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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13A-16 OR 15D-16 UNDER THE SECURITIES
EXCHANGE ACT OF 1934

For the month of September 2020

Commission File Number:  000-29106

GOLDEN OCEAN GROUP 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 of Form 20-F or Form 40-F.
Form 20-F [ X ]     Form 40-F [   ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ________.

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ________.

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.


1


INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached hereto as Exhibit 99.1 to this Report on Form 6-K are the Management’s Discussion and Analysis of Financial Condition and Results of Operations and the unaudited condensed consolidated interim financial statements and related information and data of Golden Ocean Group Limited (the “Company”) for the six months ended June 30, 2020.

Attached hereto as Exhibit 99.2 to this Report is a press release of the Company dated April 7, 2020, announcing the appointment of the Company's Chief Executive Officer.

Attached hereto as Exhibit 99.3 to this Report is a press release of the Company dated April 24, 2020, announcing share options granted to the new Company's Chief Executive Officer.

Attached hereto as Exhibit 99.4 to this Report is a press release of the Company dated August 31, 2020, announcing the resolutions from the 2020 Annual General Meeting.

Attached hereto as Exhibit 99.5 to this Report is a press release of the Company dated September 7, 2020, announcing the notice of resignation from the Company's Chief Financial Officer and the appointment of the new Chief Financial Officer.

This Report on Form 6-K, except for the commentary of Mr. Ola Lorentzon, Mr. Ulrik Andersen, Mr. Per Heiberg and Mr. Simonsen included in any of the Exhibits to this Form 6-K, is hereby incorporated by reference into the Company's Registration Statement on Form F-3 (File No. 333-232709) filed with the U.S. Securities and Exchange Commission with an effective date of July 26, 2019.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
Matters discussed in this report on Form 6-K, and the documents incorporated by reference herein, may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995, or the PSLRA, provides safe harbor protections for forward-looking statements, which include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
We desire to take advantage of the safe harbor provisions of the PSLRA and are including this cautionary statement in connection with this safe harbor legislation. This Form 6-K and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. This report includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements." We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. When used in this document, the words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "may," "should," "would," "could," "continue" "contemplate," "possible," "might," "expect," "will" and similar expressions identify forward-looking statements.

The forward-looking statements in this report on Form 6-K, and the documents incorporated by reference herein, are based upon various assumptions, including, without limitation, management's examination of historical operating trends, data contained in our records and data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. As a result, you are cautioned not to rely on any forward-looking statements.

All statements in this document that are not statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, such matters as:
our future operating or financial results;
our continued borrowing availability under our debt agreements and compliance with the covenants contained therein;
changes in credit risk with respect to our counterparties on contracts;
the failure of our contract counterparties to meet their obligations;
the impact of the discontinuance of the London Interbank Offered Rate, or LIBOR, after 2021 on interest rates of our debt that reference LIBOR;
our ability to procure or have access to financing, our liquidity and the adequacy of cash flows for our operations;
fluctuations in the contributions of our joint ventures to our profits and losses;
our ability to successfully employ our dry bulk vessels;
changes in our operating expenses and voyage costs, including bunker prices, fuel prices (including increased costs for low sulfur fuel), drydocking, crewing and insurance costs;
the adequacy of our insurance to cover our losses;
our ability to replace our operating leases on favorable terms, or at all;
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our ability to fund future capital expenditures and investments in the construction, acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of completion of vessels under construction, the delivery and commencement of operation dates, expected downtime and lost revenue);
planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including drydocking, surveys, upgrades and insurance costs;
risks associated with any future vessel construction;
our expectations regarding the availability of vessel acquisitions and our ability to complete acquisition transactions planned;
our ability to renew our time charters when they expire or to enter into new time charters;
competition within our industry and our ability to compete effectively for charters with companies with greater resources;
the loss of a large customer or significant business relationship;
the potential for technological innovation to reduce the value of our vessels and charter income derived therefrom;
the impact of an interruption in or failure of our information technology and communications system, including the impact of cyber-attacks, upon our ability to operate;
vessel breakdowns and instances of off-hire;
potential conflicts of interest involving members of our board of directors and senior management;
our ability to attract, retain and motivate key employees;
work stoppages or other labor disruptions by our employees or the employees of other companies in related industries;
potential liability from pending or future litigation;
the impact of government inquiries and investigations;
the arrest of our vessels by maritime claimants;
government requisition of our vessels during a period of war or emergency;
potential exposure or loss from investment in derivative instruments;
the highly cyclical nature of the industry in which we operate;
general dry bulk shipping market trends, including fluctuations in charter hire rates and vessel values;
changes in supply and demand in the dry bulk shipping industry, including the market for our vessels and the number of newbuildings under construction;
the strength of world economies;
stability of Europe and the Euro;
fluctuations in interest rates and foreign exchange rates;
governmental claims against us;
our compliance with complex laws, regulations, including environmental laws and regulations and the U.S. Foreign Corrupt Practices Act of 1977;
the impact of increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance policies;
changes in seaborne and other transportation;
changes in governmental rules and regulations or actions taken by regulatory authorities;
the impact of public health threats and other highly communicable diseases, such as the recent outbreak of Coronavirus ("COVID-19");
general domestic and international political and geopolitical conditions;
the impact of adverse weather and natural disasters;
any further changes in U.S. trade policy that could trigger retaliatory actions by affected countries;
potential disruption of shipping routes due to accidents or political events;
acts of piracy on ocean-going vessels, terrorist attacks and international hostilities and instability; and
other factors discussed in "Item 3.D. Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2019 filed with the Commission on March 12, 2020, or our Annual Report.

In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report on Form 6-K and the documents incorporated by reference herein, might not occur, and our actual results could differ materially from those anticipated in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement contained in this report on Form 6-K, and the documents incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by law.


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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 authorized.


GOLDEN OCEAN GROUP LIMITED
(registrant)
Date:September 8, 2020By:/s/ Per Heiberg
Name: Per Heiberg
Title: Principal Financial Officer

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EXHIBIT 99.1
Management's Discussion and Analysis of Financial Condition and Results of Operations

The following presentation of management's discussion and analysis of financial condition and results of operations for the six month periods ended June 30, 2020 and 2019 should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes thereto included elsewhere herein, which have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"). For additional information relating to our management's discussion and analysis of results of operations and financial condition, please see our Annual Report.

As used herein, "we," "us," "our", "Golden Ocean" and the "Company" all refer to Golden Ocean Group Limited and its subsidiaries. The term deadweight ton, or dwt, is used in describing the size and capacity of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.

We own and operate dry bulk vessels of the following sizes:
Newcastlemax, which are vessels with carrying capacities of between 200,000 dwt and 210,000 dwt;
Capesize, which are vessels with carrying capacities of between 100,000 dwt and 200,000 dwt;
Panamax, which are vessels with carrying capacities of between 65,000 and 100,000 dwt; and
Ultramax, which are vessels with carrying capacities of between 55,000 and 65,000 dwt.

Unless otherwise indicated, all references to “USD” and “$” in this report are to, and amounts are represented in, U.S. dollars.

The below discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section "Risk Factors" included in our Annual Report.

General
On September 18, 1996, we were incorporated in Bermuda under the name Knightsbridge Tankers Limited as an exempted company pursuant to the Bermuda Companies Act 1981. In October 2014, we changed our name to Knightsbridge Shipping Limited. On March 31, 2015, we completed a merger with Golden Ocean Group Limited and subsequently changed our name to Golden Ocean Group Limited. Our registered and principal executive offices are located at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda, and our telephone number at this location is +1 (441) 295-6935.

Our common shares currently trade on the NASDAQ Global Select Market and the Oslo Stock Exchange under the symbol "GOGL".

We own and operate dry bulk carriers primarily consisting of Newcastlemax, Capesize, Panamax and Ultramax vessels. Our vessels transport a broad range of major and minor bulk commodities, including ores, coal, grains and fertilizers, along worldwide shipping routes. We operate through subsidiaries located in Bermuda, Liberia, Norway and Singapore. We are also involved in the charter, purchase and sale of vessels.

As of June 30, 2020, we owned 67 dry bulk vessels. In addition, we had 11 vessels chartered-in (of which seven were chartered in on financial leases and one on an operating lease from SFL Corporation Ltd., the former Ship Finance International Limited, or SFL, and three chartered in on operating leases from an unrelated third party). Each vessel is operated by one of our subsidiaries and is flagged either in the Marshall Islands, Hong Kong or Panama.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Management believes that the following accounting policies are the most critical in fully understanding and evaluating our reported financial results as they require a higher degree of judgment in their application resulting from the need to make
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estimates about the effect of matters that are inherently uncertain. See also "Note 2, accounting policies" to the audited Consolidated Financial Statements included in our Annual Report.

Impairment of vessels and right of use assets

The carrying values of our vessels and right of use assets, if any, may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates. Historically, both charter rates and vessel values tend to be cyclical. The carrying amounts of vessels and right of use assets that are held and used by us are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a particular vessel or and right of use assets may not be fully recoverable. Indicators of impairment are identified based on a combination of factors which include amongst other, development of second hand vessel values based on external appraisals of our ships, development of forward freight rates, spot rates and operating cash flow.

We assess recoverability of the carrying value of each own asset on an individual basis by estimating the future undiscounted cash flows expected to result from the asset and eventual disposal. Fair value for our owned vessels is estimated based on values achieved for the sale/purchase of similar vessels and external appraisals. In addition, owned vessels to be disposed of or held for sale are reported at the lower of carrying amount and fair value less estimated costs to sell. Recoverability of right of use assets is assessed on an asset by asset basis by estimating the future undiscounted cash flows from the right of use assets earned over the remaining lease term of our operating and finance leases. For both, own assets and right of use assets, if the future net undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value.

In developing estimates of future cash flows for owned vessels, we must make assumptions about future performance, with significant assumptions being related to charter rates, additional earnings due to scrubber installations, ship operating expenses, utilization, drydocking requirements, residual value and the estimated remaining useful lives of the vessels. In developing estimates of future cash flows for right of use assets, we must make significant assumptions related to charter rates, additional earnings due to scrubber installations, ship operating expenses, utilization and drydocking requirements. For both owned vessels and leased assets, these assumptions are based on historical trends as well as future expectations. Specifically, in estimating future charter rates, management takes into consideration rates currently in effect for existing time charters and estimated daily time charter equivalent rates for each vessel class for the unfixed days over the estimated remaining lives of each of the vessels. The estimated daily time charter equivalent rates used for unfixed days are based on a combination of (i) forward freight market rates and (ii) estimate of implied charter rates based on the broker values received from third party brokers. The implied rate is a calculated rate for each vessel based on the charter rate the vessel would need to achieve, given our estimated future operating costs and discount factors that once discounted would equate to the average broker values. Benefits from scrubber installations are calculated based on expected bunker fuel cost savings and estimated consumption per year. We then use the resultant undiscounted cash flows in our model. Recognizing that the transportation of dry bulk cargoes is cyclical and subject to significant volatility based on factors beyond our control, management believes the use of estimates based on the combination of internally forecasted rates and calculated average rates as of the reporting date to be reasonable. We believe that the estimated future undiscounted cash flows expected to be earned by each of our owned vessels over their remaining estimated useful life will exceed the vessels' carrying value as of June 30, 2020, and accordingly, have not recorded an impairment charge for owned vessels. Estimated undiscounted cash flows expected to be earned by each of our leased vessels over the remaining lease term were below carrying value of the vessels as of March 31, 2020, and we have recorded an impairment charge as a difference between carrying value and fair value of the leased vessels. We believe that estimated undiscounted cash flows expected to be earned by each of our leased vessels over the remaining lease term were above the carrying value of the vessels as of June 30, 2020.

Estimated outflows for operating expenses and drydocking requirements are based on historical and budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved and estimates of a residual value are consistent with the pattern of scrap rates used in management's evaluation of salvage value.

The more significant factors that could impact management's assumptions regarding cash flows include (i) loss or reduction in business from significant customers, (ii) unanticipated changes in demand for transportation of dry bulk cargoes, (iii) greater than anticipated levels of newbuilding orders or lower than anticipated levels of vessel scrappings, and (iv) changes in rules and regulations applicable to the dry bulk industry, including legislation adopted by international organizations such as the International Maritime Organization and the European Union or by individual countries. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially, in the future. There can be no assurance as to how long charter rates and vessel values will remain at their current low levels or whether they will improve by a significant degree. If charter rates were to remain at depressed levels future assessments of vessel impairment would be adversely affected.

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Our Fleet – Comparison of Possible Excess of Carrying Value Over Estimated Charter-Free Market Value of Certain Vessels

In "Critical Accounting Policies – Impairment of long-lived assets", we discuss our policy for impairing the carrying values of our vessels. During the past few years, the market values of vessels have experienced particular volatility, with substantial declines in many vessel classes. As a result, the charter-free market value, or basic market value, of certain of our vessels may have declined below those vessels' carrying value, even though we would not impair those vessels' carrying value under the accounting impairment policy, due to the belief that future undiscounted cash flows expected to be earned by such vessels over their operating lives would exceed such vessels' carrying amounts.

Our estimates of basic market value assume that our vessels are all in good and seaworthy condition without need for repair and if inspected would be certified in class without notations of any kind. Our estimates are based on the values achieved for the sale/purchase of similar vessels and appraised valuations and are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future basic market value of the vessels or prices that we could achieve if we were to sell them.

COVID-19 Update

With respect to the ongoing COVID-19 pandemic, we are focused on maintaining our efficient operations and, above all, the health and safety of our seafarers and shore-based employees. During this challenging time, we are grateful to the contributions made by all of our staff, at sea and ashore, who have been working hard under extraordinary conditions.

Because of port restrictions and various quarantine measures, we continue to experience challenges with crew changes. In light of these challenges our crew has to stay on board for longer periods and increased off-hire may occur in conjunction with crew changes. We have together with our technical managers implemented various measures to protect the safety and wellbeing of our seafarers and to minimize the consequences of the pandemic.

Chief Executive Officer and Chief Financial Officer updates

On April 7, 2020 we announced that Ulrik Uhrenfeldt Andersen was appointed as the new Chief Executive Officer of Golden Ocean Management AS with effect from Tuesday April 14, 2020. Mr Andersen comes from a position as Chief Executive Officer of Avance Gas AS and previously worked as Head of Shipping for Petredec, Managing Director for Neu Gas Shipping and Head of the Maersk VLGC Pool.

On April 24, 2020, we announced that 550,000 share options have been granted to Mr Ulrik Andersen.

On September 7, 2020, Mr. Per Heiberg announced his resignation as Chief Financial Officer of Golden Ocean Management AS. Mr. Peder Simonsen has been appointed as his successor. Mr. Simonsen was most recently the Chief Financial Officer and Interim Chief Executive Officer of Avance Gas AS. Prior to joining Avance Gas AS in 2014, he was First Vice President at Nordea Bank Norge ASA, where he worked with numerous large shipping and offshore companies.

Results of Operations
Six-months ended June 30, 2020 compared to the six-months ended June 30, 2019

Operating revenues

We currently operate most of our vessels in the spot market, exposing us to fluctuations in spot market charter rates. As a result, our shipping revenues and financial performance are significantly affected by conditions in the dry bulk spot market, and any decrease in spot charter rates may adversely affect our earnings. In the first six months of 2020, market conditions were weaker compared to the first six months of 2019, which was brought about by the COVID-19 pandemic. However, the freight rates in the first six months of 2020 were also impacted by the stronger market in the second half of 2019 when some of our voyages were contracted, and therefore, overall, the average freight rates in the first six months of 2020 were higher than the average freight rates in the first six months of 2019. The mix of charters between spot or voyage charters and time charters also affected our revenues and voyage expenses.

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Six Months Ended June 30,Change
(in thousands of $)20202019$
Time charter revenues86,250 128,139 (41,889)
Voyage charter revenues166,382 112,867 53,515 
Other revenues1,022 786 236 
Total operating revenues253,654 241,792 11,862 

Time charter revenues decreased by $41.9 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019 primarily due to a decrease of $44.1 million reflecting the decline in the dry bulk market which resulted in lower rates under index-linked and short-term time charters for vessels that were in our fleet through the duration of both these periods.

This factor was partially offset by an increase of $2.2 million attributable to a decrease in amortization of favorable charter party contracts during the six months ended June 30, 2019

Voyage charter revenues increased by $53.5 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019 primarily due to:

an increase of $19.5 million attributable to an increase in average freight rate and increased voyage activity on chartered-in vessels trading on voyage charters during the six months ended June 30, 2020, and
an increase of $34.0 million as a result of an increase in average freight rate and increased voyage activity for vessels that were in our fleet through the duration of both periods.

Other revenues increased by $0.2 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019.

Other operating income (expenses), net
Six Months Ended June 30,Change
(in thousands of $)20202019$
Other operating income (expenses), net2,362 2,816 (454)

The decrease in other operating income (expenses) is primarily related to a decrease in net income from Capesize Chartering Ltd., or CCL, under our revenue sharing agreement with CCL.

Voyage expenses and commissions
Six Months Ended June 30,Change
(in thousands of $)20202019$
Voyage expenses and commissions107,705 67,104 40,601 

Voyage expenses and commissions increased by $40.6 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019. An increase of $32.0 million attributable to vessels that were in our fleet through the duration of both periods and was driven by
an increase of $22.6 million in bunker expenses primarily as a result of higher bunker fuel prices in the end of 2019 when bunker fuel was purchased, further affected by increased bunker fuel consumption due to the higher number of voyage days, and
an increase of $9.1 million in port expenses as a result of a higher number of port calls in 2020, and
an increase in other voyage costs of $0.3 million compared with 2019.

The increase was further contributed by an increase in voyage expenses of $8.6 million relating to more short-term chartered-in vessels trading on voyage charters in the period.

Ship operating expenses
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Six Months Ended June 30,Change
(in thousands of $)20202019$
Ship operating expenses100,159 90,818 9,341 

Ship operating expenses increased by $9.3 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019 primarily due to:

an increase of $10.1 million in drydocking expenses due to more ships being drydocked,
an increase of $1.2 million attributable to operating lease service element for Admiral Schmidt and Vitus Bering, vessels which were chartered in for a three-year period in the second half of 2019, and
an increase of $0.4 million attributable to remaining vessels.

The increase was partially offset by a decrease of $2.4 million attributable to lower running expenses, primarily crew costs as a result of postponed crew changes due to the COVID-19 pandemic.

Charter hire expenses
Six Months Ended June 30,Change
(in thousands of $)20202019$
Charter hire expenses29,239 31,616 (2,377)

Charter hire expenses decreased by $2.4 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019 primarily due to:

a decrease of $13.3 million as a result of a reclassification of charter hire expenses for seven vessels chartered in from SFL. In December 2019, leases for these vessels were reclassified from operating leases to finance leases, and as a result, lease expense for these vessels was not presented under charter hire expense in the six months ended June 30, 2020, but instead accounted for under depreciation and interest expense.
a decrease of $0.3 million due to lower charter hire expense for KSL China and Golden Hawk
This was partially offset by:
an increase of $10.6 million mainly due to an increase in short-term charter-in activity from third parties, and
an increase of $0.6 million incurred for the Admiral Schmidt and the Vitus Bering, vessels which were chartered in for a three-year period in the second half of 2019.


Administrative expenses
Six Months Ended June 30,Change
(in thousands of $)20202019$
Administrative expenses6,594 6,805 (211)

Administrative expenses decreased by $0.2 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019.

Impairment loss on right of use assets
Six Months Ended June 30,Change
(in thousands of $)20202019$
Impairment loss on right of use assets94,233  94,233 

In the six months ended June 30, 2020, an impairment loss of $94.2 million equal to the difference between the asset's carrying value and fair value, has been recorded as a result of an impairment review performed on an asset by asset basis. $70.0 million of impairment loss related to seven vessels on financial lease from SFL and $24.2 million related to four vessels on operating leases. No impairments have been recorded in the six months ended June 30, 2019.

Depreciation
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Six Months Ended June 30,Change
(in thousands of $)20202019$
Depreciation56,081 46,853 9,228 

Depreciation increased by $9.2 million in the six months ended June 30, 2020 compared to the six months ended June 30, 2019 primarily due to:

an increase of $9.1 million attributable to higher depreciation on finance leases for vessels chartered in from SFL and reclassified from operating leases to finance leases in December 2019, and
an increase of $0.8 million related to vessels that have installed ballast water treatment systems ("BWTS") and/or scrubbers during 2019.
The increase was partially offset by:
a decrease of $0.5 million attributable to vessels in our fleet, and
a decrease in depreciation expense of $0.2 million due to redelivery of the Golden Eclipse in April 2020, whereas in the six months ended June 30, 2019 the vessel was in our fleet for the whole period.

Interest income
Six Months Ended June 30,Change
(in thousands of $)20202019$
Interest income786 2,775 (1,989)

Interest income decreased by $2.0 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019 primarily due to our decreased cash position during this period and to lower interest rates earned on our deposits.

Interest expense
Six Months Ended June 30,Change
(in thousands of $)20202019$
Interest on fixed rate debt 430 (430)
Interest on floating rate debt21,257 29,732 (8,475)
Finance lease interest expense5,397 200 5,197 
Commitment fees 195 (195)
Amortization of deferred charges1,259 941 318 
Amortization of fair value adjustments as a result of the Merger 813 (813)
27,913 32,311 (4,398)

Interest expense decreased by $4.4 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019 primarily due to:

a decrease of $8.5 million of interest on our floating rate debt primarily due to (i) a decrease in total floating rate debt , and (ii) a decrease in LIBOR rates, with the average 3 month LIBOR rates decreasing from 2.60% in the first half of 2019 to 1.07% in the first half of 2020, and
a decrease of $0.8 million in amortization of fair value adjustment and a decrease of $0.4 million of fixed rate interest debt following the full repayment of our convertible bond at maturity in January 2019.

These factors were partially offset by:
an increase of $5.2 million in finance lease interest expense following a reclassification of seven SFL vessels from operating leases to finance leases, and as a result, lease expense for these vessels is no longer presented under charter hire expense, but instead accounted for under depreciation and interest expense, and
an increase of $0.3 million of amortization of deferred charges as a result of increased debt issuance costs from the amendment of our $420 million loan facility and our new $93.75 million and $131.79 million loan facilities in 2019.

Equity results of associated companies
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Six Months Ended June 30,Change
(in thousands of $)20202019$
Equity results of associated companies(2,564)178 (2,742)

Equity results of associated companies decreased by $2.7 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019. This was primarily due to a loss of $3.3 million from our equity investments in SwissMarine Pte. Ltd. ("SwissMarine") and a $0.8 million gain from our investments in TFG Marine Pte Ltd ("TFG Marine"), the bunkering joint venture with Trafigura Pte Ltd (“Trafigura”) and Frontline Ltd (“Frontline”). We acquired a 10% ownership interest in TFG Marine in January 2020.

Gain (loss) on derivatives
Six Months Ended June 30,Change
(in thousands of $)20202019$
Gain (loss) on derivatives(23,397)(10,217)(13,180)

The loss on derivatives increased by $13.2 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019 primarily due to a negative development in the fair value of our USD denominated interest rate swaps and bunker derivatives of $14.3 million and $2.6 million, respectively. This was partially offset by increased gains from our forward freight derivatives and foreign currency derivatives of $3.2 million and $0.6 million, respectively.

Other financial items
Six Months Ended June 30,Change
(in thousands of $)20202019$
Other financial items(10,938)(2,313)(8,625)

Other financial items decreased by $8.6 million in the six months ended June 30, 2020 compared with the six months ended June 30, 2019 primarily due to:
a $8.5 million mark-to-market loss of our investments in equity securities recognized at fair value, and
a $0.1 million increase in foreign exchange losses.

Recent Accounting Pronouncements 

For information regarding recently adopted and recently issued accounting standards applicable to us, see "Note 3, Recently Issued Accounting Standards" to the unaudited interim condensed consolidated financial statements in this report.

LIQUIDITY AND CAPITAL RESOURCES

We operate in a capital-intensive industry and have historically financed our purchase of vessels through a combination of equity capital and borrowings from commercial banks, as well as through issuance of convertible bonds. Our ability to generate adequate cash flows on a short and medium term basis depends substantially on the performance of our vessels in the market. Periodic adjustments to the supply of and demand for dry bulk vessels cause the industry to be cyclical in nature.

We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short and medium term liquidity.

Our funding and treasury activities are conducted within corporate policies to increase investment returns while maintaining appropriate liquidity for our requirements. Cash and cash equivalents are held primarily in U.S. dollars with some balances held in Norwegian kroner, Singapore dollars and Euro.

Following the completion of committed scrubber installations in the first six months of 2020, we have very limited capital expenditure requirements for 2020 and 2021.

Our short-term liquidity requirements relate to payment of operating expenses (including drydocking) and BWTS on certain of our vessels, funding working capital requirements, repayment of bank loans, lease payments for our chartered in fleet and need to maintain cash reserves against fluctuations in operating cash flows and payment of potential cash distributions. Sources of
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short-term liquidity include cash balances, and short-term investments. Restricted cash consists of cash, which may only be used for certain purposes under our contractual arrangements and mainly comprises collateral deposits for derivative trading. As of June 30, 2020, we have changed our accounting treatment of restricted cash, which under the previous accounting principle applied included minimum covenanted cash. In accordance with our debt facilities, we need to maintain free cash of the higher of $20 million or 5% of total interest-bearing debt. From April 1, 2020, cash required to be maintained by the financial covenants in our loan facilities is no longer recorded as restricted cash, but as cash and cash equivalents. We have adjusted for this change in previous periods. This change was made to align our accounting principles with the way most other shipping companies present their cash balances. For further information, please refer to "Note 2, Accounting policies".

To preserve our liquidity, in the first half of 2020 we decided not to pay dividends given the negative result, and the current market environment, as well as the uncertain and evolving nature of near-term expectations. Our Board of Directors remains committed to returning value to our shareholders through dividends, and the amount and timing of any future dividend payments will be based on our results and on market expectations.

As of June 30, 2020 and December 31, 2019, we had cash, cash equivalents and restricted cash of $104.1 million and $163.2 million, respectively.

As of June 30, 2020, our current portion of long-term debt was $379.3 million. The current portion of long-term debt includes the full outstanding amount of $310.2 million on our $425.0 million loan facility for 14 Capesize vessels that matures on March 31, 2021, as well as ordinary repayments of $69.1 million. We are currently in the process of refinancing our $425.0 million credit facility and expect to finalize this prior to its maturity in March 2021. We believe it is probable that we will be able to implement our refinancing plan, based on the existing level of collateral and our history of successfully refinancing our debt. Most recently, we refinanced the non-recourse debt with our $93.75 million, $131.79 million and $284 million facilities and increased principal under our $420 million facility compared to the original balloon to cover additional investments in exhaust gas scrubbers for some of the vessels in the facility. See also "Note 15, Debt" to these condensed consolidated interim financial statements for additional information. We believe that our cash on hand, expected cash flows from operations and borrowings under our current facilities, including the expected refinancing of our $425.0 million credit facility, will be sufficient to fund our requirements for, at least, the 12 months from the date of this report.

Medium to Long-term Liquidity and Cash Requirements

Our medium and long-term liquidity requirements include funding drydockings, BWTS and the equity portion of potential investments in new or replacement vessels and repayment of bank loans. Potential additional sources of funding for our medium and long-term liquidity requirements include new loans, refinancing of existing arrangements, equity issues, public and private debt offerings, sales of vessels or other assets and sale and leaseback arrangements.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated.
Six Months Ended June 30,
(in thousands of $)20202019
Net cash provided by (used in) operating activities11,212 28,489 
Net cash provided by (used in) investing activities(19,405)(18,755)
Net cash provided by (used in) financing activities(50,969)(219,082)
Net change in cash, cash equivalents and restricted cash(59,162)(209,348)
Cash, cash equivalents and restricted cash at beginning of period163,244 372,605 
Cash, cash equivalents and restricted cash at end of period104,082 163,257 

Operating Activities
We have significant exposure to the spot market as only 10 of our vessels were fixed on long term time charter contracts during the six months ended June 30, 2020. At the date of this report, we have 11 vessels on fixed rate time charter contracts with an initial contract duration of more than eleven months. From time to time we may also enter into forward freight agreements, or FFAs, to hedge our exposure to the charter market for a specified route and period of time. The revenues and net operating income are therefore dependent on the earnings in the spot market.

12


Revenues from time charters are generally received monthly or bi-weekly in advance while revenues from voyage charters are received on negotiated terms for each voyage, normally 90% or 95% after completed loading and the remaining 5-10% after completed discharge.

Net cash provided by operating activities in the six months ended June 30, 2020 was $11.2 million compared with $28.5 million in the six months ended June 30, 2019. As a substantial part of our fleet trades on either voyage charters or index linked time charter contracts, we are significantly exposed to the spot market. Therefore, our spot market exposure contributes to volatility in cash flows from operating activities. Any increase or decrease in the average rates earned by our vessels in periods subsequent to June 30, 2020, compared with the actual rates achieved during the first six months of 2020, will consequently have a positive or negative comparative impact on the amount of cash provided by operating activities.

Based on the current level of operating expenses, debt repayments, interest expenses and general and administrative costs, the estimated average cash break-even rates on a time charter equivalent ("TCE") basis are (i) approximately $12,084 per day for our Capesize vessels without scrubbers and (ii) approximately $8,561 per day for our Panamax vessels. The average market spot rates for the first six months of 2020 were as follows: for Capesize vessels, approximately $7,181 per day for non-scrubber vessels and for Panamax vessels, approximately $5,896 per day. However, market conditions started to improve at the end of second quarter of 2020 and have held up so far in the third quarter of 2020. The average market spot rates from July 1, 2020 to September 7, 2020 were as follows: for Capesize vessels, approximately $21,714 per day for non-scrubber vessels and for Panamax vessels, approximately $12,143 per day.

Investing Activities

Net cash used in investing activities was $19.4 million in the six months ended June 30, 2020 and comprised primarily:

payments of approximately $23.8 million related to installation of scrubbers on certain of our vessels, and
payment of $1.0 million shareholder loan to TFG Marine

This was partially offset by a repayment of a $5.4 million shareholder loan from SwissMarine.

Net cash used in investing activities was $18.8 million in the six months ended June 30, 2019 and comprised primarily:

payments of $10.0 million in relation to our investment in SwissMarine, and
payments of approximately $8.9 million related to installation of scrubbers and BWTS on certain of our vessels.

This was partially offset by $0.1 million in dividends from our investment in Scorpio Bulkers Inc., an unaffiliated dry bulk shipping company listed on the New York Stock Exchange. We treat this investment as an investment in marketable securities.

Financing Activities

Net cash used in financing activities was $51.0 million in the six months ended June 30, 2020 and comprised primarily:

ordinary repayment of long-term debt of $45.4 million,
distributions of $7.2 million in cash dividends to our shareholders, and
repayments of $33.9 million in finance lease obligations

This was partially offset by:
a drawdown of the remaining available $18.0 million under the scrubber tranches of our $420.0 million loan facility, and
scrubber related financing received from SFL of $17.5 million

Net cash used in financing activities was $219.1 million in the six months ended June 30, 2019 and comprised primarily:

repayments of $423.5 million, which included the full repayment at maturity on January 30, 2019 of the net outstanding amount of $168.2 million under our convertible bond, prepayments of an aggregate of $222.1 million under our three non-recourse loan facilities, $102.7 million credit facility, $73.4 million credit facility and $80.2 million credit facility, which financed the 14 vessels acquired from Quintana Shipping Ltd. in 2017, and repayments of $33.2 million in ordinary installments,
distributions of $10.8 million in cash dividends to our shareholders, and
repayments of $2.7 million in finance lease obligations, $2.6 million in share repurchases and $5.2 million in debt

13


This was partially offset by:

$225.5 million in proceeds from drawdowns from our $93.75 million and $131.79 million term loan facilities to finance the repayment of our non-recourse debt as described above, and
net proceeds of $0.2 million from the exercise of options previously granted to employees under our 2016 share option plan to purchase 50,000 shares.

Borrowing Activities
Our $425.0 million senior secured post-delivery term loan facility matures on March 31, 2021.
The current portion of long-term debt includes the full outstanding amount of $310.2 million on this facility for 14 Capesize vessels. We currently do not have the liquid funds needed to repay the debt in full at maturity, but we expect to refinance the existing balloon payment of the debt at maturity.

Debt covenants
Our loan agreements contain loan-to-value clauses, which could require us to post additional collateral or prepay a portion of the outstanding borrowings should the value of the vessels securing borrowings under each of such agreements decrease below required levels. In addition, our loan agreements contain certain financial covenants. We are required to maintain free cash of the higher of $20 million or 5% of total interest-bearing debt, maintain positive working capital as defined in our loan agreements which excludes the short-term portion of long-term borrowings and finance lease obligations, and maintain a value adjusted equity of at least 25% of value adjusted total assets. Further, under our debt facilities, the aggregate value of the collateral vessels shall not fall below 135% of the outstanding loan.

With regards to free cash, we have covenanted to retain at least $62.5 million of cash and cash equivalents as at June 30, 2020 (December 31, 2019: $64.1 million) and in accordance with our updated accounting policy this is classified under cash and cash equivalents. Please refer to "Note 2, Accounting Policies" for description of changes made to our accounting policy. In addition, none of our vessel owning subsidiaries may sell, transfer or otherwise dispose of their interests in the vessels they own without the prior written consent of the applicable lenders unless, in the case of a vessel sale, the outstanding borrowings under the credit facility applicable to that vessel are repaid in full. Failure to comply with any of the covenants in the loan agreements could result in a default, which would permit the lender to accelerate the maturity of the debt and to foreclose upon any collateral securing the debt. Under those circumstances, we might not have sufficient funds or other resources to satisfy our obligations.

As of June 30, 2020, we were in compliance with all of the financial and other covenants contained in our loan agreements.

Our operations in the first six months of 2020 were affected by the outbreak of the COVID-19 pandemic and resulting economic downturn. Our free cash and cash equivalents decreased to $70.4 million as of June 30, 2020, which was above the minimum cash covenant requirement contained in our loan agreements. A potential decrease in market spot rates below our average cash break-even levels would affect cash and cash equivalents and might, if it lasts for a longer period, result in us not being able to comply with the minimum covenant requirements contained in our loan agreements. In such circumstances, we will use our potential additional sources of funding such as new loans, refinancing of existing arrangements, equity issues, public and private debt offerings, sales of vessels or other assets and sale and leaseback arrangements to resolve this situation.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk

We are exposed to interest rate fluctuations primarily due to our floating interest rate bearing long term debt. The international dry bulk industry is a capital-intensive industry, which requires significant amounts of financing, typically provided in the form of secured long-term debt. Our current bank financing agreements bear floating interest rates, typically three-month USD LIBOR. Significant adverse fluctuations in floating interest rates could adversely affect our operating and financial performance and our ability to service our debt.

From time to time, we may take positions in interest rate derivative contracts to manage the risk associated with fluctuations in interest payments resulting from fluctuations of the underlying floating interest rates of our long-term debt. Adverse fluctuations in floating interest rates could adversely affect our free cash position as we may be required to secure cash as collateral, under our interest rate derivative contracts.

We are exposed to credit risk in the event of non-performance by the counterparties of our interest rate derivative contracts.

14


Our variable rate borrowings as of June 30, 2020 amounted to $1,094.8 million compared to $1,122.1 million as of December 31, 2019 and bear interest at LIBOR plus a margin.

Interest Rate Swap Agreements

Our interest rate swaps are intended to reduce the risk associated with fluctuations in interest rates whereby the floating interest rates on an original principal amount of $500 million (December 31, 2019: $500 million) are swapped to fixed rate. In the six months ended June 30, 2020, we recognized a net loss of $26.7 million related to interest rate swap agreements (six months ended June 30, 2019: net loss of $12.4 million). As of June 30, 2020 and December 31, 2019, the weighted average fixed interest rate for our portfolio of interest rate swaps was 1.81% and 2.03%, respectively.

Foreign Currency Risk

The majority of our transactions, assets and liabilities are denominated in United States dollars, our functional currency. However, we incur expenditure in currencies other than the functional currency, mainly in Norwegian kroner, Euro and Singapore dollars. There is a risk that currency fluctuations in transactions incurred in currencies other than the functional currency will have a negative effect of the value of our cash flows. We may enter into foreign currency swaps to mitigate such risk exposures. The counterparties to such contracts are major banking and financial institutions. Credit risk exists to the extent that the counterparties are unable to perform under the contracts but this risk is considered remote as the counterparties are, in our opinion, well established banks.

Foreign currency Swap Agreements

In the six months ended June 30, 2020, we recognized a net gain of $0.3 million related to foreign currency swaps (six months ended June 30, 2019: net loss of $0.3 million).

Inflation

Inflation has only a moderate effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase operating, voyage, general and administrative, and financing costs.

Commodity Price Risk

Fuel costs represent the largest component of our voyage expenses. An increase in the price of fuel may adversely affect our profitability if these increases cannot be passed onto customers. The price and supply of fuel is unpredictable and fluctuates as a result of events outside our control, including geo-political developments, supply and demand for oil and gas, actions by members of the Organization of the Petroleum Exporting Countries, or OPEC, and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns and regulations.

Bunker Swap Agreements

From time to time we may enter into contracts of affreightment and time charter contracts with fixed bunker prices on redelivery. We are exposed to fluctuations in bunker prices, when the contracts of affreightment and time charter contracts are based on an assumed bunker price for the trade. There is no guarantee that a bunker swap agreement removes all the risk from the bunker exposure, due to possible differences in location and timing of the bunkering between the physical and financial position. The counterparties to such contracts are major banking and financial institutions, and fuel suppliers. Credit risk exists to the extent that the counterparties are unable to perform under the contracts but this risk is considered remote as the counterparties are, in our opinion, usually well-established banks or other well-known institutions in the market.

In the six months ended June 30, 2020, we recognized a net loss of $2.6 million related to bunker swap agreements (six months ended June 30, 2019: net gain of $7.0 thousand).

Spot Market Rate Risk

The cyclical nature of the dry bulk shipping industry causes significant increases or decreases in the revenue that we earn from our vessels, particularly those vessels that operate in the spot market, participate in pools or revenue sharing agreements that are concentrated in the spot market.

15


FFA

From time to time, we may take positions in freight derivatives, mainly through FFAs. Generally, freight derivatives may be used to hedge a vessel owner’s exposure to the charter market for a specified route and period of time. By taking positions in FFA or other derivative instruments, we could suffer losses in the settling or termination of these agreements. This could adversely affect our results of operation and cash flow. FFAs are settled on a daily basis through reputable clearing houses and also include a margin maintenance requirement based on marking the contract to market.

In the six months ended June 30, 2020, we recognized a net gain of $5.7 million related to FFAs (six months ended June 30, 2019: net gain of $2.5 million).

GOLDEN OCEAN GROUP LIMITED

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


  
 
 
 

16


Golden Ocean Group Limited
Unaudited Interim Condensed Consolidated Statements of Operations for the six months ended June 30, 2020 and June 30, 2019

(in thousands of $, except per share data)
Six months ended June 30,
 20202019
Operating revenues  
Time charter revenues86,250 128,139 
Voyage charter revenues166,382 112,867 
Other revenues1,022 786 
Total operating revenues253,654 241,792 
Other operating income (expenses), net2,362 2,816 
Operating expenses  
Voyage expenses and commissions107,705 67,104 
Ship operating expenses100,159 90,818 
Charter hire expenses29,239 31,616 
Administrative expenses6,594 6,805 
Impairment loss on right of use assets94,233  
Depreciation56,081 46,853 
Total operating expenses394,011 243,196 
Net operating income (loss)(137,995)1,412 
Other income (expenses)  
Interest income786 2,775 
Interest expense(27,913)(32,311)
Equity results of associated companies(2,564)178 
Gain (loss) on derivatives(23,397)(10,217)
Other financial items(10,938)(2,313)
Net other income (expenses)(64,026)(41,888)
Net income (loss) before tax(202,021)(40,476)
Income tax expense 80 75 
Net income (loss)(202,101)(40,551)
Per share information:  
Basic and diluted earnings (loss) per share$(1.41)$(0.28)
Dividends per share$ $0.13 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Golden Ocean Group Limited
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss) for the six months ended June 30, 2020 and June 30, 2019

(in thousands of $)
Six months ended June 30,
 20202019
Comprehensive income (loss), net
Net income (loss)(202,101)(40,551)
Other comprehensive income (loss), net
Unrealized gain (loss)  
Other comprehensive income (loss), net  
Comprehensive income (loss), net(202,101)(40,551)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Golden Ocean Group Limited
Unaudited Interim Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019
(in thousands of $)
June 30,December 31,
 20202019
ASSETS 
Current assets  
Cash and cash equivalents70,335 153,060 
Restricted cash33,747 10,184 
Marketable securities 3,329 13,861 
Trade accounts receivable, net21,503 45,635 
Other current assets33,154 31,498 
Related party receivables2,062 5,180 
Derivative instruments receivable1,227 3,876 
Inventories27,037 28,235 
Prepaid expenses6,752 6,335 
Voyages in progress11,280 21,929 
Favorable charter party contracts7,259 12,148 
Total current assets217,685 331,941 
Vessels and equipment, net2,324,419 2,340,753 
Finance leases, right of use assets, net121,015 193,987 
Operating leases, right of use assets, net25,981 54,853 
Favorable charter party contracts1,906 4,073 
Investments in associated companies18,469 21,483 
Related party receivables6,303 10,700 
Other long term assets200 8,267 
Total assets2,715,978 2,966,057 
LIABILITIES AND EQUITY  
Current liabilities  
Current portion of long-term debt379,312 87,787 
Current portion of finance lease obligations22,735 17,502 
Current portion of operating lease obligations14,698 14,377 
Derivative instruments payable36,208 10,455 
       Related party payables2,066 3,970 
       Trade accounts payables15,873 12,402 
Accrued expenses32,944 44,739 
       Other current liabilities25,775 42,135 
Total current liabilities529,611 233,367 
Long-term liabilities  
Long-term debt708,423 1,026,083 
Non-current portion of finance lease obligations139,566 151,206 
Non-current portion of operating lease obligations34,433 42,010 
Total liabilities1,412,033 1,452,666 
Commitments and contingencies
Equity  
Share capital (2020: 144,272,697 shares. 2019: 144,272,697 shares. All shares are issued and outstanding at par value $0.05)
7,215 7,215 
19


Treasury shares(5,669)(5,669)
Additional paid in capital768 715 
Contributed capital surplus1,732,670 1,739,834 
Accumulated deficit(431,039)(228,704)
Total equity1,303,945 1,513,391 
Total liabilities and equity2,715,978 2,966,057 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.


20




Golden Ocean Group Limited
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and June 30, 2019
(in thousands of $) 
Six months ended June 30,
20202019
Net income (loss)(202,101)(40,551)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation56,081 46,853 
Amortization of deferred charges1,258 941 
   Impairment loss on right of use assets94,233  
Share option expenses53 241 
Share of results of associated companies2,564 (178)
Dividends received from associated companies450 150 
Amortization of charter party-out contracts7,057 9,289 
   Amortization of other fair value adjustments, net, arising on the Merger 813 
Mark to market (gain) loss on derivatives28,403 15,668 
Mark to market (gain) loss on marketable securities10,532 2,024 
Provision for onerous contracts (299)
Non-cash lease expense(2,607)(1,081)
Other(173)(1,227)
Changes in operating assets and liabilities, net:
Trade accounts receivable24,104 (2,788)
Related party balances1,203 (1,658)
Other receivables(1,683)(2,805)
Inventories1,198 (11,134)
Voyages in progress10,635 (2,362)
Prepaid expenses(417)(1,935)
Trade accounts payables3,471 6,920 
Accrued expenses(6,697)7,203 
Other current liabilities(16,352)4,405 
Net cash provided by operating activities11,212 28,489 
Investing activities  
Investments in equity securities (10,000)
Payments related to upgrades and vessels (23,809)(8,844)
Loan advances to related party(1,000) 
Repayments of loans receivable from related party5,350  
Other investing activities, net54 89 
Net cash used in investing activities(19,405)(18,755)
Financing activities  
Proceeds from long-term debt18,000 225,540 
Repayment of long-term debt(45,394)(423,482)
Repayment of finance leases(33,911)(2,748)
Distributions to shareholders(7,164)(10,773)
21


Debt fees paid (5,174)
Payments related to share repurchases (2,630)
Proceeds from share distributions 185 
   Lease incentives received17,500  
Net cash used in financing activities(50,969)(219,082)
Net change in cash, cash equivalents and restricted cash(59,162)(209,348)
Cash, cash equivalents and restricted cash at beginning of period163,244 372,605 
Cash, cash equivalents and restricted cash at end of period104,082 163,257 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.


22


Golden Ocean Group Limited
Unaudited Interim Condensed Consolidated Statements of Changes in Equity for the six months ended June 30, 2020 and June 30, 2019

(in thousands of $, except number of shares)
Six months ended June 30,
 20202019
Number of shares outstanding  
Balance at beginning of period143,277,697 143,827,697 
Shares issued  
Repurchases of shares (350,000)
Distribution of treasury shares 50,000 
Balance at end of period143,277,697 143,527,697 
Share capital  
Balance at beginning of period7,215 7,215 
Shares issued  
Balance at end of period7,215 7,215 
Treasury shares
Balance at beginning of period(5,669)(2,643)
Shares purchased (1,881)
Shares distributed 285 
Balance at end of period(5,669)(4,239)
Additional paid in capital  
Balance at beginning of period715 233 
Shares issued  
Stock option expense53 240 
Balance at end of period768 473 
Contributed capital surplus  
Balance at beginning of period1,739,834 1,786,451 
Distributions to shareholders(7,164)(10,773)
Balance at end of period1,732,670 1,775,678 
Accumulated deficit  
Balance at beginning of period(228,704)(267,744)
Adjustment on adoption of ASC 326(234) 
Adjustment on adoption of ASC 842 2,485 
Distributed treasury shares (100)
Net income (loss)(202,101)(40,551)
Balance at end of period(431,039)(305,910)
Total equity1,303,945 1,473,217 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Golden Ocean Group Limited
Notes to the Unaudited Interim Condensed Consolidated Financial Statements

1. INTERIM FINANCIAL DATA

The unaudited interim condensed consolidated financial statements of Golden Ocean Group Limited. (“Golden Ocean,” the “Company,” "we," or "our") have been stated on the same basis, except for the adoption of ASC 326 and change in accounting principle for restricted cash as noted below, as the Company’s audited consolidated financial statements and, in the opinion of management, include all material adjustments, consisting only of normal recurring adjustments considered necessary for a fair statement of our consolidated financial statements, in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited interim condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and notes included in our Annual Report on Form 20-F for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the "SEC") on March 12, 2020 (our "Annual Report").

The unaudited interim condensed consolidated financial statements do not include all the disclosures required in an Annual Report on Form 20-F. The results of operations for the interim period ended June 30, 2020 are not necessarily indicative of the results for the year ending December 31, 2020.

2. ACCOUNTING POLICIES

Basis of accounting
These unaudited interim condensed consolidated financial statements are stated in accordance with U.S. GAAP. These unaudited interim condensed consolidated financial statements include the assets and liabilities of the Company and those of the Company's subsidiaries. All intercompany balances and transactions have been eliminated on consolidation.

Accounting Policies
The preparation of these unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Some accounting policies have a significant impact on amounts reported in these unaudited interim condensed consolidated financial statements. Other than our accounting policies adopted as a result of new guidance and as described under "Note 3, Recently Issued Accounting Standards" and revised as described in the paragraph below, our accounting policies have not changed from those reported in our Annual Report.

On April 1, 2020, we changed our accounting policy for restricted cash. Previously, we presented minimum cash balance required by covenants in loan agreements as restricted cash. This method of presentation differs from that of most comparable shipping companies that have equivalent covenant restrictions in their debt agreements. Comparable industry practice is to reflect minimum cash required by covenants as cash and cash equivalents when there is no legal requirement to keep covenanted cash on a restricted account. Please refer to "Note 8, Cash, cash equivalents and restricted cash" for a description of our covenant requirements. From April 1, 2020 we have presented minimum cash required by covenants as cash and cash equivalents. Based on the assessment performed, the change in accounting policy was considered to be preferable and justifiable, because the new principle will result in a more comparable reflection of assets and ratios of working capital and liquidity with our industry peers. Further, the new principle is clearer and more transparent for the users of financial statements and continuing to provide clear and transparent disclosure. The change in accounting principle has been applied retrospectively to comparative periods.

Changes to our accounting policy as a result of changes in accounting principle are as follows:

Cash and cash equivalents
All demand and time deposits and highly liquid, low risk investments with original maturities of three months or less at the date of purchase are considered equivalent to cash.
Cash includes cash on hand and in the Company's bank accounts. The Company is required to maintain a minimum cash balance in accordance with its debt facility agreements with various banks. Such amounts are included in Cash and cash equivalents.

Restricted cash
Restricted cash consists of cash, which may only be used for certain purposes under our contractual arrangements and primarily comprises collateral deposits for derivative trading.

24


The following financial statement line items as of December 31, 2019 and June 30, 2019 were affected by the change in accounting principle. There was no impact of the change on the statements of operations, of comprehensive income, of cash flows or of changes in equity.
As of December 31, 2019 (in thousands of $)
As reported before change of principleAs reported after change of principleEffect of change
Cash and cash equivalents88,931 153,060 64,129 
Restricted cash – current15,449 10,184 (5,265)
Restricted cash – long-term58,864  (58,864)
Total cash and cash equivalents and restricted cash163,244 163,244  
As of June 30, 2019 (in thousands of $)
As reported before change of principleAs reported after change of principleEffect of change
Cash and cash equivalents97,937 155,562 57,625 
Restricted cash – current19,612 7,695 (11,917)
Restricted cash – long-term45,708  (45,708)
Total cash and cash equivalents and restricted cash163,257 163,257  



3. RECENTLY ISSUED ACCOUNTING STANDARDS

Accounting Standards Updates, not yet adopted

In March 2020, the FASB issued final ASU 2020-04 (ASC 848 Reference Rate Reform), which provides temporary optional expedients and exceptions to the guidance in US GAAP on contract modifications, hedge accounting and other transactions affected by reference reform if certain criteria are met. The amendments in this update are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. We are evaluating the impact of this revised guidance on our consolidated financial statements.

Accounting Standards Updates, recently adopted

On January 1, 2020, we adopted ASU No 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, using a modified retrospective approach. The standard revised guidance for the accounting for credit losses on financial instruments within its scope. The standard added an impairment model known as the current expected credit loss (“CECL”) model that is based on expected losses rather than incurred losses. The new guidance is applicable to financial assets measured at amortized cost, including trade receivables, contract assets such as voyages in progress and other, as well as related party receivables. In November 2018, the FASB issued ASU 2018-19, Financial Instruments – Credit losses (ASC 326), which clarifies that operating lease receivables are not within the scope of ASC 326 and should instead be accounted for under the new leasing standard, ASC 842. Expected credit losses are estimated using historical experience, information relating to current conditions and reasonable and supportable cash flows. The Company makes significant judgements and assumptions to estimate its expected losses. The implementation of the standard did not have any material effect on our interim condensed consolidated financial statements.

On January 1, 2020 we adopted ASU No. 2018-13, Fair value measurement (Topic 820), which streamlines the disclosure requirements on fair value measurements. The implementation of this accounting standard did not have any material impact on our consolidated financial statements.

On January 1, 2020 we adopted ASU 2018-18, Collaborative Arrangements (Topic 808), which provides clarity on when transactions between entities in a collaborative arrangement should be accounted for under the new revenue standard, ASC 606.
25


The implementation of the accounting standard did not have any material impact on our consolidated financial statements.

4. EARNINGS PER SHARE

The components of the numerator and the denominator in the calculation of basic and diluted earnings per share for the six months ended June 30, 2020 and 2019 are as follows:
(in thousands of $)20202019
Net income (loss) (202,101)(40,551)

(in thousands)20202019
Weighted average number of shares outstanding - basic143,278 143,687 
Dilutive effect of share options   
Weighted average number of shares outstanding - diluted143,278 143,687 

In April, 2020, 550,000 share options were granted to the Chief Executive Officer of Golden Ocean Management AS in accordance with the terms of our share option scheme. In the six months ended June 30, 2020, all 790,000 of our outstanding share options were anti-dilutive. In the six months ended June 30, 2019, 495,000 of our outstanding share options were anti-dilutive.

5. SEGMENT INFORMATION

The chief operating decision maker ("CODM") measures performance based on the overall return to shareholders using consolidated net income. The CODM does not review a measure of operating result at a lower level than the consolidated group and we only have one reportable segment.
 
Our vessels operate worldwide and therefore management does not evaluate performance by geographical region as this information is not meaningful.

6. OPERATING REVENUES
The following table shows the revenues earned from time charters, voyage charters and other revenues for the six months ended June 30, 2020 and 2019 respectively:
(in thousands of $)20202019
Time charter revenues86,250 128,139 
Voyage charter revenues166,382 112,867 
Other revenues1,022 786 
Total operating revenues253,654 241,792 

In the six months ended June 30, 2020 and June 30, 2019, we recognized a total of $6.4 million and $7.8 million, respectively, in demurrage which is included under voyage revenues. Most of our voyage contracts are considered service contracts which fall under the provisions of ASC 606 because we, as the shipowner, retain control over the operations of the vessel such as directing the routes or the vessel speed. However, some of our voyage charter contracts could be considered to contain a lease. A voyage charter contains a lease component if the contract (i) specifies a specific vessel asset; and (ii) has terms that allow the charterer to exercise substantive decision-making rights, which have an economic value to the charterer and therefore allow the charterer to direct how and for what purpose the vessel is used. The new lease standard provides a practical expedient for lessors in which the lessor may elect, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for these components as a single component if both of the following are met: (1) the timing and pattern of transfer of the non-lease component(s) and associated lease component are the same and (2) the lease component, if accounted for separately, would be classified as an operating lease. When a lessor, we have elected this practical expedient for our time charter contracts and voyage charter contracts that qualify as leases and thus do not separate the non-lease component, or service element, from the lease. Furthermore, the standard requires us to account for the combined component in accordance with ASC 606 revenues from contracts with customers if the non-lease components are the predominant components. Under this guidance we have assessed that the lease components were the predominant component for all of our time charter contracts. Furthermore, for certain of our voyage charter contracts the lease components were the predominant components.
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(in thousands of $)LeaseNon- leaseTotal
Time charter revenues86,250  86,250 
Voyage charter revenues5,466 160,916 166,382 
Other revenues 1,022 1,022 
Total operating revenues91,716 161,938 253,654 

Certain voyage expenses are capitalized between the previous discharge port, or contract date if later, and the next load port and amortized between load port and discharge port. $12.3 million of contract assets were capitalized in the period ended June 30, 2020 under "Other current assets", of which $9.1 million was amortized up to June 30, 2020, leaving a remaining balance of $3.3 million. $5.9 million of contract assets were amortized in the six months ended June 30, 2020 in relation to voyages in progress at the end of December 31, 2019.

As of June 30, 2020 and December 31, 2019, we reported the following contract assets in relation to our contracts with customers, including contracts containing lease components where the non-lease component was the predominant component and the revenues where therefore accounted for under ASC 606:
(in thousands of $)20202019
Voyages in progress11,077 17,966 
Trade accounts receivable13,546 31,293 
Other current assets (capitalized fulfillment costs)3,260 5,905 
Total27,883 55,164 

As at June 30, 2020, we recorded $15.3 million in total deferred charter revenue for consideration received or unearned revenue related to ongoing voyages at period end. In the first six months of 2020, we recognized $17.9 million in revenue, which was deferred as at December 31, 2019, as the performance obligations were met. Credit loss allowance as of June 30, 2020 relating to the contract assets above amounted to $47,000. No impairment losses were recognized as of December 31, 2019.

Total revenues for the six months ended June 30, 2020 and the six months ended June 30, 2019 relating to our owned vessels that were under the CCL RSA or arrangements where we are considered the principal were $92.0 million and $98.1 million, respectively. In addition to these amounts, we retained or paid a net pro/contra amount based on a net settlement of our relative share of the pool results. The net pro/contra amounts relating to the pool arrangements where we were considered the principal were net positive $2.4 million and $2.8 million, in the six months ended June 30, 2020 and in the six months ended June 30, 2019, respectively. These amounts are presented under the line item “other operating income (expenses), net”.

Total lease revenues for the six months ended June 30, 2020 and the six months ended June 30, 2019, relating to our owned vessels that were under the CTM Supramax RSA and which have been accounted for as operating leases were $2.5 million and $4.9 million, respectively.


7. IMPAIRMENT OF RIGHT OF USE ASSETS

During the first six months of 2020, we recorded an impairment loss of $94.2 million related to our leased vessels. Based on impairment tests performed as of March 31, 2020 on an asset by asset basis, estimated undiscounted cash flows expected to be earned by each of our leased vessels over the remaining lease term were below carrying value of the vessels, and we have adjusted the carrying value of the leased vessels to the fair value of the leased vessels. The impairment consisted of $70.0 million related to seven vessels on financial lease from SFL Corporation Ltd. ("SFL") and $24.2 million related to four vessels on operating leases.

8. CASH, CASH EQUIVALENTS AND RESTRICTED CASH

As of June 30, 2020 and June 30, 2019, the following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.

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(in thousands of $)20202019
Cash and cash equivalents70,335 155,562 
Short term restricted cash33,747 7,695 
Total cash, cash equivalents and restricted cash shown in the statement of cash flows104,082 163,257 

With reference to Note 2, we have changed our accounting policy for cash and cash equivalents; and restricted cash. According to our new accounting policy, amounts included in cash and cash equivalents include cash balances that are required to be maintained by the financial covenants in our loan facilities. Under our debt facilities, we need to maintain free cash of the higher of $20 million or 5% of total interest bearing debt. We have covenanted to retain at least $62.5 million of cash and cash equivalents as at June 30, 2020 (at June 30, 2019: $57.6 million).

Restricted cash consists of cash, which may only be used for certain purposes under our contractual arrangements and primarily comprises collateral deposits for derivative trading.

9. MARKETABLE SECURITIES

Our marketable securities consist of equity securities in Scorpio Bulkers Inc., a dry bulk shipping company listed on the New York Stock Exchange.
(in thousands of $)
Balance at December 31, 201913,861 
Unrealized gain (loss)(10,532)
Balance at June 30, 20203,329 

During the six months ended June 30, 2020, we received approximately $0.45 million in dividends from our investment in Scorpio Bulkers Inc.


10. OTHER CURRENT ASSETS


(in thousands of $)20202019
Capitalized fulfillment costs