86,188

Investments in subsidiaries	$	434,172		$	468,817
Loan to subsidiaries		324,420			526,574
Investment in associate company		201			201
Total non-current assets	$	758,793		$	995,593

Total assets	$	850,506		$	1,081,780

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses	$	170		$	2,416
Total current liabilities	$	170		$	2,416

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

Total liabilities	$	170		$	118,984

Stockholders' equity
Stock	$	1,708		$	1,468
Paid-in additional capital		1,245,449			1,121,047
Accumulated deficit		(396,820	)		(159,719	)
Total stockholders' equity	$	850,336		$	962,796

Total liabilities and stockholders' equity	$	850,506		$	1,081,780

INCOME STATEMENT

(Dollars in thousands)	Jan. 1 - Dec. 31, 2020			Jan. 1 - Dec. 31, 2019			Jan. 1 - Dec. 31, 2018
Impairment charge	$	(35,278	)	$	455		$	(93,452	)
Dividend income		17,081			25,519			9,909
General and administrative expense		(19,148	)		(14,782	)		(13,735	)
Operating income/(loss)	$	(37,345	)	$	11,192		$	(97,279	)

Interest income	$	21,434		$	27,943		$	24,893
Interest expense		(6,766	)		(12,177	)		(10,341	)
Other financial income/(expenses)		245			17			(3,416	)
Profit/(loss) for the year	$	(22,433	)	$	26,975		$	(86,143	)

Statement of Comprehensive Income

(Dollars in thousands)	Jan. 1 - Dec. 31, 2020			Jan. 1 - Dec. 31, 2019		Jan. 1 - Dec. 31, 2018
Profit/(loss) for the year	$	(22,433	)	$	26,975	$	(86,143	)
Total comprehensive income/(loss) for the period	$	(22,433	)	$	26,975	$	(86,143	)
Attributable to the owners	$	(22,433	)	$	26,975	$	(86,143	)

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, 2020			Jan. 1 - Dec. 31, 2019			Jan. 1 - Dec. 31, 2018

Cash Flows from Operating Activities:
Profit/(loss) for the year	$	(22,433	)	$	26,975		$	(86,143	)
Items included in net income not affecting cash flows:
Amortization		3,250			5,459			4,733
Impairment charge		35,278			(455	)		93,452
Compensation related to options and restricted stock		4,204			693			663
(Gain)/loss purchase convertible bond		-			-			3,589
Changes in operating assets and liabilities:
Accounts receivable and prepaid expenses		(805	)		(500	)		(125	)
Accounts payable and accrued expenses		(2,246	)		(1,317	)		2,279
Amounts due to related parties		(43,313	)		(63,280	)		(72,365	)
Net cash used in operating activities	$	(26,063	)	$	(32,425	)	$	(53,917	)

Cash flows from Investing Activities
Loan to subsidiaries	$	223,550		$	75,500		$	58,990
Investment in vessels under construction		-			-			(21,263	)
Net cash provided by investing activities	$	223,550		$	75,500		$	37,727

Cash flows from Financing Activities
Cash dividends paid	$	(214,669	)	$	(28,685	)	$	(11,487	)
Purchase of treasury shares		-			(3,248	)		(5,026	)
Issuance of convertible bonds		-			(7	)		38,945
Repayment of convertible bonds		-			(6,426	)		-
Net cash (used in)/provided by financing activities	$	(214,669	)	$	(38,366	)	$	22,432

Net (decrease)increase in cash and cash equivalents	$	(17,182	)	$	4,709		$	6,242
Cash and cash equivalents at beginning of period		22,492			17,783			11,540
Cash and cash equivalents at end of period	$	5,310		$	22,492		$	17,783

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, 2020			Jan. 1 - Dec. 31, 2019		Jan. 1 - Dec. 31, 2018

Profit/(loss) of the parent company only under cost method of accounting	$	(22,433	)	$	26,975	$	(86,143	)
Additional profit/(loss) if subsidiaries had been accounted for using equity method of accounting as opposed to cost method of accounting		288,653			46,969		39,014
Profit/(loss) of the parent company only under equity method of accounting	$	266,221		$	73,944	$	(47,128	)

Equity Reconciliation

(Dollars in thousands)	December 31, 2020		December 31, 2019

Equity of the parent company only under cost method of accounting	$	850,336	$	962,796
Additional profit if subsidiaries had been accounted for using equity method of accounting as opposed to cost method of accounting		358,384		69,731
Equity of the parent company only under equity method of accounting	$	1,208,720	$	1,032,527

Dividends from subsidiaries are recognized when they are authorized. During the year ended December 31, 2020, the parent company recorded dividend income from its subsidiaries of $15,000 thousand. 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, 2020, 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.