SFL Corp Ltd. (SFL)

Overview

We have established ourselves as a leading international maritime asset-owning company with a large and diverse asset base across the maritime and offshore industries. A full fleet list is provided in “Item 4. Information on the Company – D. Property, Plants and Equipment” showing the assets that we currently own and charter to our customers.

Fleet Development

The following table summarizes the development of our active fleet of vessels and rigs, including four chartered-in container vessels that are included in our associated companies and six container vessels and seven car carriers financed through sale and leaseback transactions.

Between January 1, 2026 and March 16, 2026, we sold and delivered the Suezmax tanker, SFL Thelon, to an unrelated third party. The vessel was delivered to its new owners in February 2026.

Factors Affecting Our Current and Future Results

Principal factors that have affected our current results, or are expected to affect our future results of operations and financial position, include:

•the earnings of our vessels under time charters or rigs under drilling contracts, including Maersk, Hapag Lloyd, Trafigura, ConocoPhillips, Volkswagen and other charterers;

•the earnings of our vessels under short term charter or trading in the spot market impacted by freight market conditions;

•the amount we receive under the profit sharing arrangements on fuel cost savings with Maersk and Eukor;

•the earnings and expenses related to any additional vessels that we acquire;

•earnings from the sale of assets and termination of charters;

•vessel management fees and operating expenses;

•vessel impairments;

•administrative expenses;

•interest expenses;

•mark-to-market movements on investment in equity securities; and

•mark-to-market movements on derivative financial instruments.

48

Revenues

Since our incorporation in 2003 and public listing in 2004, we have increased our customer base from one to more than 10 customers. In addition, Golden Ocean is no longer a customer, since July 2025, when we sold and delivered eight Capesize dry bulk carriers to them, following exercise of the applicable purchase options in the charter contracts.

As of December 31, 2025, our revenue is mainly generated from:

•15 container vessels on time charters to Maersk accounted for 26% of our consolidated operating revenues (December 31, 2024: 23%, 14 container vessels).

•Four car carriers on time charter to Volkswagen accounted for 9% of our consolidated operating revenues (December 31, 2024: 8%, four car carriers).

•Seven tanker vessels on time charter to Trafigura accounted for 8% of our consolidated operating revenues (December 31, 2024: 7%, seven tanker vessels).

•Six container vessels on time charter to Hapag Lloyd accounted for 15% of our consolidated operating revenues (December 31, 2024: 6%, six container vessels).

•One jack-up drilling rig on drilling contract revenue with ConocoPhillips accounted for 13% of our consolidated operating revenues (December 31, 2024: 7%, one jack-up drilling rig).

Our revenues arise primarily from our long-term, fixed-rate charters and as shown in Results of Operations below. Our income is derived from time charter income as well as drilling contract revenues, voyage charter and pool income.

Our future earnings depend on the continuation of existing charter arrangements and our ability to secure new charters, and may be materially affected by vessel sales or counterparty defaults under our charter agreements. Please also see Item 3. Key Information—D. Risk Factors.

We have two Suezmax tankers and two dry bulk carriers trading in the spot or short-term time charter market, and, where the effects of seasonality may affect the earnings of these vessels. We also have one chemical tanker trading in a pool alongside similar third party owned vessels.

We have revenue under profit sharing agreements with two of our charterers, Maersk and Eukor. We have an arrangement for seven container vessels on charter to Maersk and one car carrier on charter to Eukor, whereby we are entitled to a share of the fuel savings dependent on the price difference between IMO compliant fuel and IMO non-compliant fuel.

Vessel and Rig Management and Operating Expenses

We outsource the technical management for our vessels and we pay operating expenses as they are incurred. Operating expenses include mainly crew costs, repairs and maintenance, spares and supplies, insurance, management fees and drydocking. Our four chartered-in container vessels that are included in our associated companies are employed on bareboat charters, where the charterer pays all operating expenses, including maintenance, drydocking and insurance.

In addition, we engage Odfjell Technology Ltd. and Odfjell Drilling Ltd. or collectively Odfjell, for the operational management of our two drilling rigs, Linus and Hercules, respectively. We pay Odfjell a management fee and provide funding for the rigs' running costs as they are incurred.

Vessel and Rig Impairments

The vessels and rigs held and used by us are reviewed for impairment on a quarterly basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, an impairment charge is recognized if the estimate of future undiscounted cash flows expected to result from the use of the vessel or rig and its eventual disposal is less than its carrying amount.

49

Administrative Expenses

Administrative expenses consist of general corporate overhead expenses, including personnel costs, property costs, legal and professional fees, and other administrative expenses. Personnel costs include, among other things, salaries, pension costs, fringe benefits, travel costs and health insurance. We have entered into administrative services agreements with Frontline Management (Cyprus) Ltd., previously named Frontline Management (Bermuda) Ltd. or Frontline Management, Seatankers, Front Ocean Management AS and Front Ocean Management Ltd. or collectively Front Ocean, under which they provide us with certain administrative support services, and we have agreed to reimburse them for reasonable third party costs, if any, advanced on our behalf. Some of the compensation paid to Frontline Management, Seatankers and Front Ocean is based on cost sharing for the services rendered, based on actual incurred costs plus a margin.

Our Chief Information Security Officer, or CISO, who is employed by Front Ocean, a related party, is responsible for assessing and managing cybersecurity threats, reporting cybersecurity updates and reporting to the Board material cybersecurity incidents. For more information on our cybersecurity risk management and strategy, please see “Item 16K. Cybersecurity”.

Mark-to-Market Movements on derivative financial instruments

In order to hedge against fluctuations in interest rates, we have entered into interest rate swaps which effectively fix the interest payable on a portion of our floating rate debt. We have also entered into interest/currency swaps in order to fix both the interest and exchange rates applicable to the payment of interest and eventual settlement on our floating rate NOK bonds. Although the intention is to hold such financial instruments until maturity, U.S. GAAP requires us to record them at fair value in our financial statements. Adjustments to the mark-to-market valuation of these derivative financial instruments, which are caused by variations in interest and exchange rates, are reflected in results of operations and other comprehensive income. Accordingly, our financial results may be affected by fluctuations in interest and exchange rates.

Mark-to-Market Movements on investment in equity securities

We hold investments in shares consisting of 1.3 million shares in NorAm Drilling with a fair value of $4.1 million, trading on the Euronext Growth facility in Oslo. Upon the adoption of ASU 2016-01 from January 2018, we recognize any changes in the fair value of these equity investments in the statement of operations.

Interest Expenses

Other than the interest expense associated with our senior unsecured sustainability-linked bonds, and our senior unsecured NOK bonds, the amount of our interest expense will be dependent on our overall borrowing levels and may significantly increase when we acquire vessels or on the delivery of newbuildings. Interest incurred during the construction of a newbuilding is capitalized in the cost of the newbuilding. Interest expense may also change with prevailing interest rates, although the effect of these changes may be reduced by interest rate swaps or other derivative instruments that we enter into.

Equity in earnings of associated companies

In the year ended December 31, 2025 and December 31, 2024, we earned income from our 49.9% investment in River Box Holding Inc. or River Box, which has been accounted for using the equity method.

In the year ended December 31, 2025, income from River Box amounted to $6.9 million (December 31, 2024: $7.4 million). In 2024, income from River Box accounted for 6% of our net income. A net loss was incurred for the year ended December 31, 2025.

For information regarding various market risks, including interest rates and foreign currency fluctuations, please see “Item 11. Quantitative and Qualitative Disclosures About Market Risk”.

50

Results of Operations

Year ended December 31, 2025, compared with year ended December 31, 2024

Net loss for the year ended December 31, 2025, was $26.4 million compared to a net profit of $130.7 million for the year ended December 31, 2024.

Operating revenues

Total operating revenues decreased by 18.9% in the year ended December 31, 2025, compared with the year ended December 31, 2024.

Sales-type leases interest income

In the year ended December 31, 2025, sales-type leases interest income arose on seven container vessels on long-term charters to MSC, all of which were sold

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]