GasLog Ltd
Annual Report 2015

Plain-text annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) (cid:2) (cid:3) REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (cid:2) (cid:2) GasLog Ltd. (Exact name of Company as specified in its charter) Not Applicable (Translation of Company’s name into English) Bermuda (Jurisdiction of incorporation or organization) c/o GasLog Monaco S.A.M. Gildo Pastor Center 7 Rue du Gabian MC 98000, Monaco (Address of principal executive offices) Nicola Lloyd, General Counsel c/o GasLog Monaco S.A.M. Gildo Pastor Center 7 Rue du Gabian MC 98000, Monaco Monaco Telephone: +377 97 97 51 15 Facsimile: +377 97 97 51 24 (Name, Address, Telephone Number and Facsimile Number of Company contact person) SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of Each Exchange on Which Registered Title of Each Class Common Shares, $0.01 par value per share Series A Preference Shares, $0.01 par value per share New York Stock Exchange New York Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d) OF THE ACT: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. As of December 31, 2015, there were 80,496,499 common shares of the Company’s common stock outstanding and 4,600,000 Series A Preference shares. Indicate by check mark if the Company is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. If this report is an annual or transition report, indicate by check mark if the Company is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (cid:3) No (cid:2) Indicate by check mark whether the Company has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Company was required to submit and post such files). Yes (cid:2) No (cid:2) Indicate by check mark whether the Company is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer (cid:3) Accelerated filer (cid:2) Indicate by check mark which basis of accounting the Company has used to prepare the financial statements Non-accelerated filer (cid:2) included in this filing. U.S. GAAP (cid:2) International Financial Reporting Standards as issued by the International Accounting Standards Board (cid:3) Other (cid:2) If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Company has elected to follow. If this is an annual report, indicate by check mark whether the Company is a shell company (as defined in Item 17 (cid:2) Item 18 (cid:2) Yes (cid:2) No (cid:3) Rule 12b-2 of the Exchange Act). Yes (cid:2) No (cid:3) Yes (cid:2) No (cid:3) TABLE OF CONTENTS ABOUT THIS REPORT FORWARD-LOOKING STATEMENTS PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS OFFER STATISTICS AND EXPECTED TIMETABLE KEY INFORMATION INFORMATION ON THE COMPANY ITEM 2. ITEM 3. ITEM 4. ITEM 4.A. UNRESOLVED STAFF COMMENTS ITEM 5. ITEM 6. ITEM 7. ITEM 8. ITEM 9. ITEM 10. ITEM 11. OPERATING AND FINANCIAL REVIEW AND PROSPECTS DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS FINANCIAL INFORMATION THE OFFER AND LISTING ADDITIONAL INFORMATION QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES ITEM 12. PART II ITEM 13. ITEM 14. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS CONTROLS AND PROCEDURES [RESERVED] ITEM 15. ITEM 16. ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT ITEM 16.B. CODE OF ETHICS ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES ITEM 16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT ITEM 16.E. COMMITTEES PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS ITEM 16.F. CHANGE IN COMPANY’S CERTIFYING ACCOUNTANT ITEM 16.G. CORPORATE GOVERNANCE ITEM 16.H. MINE SAFETY DISCLOSURE PART III ITEM 17. ITEM 18. ITEM 19. FINANCIAL STATEMENTS FINANCIAL STATEMENTS EXHIBITS INDEX TO CONSOLIDATED FINANCIAL STATEMENTS i Page ii ii 1 1 1 1 33 54 55 83 91 100 101 102 117 118 119 119 119 119 121 121 121 121 122 122 122 122 123 124 124 124 124 F-1 ABOUT THIS REPORT In this annual report, unless otherwise indicated: • “GasLog”, the “Company”, the “Group”, “we”, “our”, “us” or similar terms refer to GasLog Ltd. or any one or more of its subsidiaries (including GasLog Partners LP) or their predecessors, or to such entities collectively, except that when such terms are used in this annual report in reference to the common shares or the 8.75% Series A Cumulative Redeemable Perpetual Preference Shares (the “Preference Shares”), they refer to GasLog Ltd.; • “GasLog Partners” or the “Partnership”, refers to GasLog Partners LP, a master limited partnership formed by GasLog to own, operate and acquire liquefied natural gas, or “LNG”, carriers under long-term charters, or any one or more of GasLog Partners’ subsidiaries; • the “general partner” refers to GasLog Partners GP LLC, the general partner of GasLog Partners; • “GasLog LNG Services” refers to GasLog LNG Services Ltd., our wholly owned subsidiary; • “our vessels” or “our ships” refers to the LNG carriers owned or controlled by the Company and its subsidiaries, including the LNG carriers owned by GasLog Partners; “our wholly owned vessels” or “our wholly owned ships” refers to the LNG carriers owned by the Company and its subsidiaries, excluding any LNG carriers owned by GasLog Partners (in which we hold the controlling general partner interest as well as limited partner interests) and its subsidiaries and Egypt LNG Shipping Ltd. (in which we hold a 25.0% equity interest); • “BG Group” refers to BG Group plc which was acquired by Royal Dutch Shell plc (“Shell”) on February 15, 2016; “MSL” refers to Methane Services Limited, a subsidiary of BG Group; “Hyundai” refers to Hyundai Heavy Industries Co., Ltd.; and “Samsung” refers to Samsung Heavy Industries Co., Ltd.; or, in each case, one or more of their subsidiaries or to such entities collectively; • “NYSE” refers to the New York Stock Exchange; and “SEC” refers to the U.S. Securities and Exchange Commission; • “dollars” and “$” refers to, and amounts are presented in, U.S. dollars; • “cbm” refers to cubic meters; • “Dynagas” refers to Dynagas Ltd. and “Golar” refers to Golar LNG Ltd.; and • “Mitsui” refers to Mitsui Co., Ltd. and “Lepta Shipping” refers to Lepta Shipping Co., Ltd., a subsidiary of Mitsui. FORWARD-LOOKING STATEMENTS All statements in this annual report that are not statements of historical fact are “forward- looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, particularly in relation to our operations, cash flows, financial position, liquidity and cash available for dividends or distributions, plans, strategies, business prospects and changes and trends in our business and the markets in which we operate. In some cases, predictive, future-tense or forward-looking words such as “believe”, “intend”, “anticipate”, “estimate”, “project”, “forecast”, “plan”, “potential”, “may”, “should”, “could” and “expect” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. In addition, we and our representatives may from time to time make other oral or written statements which are forward- looking statements, including in our periodic reports that we file with the SEC, other information sent to our security holders, and other written materials. We caution that these forward-looking statements represent our estimates and assumptions only as of the date of this annual report or the date on which such oral or written statements are made, as applicable, about factors that are beyond our ability to control or predict, and are not intended to give any assurance as to future results. Any ii of these factors or a combination of these factors could materially affect future results of operations and the ultimate accuracy of the forward-looking statements. Accordingly, you should not unduly rely on any forward-looking statements. Factors that might cause future results and outcomes to differ include, but are not limited to, the following: • general LNG shipping market conditions and trends, including spot and long-term charter rates, ship values, factors affecting supply and demand of LNG and LNG shipping and technological advancements; • continued low prices for crude oil and petroleum products; • our ability to enter into time charters with new and existing customers; • changes in the ownership of our charterers; • our customers’ performance of their obligations under our time charters; • our future operating performance, financial condition, liquidity and cash available for dividends and distributions; • our ability to obtain financing to fund capital expenditures, acquisitions and other corporate activities, funding by banks of their financial commitments, and our ability to meet our restrictive covenants and other obligations under our credit facilities; • future, pending or recent acquisitions of or orders for ships or other assets, business strategy, areas of possible expansion and expected capital spending or operating expenses; • the time that it may take to construct and deliver newbuildings and the useful lives of our ships; • number of off-hire days, drydocking requirements and insurance costs; • fluctuations in currencies and interest rates; • our ability to maintain long-term relationships with major energy companies; • our ability to maximize the use of our ships, including the re-employment or disposal of ships not under time charter commitments; • environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities; • the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, requirements imposed by classification societies and standards imposed by our charterers applicable to our business; • risks inherent in ship operation, including the discharge of pollutants; • availability of skilled labor, ship crews and management; • potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists; • potential liability from future litigation; • any malfunction or disruption of information technology systems and networks that our operations rely on or any impact of a possible cybersecurity breach; and • other factors discussed in “Item 3. Key Information—D. Risk Factors” of this annual report. We undertake no obligation to update or revise any forward-looking statements contained in this annual report, whether as a result of new information, future events, a change in our views or expectations or otherwise, except as required by applicable law. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. iii [THIS PAGE INTENTIONALLY LEFT BLANK] ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable. PART I ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable. ITEM 3. KEY INFORMATION A. Selected Financial Data The following table presents summary consolidated financial and other data of GasLog for each of the five years in the five-year period ended December 31, 2015. The summary consolidated financial data of GasLog as of December 31, 2014 and 2015, and for each of the years in the three year period ended December 31, 2015, is derived from our audited consolidated financial statements included in “Item 18. Financial Statements”. The selected consolidated financial data as of December 31, 2011, 2012 and 2013, and for the years ended December 31, 2011 and 2012, is derived from our audited consolidated financial statements which are not included in this annual report. Our consolidated financial statements are prepared and presented in accordance with International Financial Reporting Standards, or “IFRS”, as issued by the International Accounting Standards Board, or the “IASB”. This information should be read together with, and is qualified in its entirety by, our consolidated financial statements and the notes thereto included in “Item 18. Financial Statements”. You should also read “Item 5. Operating and Financial Review and Prospects”. 1 CONSOLIDATED STATEMENT OF PROFIT OR LOSS Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . Vessel operating and supervision costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . Voyage expenses and commissions. . . . . . . . . . . . . . . . . . . . . Depreciation of fixed assets . . . . . . . General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . Profit from operations. . . . . . . . . . . . . Financial costs. . . . . . . . . . . . . . . . . . . . . Financial income . . . . . . . . . . . . . . . . . . (Loss)/gain on swaps . . . . . . . . . . . . . . Share of profit of associate and joint venture . . . . . . . . . . . . . . . . . . . . Gain on disposal of subsidiaries . . . Total other expenses, net. . . . . . . . . . Profit for the year. . . . . . . . . . . . . . . . . Profit attributable to owners of the Group. . . . . . . . . . . . . . . . . . . . . . . (Loss)/profit attributable to non- controlling interest . . . . . . . . . . . . . . Earnings per share, basic and diluted(1) . . . . . . . . . . . . . . . . . . . . . . . . Weighted average number of shares, basic(1) . . . . . . . . . . . . . . . . . . . Weighted average number of shares, diluted(1) . . . . . . . . . . . . . . . . . Dividends declared per common share(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . Dividends declared per preference share . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 Year Ended December 31, 2013 (in thousands of U.S. dollars, except share and per share data) 2012 2014 2015 $ 66,471 $ 68,542 $ 157,240 $ 328,679 $ 415,078 (12,654) (14,354) (32,058) (70,732) (98,552) (7,738) (70,695) (14,290) (106,641) (292) (12,827) (15,997) 24,701 (9,631) 42 (2,725) 1,311 25 (10,978) 13,723 14,040 $ $ (292) (13,065) (20,380) 20,451 (11,670) 1,174 (6,783) 1,078 — (16,201) 4,250 4,250 $ $ (2,861) (29,322) (21,598) 71,401 (27,851) 411 11,498 1,470 — (14,472) 56,929 56,929 (34,154) 145,360 (71,579) 274 (24,787) 1,497 — (94,595) 50,765 42,161 $ $ (317) $ — $ — $ 8,604 0.36 $ 0.07 $ 0.91 $ 0.54 $ $ $ $ (41,282) 154,313 (91,956) 427 (10,332) 1,216 — (100,645) 53,668 10,829 42,839 0.04 $ $ $ $ 35,837,297 56,093,775 62,863,665 78,633,820 80,496,314 39,101,496 56,695,519 62,863,665 78,800,192 80,610,420 $ $ 0.22 $ 0.11 $ 0.45 $ 0.50 $ — $ — $ — $ — $ 0.56 1.60 2 2011 2012 As of December 31, 2013 (in thousands of U.S. dollars) 2014 2015 CONSOLIDATED STATEMENT OF FINANCIAL POSITION DATA Cash and cash equivalents . . . . . . . . . . . . . Short-term investments. . . . . . . . . . . . . . . . . Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . Investment in associate and joint venture(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tangible fixed assets(4) . . . . . . . . . . . . . . . . . Vessels under construction . . . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . Borrowings, current portion. . . . . . . . . . . . Borrowings, non-current portion . . . . . . . Share capital(1) . . . . . . . . . . . . . . . . . . . . . . . . . Preferred stock. . . . . . . . . . . . . . . . . . . . . . . . . Equity attributable to owners of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . . . . . Total equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . CONSOLIDATED CASH FLOW DATA Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash used in investing activities. . . . Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,093 — — $110,978 104,674 — $ 103,798 4,500 — $ 211,974 28,103 22,826 $ 302,988 6,000 62,718 6,528 438,902 109,070 607,013 24,277 256,788 391 — 290,414 — 290,414 2011 6,856 426,880 217,322 908,768 25,753 228,515 629 — 603,271 — 603,271 6,326 1,529,720 120,295 1,816,679 100,320 1,014,754 629 — 639,533 — 639,533 6,603 2,809,517 142,776 3,269,971 116,431 1,778,845 810 — 929,391 323,646 1,253,037 2012 Year Ended December 31, 2013 (in thousands of U.S. dollars) 2014 6,274 3,400,270 178,405 4,039,621 636,987 1,737,500 810 46 1,001,674 506,246 1,507,920 2015 $ 27,001 (86,464) $ 24,918 (212,621) $ 86,745 (935,516) 148,288 $ (1,386,656) $ 161,579 (704,052) 56,286 278,811 840,481 1,346,762 634,317 FLEET DATA(5) Number of managed ships at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average number of managed ships 2011 14 during period . . . . . . . . . . . . . . . . . . . . . . . . . 14.0 Number of owned ships at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average number of owned ships during period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average age of owned ships (years) . . . . Total calendar days for owned fleet. . . . . Total operating days for owned fleet(6) . . 2 2.0 1.5 730 730 2015 22 21.7 19 18.2 5.2 6,638 6,097 Year Ended December 31, 2013 2012 2014 14 14.0 2 2.0 2.5 732 732 20 16.9 8 5.0 1.7 1,832 1,808 21 20.0 16 12.4 4.4 4,520 4,392 3 2011 2012 Year Ended December 31, 2013 (in thousands of U.S. dollars) 2014 2015 OTHER FINANCIAL DATA EBITDA(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjusted EBITDA(7) . . . . . . . . . . . . . . . . . . . Capital expenditures: Payment for vessels . . . . . . . . . . . . . . . . . . . . Common share dividend declared(2) . . . . Preference share dividend declared . . . . $38,864 38,738 $ 34,594 34,047 $ 102,193 101,617 $ 217,552 217,172 $262,170 262,969 88,036 8,500 — 110,765 6,915 — 1,038,153 28,288 — 1,364,283 39,840 — 728,446 45,078 7,379 (1) Gives effect to the 238-for-1 share split effected on March 13, 2012. (2) Of the total $8.50 million dividend declared during the year ended December 31, 2011, $0.77 million, was paid in cash and the remainder was contributed to the capital of the Company by our existing majority shareholder. The dividends declared during the years ended December 31, 2012, 2013, 2014 and 2015 were paid in cash. (3) Consists of our 25.0% ownership interest in Egypt LNG Shipping Ltd. or “Egypt LNG” and our 33.33% ownership interest in The Cool Pool Limited or “the Cool Pool”. On October 1, 2015, GasLog, Dynagas and Golar signed an LNG carrier pooling agreement to establish the Cool Pool to market their vessels, which are currently operating in the LNG shipping spot market. The Cool Pool initially consists of 14 modern, high quality and essentially equivalent vessels powered by fuel efficient tri fuel diesel electric (“TFDE”) propulsion technology. The three owners’ initial vessels participation in the Cool Pool was as follows: Dynagas: three vessels; GasLog: three vessels; and Golar: eight vessels. Each vessel owner continues to be fully responsible for the manning and technical management of their respective vessels. The Cool Pool was incorporated in September 2015. (4) Includes delivered ships (including drydocking component of vessel cost) as well as office property and other tangible assets, less accumulated depreciation. See Note 6 to our consolidated financial statements included elsewhere in this annual report. (5) Presentation of fleet data does not include newbuildings on order during the relevant periods. The data presented regarding our owned fleet includes only our owned ships delivered prior to December 31, 2015 including the ships owned by GasLog Partners. The data presented regarding our managed fleet includes our wholly owned vessels as well as ships owned by GasLog Partners, BG Group, Egypt LNG and Lepta Shipping that are operating under our management. (6) The operating days for our fleet are the total number of days in a given period that the vessels were in our possession less the total number of days off-hire not recoverable from the insurers. In 2015, operating days include 174 for our vessels operating in the Cool Pool. We define days off-hire as days lost to, among other things, operational deficiencies, drydocking for repairs, maintenance or inspection, equipment breakdowns, special surveys and vessel upgrades, delays due to accidents, crew strikes, certain vessel detentions or similar problems, our failure to maintain the vessel in compliance with its specifications and contractual standards or to provide the required crew, or periods of commercial waiting time during which we do not earn charter hire. (7) Non-GAAP Financial Measures: EBITDA is defined as earnings before depreciation, amortization, interest income and expense, gain/loss on swaps and taxes. Adjusted EBITDA is defined as EBITDA before foreign exchange gains/losses. EBITDA and Adjusted EBITDA are non-GAAP financial measures that are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and operating performance. We believe that these non- GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. We believe that including EBITDA and Adjusted EBITDA assists our management and investors in (i) understanding and analyzing the results of our operating and business performance, (ii) selecting between investing in us and other investment alternatives and (iii) monitoring our ongoing financial and operational strength in assessing whether to continue to hold our common shares. This is achieved by excluding the potentially disparate effects between periods of interest, gain/loss on swaps, taxes, depreciation and amortization, and, in the case of Adjusted EBITDA, foreign exchange gains/losses, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect results of operations between periods. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered as alternatives to, or as substitutes for, or superior to profit, profit from operations or any other measure of financial performance presented in accordance with IFRS. Some of these limitations include the fact that they do not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments, (ii) changes in, or cash requirements for our working capital needs and (iii) the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. EBITDA and Adjusted EBITDA are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows and other companies in our industry may calculate these measures differently than we do, limiting their usefulness as a comparative measure. 4 In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by the excluded items. Therefore, the non-GAAP financial measures as presented below may not be comparable to similarly titled measures of other companies in the shipping or other industries. Reconciliation of EBITDA and Adjusted EBITDA to Profit: Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss/(gain) on swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 $13,723 12,827 9,631 (42) 2,725 Year Ended December 31, 2012 2014 2013 (in thousands of U.S. dollars) $ 50,765 70,695 71,579 (274) 24,787 $ 56,929 29,322 27,851 (411) (11,498) $ 4,250 13,065 11,670 (1,174) 6,783 2015 $ 53,668 106,641 91,956 (427) 10,332 EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,864 34,594 102,193 217,552 262,170 Foreign exchange (gains)/losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (126) (547) (576) (380) 799 Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38,738 $34,047 $101,617 $217,172 $262,969 B. Capitalization and Indebtedness The following table sets forth our capitalization as of December 31, 2015: This information should be read in conjunction with “Item 5. Operating and Financial Review and Prospects”, and our consolidated financial statements and the related notes thereto included elsewhere in this annual report. Debt:(1) Borrowings, current portion(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Borrowings, non-current portion(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity: Preferred stock(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share capital(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributed surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves Treasury shares(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2015 (in thousands of U.S. dollars) $ 636,987 1,737,500 2,374,487 46 810 1,020,292 (8,829) (12,491) 1,846 506,246 1,507,920 $3,882,407 (1) Our indebtedness, other than our NOK 1 billion bond, or the “Bond”, is secured by mortgages on our owned ships and is guaranteed by the Company or a combination of the Company and GasLog Partners, in the case of the Partnership’s indebtedness. The Bond (the carrying amount of which, net of unamortized financing costs as of December 31, 2015 is $112.19 million) is unsecured. Debt presented does not include our scheduled debt payments since December 31, 2015 totaling $18.28 million and the prepayment of the outstanding debt of GAS-twenty six Ltd. of $230.0 million, following the completion of the sale and leaseback of the Methane Julia Louise. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities” for more information about our credit facilities. (2) Borrowings presented at December 31, 2015, are shown net of $33.29 million of loan issuance costs and premium that are being amortized over the term of the respective borrowings. (3) Does not include any shares that may be issued under the Company’s 2013 Omnibus Incentive Compensation Plan. At December 31, 2015, our share capital consisted of 80,496,499 issued and outstanding common shares, 496,627 treasury shares issued and 4,600,000 Preference Shares issued and outstanding. 5 C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors Risks Inherent to Our Business Our future performance and ability to secure future time charters depends on continued growth in LNG production and demand for LNG and LNG shipping. Our future performance, including our ability to profitably expand our fleet, will depend on continued growth in LNG production and the demand for LNG and LNG shipping. A complete LNG project includes production, liquefaction, storage, regasification and distribution facilities, in addition to the marine transportation of LNG. Increased infrastructure investment has led to an expansion of LNG production capacity in recent years, but material delays in the construction of new liquefaction facilities could constrain the amount of LNG available for shipping, reducing ship utilization. The rate of growth of the LNG industry has fluctuated due to several factors, including the global economic crisis and continued economic uncertainty, fluctuations in global commodity prices, including natural gas, oil and coal as well as other sources of energy. Continued growth in LNG production and demand for LNG and LNG shipping could be negatively affected by a number of factors, including: • continued low prices for crude oil and petroleum products; • increases in interest rates or other events that may affect the availability of sufficient financing for LNG projects on commercially reasonable terms; • increases in the cost of natural gas derived from LNG relative to the cost of natural gas generally; • increases in the production levels of low-cost natural gas in domestic natural gas consuming markets, which could further depress prices for natural gas in those markets and make LNG uneconomical; • increases in the production of natural gas in areas linked by pipelines to consuming areas, the extension of existing, or the development of new pipeline systems in markets we may serve, or the conversion of existing non-natural gas pipelines to natural gas pipelines in those markets; • decreases in the consumption of natural gas due to increases in its price, decreases in the price of alternative energy sources, including coal, or other factors making consumption of natural gas less attractive; • any significant explosion, spill or other incident involving an LNG facility or carrier; • infrastructure constraints such as delays in the construction of liquefaction facilities, the inability of project owners or operators to obtain governmental approvals to construct or operate LNG facilities, as well as community or political action group resistance to new LNG infrastructure due to concerns about the environment, safety and terrorism; • labor or political unrest or military conflicts affecting existing or proposed areas of LNG production or regasification; • decreases in the price of LNG, which might decrease the expected returns relating to investments in LNG projects; • new taxes or regulations affecting LNG production or liquefaction that make LNG production less attractive; or • negative global or regional economic or political conditions, particularly in LNG consuming regions, which could reduce energy consumption or its growth. In 2015, global crude oil prices were very volatile and fell significantly. Such decline in oil prices since late 2014 has depressed natural gas prices and led to a narrowing of the gap in pricing in 6 different geographic regions, which has adversely affected the length of voyages in the spot LNG shipping market and the spot rates and medium term charter rates for charters which commence in the near future. A continued decline in oil prices could adversely affect both the competitiveness of gas as a fuel for power generation and the market price of gas, to the extent that gas prices are benchmarked to the price of crude oil. Some production companies have announced delays or cancellations of certain previously announced LNG projects, which, unless offset by new projects coming on stream, could adversely affect demand for LNG charters over the next few years, while the amount of tonnage available for charter is expected to increase. Unless LNG charter market conditions improve, we may have difficulty in securing charters at attractive rates and durations on our ships when we are seeking a new charter. Such a failure may adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders, as well as our ability to meet certain of our debt covenants. A sustained decline in charter rates could also adversely affect the market value of our ships, on which certain of the ratios and financial covenants we are required to comply with are based. See “—Risks Related to Our Business—Our credit facilities are secured by our ships and contain payment obligations and restrictive covenants that may restrict our business and financing activities as well as our ability to pay dividends. A failure by us to meet our obligations under our credit facilities could result in an event of default under such credit facilities and foreclosure on our ships.” A continuation of the recent significant declines in natural gas and oil prices may adversely affect our growth prospects, results of operations and cash flows. Natural gas prices are volatile and are affected by numerous factors beyond our control, including but not limited to the following: • price and availability of crude oil and petroleum products; • worldwide demand for natural gas and oil; • the cost of exploration, development, production, transportation and distribution of natural gas; • expectations regarding future energy prices for both natural gas and other sources of energy; • the level of worldwide LNG production and exports; • government laws and regulations, including but not limited to environmental protection laws and regulations; • local and international political, economic and weather conditions; • political and military conflicts; and • the availability and cost of alternative energy sources, including alternate sources of natural gas in gas importing and consuming countries. Natural gas prices have historically varied substantially between regions. This price disparity between producing and consuming regions supports demand for LNG shipping and any convergence of natural gas prices would adversely affect demand for LNG shipping. In 2015, global crude oil prices were very volatile and fell significantly. Such decline in oil prices since late 2014 has depressed natural gas prices and led to a narrowing of the gap in pricing in different geographic regions. Given the significant global natural gas and crude oil price decline as referenced above, a continuation of lower natural gas or oil prices or a further decline in natural gas or oil prices may adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders, as a result of, among other things: • a reduction in exploration for or development of new natural gas reserves or projects, or the delay or cancelation of existing projects as energy companies lower their capital expenditures budgets, which may reduce our growth opportunities; 7 • low oil prices negatively affecting both the competitiveness of natural gas as a fuel for power generation and the market price of natural gas, to the extent that natural gas prices are benchmarked to the price of crude oil; • lower demand for vessels of the types we own and operate, which may reduce available charter rates and revenue to us upon redeployment of our vessels following expiration or termination of existing contracts or upon the initial chartering of vessels; • customers potentially seeking to renegotiate or terminate existing vessel contracts, or failing to extend or renew contracts upon expiration; • the inability or refusal of customers to make charter payments to us due to financial constraints or otherwise; or • declines in vessel values, which may result in losses to us upon vessel sales or impairment charges against our earnings. Our future growth depends on our ability to expand relationships with existing customers, establish relationships with new customers and obtain new time charter contracts, for which we will face substantial competition from established companies with significant resources and potential new entrants. We are seeking to enter into time charter contracts for (i) one of our newbuildings scheduled for delivery in 2018, (ii) the GasLog Chelsea, the GasLog Saratoga and the GasLog Salem, which operate in the Cool Pool, and (iii) the GasLog Skagen, which from 2016 will be on a seasonal contract (i.e., employed for seven months and available to accept other charters for five months per year). We will also seek to enter into new time charter contracts upon the expiration or early termination of our existing charter arrangements, and upon any expansion of our fleet of owned ships beyond our contracted newbuildings. One of our principal objectives is to enter into additional long-term, fixed-rate charters. In addition, we may seek to expand the customer base for our ship management services. The process of obtaining charters for LNG carriers is highly competitive and generally involves an intensive screening procedure and competitive bids, which often extends for several months. We believe LNG carrier time charters are awarded based upon a variety of factors relating to the ship and the ship operator, including: • size, age, technical specifications and condition of the ship; • efficiency of ship operation; • LNG shipping experience and quality of ship operations; • shipping industry relationships and reputation for customer service; • technical ability and reputation for operation of highly specialized ships; • quality and experience of officers and crew; • safety record; • the ability to finance ships at competitive rates and financial stability generally; • relationships with shipyards and the ability to get suitable berths; • construction management experience, including the ability to obtain on-time delivery of new ships according to customer specifications; and • competitiveness of the bid in terms of overall price. We expect substantial competition for providing marine transportation services for potential LNG projects from a number of experienced companies, including other independent ship owners as well as state-sponsored entities and major energy companies that own and operate LNG carriers and may compete with independent owners by using their fleets to carry LNG for third parties. Some of these competitors have significantly greater financial resources and larger fleets than we have. A number of marine transportation companies—including companies with strong reputations and extensive resources and experience—have entered the LNG transportation market in recent years, and there are other ship owners and managers who may also attempt to participate in the LNG 8 market in the future. This increased competition may cause greater price competition for time charters. As a result of these factors, we may be unable to expand our relationships with existing customers or to obtain new customers on a profitable basis, if at all, which could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. Hire rates for LNG carriers may fluctuate substantially and are currently below historical average rates. If rates are lower when we are seeking a new charter, our revenues and cash flows may decline. Our ability from time to time to charter or re-charter any ship at attractive rates will depend on, among other things, the prevailing economic conditions in the LNG industry. Hire rates for LNG carriers may fluctuate over time as a result of changes in the supply-demand balance relating to current and future ship capacity. This supply-demand relationship largely depends on a number of factors outside our control. The LNG charter market is connected to world natural gas prices and energy markets, which we cannot predict. A substantial or extended decline in demand for natural gas or LNG could adversely affect our ability to charter or re-charter our ships at acceptable rates or to acquire and profitably operate new ships. Hire rates for newbuildings are correlated with the price of newbuildings. Hire rates at a time when we may be seeking new charters may be lower than the hire rates at which our ships are currently chartered. If hire rates are lower when we are seeking a new charter, or at the time option extensions are due to be declared, our revenues and cash flows, including cash available for dividends to our shareholders, may decline, as we may only be able to enter into new charters at reduced or unprofitable rates or may not be able to re-charter our ship, or we may have to secure a charter in the spot market, where hire rates are more volatile. Prolonged periods of low charter hire rates or low ship utilization could also have a material adverse effect on the value of our assets. These factors, among others, have in turn led to a significant shortening of the average duration of spot charters fixed during 2015, as well as a significant decline in average rates for new spot and shorter-term LNG charters commencing promptly. Unless LNG charter market conditions improve, we may have difficulty in securing new charters at attractive rates and durations for the two vessels that could come off charter during 2016 and those vessels in the Cool Pool. Currently, we have a total of 1,191 open vessel days during the remainder of 2016, including 978 days for the three vessels operating in the Cool Pool. An oversupply of LNG carriers may lead to a reduction in the charter hire rates we are able to obtain when seeking charters in the future which could adversely affect our results of operations and cash flows. Driven in part by an increase in LNG production capacity, the market supply of LNG carriers has been increasing as a result of the construction of new ships. The development of liquefaction projects in the United States and the anticipated exports beginning in early 2016 has driven significant ordering activity. As of December 31, 2015, the LNG carrier order book totalled 145 vessels, and the delivered fleet stood at 427 vessels. We believe that this and any future expansion of the global LNG carrier fleet may have a negative impact on charter hire rates, ship utilization and ship values, which impact could be amplified if the expansion of LNG production capacity does not keep pace with fleet growth. If charter hire rates are lower when we are seeking new time charters, our revenues and cash flows, including cash available for dividends to our shareholders, may decline. If an active short-term or spot LNG carrier charter market continues to develop, our revenues and cash flows may become more volatile and may decline following expiration or early termination of our current charter arrangements. Most shipping requirements for new LNG projects continue to be provided on a multi-year basis, though the level of spot voyages and short-term time charters of less than 12 months in 9 duration has grown in the past few years. If an active short-term or spot charter market continues to develop, we may enter into short-term time charters upon expiration or early termination of our current charters, for any ships for which we have not secured charters, or for any new ships we acquire beyond our contracted newbuildings. As a result, our revenues and cash flows may become more volatile. In addition, an active short-term or spot charter market may require us to enter into charters based on changing market prices, as opposed to contracts based on fixed rates, which could result in a decrease in our revenues and cash flows, including cash available for dividends to our shareholders, if we enter into charters during periods when the market price for shipping LNG is depressed. Further technological advancements and other innovations affecting LNG carriers could reduce the charter hire rates we are able to obtain when seeking new employment, and this could adversely impact the value of our assets and our results of operations and cash flows. The charter rates, asset value and operational life of an LNG carrier are determined by a number of factors, including the ship’s efficiency, operational flexibility and physical life. Efficiency includes speed and fuel economy. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. Physical life is related to the original design and construction, the ongoing maintenance and the impact of operational stresses on the asset. Ship and engine designs are continually evolving. At such time as newer designs are developed and accepted in the market, these newer vessels may be found to be more efficient or more flexible or have longer physical lives than our ships. Competition from these more technologically advanced LNG carriers and the older technology of our steam-powered (“Steam”) vessels, as well as any vessels with older technology which we acquire, could adversely affect our ability to charter or re-charter our ships and the charter hire rates we will be able to secure when we seek to charter or re-charter our ships, and could also reduce the resale value of our ships. This could adversely affect our revenues and cash flows, including cash available for dividends to our shareholders. Risks associated with operating and managing ocean-going ships could affect our business and reputation. The operation and management of ocean-going ships carries inherent risks. These risks include the possibility of: • marine disaster; • piracy; • environmental accidents; • adverse weather conditions; • grounding, fire, explosions and collisions; • cargo and property loss or damage; • business interruptions caused by mechanical failure, human error, war, terrorism, disease and quarantine, or political action in various countries; and • work stoppages or other labor problems with crew members serving on our ships. An accident involving any of our owned or managed ships could result in any of the following: • death or injury to persons, loss of property or environmental damage; • delays in the delivery of cargo; • loss of revenues from termination of charter contracts or ship management agreements; • governmental fines, penalties or restrictions on conducting business; • litigation with our employees, customers or third parties; • higher insurance rates; and • damage to our reputation and customer relationships generally. 10 Any of these results could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. Our insurance may be insufficient to cover losses that may occur to our property or result from our operations which could adversely affect our results of operations and cash flows. The operation of any ship includes risks such as mechanical failure, personal injury, collision, fire, contact with floating objects, property loss or damage, cargo loss or damage and business interruption due to a number of reasons, including political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of a marine disaster, including explosion, spills and other environmental mishaps, and other liabilities arising from owning, operating or managing ships in international trade. Although we carry protection and indemnity, hull and machinery and loss of hire insurance covering our owned ships consistent with industry standards, we can give no assurance that we are adequately insured against all risks or that our insurers will pay a particular claim. We also may be unable to procure adequate insurance coverage at commercially reasonable rates in the future. Even if our insurance coverage is adequate to cover our losses, we may not be able to obtain a timely replacement ship in the event of a loss of a ship. Any uninsured or underinsured loss could harm our business, financial condition, results of operations and cash flows, including cash available for dividends to shareholders. Similarly, although we carry ship manager insurance in connection with our management of third-party ships, we can give no assurance that such insurance will adequately insure us against all risks associated with our ship management services, that our insurers will pay a particular claim or that we will be able to procure adequate insurance coverage at commercially reasonable rates in the future. In addition, some of our insurance coverage is maintained through mutual protection and indemnity associations, and as a member of such associations we may be required to make additional payments over and above budgeted premiums if member claims exceed association reserves. The required drydocking of our ships could be more expensive and time consuming than we anticipate, which could adversely affect our results of operations and cash flows. Drydockings of our owned ships require significant capital expenditures and result in loss of revenue while our ships are off-hire. Any significant increase in either the number of off-hire days due to such drydockings or in the costs of any repairs carried out during the drydockings could have a material adverse effect on our profitability and our cash flows. We may not be able to accurately predict the time required to drydock any of our ships or any unanticipated problems that may arise. If more than one of our ships is required to be out of service at the same time, or if a ship is drydocked longer than expected or if the cost of repairs during the drydocking is greater than budgeted, our results of operations and our cash flows, including cash available for dividends to our shareholders, could be adversely affected. During the year ended December 31, 2015, the drydockings of the GasLog Savannah, the GasLog Singapore, the GasLog Chelsea, the Methane Alison Victoria, the Methane Shirley Elizabeth, the Methane Heather Sally, the Methane Becki Anne and the Methane Julia Louise were completed. The drydockings of the remainder of our vessels are expected to be carried out in 2016 (two vessels) and 2018 (five vessels), respectively. Changes in global and regional economic conditions could adversely impact our business, financial condition, results of operations and cash flows. Weak global or regional economic conditions may negatively impact our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders in ways that we cannot predict. Our ability to expand our fleet beyond our contracted newbuildings will be dependent on our ability to obtain financing to fund the acquisition of additional ships. In addition, uncertainty about current and future global economic conditions may cause our customers to defer projects in response to tighter credit, decreased capital availability and 11 declining customer confidence, which may negatively impact the demand for our ships and services and could also result in defaults under our current charters or termination of our ship management contracts. Global financial markets and economic conditions have been volatile in recent years and remain subject to significant vulnerabilities. In particular, despite recent measures taken by the European Union, concerns persist regarding the debt burden of certain Eurozone countries, including Greece, and their ability to meet future financial obligations, and the overall stability of the euro. Furthermore, a tightening of the credit markets may further negatively impact our operations by affecting the solvency of our suppliers or customers which could lead to disruptions in delivery of supplies such as equipment for conversions, cost increases for supplies, accelerated payments to suppliers, customer bad debts or reduced revenues. Similarly, such market conditions could affect lenders participating in our financing agreements, making them unable to fulfill their commitments and obligations to us. Any reductions in activity owing to such conditions or failure by our customers, suppliers or lenders to meet their contractual obligations to us could adversely affect our business, financial position, results of operations and cash flows, including cash available for dividends to our shareholders. GasLog LNG Services, our vessels’ management company, and a substantial number of its staff are located in Greece. The current economic instability in Greece could disrupt our operations and have an adverse effect on our business. We have sought to minimize this risk and preserve operational stability by carefully developing staff deployment plans, an information technology recovery site, an alternative ship to shore communications plan and funding mechanisms. While we believe these plans, combined with the international nature of our operations, will mitigate the impact of any disruption of operations in Greece, we cannot assure you that these plans will be effective in all circumstances. Disruptions in world financial markets could limit our ability to obtain future debt financing or refinance existing debt. Global financial markets and economic conditions have been disrupted and volatile in recent years. Credit markets as well as the debt and equity capital markets were exceedingly distressed and at certain times in recent years it was difficult to obtain financing and the cost of any available financing increased significantly. If global financial markets and economic conditions significantly deteriorate in the future, we may experience difficulties obtaining financing commitments, including commitments to refinance our existing debt as substantial balloon payments come due under our credit facilities, in the future if lenders are unwilling to extend financing to us or unable to meet their funding obligations due to their own liquidity, capital or solvency issues. As a result, financing may not be available on acceptable terms or at all. If financing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our future obligations as they come due. Our failure to obtain the funds for these capital expenditures could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In the absence of available financing, we also may be unable to take advantage of further business opportunities or respond to competitive pressures. Compliance with safety and other requirements imposed by classification societies may be very costly and may adversely affect our business. The hull and machinery of every commercial LNG carrier must be classed by a classification society. The classification society certifies that the ship has been built and subsequently maintained in accordance with the applicable rules and regulations of that classification society. Moreover, every ship must comply with all applicable international conventions and the regulations of the ship’s flag state as verified by a classification society. Finally, each ship must successfully undergo periodic surveys, including annual, intermediate and special surveys performed under the classification society’s rules. If any ship does not maintain its class, it will lose its insurance coverage and be unable to trade, and the ship’s owner will be in breach of relevant covenants under its financing arrangements. Failure to maintain the class of one or more of our ships could have a material adverse effect on 12 our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. The LNG shipping industry is subject to substantial environmental and other regulations, which may significantly limit our operations or increase our expenses. Our operations are materially affected by extensive and changing international, national, state and local environmental laws, regulations, treaties, conventions and standards which are in force in international waters, or in the jurisdictional waters of the countries in which our ships operate and in the countries in which our ships are registered. These requirements include those relating to equipping and operating ships, providing security and minimizing or addressing impacts on the environment from ship operations. We may incur substantial costs in complying with these requirements, including costs for ship modifications and changes in operating procedures. We also could incur substantial costs, including cleanup costs, civil and criminal penalties and sanctions, the suspension or termination of operations and third-party claims as a result of violations of, or liabilities under, such laws and regulations. In addition, these requirements can affect the resale value or useful lives of our ships, require a reduction in cargo capacity, necessitate ship modifications or operational changes or restrictions or lead to decreased availability of insurance coverage for environmental matters. They could further result in the denial of access to certain jurisdictional waters or ports or detention in certain ports. We are required to obtain governmental approvals and permits to operate our ships. Delays in obtaining such governmental approvals may increase our expenses, and the terms and conditions of such approvals could materially and adversely affect our operations. Additional laws and regulations may be adopted that could limit our ability to do business or increase our operating costs, which could materially and adversely affect our business. For example, new or amended legislation relating to ship recycling, sewage systems, emission control (including emissions of greenhouse gases) as well as ballast water treatment and ballast water handling may be adopted. The United States has recently enacted ballast water management system legislation and regulations that require more stringent controls of air and water emissions from ocean-going ships. Such legislation or regulations may require additional capital expenditures or operating expenses (such as increased costs for low-sulfur fuel) in order for us to maintain our ships’ compliance with international and/or national regulations. We also may become subject to additional laws and regulations if we enter new markets or trades. We also believe that the heightened environmental, quality and security concerns of insurance underwriters, regulators and charterers will generally lead to additional regulatory requirements, including enhanced risk assessment and security requirements, as well as greater inspection and safety requirements on all LNG carriers in the marine transportation market. These requirements are likely to add incremental costs to our operations, and the failure to comply with these requirements may affect the ability of our ships to obtain and, possibly, recover from, insurance or to obtain the required certificates for entry into the different ports where we operate. Some environmental laws and regulations, such as the U.S. Oil Pollution Act of 1990, or “OPA”, provide for potentially unlimited joint, several and/or strict liability for owners, operators and demise or bareboat charterers for oil pollution and related damages. OPA applies to discharges of any oil from a ship in U.S. waters, including discharges of fuel and lubricants from an LNG carrier, even if the ships do not carry oil as cargo. In addition, many states in the United States bordering a navigable waterway have enacted legislation providing for potentially unlimited strict liability without regard to fault for the discharge of pollutants within their waters. We also are subject to other laws and conventions outside the United States that provide for an owner or operator of LNG carriers to bear strict liability for pollution, such as the Convention on Limitation of Liability for Maritime Claims of 1976, or the “London Convention”. Some of these laws and conventions, including OPA and the London Convention, may include limitations on liability. However, the limitations may not be applicable in certain circumstances, such as where a spill is caused by a ship owner’s or operator’s intentional or reckless conduct. These limitations are also subject to periodic updates and may otherwise be amended in the future. 13 Compliance with OPA and other environmental laws and regulations also may result in ship owners and operators incurring increased costs for additional maintenance and inspection requirements, the development of contingency arrangements for potential spills, obtaining mandated insurance coverage and meeting financial responsibility requirements. Climate change and greenhouse gas restrictions may adversely impact our operations and markets. Due to concern over the risks of climate change, a number of countries and the International Maritime Organization, or “IMO”, have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emission from ships. These regulatory measures may include adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy. Although emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, or the “Kyoto Protocol”, or any amendments or successor agreements, a new treaty may be adopted in the future that includes additional restrictions on shipping emissions to those already adopted under the International Convention for the Prevention of Marine Pollution from Ships, or the “MARPOL Convention”. Compliance with future changes in laws and regulations relating to climate change could increase the costs of operating and maintaining our ships and could require us to install new emission controls, as well as acquire allowances, pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program. Revenue generation and strategic growth opportunities may also be adversely affected. Adverse effects upon the oil and gas industry relating to climate change, including growing public concern about the environmental impact of climate change, may also have an effect on demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for oil and natural gas in the future or create greater incentives for use of alternative energy sources. Any long-term material adverse effect on the oil and gas industry could have significant financial and operational adverse impacts on our business that we cannot predict with certainty at this time. We operate our ships worldwide, which could expose us to political, governmental and economic instability that could harm our business. Because we operate our ships in the geographic areas where our customers do business, our operations may be affected by political, governmental and economic conditions in the countries where our ships operate or where they are registered. Any disruption caused by these factors could harm our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In particular, our ships frequent LNG terminals in countries including Egypt, Equatorial Guinea and Trinidad as well as transit through the Gulf of Aden and the Strait of Malacca. Economic, political and governmental conditions in these and other regions have from time to time resulted in military conflicts, terrorism, attacks on ships, mining of waterways, piracy and other efforts to disrupt shipping. Future hostilities or other political instability in the geographic regions where we operate or may operate could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In addition, our business could also be harmed by tariffs, trade embargoes and other economic sanctions by the United States or other countries against countries in the Middle East, Southeast Asia or elsewhere as a result of terrorist attacks, hostilities or diplomatic or political pressures that limit trading activities with those countries. Terrorist attacks, international hostilities and piracy could adversely affect our business, financial condition, results of operations and cash flows. Terrorist attacks, piracy and the current conflicts in the Middle East, and other current and future conflicts, may adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. The continuing hostilities in the Middle East may lead to additional acts of terrorism, further regional conflicts, other armed actions around the world and civil disturbance in the United States or elsewhere, which may contribute to 14 further instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us, or at all. In the past, political conflicts have also resulted in attacks on ships, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and piracy have also affected ships trading in regions such as the South China Sea and the Gulf of Aden. Since 2008, the frequency of piracy incidents against commercial shipping vessels has increased significantly, particularly in the Gulf of Aden and off the coast of Somalia. Any terrorist attacks targeted at ships may in the future negatively materially affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders and could directly impact our ships or our customers. We currently employ armed guards onboard certain vessels operating in areas that may be prone to hijacking or terrorist attacks. The presence of armed guards may increase the risk of damage, injury or loss of life in connection with any attacks on our vessels, in addition to increasing crew costs. We may not be adequately insured to cover losses from acts of terrorism, piracy, regional conflicts and other armed actions, including losses relating to the employment of armed guards. LNG facilities, shipyards, ships, pipelines and gas fields could be targets of future terrorist attacks or piracy. Any such attacks could lead to, among other things, bodily injury or loss of life, as well as damage to the ships or other property, increased ship operating costs, including insurance costs, reductions in the supply of LNG and the inability to transport LNG to or from certain locations. Terrorist attacks, war or other events beyond our control that adversely affect the production, storage or transportation of LNG to be shipped by us could entitle our customers to terminate our charter contracts in certain circumstances, which would harm our cash flows and our business. Terrorist attacks, or the perception that LNG facilities and LNG carriers are potential terrorist targets, could materially and adversely affect expansion of LNG infrastructure and the continued supply of LNG. Concern that LNG facilities may be targeted for attack by terrorists has contributed significantly to local community and environmental group resistance to the construction of a number of LNG facilities, primarily in North America. If a terrorist incident involving an LNG facility or LNG carrier did occur, in addition to the possible effects identified in the previous paragraph, the incident may adversely affect the construction of additional LNG facilities and could lead to the temporary or permanent closing of various LNG facilities currently in operation. A cyber-attack could materially disrupt GasLog’s business. GasLog’s business operations could be targeted by individuals or groups seeking to sabotage or disrupt GasLog’s information technology systems and networks, or to steal data. A successful cyber- attack could materially disrupt GasLog’s operations, including the safety of its operations, or lead to unauthorized release of information or alteration of information on its systems. Any such attack or other breach of GasLog’s information technology systems could have a material adverse effect on GasLog’s business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In the future, the ships we own or manage could be required to call on ports located in countries that are subject to restrictions imposed by the United States and other governments. The United States and other governments and their agencies impose sanctions and embargoes on certain countries and maintain lists of countries they consider to be state sponsors of terrorism. For example, in 2010, the United States enacted the Comprehensive Iran Sanctions Accountability and Divestment Act, or “CISADA”, which expanded the scope of the former Iran Sanctions Act. Among other things, CISADA expanded the application of the prohibitions imposed by the U.S. government to non-U.S. companies, such as us, and limits the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products, as well as LNG. 15 In 2012, President Obama signed Executive Order 13608, which prohibits foreign persons from violating or attempting to violate, or causing a violation of, any sanctions in effect against Iran, or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. The Secretary of the Treasury may prohibit any transactions or dealings, including any U.S. capital markets financing, involving any person found to be in violation of Executive Order 13608. Also in 2012, the U.S. enacted the Iran Threat Reduction and Syria Human Rights Act of 2012, or the “ITRA”, which created new sanctions and strengthened existing sanctions. Among other things, the ITRA intensifies existing sanctions regarding the provision of goods, services, infrastructure or technology to Iran’s petroleum or petrochemical sector. The ITRA also includes a provision requiring the President of the United States to impose five or more sanctions from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of such person’s vessels from U.S. ports for up to two years. The ITRA also includes a requirement that issuers of securities must disclose to the SEC in their annual and quarterly reports filed after February 6, 2013 whether the issuer or “any affiliate” has “knowingly” engaged in certain sanctioned activities involving Iran during the timeframe covered by the report. Finally, in January 2013, the U.S. enacted the Iran Freedom and Counter-Proliferation Act of 2012 or the “IFCA”, which expanded the scope of U.S. sanctions on any person that is part of Iran’s energy, shipping or shipbuilding sector and operators of ports in Iran, and imposes penalties on any person who facilitates or otherwise knowingly provides significant financial, material or other support to these entities. On January 16, 2016, the United States suspended certain sanctions against Iran applicable to non-U.S. companies, such as us, pursuant to the nuclear agreement reached between Iran, China, France, Germany, Russia, the United Kingdom, the United States and the European Union. To implement these changes, beginning on January 16, 2016, the United States waived enforcement of many of the sanctions against Iran’s energy and petrochemical sectors described above, among other things, including certain provisions of CISADA, ITRA, and IFCA. While non-U.S. companies may now engage in certain business or trade with Iran that was previously prohibited, the U.S. has the ability to reimpose sanctions against Iran if, in the future, Iran does not comply with its obligations under the nuclear agreement. Although the ships we own and those we manage have not called on ports in countries subject to sanctions or embargoes or in countries identified as state sponsors of terrorism, including Iran, North Korea and Syria, we cannot assure you that these ships will not call on ports in these countries in the future. While we intend to maintain compliance with all sanctions and embargoes applicable to us, U.S. and international sanctions and embargo laws and regulations do not necessarily apply to the same countries or proscribe the same activities, which may make compliance difficult. Additionally, the scope of certain laws may be unclear, and these laws may be subject to changing interpretations and application and may be amended or strengthened from time to time, including by adding or removing countries from the proscribed lists. Violations of sanctions and embargo laws and regulations could result in fines or other penalties and could result in some investors deciding, or being required, to divest their investment, or not to invest, in us. Failure to comply with the U.S. Foreign Corrupt Practices Act, the UK Bribery Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, contract terminations and an adverse effect on our business. We operate our ships worldwide, requiring our ships to trade in countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the “FCPA”, and the 16 Bribery Act 2010 of the United Kingdom or the “UK Bribery Act”. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA and the UK Bribery Act. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, or curtailment of operations in certain jurisdictions, and might adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management. Reliability of suppliers may limit our ability to obtain supplies and services when needed. We rely, and will in the future rely, on a significant supply of consumables, spare parts and equipment to operate, maintain, repair and upgrade our fleet of ships. Delays in delivery or unavailability of supplies could result in off-hire days due to consequent delays in the repair and maintenance of our fleet. This would negatively impact our revenues and cash flows. Cost increases could also negatively impact our future operations, although the impact of significant cost increases may be mitigated to some extent with respect to the vessels that are employed under charter contracts with automatic periodic adjustment provisions or cost review provisions. Governments could requisition our ships during a period of war or emergency, resulting in loss of earnings. The government of a jurisdiction where one or more of our ships are registered could requisition for title or seize our ships. Requisition for title occurs when a government takes control of a ship and becomes its owner. Also, a government could requisition our ships for hire. Requisition for hire occurs when a government takes control of a ship and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency, although governments may elect to requisition ships in other circumstances. Although we would expect to be entitled to government compensation in the event of a requisition of one or more of our ships, the amount and timing of payments, if any, would be uncertain. A government requisition of one or more of our ships would result in off-hire days under our time charters and may cause us to breach covenants in certain of our credit facilities, and could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. Maritime claimants could arrest our ships, which could interrupt our cash flows. Crew members, suppliers of goods and services to a ship, shippers or receivers of cargo and other parties may be entitled to a maritime lien against a ship for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lienholder may enforce its lien by arresting a ship. The arrest or attachment of one or more of our ships which is not timely discharged could cause us to default on a charter or breach covenants in certain of our credit facilities and, to the extent such arrest or attachment is not covered by our protection and indemnity insurance, could require us to pay large sums of money to have the arrest or attachment lifted. Any of these occurrences could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. Additionally, in some jurisdictions, such as the Republic of South Africa, under the “sister ship” theory of liability, a claimant may arrest both the ship that is subject to the claimant’s maritime lien and any “associated” ship, which is any ship owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one ship in our fleet for claims relating to another of our ships. 17 We may be subject to litigation that could have an adverse effect on us. We may in the future be involved from time to time in litigation matters. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, toxic tort claims, employment matters and governmental claims for taxes or duties, as well as other litigation that arises in the ordinary course of our business. We cannot predict with certainty the outcome of any claim or other litigation matter. The ultimate outcome of any litigation matter and the potential costs associated with prosecuting or defending such lawsuits, including the diversion of management’s attention to these matters, could have an adverse effect on us and, in the event of litigation that could reasonably be expected to have a material adverse effect on us, could lead to an event of default under certain of our credit facilities. Risks Inherent in an Investment in Us Any limitation in the availability or operation of our ships could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our owned fleet consists of 18 LNG carriers that are in operation (including the eight LNG carriers owned by GasLog Partners) and eight newbuildings on order. If any of our vessels is unable to generate revenues for any significant period of time for any reason, including unexpected periods of off-hire, early charter termination (which could result from damage to our vessels) or failure to secure employment for any vessels for which we have not secured charters, our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders, could be materially and adversely affected. The impact of any limitation in the operation of our vessels or any early charter termination would be amplified during the period prior to delivery of our newbuildings, as a substantial portion of our cash flows and income are dependent on the revenues earned by the chartering of our 18 LNG carriers in operation. In addition, the costs of vessel repairs are unpredictable and can be substantial. In the event of repair costs that are not covered by our insurance policies, we may have to pay for such repair costs, which would decrease our earnings and cash flows, including cash available for dividends to our shareholders. We depend upon one customer for nearly all of our revenues. The loss of this customer would result in a significant loss of revenues and could have a material adverse effect on our business, financial condition, results of operations and cash flows. We have historically derived nearly all of our revenues from one customer, MSL, a subsidiary of BG Group, which was acquired by our other customer, Shell on February 15, 2016. For the year ended December 31, 2015, MSL and Shell accounted for 83.14% and 11.76% of our revenues, respectively. Following the delivery of our eight new LNG carriers on order, MSL will continue to be a key customer, as seven of our newbuildings will be chartered to MSL upon delivery for a total of 21 vessels chartered to MSL. Although MSL’s contractual obligations under the charter agreements are not impacted by the acquisition, we cannot provide assurance that we will be able to maintain the same business relationship previously enjoyed with BG Group following its acquisition by Shell or BG Group. In addition, the acquisition by Shell has increased our customer concentration because all of our vessels are now chartered to subsidiaries of Shell. Furthermore, we could lose a customer or the benefits of our time charter or ship management arrangements for many different reasons, including if the customer is unable or unwilling to make charter hire or other payments to us because of a deterioration in its financial condition, disagreements with us or otherwise. If our customer terminates its charters, chooses not to re-charter our ships after the initial charter terms or is unable to perform under its charters and we are not able to find replacement charters on similar terms, we will suffer a loss of revenues that could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. Our revenues would also be impacted if MSL terminates or is unable to perform under our ship management contracts. 18 Any charter termination could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our charterers have the right to terminate a ship’s time charter in certain circumstances, such as: • loss of the ship or damage to it beyond repair; • if the ship is off-hire for any reason other than scheduled drydocking for a period exceeding 90 consecutive days, or for more than 90 days or 110 days, depending on the charter, in any one-year period; • defaults by us in our obligations under the charter; or • the outbreak of war or hostilities involving two or more major nations, such as the United States or the People’s Republic of China, that would materially and adversely affect the trading of the ship for a period of at least 30 days. A termination right under one ship’s time charter would not automatically give the charterer the right to terminate its other charter contracts with us. However, a charter termination could materially affect our relationship with the customer and our reputation in the LNG shipping industry, and in some circumstances the event giving rise to the termination right could potentially impact multiple charters. Accordingly, the existence of any right of termination could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. If we lose a charter, we may be unable to obtain a new time charter on terms as favorable to us or with a charterer of comparable standing, particularly if we are seeking new time charters at a time when charter rates in the LNG industry are depressed. Consequently, we may have an increased exposure to the volatile spot market, which is highly competitive and subject to significant price fluctuations. In the event that we are unable to re-deploy a ship for which a charter has been terminated, we will not receive any revenues from that ship, and we may be required to pay expenses necessary to maintain the ship in proper operating condition. In addition, in the event of a charter termination we could be required under certain of our credit facilities to deposit cash in an account held with the applicable lender until we have obtained a new time charter on terms acceptable to such lender, or under some other of our credit facilities repay the outstanding loan amount, which could restrict our cash available for dividends to our shareholders. Our ship management agreements may be terminated with limited advance notice. Unlike our time charters, our ship management agreements with MSL and Egypt LNG may be terminated at any time by either party with a short period of advance notice. In the event that a ship management agreement is terminated by MSL other than in connection with the sale of a ship, MSL would generally be entitled to immediately terminate the ship management agreements for the other ships we manage on its behalf. If a customer were to terminate our ship management agreements, we may be unable to find new customers for our ship management services or we may choose not to continue providing ship management services to third-party customers, which could adversely impact our revenues and cash flows, including cash available for dividends to our shareholders. Due to our lack of diversification, adverse developments in the LNG transportation industry could adversely affect our business, particularly if such developments occur at a time when we are seeking a new charter. We rely exclusively on cash flow generated from charters for our LNG vessels and management of our and third party LNG vessels. Due to our lack of diversification, an adverse development in the LNG transportation industry could have a significantly greater impact on our business, particularly if such developments occur at a time when our ships are not under charter or nearing the end of their charters, than if we maintained more diverse assets or lines of businesses. 19 Our contracts for the eight newbuildings we have on order are subject to risks that could cause delays in the delivery of the ships, which could adversely affect our results of operations and cash flows. Our eight contracted newbuildings are scheduled to be delivered to us on various dates between 2016 and 2019. Significant delays in the delivery of one or more of these ships, which are expected to generate a substantial portion of our contracted revenue in future years, would delay our receipt of revenues under the related time charters. For prolonged delays, the customer may terminate the charter and, in addition to the resulting loss of revenues, we may be responsible for additional substantial liquidated damages, which could adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In addition, the delivery of any of these ships with substantial defects or unexpected operational problems could have similar consequences. The completion of newbuildings could be delayed because of: • shortages of equipment, materials or skilled labor; • delays in the receipt of necessary construction materials, such as steel, or equipment, such as engines or generators; • failure of equipment to meet quality and/or performance standards; • the shipyards over-committing to new ships to be constructed; • changes in governmental regulations or maritime self-regulatory organization standards; • political or economic disturbances; • financial or operating difficulties experienced by equipment vendors or the shipyards; • requests for changes to the original vessel specifications; • inability to obtain required permits or approvals; • disputes with the shipyards; • inability to finance the construction or conversion of the vessels; • work stoppages and other labor disputes; and • adverse weather conditions or any other events of force majeure, including war or hostilities between South Korea, where we have ships on order at Samsung and Hyundai, and North Korea. If delivery of a vessel is materially delayed, it could adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. As we take delivery of our newbuildings or any secondhand ships we acquire in the future, we will need to expand our staff and crew. If we cannot recruit and retain employees and provide adequate compensation, our business, financial condition, results of operations and cash flows may be adversely affected. Our ability to acquire and retain customers depends on a number of factors, including our ability to man our vessels with masters, officers and crews of suitable experience in operating LNG carriers. As we take delivery of our newbuildings or any secondhand ships we acquire in the future, we expect to hire a significant number of seafarers qualified to man and operate our new vessels, as well as additional shoreside personnel. As the global LNG carrier fleet continues to grow, we expect the demand for technically skilled and experienced officers and crew to increase. This could lead to an industry-wide shortfall of qualified personnel, resulting in increased crew costs, which could constrain our ability to recruit suitable employees to operate our LNG carriers within our budget parameters. Material increases in crew costs could adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In addition, if we cannot recruit and retain sufficient numbers of quality on-board seafaring personnel, we may 20 not be able to fully utilize our expanded fleet, which could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. We must make substantial capital expenditures to acquire the eight newbuildings we have on order and any additional ships we may acquire in the future. We are obligated to make substantial capital expenditures to fund our commitments for the eight newbuildings we have on order. We are scheduled to take delivery of the vessels on various dates between 2016 and 2019. As of December 31, 2015, the total remaining balance of the contract prices for the eight vessels was $1.45 billion, which amounts are payable under each shipbuilding contract in installments upon the attainment of certain specified milestones. The largest portion of the purchase price for each vessel will come due upon its delivery to us from the shipyard. We intend to fund these commitments with the $1,311.3 million under the financing agreement we entered into on October 16, 2015, available cash and cash from operations. To the extent that we are unable to draw down the amounts committed under our credit facilities, whether due to our failure to comply with the terms of such facilities or the lenders’ failure to fund the committed amounts, we will need to find alternative financing. If we are unable to find alternative financing, we will not be capable of funding all of our commitments for capital expenditures relating to our eight contracted newbuildings. In the event that we fail to meet our payment obligations under a shipbuilding contract, we would be in default under the applicable contract and the shipbuilder would have the option of cancelling the contract and retaining any previously funded installment payments, which could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In addition, we may choose to make substantial capital expenditures to expand the size of our fleet in the future. In order to exercise our options with Samsung to purchase up to six additional newbuildings, we would need to obtain financing on terms acceptable to us. We expect to finance the cost of any new vessels through available cash, cash from operations and debt or equity financings. Our ability to obtain bank financing or to access the capital markets may be limited by our financial condition at the time of any such financing or offering, as well as by adverse market conditions resulting from, among other things, general economic conditions, changes in the LNG industry and further contingencies and uncertainties that are beyond our control. Even if we are successful in obtaining necessary funds, the terms of any debt financings could limit our ability to further expand our fleet and to pay dividends to our shareholders. We may have difficulty further expanding our fleet in the future. We may expand our fleet beyond our contracted newbuildings by ordering additional newbuildings or by making selective acquisitions of high-quality secondhand vessels to the extent that they are available in the same way that we acquired the GasLog Chelsea and the eight vessels acquired from MSL in 2014 and 2015. Our future growth will depend on numerous factors, some of which are beyond our control, including our ability to: • identify attractive ship acquisition opportunities and consummate such acquisitions; • obtain newbuilding contracts at acceptable prices; • obtain required equity and debt financing on acceptable terms; • secure charter arrangements on terms acceptable to our lenders; • expand our relationships with existing customers and establish new customer relationships; • recruit and retain additional suitably qualified and experienced seafarers and shore-based employees; • continue to meet technical and safety performance standards; • manage joint ventures; and 21 • manage the expansion of our operations to integrate the new ships into our fleet. We may not be successful in executing any future growth plans, and we cannot give any assurances that we will not incur significant expenses and losses in connection with such growth efforts. Our credit facilities are secured by our ships and contain payment obligations and restrictive covenants that may restrict our business and financing activities as well as our ability to pay dividends. A failure by us to meet our obligations under our credit facilities could result in an event of default under such credit facilities and foreclosure on our ships. Our credit facilities impose, and any future credit facility we enter into will impose, operating and financial restrictions on us and our subsidiaries. These restrictions in our credit facilities generally limit our shipowning subsidiaries’ ability to, among other things: • incur additional indebtedness, create liens or provide guarantees; • provide any form of credit or financial assistance to, or enter into any non-arms’ length transactions with, us or any of our affiliates; • sell or otherwise dispose of assets, including our ships; • engage in merger transactions; • enter into, terminate or amend any charter; • amend our shipbuilding contracts; • change the manager of our ships; • undergo a change in ownership; or • acquire assets, make investments or enter into any joint venture arrangements outside of the ordinary course of business. Our credit facilities also impose certain restrictions relating to us and our other subsidiaries, including restrictions that limit our ability to make any substantial change in the nature of our business or to engage in transactions that would constitute a change of control, as defined in the relevant credit facility, without repaying all of our indebtedness in full, or to allow our largest shareholders to reduce their shareholding in us below specified thresholds. Our credit facilities also impose specified financial covenants that apply to us and our subsidiaries on a consolidated basis or, in the case of the GasLog Partners’ $450.0 million credit facility, or the “GasLog Partners Credit Facility”, to GasLog Partners and its subsidiaries on a consolidated basis. These financial covenants generally include the following: • net working capital (excluding the current portion of long-term debt) must be not less than $0 (not included in the GasLog Partners Credit Facility); • total indebtedness divided by our total assets must not exceed 75.0% (in the case of the GasLog Partners Credit Facility, must be less than 60.0%); • the ratio of EBITDA over our debt service obligations (including interest and debt repayments) on a trailing 12 months basis must be not less than 110.0%; • the aggregate amount of all unencumbered cash and cash equivalents must be not less than the higher of 3.0% of total indebtedness and $20.0 million ($15.0 million under the GasLog Partners Credit Facility and $50.0 million under the credit facility provided under the facilities agreement dated October 16, 2015 (the “October 2015 Facility”) and the credit facility provided under the credit agreement entered into on February 18, 2016 to refinance the existing indebtedness on five of our contracted vessels of up to $576.50 million (the “Five Vessel Refinancing”)) after the first drawdown; • being permitted to pay dividends, provided that unencumbered cash and cash equivalents equal to at least 4.0% of total indebtedness, subject to no event of default having occurred or occurring as a consequence of the payment of such dividends (in the case of the GasLog 22 Partners Credit Facility, permitted to pay dividends subject to no event of default having occurred or resulting from such payment); and • market value adjusted net worth must be not less than $350.0 million (not included in the GasLog Partners Credit Facility). In addition, our credit facilities contain covenants requiring us and certain of our subsidiaries to maintain the aggregate of (i) the market value, on a charter exclusive basis, of the mortgaged vessel or vessels and (ii) the market value of any additional security provided to the lenders, not less than 120.0% (in the case of the October 2015 Facility, 115.0% for the first two years after each drawdown and 120.0% at any time thereafter and in the case of the Five Vessel Refinancing, 115.0% until the maturity of the junior tranche and 120.0% at any time thereafter) of the then outstanding amount under the applicable facility and any related swap exposure. If we fail to comply with these covenants and are not able to obtain covenant waivers or modifications, our lenders could require us to make prepayments or provide additional collateral sufficient to bring us into compliance with such covenants, and if we fail to do so our lenders could accelerate our indebtedness. Further, under the NOK denominated bond agreement signed on June 25, 2013, between GasLog Ltd. and the bond trustee, as amended, or the “Bond Agreement”, for our Bond we are required to comply with the following financial covenants: • our total indebtedness divided by our total assets must not exceed 75.0%; • the ratio of EBITDA over our debt service obligations (including interest and debt repayments) on a trailing 12 months basis must be not less than 115.0%; • the aggregate amount of all unencumbered cash and cash equivalents must be not less than the higher of 3.0% of our total indebtedness and $20.0 million after the first drawdown; and • our market value adjusted net worth must at all times be not less than $350.0 million. The Bond Agreement also includes a dividend restriction according to which we may not (i) declare or make any dividend payment or distribution, whether in cash or in kind, (ii) repurchase any of our shares or undertake other similar transactions (including, but not limited to, total return swaps related to our shares), or (iii) grant any loans or make other distributions or transactions constituting a transfer of value to our shareholders (items (i), (ii) and (iii) collectively referred to as the “Distributions”) that in aggregate exceed during any calendar year 50.0% of our consolidated net profit after taxes based on the audited annual accounts for the previous financial year (any unutilized portion of the permitted dividend pursuant to the above may not be carried forward). Notwithstanding the above, we are permitted to make Distributions up to an aggregate maximum per share, for the years 2016, 2017 and 2018 of $1.10/share, $1.20/share and $1.30/share, respectively, provided that total indebtedness divided by total assets (giving pro forma effect for the distribution) does not exceed 67.5% immediately after the Distribution is made, the ratio of EBITDA over debt service obligations on a trailing 12 months basis ending the quarter immediately prior to that in which the Distribution is made is not less than 115.0% and no event of default would result from such distribution. The Bond Agreement also prohibits GasLog from providing any debt or committed debt availability to GasLog Partners in excess of $75.0 million. Certain of our credit facilities also contain vessel employment conditions, pursuant to which we could be required in the event of a charter termination or in certain other circumstances to deposit cash in an account held with the applicable lender until we have obtained a new time charter on terms acceptable to such lender, or under certain of our credit facilities repay the outstanding loan amount. As of December 31, 2015, in connection with the delivery of the GasLog Saratoga and the GasLog Salem, $21.0 million per vessel has been deposited in a blocked account which amount is presented under restricted cash because the spot charters that these vessels enter into from time to time are not considered approved charters by the lenders. In addition, as of December 31, 2015, $20.0 million and $0.7 million has been presented under restricted cash pursuant to the credit facilities used to finance the GasLog Savannah and the GasLog Singapore. This requirement was triggered (a) for GasLog Savannah because the vessel’s new charter party is not considered an approved charter by the lenders and (b) for GasLog Singapore because the vessel’s charterer has not 23 exercised its option to extend its time charter within 12 months of the charter’s scheduled termination date. On February 25, 2016, a supplemental deed was signed with the lenders of the GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd. loan facility, permitting GasLog to withdraw the $21.0 million maintained in blocked accounts for each of GAS-nine Ltd. and GAS-ten Ltd., the entities which own the GasLog Saratoga and the GasLog Salem, respectively, provided GasLog has provided an executed guarantee or letter of credit with a minimum duration of six months. In connection to this, on February 26, 2016, GasLog entered into two bank guarantees, issued by BNP Paribas S.A. for GAS-nine Ltd. and GAS-ten Ltd. of $21.0 million each. The bank guarantees bear interest at a margin and are available for a period of up to two years. Consequently, $42.0 million was reclassified from restricted cash to cash and cash equivalents. Our ability to comply with covenants and restrictions contained in our financing arrangements may be affected by events beyond our control, including prevailing economic, financial and industry conditions. A failure to comply with covenants and restrictions or to meet our payment and other obligations could lead to defaults under our credit facilities which could cause our payment obligations to be accelerated. We may not have, or be able to obtain, sufficient funds to make these accelerated payments. Because obligations under our financing arrangements are secured by our ships and are guaranteed by our ship-owning subsidiaries, if we are unable to repay debt under our financing arrangements, the lenders could seek to foreclose on those assets, which would materially and adversely impact our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In addition, a default under one of our credit facilities could result in the cross-acceleration of our other indebtedness. For more information regarding our credit facilities, please read “Item 5. Operating and Financial Review and Prospects— B. Liquidity and Capital Resources—Credit Facilities”. The significant global natural gas and crude oil price decline, amongst other factors referenced above, have in turn led to a significant shortening of the average duration of spot charters fixed during 2015, as well as a significant decline in average rates for new spot and shorter-term LNG charters commencing promptly. Over the next 18 months, unless LNG charter market conditions improve, we may have difficulty in securing new charters at attractive rates and durations for the two vessels that could come off charter during 2016. Currently, we have a total of 1,191 open vessel days during the remainder of 2016, including 978 days for the three vessels operating in the Cool Pool. A failure to obtain charters at acceptable rates on these vessels could adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders, as well as our ability to meet certain of our debt covenants later in 2016, particularly the required ratio of EBITDA to debt service and the minimum cash requirement. Ship values may fluctuate substantially, which could result in an impairment charge, could impact our compliance with the covenants in our loan agreements and, if the values are lower at a time when we are attempting to dispose of ships, could cause us to incur a loss. Values for ships can fluctuate substantially over time due to a number of different factors, including: • prevailing economic conditions in the natural gas and energy markets; • a substantial or extended decline in demand for LNG; • the level of worldwide LNG production and exports; • changes in the supply-demand balance of the global LNG carrier fleet; • changes in prevailing charter hire rates; • the physical condition of the ship; • the size, age and technical specifications of the ship; • demand for LNG carriers; and 24 • the cost of retrofitting or modifying existing ships, as a result of technological advances in ship design or equipment, changes in applicable environmental or other regulations or standards, customer requirements or otherwise. If the market value of our ships declines, we may be required to record an impairment charge in our financial statements, which could adversely affect our results of operations. See “Item 5. Operating and Financial Review and Prospects -B. Liquidity and Capital Resourced—Critical Accounting Policies—Impairment of Vessels”. In addition, any such deterioration in market value of our ships may trigger a breach of some of the covenants contained in our credit facilities. If we do breach such covenants and we are unable to remedy the relevant breach, our lenders could accelerate our indebtedness and seek to foreclose on the ships in our fleet securing those credit facilities. In addition, if a charter contract expires or is terminated by the customer, we may be unable to re-deploy the affected ships at attractive rates and, rather than continue to incur costs to maintain and finance them, we may seek to dispose of them. Any foreclosure on our ships, or any disposal by us of a ship at a time when ship prices have fallen, could result in a loss and could materially and adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. Our debt levels may limit our flexibility in obtaining additional financing, pursuing other business opportunities and paying dividends to our shareholders. As of December 31, 2015, we had an aggregate of $2.29 billion of indebtedness outstanding under eleven credit agreements, of which $645.19 million is repayable within one year which includes $42.17 million under the revolving credit facility, and we had $113.74 million outstanding under the Bond which amount is payable in June 2018. As of December 31, 2015 there is an undrawn amount of $7.83 million from the revolving facility of GAS-two Ltd. from which the balance is available to be drawn under certain conditions. In addition, there is one loan facility with an aggregate undrawn amount of $1.3 billion available that will be used to finance a portion of the contract price of eight of our newbuildings on their delivery. We may incur additional indebtedness in the future as we grow our fleet. This level of debt could have important consequences to us, including the following: • our ability to obtain additional financing, if necessary, for working capital, capital expenditures, ship acquisitions or other purposes may be impaired or such financing may not be available on favorable terms; • our costs of borrowing could increase as we become more leveraged; • we will need a substantial portion of our cash flow to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and dividends to our shareholders; • our debt level may make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our industry or the economy generally; and • our debt level may limit our flexibility in responding to changing business and economic conditions. Our ability to service our debt depends upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital or bankruptcy protection. We may not be able to effect any of these remedies on satisfactory terms, or at all. 25 Our ability to obtain additional debt financing for future acquisitions of ships or to refinance our existing debt may depend on the creditworthiness of our charterers and the terms of our future charters. Our ability to borrow against the ships in our existing fleet and any ships we may acquire in the future largely depends on the value of the ships, which in turn depends in part on charter hire rates and the ability of our charterers to comply with the terms of their charters. The actual or perceived credit quality of our charterers, and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require to purchase additional ships and to refinance our existing debt as balloon payments come due, or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing or committing to financing on unattractive terms could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. Our ability to pay dividends or to redeem our Preference Shares may be limited by the amount of cash we generate from operations, by restrictions in our credit facilities and by additional factors unrelated to our profitability. We intend to pay regular quarterly dividends. The declaration and payment of any dividend (including cumulative dividends payable with respect to our Preference Shares) is subject to the discretion of our board of directors and the requirements of Bermuda law. The timing and amount of any dividend or redemption payments will be dependent on our earnings, financial condition, cash requirements and availability, restrictions in our debt agreements, the provisions of Bermuda law and other factors. The amount of cash we generate from operations and the actual amount of cash we will have available for dividends or redeem our Preference Shares will vary based upon, among other things: • general LNG shipping market conditions and trends, including charter rates, ship values, factors affecting supply and demand, technological advancements and opportunities for the profitable operations of LNG carriers; • our ability to comply with the specified financial covenants in our loan facilities and the Bond and as corporate guarantor for certain loan facilities on a consolidated basis; • our ability to obtain new charters for our vessels at favourable rates; • the charter hire payments we obtain from our charters as well as our ability to re-charter the vessels and the rates obtained upon the expiration of our existing charters; • our fleet expansion and associated uses of our cash as well as any financing requirements; • the due performance by our charterers of their obligations; • delays in the delivery of newbuild vessels and the beginning of payments under charters relating to those vessels; • the level of our operating costs, such as the costs of crews, lubricants and insurance, as well as the costs of repairs, maintenance or modifications of our ships; • the number of unscheduled off-hire days for our fleet and the timing of, and number of days required for, scheduled drydocking of our ships; • our ability to obtain financing to fund capital expenditures, acquisitions and other corporate activities, funding by banks of their financial commitments, and our ability to meet our obligations under our credit facilities; • prevailing global and regional economic or political conditions; • changes in interest rates; • the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business; • changes in the basis of taxation of our activities in various jurisdictions; • modification or revocation of our dividend policy by our board of directors; and 26 • the amount of any cash reserves established by our board of directors. For information regarding the dividend payment restrictions in our financing agreements, see “—Risks Related to Our Business—Our credit facilities are secured by our ships and contain payment obligations and restrictive covenants that may restrict our business and financing activities as well as our ability to pay dividends. A failure by us to meet our obligations under our credit facilities could result in an event of default under such credit facilities and foreclosure on our ships.” The amount of cash we generate from our operations may differ materially from our profit or loss for the period, which will be affected by non-cash items. We may incur other expenses or liabilities that could reduce or eliminate the cash available for dividends. Under Bermuda law, a company may not declare or pay dividends if there are reasonable grounds for believing that: (i) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii) the realizable value of the company’s assets would thereby be less than its liabilities. Under our bye-laws, each common share is entitled to dividends as and when any such dividends are declared by our board of directors. As a result of these and the other factors mentioned above, we may pay dividends during periods when we record losses and may not pay dividends during periods when we record a profit. We can give no assurance that dividends will be paid in the future. We are a holding company and we depend on the ability of our subsidiaries, including GasLog Partners, to distribute funds to us in order to satisfy our financial obligations and to make dividend payments. We are a holding company. Our subsidiaries conduct substantially all of our operations and own all of our operating assets, including our ships. We have no significant assets other than the equity interests in our subsidiaries, including GasLog Partners, in which we hold a 32.9% equity interest (including our 2.0% general partner interest) as well as all of the incentive distribution rights. As a result, our ability to pay our obligations and to make dividend payments depends entirely on our subsidiaries and their ability to distribute funds to us, including cash distributions and management and administrative services fees received from GasLog Partners. The ability of a subsidiary to make these distributions could be affected by a claim or other action by a third party, including a creditor, or by the law of its jurisdiction of incorporation which regulates the payment of dividends. Other factors which may impact the value of our equity interest in GasLog Partners and its ability to distribute funds to us are described in its public filings with the SEC. If we are unable to obtain funds from our subsidiaries, our board of directors may exercise its discretion not to declare or pay dividends. Fluctuations in exchange rates and interest rates could result in financial losses for us. Fluctuations in currency exchange rates and interest rates may have an impact on our financial performance. We receive virtually all of our revenues in dollars, while some of our operating expenses, including employee costs and certain crew costs, are denominated in euros. As a result, we are exposed to foreign exchange risk. However, we also maintain cash balances in euros, which amounted to approximately $20.95 million as of December 31, 2015. Although we monitor exchange rate fluctuations on a continuous basis, we do not currently hedge movements in currency exchange rates. As a result, there is a risk that currency fluctuations will have a negative effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. In addition, we are exposed to a market risk relating to fluctuations in interest rates because our credit facilities bear interest costs at a floating rate based on London Interbank Offered Rate, or “LIBOR”. Significant increases in LIBOR could adversely affect our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders and ability to service our debt. Although we use interest rate swaps from time to time to reduce our exposure to interest rate risk, we hedge only a portion of our outstanding indebtedness. There is no assurance that our derivative contracts will provide adequate protection against adverse changes in interest rates or that our bank counterparties will be able to perform their obligations. 27 The derivative contracts used to hedge our exposure to fluctuations in interest rates could result in reductions in our shareholders’ equity as well as charges against our profit. We enter into interest rate swaps from time to time for purposes of managing our exposure to fluctuations in interest rates applicable to floating rate indebtedness. As of December 31, 2015, we had 20 interest rate swaps in place with a notional amount of $906.38 million. For the 6 interest rate swaps that have been designated as cash flow hedging instruments, the changes in the fair value of the contracts are recognized in our statement of other comprehensive income or loss as cash flow hedge gains or losses for the period, and could affect compliance with the market value adjusted net worth covenants in our credit facilities. In addition, the changes in the fair value of the 14 derivative contracts that have not been designated as cash flow hedging instruments are recognized in our statement of profit or loss. Changes in the fair value of any derivative contracts that do not qualify for treatment as cash flow hedges for financial reporting purposes would affect, among other things, our profit, earnings per share and affect compliance with the market value adjusted net worth covenants in our credit facilities. In June 2013 and April 2014, we entered into six Cross Currency Swaps, or “CCSs”, to exchange interest payments and principal on maturity on the same terms as the Bond Agreement, in order to hedge the variability of the functional currency equivalent cash flows on the Bond. As of December 31, 2015, the six CCSs had a notional amount of $166.82 million and qualified as cash flow hedging instruments for accounting purposes. The effective portion of changes in the fair value of CCSs is recognized in other comprehensive income while the ineffective portion impacts the statement of profit or loss for the period. There is no assurance that our derivative contracts will provide adequate protection against adverse changes in interest rates or that our bank counterparties will be able to perform their obligations. In addition, as a result of the implementation of new regulation of the swaps markets in the United States, the European Union and elsewhere over the next few years, the cost and availability of interest rate and currency hedges may increase or suitable hedges may not be available. Our earnings and business are subject to the credit risk associated with our contractual counterparties. We enter into, among other things, time charters, ship management agreements and other contracts with our customers, shipbuilding contracts and refund guarantees relating to newbuildings, credit facilities and commitment letters with banks, insurance contracts and interest rate swaps. Such agreements subject us to counterparty credit risk. The ability and willingness of each of our counterparties to perform its obligations under a contract with us will depend upon a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the natural gas and LNG markets and charter hire rates. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses which in turn could have a material adverse effect on our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders. Our business depends on certain of our senior executives who are subject to increasing demands as a result of our growth and who may not necessarily continue to work for us. Increasing demands are placed on our management as a result of our growth. As we expand operations, we must monitor our operations, control costs and maintain quality control. In addition, the provision of management services to our publicly traded subsidiary, GasLog Partners, has increased the complexity of our business and placed additional demands on our management. Our success depends to a significant extent upon the abilities and the efforts of our Chairman, Peter G. Livanos, and certain of our senior executives. Mr. Livanos has substantial experience in the shipping industry and has worked with us for many years. He and certain of our senior executives are important to the execution of our business strategies and to the growth and development of our business. If Mr. Livanos or one or more of our senior executives ceased to be affiliated with us, we may be unable to recruit other employees with equivalent talent and experience, and our business and financial condition could suffer. 28 We are a partial owner of Egypt LNG. The dividends we receive on account of our ownership interest may decline in the future and we may have to write down the value of our investment. We currently own a 25.0% stake in Egypt LNG, an entity whose principal asset is the LNG carrier Methane Nile Eagle, which is currently operating under a 20-year time charter with MSL. On October 29, 2015, Egypt LNG and BG Group mutually agreed to lay up the Methane Nile Eagle for a period of approximately one year. The charterer continues to pay charter hire costs adjusted for net savings in operating expenses and insurance as a result of the vessel being laid up. The declaration and payment of dividends by Egypt LNG is subject to the discretion of its board of directors, which we do not control, as well as other restrictions, including a minimum cash reserve requirement. As a result, the dividends we receive on account of our ownership interest may decline in the future, which would adversely impact our cash flows, including cash available for dividends to our shareholders. In the event of an adverse change in the operating results of Egypt LNG resulting from, among other things, unscheduled off-hire days, damage to or loss of the Methane Nile Eagle or early termination of the ship’s charter, we would expect the amount of dividends we receive to be reduced or eliminated, and we may be required to record an impairment of our investment. The loss may limit our ability to borrow against our assets for future credit and could also adversely affect our share price. In addition, we have entered into a shareholders’ agreement with the other shareholders of Egypt LNG that imposes restrictions, including preemption rights, on each party’s ability to transfer, grant any security interest over or otherwise dispose of its ownership interest. Risks Related to Our Securities The price of our equity securities may be volatile. The price of our equity securities may be volatile and may fluctuate due to factors including: • actual or anticipated fluctuations in quarterly and annual results; • fluctuations in the seaborne transportation industry, including fluctuations in the LNG carrier market; • mergers and strategic alliances in the shipping industry; • changes in governmental regulations or maritime self-regulatory organizations standards; • shortfalls in our operating results from levels forecasted by securities analysts; • our payment of dividends; • announcements concerning us or our competitors; • the failure of securities analysts to publish research about us, or analysts making changes in their financial estimates; • general economic conditions; • terrorist acts; • future sales of our shares or other securities; • investors’ perceptions of us and the LNG shipping industry; • our payment of cash dividends to our shareholders; • the general state of the securities markets; and • other developments affecting us, our industry or our competitors. Securities markets worldwide are experiencing significant price and volume fluctuations. The market price for our common shares may also be volatile. This market volatility, as well as general economic, market or political conditions, could reduce the market price of our common shares despite our operating performance. 29 Increases in interest rates may cause the market price of our securities to decline. An increase in interest rates may cause a corresponding decline in demand for equity investments in general. Any such increase in interest rates may result in a reduction in demand for our securities resulting from other relatively more attractive investment opportunities may cause the trading price of our securities to decline. We are a “foreign private issuer” under NYSE rules, and as such we are entitled to exemption from certain NYSE corporate governance standards, and you may not have the same protections afforded to shareholders of companies that are subject to all of the NYSE corporate governance requirements. We are a “foreign private issuer” under the securities laws of the United States and the rules of the NYSE. Under the securities laws of the United States, “foreign private issuers” are subject to different disclosure requirements than U.S. domiciled registrants, as well as different financial reporting requirements. Under the NYSE rules, a “foreign private issuer” is subject to less stringent corporate governance requirements. Subject to certain exceptions, the rules of the NYSE permit a “foreign private issuer” to follow its home country practice in lieu of the listing requirements of the NYSE, including (i) the requirement that a majority of the board of directors consist of independent directors, (ii) the requirement that the nominating/corporate governance committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities, (iii) the requirement that the compensation committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities and (iv) the requirement of an annual performance evaluation of the nominating/corporate governance and compensation committees. As permitted by these exemptions, as well as by our bye-laws and the laws of Bermuda, we have one or more non-independent directors serving as committee members on our compensation committee and our corporate governance and nominating committee. As a result, non-independent directors may, among other things, participate in fixing the compensation of our management, making share and option awards and resolving governance issues regarding our Company. Accordingly, in the future you may not have the same protections afforded to shareholders of companies that are subject to all of the NYSE corporate governance requirements. Future sales of our equity securities could cause the market price of our equity securities to decline. Sales of a substantial number of our equity securities in the public market, or the perception that these sales could occur, may depress the market price for our equity securities. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future. In the future we may issue additional equity securities which may be pari passu with or senior to our common shares. The issuance by us of additional common shares or other equity securities that are contractually or structurally pari passu with or senior to our common shares would have the following effects: • our shareholders’ proportionate ownership interest in us will decrease; • the dividend amount payable per share on our common shares may be lower; • the relative voting strength of each previously outstanding common share may be diminished; and • the market price of our common shares may decline. Our shareholders also may elect to sell large numbers of equity securities held by them from time to time. The number of our equity securities available for sale in the public market will be limited by restrictions applicable under securities laws. 30 Our Preference Shares are subordinated to our debt obligations and investors’ interests could be diluted by the issuance of additional preference shares and by other transactions. Our Preference Shares are subordinated to all of our existing and future indebtedness. During the year ended December 31, 2015, we had an average of $2.35 billion of outstanding indebtedness. Our existing indebtedness restricts, and our future indebtedness may include restrictions on, our ability to pay dividends to shareholders. Our memorandum of association and bye-laws currently authorizes the issuance of an unlimited number of preference shares out of the 500,000,000 shares of share capital in one or more classes or series. The issuance of additional preference shares on a parity with or senior to our Preference Shares would dilute the interests of the holders of our Preference Shares, and any issuance of preference shares senior to or on a parity with our Preference Shares or of additional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on our Preference Shares. No provisions relating to our Preference Shares protect the holders of our Preference Shares in the event of a highly leveraged or other transaction, including the sale, lease or conveyance of all or substantially all our assets or business, which might adversely affect the holders of our Preference Shares. Our Preference Shares rank pari passu with any other class or series of shares established after the original issue date of the Preference Shares that is not expressly subordinated or senior to the Preference Shares as to the payment of dividends and amounts payable upon liquidation or reorganization. If less than all dividends payable with respect to the Preference Shares and any parity securities are paid, any partial payment shall be made pro rata with respect to shares of Preference Shares and any parity securities entitled to a dividend payment at such time in proportion to the aggregate amounts remaining due in respect of such shares at such time. Holders of our Preference Shares have extremely limited voting rights. Our common shares are the only class of our shares carrying full voting rights. Holders of the Preference Shares generally have no voting rights. However, if and whenever dividends payable on the Preference Shares are in arrears for six or more quarterly periods, whether or not consecutive, holders of Preference Shares (voting together as a class with all other classes or series of parity securities upon which like voting rights have been conferred and are exercisable) will be entitled to elect one additional director to serve on our board of directors, and the size of our board of directors will be increased as needed to accommodate such change (unless the size of our board of directors already has been increased by reason of the election of a director by holders of parity securities upon which like voting rights have been conferred and with which the Preference Shares voted as a class for the election of such director). The right of such holders of Preference Shares to elect a member of our board of directors will continue until such time as all accumulated and unpaid dividends on the Preference Shares have been paid in full. In addition, holders of Preference Shares are entitled to vote together with holders of common shares on matters related to the approval of an amalgamation or merger. The Preference Shares represent perpetual equity interests and holders have no right to receive any greater payment than the liquidation preference regardless of the circumstances. The Preference Shares represent perpetual equity interests in us and, unlike our indebtedness, will not give rise to a claim for payment of a principal amount at a particular date. As a result, holders of the Preference Shares may be required to bear the financial risks of an investment in the Preference Shares for an indefinite period of time. The payment due to a holder of Preference Shares upon a liquidation is fixed at the redemption preference of $25.00 per share plus accumulated and unpaid dividends to the date of liquidation. If, in the case of our liquidation, there are remaining assets to be distributed after payment of this amount, holders of Preference Shares will have no right to receive or to participate in these amounts. Furthermore, if the market price for Preference Shares is greater than the liquidation preference, holders of Preference Shares will have no right to receive the market price from us upon our liquidation. 31 Entities controlled by members of the Livanos family are our principal shareholders and can effectively control the outcome of most matters on which our shareholders are entitled to vote; their interests may be different from yours. Entities controlled by members of the Livanos family, including our Chairman, may be deemed to beneficially own approximately 40.7% of our issued and outstanding common shares. As a result of shareholding, Mr. Livanos can effectively control the outcome of most matters on which our shareholders are entitled to vote, including the election of our entire board of directors and other significant corporate actions. The interests of these shareholders may be different from yours. Provisions in our organizational documents may have anti-takeover effects. Our bye-laws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These provisions require an affirmative vote of a majority of the votes attaching to all issued and outstanding shares to approve any merger, consolidation, amalgamation or similar transactions. Our bye-laws also provide for restrictions on the time period in which directors may be nominated. These provisions could make it difficult for our shareholders to replace or remove our current board of directors or could have the effect of discouraging, delaying or preventing an offer by a third party to acquire us, even if the third party’s offer may be considered beneficial by many shareholders. As a result, shareholders may be limited in their ability to obtain a premium for their shares. Tax Risks In addition to the following risk factors, you should read “Item 10. Additional Information—E. Tax Considerations” for a more complete discussion of the material Bermuda and U.S. Federal income tax considerations relating to us and the ownership and disposition of our common shares and Preference Shares. We will have to pay tax on U.S.-source income, which would reduce our earnings. Under the United States Internal Revenue Code of 1986, as amended, or the “Code”, the U.S. source gross transportation income of a ship-owning or chartering corporation, such as ourselves, is subject to a 4% U.S. Federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under a tax treaty or Section 883 of the Code and the Treasury Regulations promulgated thereunder. U.S. source gross transportation income consists of 50% of the gross shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States. We do not currently qualify for a tax treaty exemption or a statutory tax exemption, and therefore we are subject to the 4% U.S. Federal income tax described above. We do not expect any resulting U.S. tax liability to be material or materially reduce the earnings available for distribution to our shareholders for the fiscal years ended December 31, 2015 and December 31, 2016. For 2015, the accrued U.S. source gross transportation tax was $0.01 million. Changes to our business could change this expectation and in such circumstances we may attempt to qualify for the exemption from tax under Section 883. For a more detailed discussion, see the section entitled “Item 10. Additional Information—E. Tax Considerations—United States Federal Income Tax Considerations—U.S. Taxation of Our Operating Income”. If we were treated as a “passive foreign investment company”, certain adverse U.S. Federal income tax consequences could result to U.S. shareholders. A foreign corporation will be treated as a “passive foreign investment company”, or “PFIC”, for U.S. Federal income tax purposes if at least 75% of its gross income for any tax year consists of certain types of “passive income”, or at least 50% of the average value of the corporation’s assets produce or are held for the production of those types of “passive income”. For purposes of these tests, “passive income” includes dividends, interest, gains from the sale or exchange of investment 32 property and rents and royalties other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income”. U.S. shareholders of a PFIC are subject to a disadvantageous U.S. Federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC. If we are treated as a PFIC for any tax year, we will provide information to U.S. shareholders who request such information to enable them to make certain elections to alleviate certain of the adverse U.S. Federal income tax consequences that would arise as a result of holding an interest in a PFIC. Based on our method of operation, we do not believe that we are a PFIC for this tax year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, we believe that our income from our time chartering activities does not constitute “passive income”, and the assets that we own and operate in connection with the production of that income do not constitute passive assets. There is, however, no legal authority under the PFIC rules addressing our proposed method of operation. Accordingly, the U.S. Internal Revenue Service, or the “IRS”, or a court of law may not accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, we could constitute a PFIC for a future tax year if there were to be changes in the nature and extent of our operations. If the IRS were to find that we are or have been a PFIC for any tax year, U.S. shareholders would face adverse tax consequences. Under the PFIC rules, unless those shareholders make certain elections available under the Code, such shareholders would be liable to pay U.S. Federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our common shares or Preference Shares, as if the excess distribution or gain had been recognized ratably over the shareholder’s holding period. Please read “Item 10. Additional Information—E. Tax Considerations—United States Federal Income Tax Considerations—Taxation of United States Holders—PFIC Status and Significant Tax Consequences” for a more detailed discussion of the U.S. Federal income tax consequences to U.S. shareholders if we are treated as a PFIC. ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company GasLog was incorporated in Bermuda on July 16, 2003. GasLog and its subsidiaries are primarily engaged in the ownership, operation and management of vessels in the LNG market, providing maritime services for the transportation of LNG on a worldwide basis and LNG vessel management services. The Group conducts its operations through its vessel-owning subsidiaries and through its vessel management services subsidiary. Our company and its founders have a long history in shipping and in LNG carriers. Our largest shareholder is Ceres Shipping Ltd. or “Ceres Shipping”, whose founding family’s shipping activities commenced more than 100 years ago and who is currently controlled by our Chairman, Peter G. Livanos. The late Mr. George P. Livanos, father of our current Chairman, established the predecessor to Ceres Shipping. Ceres Shipping also has interests in tankers, dry bulk carriers and containerships. Ceres Shipping entered the LNG sector in 2001 by undertaking the management of BG Group’s owned fleet of LNG carriers through our subsidiary GasLog LNG Services, and in 2003 GasLog Ltd. was incorporated. Until 2010, when we took delivery of the GasLog Savannah and the GasLog Singapore, our business principally consisted of providing technical ship management services, as well as plan approval and construction supervision services for newbuilding LNG carriers. As a result, we have had a longer presence in LNG shipping than many other independent owners currently operating in the sector. For a description of our historical and current capital expenditures, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures”. 33 On April 4, 2012, we completed our initial public offering, or “IPO”, and our common shares began trading on the NYSE on March 30, 2012 under the ticker symbol “GLOG”. On January 22, 2014, GasLog completed a follow-on public offering of 10,925,000 common shares (including 1,425,000 common shares in relation to the over-allotment option exercised in full by the underwriters) and a concurrent private placement of 2,317,460 common shares at the public offering price to certain of its directors and officers and one of its major shareholders. The offering and private placement resulted in net proceeds of $199.02 million, which were used to partially finance the acquisition of the first three ships acquired from MSL in 2014. On April 16, 2014, GasLog completed a second follow-on public offering of 4,887,500 common shares (including 637,500 common shares in relation to the over-allotment option exercised in full by the underwriters). The offering resulted in net proceeds of $109.94 million, which were used to partially finance the acquisition of the additional three ships acquired from MSL in 2014. On May 12, 2014, our subsidiary GasLog Partners completed an IPO of 9,660,000 common units (including 1,260,000 units in relation to the over-allotment option exercised in full by the underwriters), resulting in net proceeds of $186.03 million. GasLog Partners is a Marshall Islands master limited partnership formed by us to own and operate LNG carriers under long-term charters. Its common units representing limited partner interests are traded on the NYSE under the ticker symbol “GLOP”. Concurrently with the initial public offering, GasLog Partners acquired a 100.0% ownership interest in GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd., the entities that owned the GasLog Shanghai, the GasLog Santiago and the GasLog Sydney, from GasLog, in exchange for (i) 162,358 common units and 9,822,358 subordinated units issued to GasLog representing a 49.8% ownership interest and all of the incentive distribution rights that entitle GasLog to increasing percentages of the cash that the Partnership distributes in excess of $0.43125 per unit per quarter, (ii) 400,913 general partner units issued to GasLog Partners GP LLC, a wholly owned subsidiary of GasLog, representing a 2.0% general partner interest and (iii) $65.70 million of cash consideration paid directly to us from the offering proceeds. In addition to the cash consideration of $65.70 million paid to us, GasLog Partners used the $186.03 million net proceeds of its IPO to (a) prepay $82.63 million of debt plus accrued interest of $0.42 million and (b) make a payment of $2.28 million (including $0.27 million accrued interest) to settle the mark-to-market loss on termination of one interest rate swap and reduction of a second interest rate swap in connection with the aforementioned debt prepayment. The balance of $35.00 million was retained by GasLog Partners for general corporate purposes. On September 29, 2014, GasLog Partners completed a follow-on public offering of 4,500,000 common units at an offering price of $31.00 per unit. The total net proceeds after deducting underwriting discounts and other offering expenses were $133.0 million. GasLog Partners used the proceeds to partially finance the acquisition from GasLog of the 100.0% ownership interests in GAS-sixteen Ltd. and GAS-seventeen Ltd., the entities that owned the Methane Rita Andrea and the Methane Jane Elizabeth, respectively, and to prepay $25.0 million of debt secured by those carriers in October 2014. On April 7, 2015, GasLog completed a public offering of 4,600,000 Preference Shares, par value $0.01 per share, liquidation preference $25.00 per share and priced at $25.00 per share, including 600,000 shares issued upon the exercise in full by the underwriters of their option to purchase additional Preference Shares. The net proceeds from the offering after deducting underwriting discounts, commissions and other offering expenses were $110.7 million to be used for general corporate purposes. The Preference Shares are listed on the New York Stock Exchange under the symbol “GLOG PR A”. On June 26, 2015, GasLog Partners completed a follow-on public offering of 7,500,000 common units at an offering price of $23.90 per unit. The total net proceeds after deducting underwriting discounts and other offering expenses were $171.83 million. The Partnership used proceeds from the public offering to partially finance the acquisition from GasLog of 100.0% of the ownership interests in GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd., the entities that own the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally, respectively. The acquisition closed on July 1, 2015. 34 As of December 31, 2015, GasLog holds a 32.9% interest in the Partnership and, as a result of its ownership of the general partner and the fact that the general partner elects the majority of the Partnership’s directors in accordance with the Partnership’s partnership agreement, or the “Partnership Agreement”, GasLog, has the ability to control the Partnership’s affairs and policies. Consequently, GasLog Partners is consolidated in the Group’s financial statements. As described elsewhere herein, GasLog Partners holds options to acquire from GasLog an additional eight vessels and GAS-twenty six Ltd. with its long-term bareboat charter of (and right to acquire) the Methane Julia Louise (which is subject to a multi-year charter to MSL). In general, we would expect the exercise of these options to be beneficial to GasLog, as it can be expected to reduce our consolidated indebtedness and, if GasLog Partners increases its per unit distributions, increase the return on our incentive distribution rights (although our common unit interest will be diluted by any GasLog Partners equity issuance). GasLog Partners will determine whether, and when, to exercise any of the options and rights that it holds. The timing of those decisions will depend in part on the price and availability of debt and equity financing to GasLog Partners. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions— Relationship with GasLog Partners—Omnibus Agreement”. On October 1, 2015, GasLog, Dynagas and Golar established the Cool Pool to market their vessels, which are currently operating in the LNG shipping spot market. The Cool Pool allows the participating owners to optimize the operation of the pool vessels through improved scheduling ability, cost efficiencies and common marketing. The objective of the Cool Pool is to serve the transportation requirements of a rapidly growing LNG shipping market by providing customers with reliable, yet flexible, and innovative solutions to meet their increasingly complex shipping requirements. The Cool Pool consists of 14 modern, high quality and essentially equivalent vessels powered by fuel efficient TFDE propulsion technology. The three owners’ initial vessels eligible for participation in the Cool Pool are as follows: GasLog: three vessels; Dynagas: three vessels; and Golar: eight vessels. Each vessel owner continues to be fully responsible for the manning and technical management of its respective vessels. The Cool Pool will focus exclusively on charters of 12 months’ duration or less. The scheduling of employment opportunities in excess of 12 months will remain the mandate of the respective vessel owner. If a Cool Pool vessel is scheduled by an owner for a charter that exceeds 12 months in duration, such vessel will cease to be part of the Cool Pool. We maintain our principal executive offices at Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco. Our telephone number at that address is +377 97 97 51 15. We are registered with the Registrar of Companies in Bermuda under registration number 33928. We maintain a registered office in Bermuda at Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda. B. Business Overview Overview We are an international owner, operator and manager of LNG carriers providing support to international energy companies as part of their LNG logistics chain. Our owned fleet consists of 26 owned LNG carriers, including 18 ships on the water and eight LNG carriers on order at two of the world’s leading LNG shipbuilders, Samsung and Hyundai. This includes eight LNG carriers in operation that are owned by our NYSE-listed subsidiary GasLog Partners, with which we have entered into certain agreements governing our relationship, including purchase options for certain of our ships. We currently manage and operate 22 LNG carriers including nine of our wholly owned ships in operation (one is managed by a subsidiary of Shell), the eight ships contributed or sold to the Partnership, three ships owned by MSL, one additional LNG carrier in which we have a 25.0% interest and a vessel secured under a long-term bareboat charter from Lepta Shipping, a subsidiary of Mitsui. We are also supervising the construction of our newbuildings. We have secured multi-year time and seasonal time charter contracts for seven of our operating ships, the eight ships owned by the Partnership, seven of our eight newbuildings on order and the one vessel secured under a long-term bareboat charter with Lepta Shipping. As of December 31, 2015, these contracts are expected to provide total contracted revenues of $3.7 billion during their initial terms, which expire between 2016 and 2029. 35 In addition to our committed order book, we have secured additional fixed price options to purchase up to six additional LNG carriers from Samsung with delivery dates in 2018 and 2019 that expire at the end of the first quarter of 2016.We also have a 25.0% interest in an additional ship, the Methane Nile Eagle, a 2007-built LNG carrier technically managed by us that is currently operating under a 20-year time charter to MSL. Our current time charters have initial terms of up to 10 years and include options that permit the charterers to extend the terms for successive periods under hire rate provisions. We will continue to evaluate the attractiveness of longer and shorter-term chartering opportunities as the commercial characteristics of the LNG carrier industry evolve. We have structured our order book of new LNG carriers to have staggered delivery dates, facilitating a smooth integration of the ships into our fleet as well as significant annual growth through 2019. This has the additional advantage of spreading our exposure to the re-employment of these ships over several years upon expiration of their current charters. Each of our 26 owned LNG carriers is designed with a capacity of between approximately 145,000 cbm and 174,000 cbm. We believe this size range maximizes their operational flexibility, as these ships are compatible with most existing LNG terminals around the world. All but one of the LNG carriers in our owned fleet are of the same specifications (in groups of ten, eight, six and one ship), which allows us to benefit from economies of scale and operating efficiencies in ship construction, crew training, crew rotation and shared spare parts. Upon delivery of the last of our eight contracted newbuildings, our owned fleet will have an average age of 6.2 years, making it one of the youngest in the industry. By comparison, as of December 31, 2015, the average age for the global fleet of LNG carriers, including LNG carriers of all sizes, was 11.2 years. Our wholly owned subsidiary, GasLog LNG Services, exclusively handles the technical management of our fleet, including plan approval for new ship orders, supervision of ship construction and planning and supervision of drydockings, as well as technical operations, crewing, training, maintenance, regulatory and classification compliance and health, safety, security and environmental, or “HSSE”, management and reporting. As the sole technical manager of BG Group’s owned fleet of LNG carriers for over 15 years, we have established a track record for the efficient, safe and reliable operation of LNG carriers, which is evidenced by our safety performance and the limited off-hire days of the 22 ships currently operating under our management. We have recently begun to investigate entering the floating LNG storage and regasification unit (“FSRU”) market and signed two front-end engineering design (“FEED”) studies with Keppel Offshore and Marine Ltd. for the potential conversion of both a Steam and TFDE vessel from our existing fleet. Our Fleet Owned Fleet The following table presents information about our wholly owned vessels and their associated time charters as of March 11, 2016: Vessel Name Year Built Cargo Capacity (cbm) Charterer Propulsion Charter Expiration(2) Optional Period(3) 1 GasLog Savannah . . . . . . . . . 2010 155,000 BG Group(1) TFDE September 2016 2017-2023 2 GasLog Singapore . . . . . . . . . 2010 155,000 BG Group(1) TFDE September 2016 2019-2024 April 2021(4) 3 GasLog Skagen. . . . . . . . . . . . 2013 155,000 BG Group(1) 2026-2031 TFDE 4 GasLog Chelsea . . . . . . . . . . . 2010 153,600 Spot Market(5) TFDE N/A N/A 5 GasLog Seattle . . . . . . . . . . . . 2013 155,000 TFDE December 2020 2025-2030 Solaris . . . . . . . . . . . . . . . . . . . . . 2014 155,000 2026-2031 TFDE 6 7 GasLog Saratoga . . . . . . . . . . 2014 155,000 Spot Market(5) TFDE N/A 8 Methane Lydon Volney . . . . 2006 145,000 BG Group(1) 2023-2025 Steam 9 Methane Becki Anne . . . . . . 2010 170,000 BG Group(1) 2027-2029 TFDE 10 GasLog Salem. . . . . . . . . . . . . 2015 155,000 Spot Market(5) TFDE N/A June 2021 N/A October 2020 March 2024 N/A Shell Shell 36 The following table presents information about GasLog Partners’ fleet and their associated time charters as of March 11, 2016: Cargo Capacity (cbm) Charterer Vessel Name Year Propulsion Built 1 GasLog Shanghai. . . . . . . . . . . 2013 155,000 BG Group(1) TFDE 2021-2026 2 GasLog Santiago . . . . . . . . . . . 2013 155,000 BG Group(1) TFDE 2021-2026 3 GasLog Sydney. . . . . . . . . . . . . 2013 155,000 BG Group(1) TFDE September 2018(6) 2021-2026 4 Methane Rita Andrea . . . . . . . 2006 145,000 BG Group(1) 2023-2025 5 Methane Jane Elizabeth . . . . 2006 145,000 BG Group(1) 2022-2024 6 Methane Shirley Elisabeth . . 2007 145,000 BG Group(1) 2023-2025 7 Methane Alison Victoria . . . . 2007 145,000 BG Group(1) 2022-2024 8 Methane Heather Sally. . . . . . 2007 145,000 BG Group(1) 2023-2025 April 2020 October 2019 June 2020 December 2019 December 2020 Charter Expiration(2) May 2018(6) July 2018(6) Steam Steam Steam Steam Steam Optional Period(3) Bareboat Vessel Vessel Name Year Built Cargo Capacity (cbm) Charterer Propulsion Charter Expiration(2) Optional Period(3) 1 Methane Julia Louise(7) . . . . . . . . . . . 2010 170,000 BG Group(1) TFDE March 2026 2029-2031 (1) Vessels are chartered to a subsidiary of BG Group. BG Group was acquired by Shell on February 15, 2016. This acquisition does not impact the contractual obligations under the existing charter party agreements. (2) Indicates the expiration of the initial term. (3) The period shown reflects the expiration of the minimum optional period and the maximum optional period. The charterer of the GasLog Singapore has unilateral options to extend the term of the time charter for periods ranging from 30 months to 90 months. The charterer of the GasLog Savannah has unilateral options to extend the term of the charter for four consecutive periods ranging from 12 to 27 months. The charterer of the GasLog Skagen has unilateral options to extend the term of the charter for up to ten years, on a seasonal charter basis. The charterer of the GasLog Seattle and the Solaris has unilateral options to extend the term of the time charter for periods ranging from 5 to 10 years, provided that the charterer provides us with advance notice of declaration of any option in accordance with the terms of the applicable charter. The charterer of the Methane Lydon Volney has a unilateral option to extend the term for a period of either three or five years at its election. In addition, the charterer of the Methane Shirley Elisabeth, the Methane Heather Sally and the Methane Alison Victoria has a unilateral option to extend the term of two of the related time charters for a period of either three or five years at its election. The charters of the GasLog Shanghai, GasLog Santiago and GasLog Sydney may be extended for up to two extension periods of three or four years at the charterer’s option, and each charter requires that the charterer provide us with 90 days’ notice before the charter expiration of its exercise of any extension option. The charterer of the Methane Rita Andrea and the Methane Jane Elizabeth may extend either or both of these charters for one extension period of three or five years, and each charter requires that the charterer provide us with advance notice of its exercise of any extension option. The charterer of the Methane Becki Anne and the Methane Julia Louise has a unilateral option to extend the term of the time charters for a period of either three or five years at its election. (4) Time charter provides for full employment for three years and a subsequent five year seasonal charter under which the ship is employed for seven months and available to accept other charters for five months. (5) Vessels operating in the spot market that participate in the Cool Pool. See “Item 4. Information of the Company—A. History and Development of the Company.” (6) Charter expiration was amended based on the agreement signed with BG Group on April 21, 2015. With respect to the GasLog Sydney whose charter was shortened by eight months under such agreement, if MSL does not exercise the charter extension options for the GasLog Sydney and GasLog Partners does not enter into a third-party charter for the GasLog Sydney, GasLog and GasLog Partners intend to enter into a bareboat or time charter arrangement that is designed to guarantee the total cash distribution from the vessel for any period of charter shortening. (7) On February 24, 2016, GasLog’s subsidiary, GAS-twenty six Ltd., completed the sale and leaseback of the Methane Julia Louise with Lepta Shipping. Lepta Shipping has the right to on-sell and lease back the vessel. The vessel was sold to Lepta Shipping for a total consideration approximately equivalent to its current book value. GasLog has leased back the vessel under a bareboat charter from Lepta Shipping for a period of up to 20 years. GasLog has the option to re-purchase the vessel on pre-agreed terms no earlier than the end of year ten and no later than the end of year 17 of the bareboat charter. The vessel remains on its eleven year charter with MSL. 37 Newbuilds Vessel Name Expected Delivery(1) Cargo Capacity (cbm) Charterer Propulsion(3) Charter Expiration(4) Optional Period(5) 1 Hull No. 2072 . . . . . . . . . . . . . . . . . Q1 2016 174,000 BG Group(2) 2 Hull No. 2073 . . . . . . . . . . . . . . . . . Q2 2016 174,000 BG Group(2) 3 Hull No. 2102 . . . . . . . . . . . . . . . . . Q3 2016 174,000 BG Group(2) 4 Hull No. 2103 . . . . . . . . . . . . . . . . . Q4 2016 174,000 BG Group(2) 5 Hull No. 2130 . . . . . . . . . . . . . . . . . Q1 2018 174,000 BG Group(2) 6 Hull No. 2131 . . . . . . . . . . . . . . . . . Q1 2019 174,000 BG Group(2) 7 Hull No. 2800 . . . . . . . . . . . . . . . . . Q1 2018 174,000 BG Group(2) 8 Hull No. 2801 . . . . . . . . . . . . . . . . . Q1 2018 174,000 N/A TFDE TFDE TFDE TFDE LP-2S LP-2S LP-2S LP-2S 2026 2026 2023 2023 2027 2029 2028 N/A 2031 2031 2028-2031 2028-2031 2030-2033 2032-2035 2031-2034 N/A (1) Expected delivery quarters are presented. (2) Vessels are chartered to a subsidiary of BG Group. BG Group was acquired by Shell on February 15, 2016. This acquisition does not impact the contractual obligations under the existing charter party agreements. (3) References to “LP-2S” refer to dual-fuel two-stroke engine propulsion. (4) Indicates the expiration of the initial term. (5) The charterer of Hulls No. 2072 and 2073 has the right to extend the charters for a period of five years at the charterer’s option. The charterer of Hulls No. 2102 and 2103 has the right to extend the charters by two additional periods of five or three years each, provided that the charterer provides us with advance notice of declaration. The charterer of Hulls No. 2130, No. 2131 and No. 2800 has the right to extend each of the charters by two consecutive periods of three years each, provided that the charterer provides us with advance notice of declaration. The Company also currently holds options to purchase up to six 174,000 cbm newbuildings from Samsung, each of which would be built against a very high specification, with delivery dates in 2018 and 2019. Such options expire at the end of the first quarter of 2016. Under the omnibus agreement entered into with GasLog Partners and certain of its subsidiaries in connection with the Partnership’s initial public offering, GasLog Partners has the option to purchase from us: (i) the Solaris and Hull Nos. 2072, 2073, 2102 and 2103 within 36 months after we notify the Partnership’s board of directors of the vessel’s acceptance by her charterer, (ii) the GasLog Seattle and the Methane Lydon Volney within 36 months after the closing of GasLog Partners’ IPO on May 12, 2014 and (iii) the Methane Becki Anne and the right to acquire GAS- twenty six Ltd. with its long-term bareboat charter of (and the right to acquire) the Methane Julia Louise (which is subject to a multi-year charter to MSL) within 36 months after the completion of its acquisition by GasLog on March 31, 2015. In each case, GasLog Partners’ option to purchase is at fair market value as determined pursuant to the omnibus agreement. The key characteristics of our current owned fleet include the following: • each ship is sized at between approximately 145,000 cbm and 174,000 cbm capacity, which places our ships in the medium- to large-size class of LNG carriers; we believe this size range maximizes their operational flexibility, as these ships are compatible with most existing LNG terminals around the world, and minimizes excess LNG boil-off; • all but one of our ships, including the newbuilds, are of the same specifications (in groups of ten, eight, six and one ship); • each ship is double-hulled, which is standard in the LNG industry; • each ship has a membrane containment system incorporating current industry construction standards, including guidelines and recommendations from Gaztransport and Technigaz (the designer of the membrane system) as well as updated standards from our classification society; • each of our ships is modern steam powered or has TFDE or dual-fuel two-stroke engine propulsion technology; • Bermuda is the flag state of each ship; • each of our delivered ships has received, and each of our newbuildings is expected to receive, an ENVIRO+ notation from our classification society, which denotes compliance with its 38 published guidelines concerning the most stringent criteria for environmental protection related to design characteristics, management and support systems, sea discharges and air emissions; and • upon delivery of the last of our eight contracted newbuildings in 2019, our owned fleet will have an average age of 6.2 years, making it one of the youngest in the industry, compared to a current average age of 11.2 years for the global LNG carrier fleet including LNG carriers of all sizes as of December 31, 2015. In addition to our owned fleet, we have a 25.0% ownership interest in Egypt LNG, an entity whose principal asset is the Methane Nile Eagle. The Methane Nile Eagle is a 145,000 cbm LNG carrier that was built in 2007. It is currently chartered to MSL under a 20-year time charter, which is subject to extension for up to 10 years at the charterer’s option. On October 29, 2015, Egypt LNG and BG Group mutually agreed to lay up the Methane Nile Eagle for a period of approximately one year. The charterer continues to pay charter hire costs adjusted for net savings in operating expenses and insurance as a result of the vessel being laid up. We continually evaluate short and long-term charter opportunities for our vessels, including the newbuildings for which we do not currently have charters fixed. Our discussions with potential charterers are at various stages of advancement; however, we cannot provide assurance that we will conclude any particular charter or, if concluded, the charter rate that will apply. Managed Fleet Through GasLog LNG Services, we provide technical ship management services for five LNG carriers owned by third parties (including the bareboat vessel) in addition to management of the 17 LNG carriers currently operating in our owned fleet (the Solaris is managed by a subsidiary of Shell). We supervised the construction by Samsung of each LNG carrier in our managed fleet, and each ship has operated under our technical management since its delivery from the shipyard with the exception of the Solaris. The following table provides information about our managed ships: Vessel Name Year Built Cargo Capacity (cbm) Propulsion GasLog Ownership 1 Methane Patricia Camila . . . . . . . . . . . . . . . . . . . . . . 2010 170,000 2 Methane Mickie Harper . . . . . . . . . . . . . . . . . . . . . . . 2010 170,000 3 Methane Kari Elin . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2004 138,000 4 Methane Nile Eagle(1) . . . . . . . . . . . . . . . . . . . . . . . . . 2007 145,000 TFDE TFDE Steam Steam Ship Owner BG Group BG Group BG Group — — — 25.0% Egypt LNG(1) (1) The Methane Nile Eagle is owned by Egypt LNG, in which we indirectly hold a 25.0% equity interest. BG Asia Pacific Pte. Limited, a subsidiary of BG Group, and Eagle Gas Shipping Co. E.S.A., an entity affiliated with the government of Egypt, have 25.0% and 50.0% equity interests, respectively, in Egypt LNG. Ship Time Charters We provide the services of our owned ships under time charters. A time charter is a contract for the use of the ship for a specified term at a daily hire rate. Under a time charter, the ship owner provides crewing and other services related to the ship’s operation, the cost of which is covered by the hire rate, and the customer is responsible for substantially all of the ship voyage costs (including bunker fuel, port charges and canal fees and LNG boil-off). We entered into four master time charters with MSL that established the general terms under which the GasLog Singapore, the GasLog Shanghai, the GasLog Santiago, the GasLog Sydney, the GasLog Skagen and the seven newbuildings identified by Hull numbers 2072, 2073, 2102, 2103, 2130, 2131 and 2800 will be chartered to MSL. We enter into separate confirmation memorandums for each ship in order to supplement the master time charter and specify the charter term, extension options (if any), hire rate and other provisions applicable to each ship’s charter. For the six vessels 39 acquired from MSL in 2014, the two vessels acquired in 2015 and the GasLog Savannah we entered into separate time charters for each vessel. We have entered into maiden voyage time charter agreements and time charter agreements with a subsidiary of Shell, establishing the terms under which the GasLog Seattle and the Solaris will be chartered to Shell. The GasLog Chelsea, the GasLog Saratoga and the GasLog Salem are operating in the Cool Pool and from time to time enter into short-term time charters. The following discussion describes the material terms of the time charters for our owned ships. Initial Term, Extensions and Redelivery The initial terms of the time charters for the GasLog Singapore, the GasLog Shanghai, the GasLog Santiago, the GasLog Sydney and the GasLog Skagen began upon delivery of the ships and will terminate in 2016, 2018, 2018, 2018 and 2021, respectively. The charter for the GasLog Skagen provides for full employment for three years and a subsequent five year seasonal charter under which the ship is employed for seven months and available to accept other charters for five months. The charterer has options to extend the terms of the charters as follows: for the GasLog Singapore for up to 7.5 years; for the GasLog Shanghai, the GasLog Santiago and the GasLog Sydney, for up to 8 years; for the GasLog Skagen for up to 10 years (on the seasonal charter basis); in each case at specified hire rates. The initial term of the time charter for the GasLog Savannah will terminate in September 2016. The charterer of the GasLog Savannah has unilateral options to extend the term of the charter for four consecutive periods ranging from 12 to 27 months. The initial term of the time charters for the Methane Lydon Volney, the Methane Rita Andrea, the Methane Jane Elizabeth, the Methane Shirley Elisabeth, the Methane Alison Victoria and the Methane Heather Sally began upon delivery to GasLog following their acquisition from MSL in 2014, and will terminate on various dates in 2019 and 2020. For the Methane Lydon Volney, the Methane Rita Andrea and the Methane Jane Elizabeth, MSL has the option to extend the term of two of the time charters for a period of either three or five years beyond the initial charter expiration date. For the other vessels, MSL has the option to extend the term of the time charters for two of the ships for an additional period of either three or five years beyond the initial charter expiration date. Our time charters for the four newbuildings that will be chartered to MSL will begin upon the delivery of each ship, which is scheduled for various dates in 2016. Our time charters to MSL for Hull No. 2130 and Hull No. 2800 will begin three and 14 months, respectively, after the delivery of the vessels in 2018 and for Hull No. 2131 will begin five months after the delivery of the vessel in 2019. The initial charter terms for the ships will terminate for two ships in 2023, for two ships in 2026, one ship in 2027, one ship in 2028 and one ship in 2029. MSL has options to extend terms of the charters for Hulls No. 2072 and No. 2073 for up to 5 years, Hulls No. 2102 and No. 2103 for up to eight years and for Hulls No. 2130, 2131 and 2800 for two consecutive periods of three years each, all at specified hire rates. The initial term of the time charter for the GasLog Seattle and the Solaris began upon delivery of the ship following an initial period during which the ships operated under a maiden voyage time charter, the purpose of which was to facilitate completion by Shell of an operational discharge inspection of the ship. The time charters for the GasLog Seattle and the Solaris will terminate in 2020 and 2021, respectively. In each case, Shell has options to extend the charter terms for periods ranging from five to ten years at specified hire rates. The initial term of the time charters for the Methane Becki Anne and the Methane Julia Louise began upon delivery to GasLog and will terminate in 2024 and 2026. MSL will have options to extend the term of the time charter for the Methane Becki Anne and the long-term bareboat charter of the Methane Julia Louise which is now owned by Lepta Shipping and leased back to GasLog, for an additional period of either three or five years beyond the initial charter expiration date. 40 The terms and period for fixtures of the GasLog Chelsea, the GasLog Saratoga and the GasLog Salem vary from charter to charter, as is the nature of trading in the spot market. Our time charters provide for redelivery of the ship to us at the expiration of the term, as such term may be extended upon the charterer’s exercise of its extension options, or upon earlier termination of the charter (as described below) plus or minus 30 days. Under all of our charters, the charterer has the right to extend the term for most periods in which the ship is off-hire, as described below. Our charter contracts do not provide the charterers with options to purchase our ships during or upon expiration of the charter term. Hire Rate Provisions “Hire rate” refers to the basic payment from the customer for use of the ship. Under all of our time charters, the hire rate is payable to us monthly in advance in U.S. dollars. Depending on the time charter contract, there are three methods by which the daily hire rate for our owned ships is determined: • Under the first method, the hire rate includes two components—a capital cost component and an operating cost component. The capital cost component relates to the cost of the ship’s purchase and is a fixed daily amount that is structured to provide a return on our invested capital. Some of the charters provide for the capital cost component to increase by a specified amount during any option period. The operating cost component is a fixed daily amount that increases annually at a fixed percentage. Although the daily amount of the operating cost component is fixed (subject to a specified annual increase), it is intended to correspond to the costs of operating the ship and related expenses. In the event of a material increase or decrease in the actual costs we incur in operating the ship, a clause in the charter provides each party the right in certain circumstances to seek a review and potential adjustment of the operating cost component. Under one of our time charters, the hire rate for an initial period of three years is as discussed above and the subsequent five years are a seasonal charter under which the ship is committed for seven consecutive months at a fixed monthly charter hire (one component) and available to accept other charters for the remaining five months. • Under the second method, the hire rate includes only one component that is a fixed daily amount that will either remain the same, increase or decrease by a specified amount during any option period as compared to the firm period. • Under the third method, the hire rate for an initial period of up to two years, at the charterer’s option, will be set at the prevailing market rate for a comparable ship, subject to a cap and a floor. Following such initial period, the hire rate will be calculated based on three components—a capital cost component, an operating cost component and a ship management fee. The capital cost component is a fixed daily amount, which will increase by a specified amount during any option period. The daily amount of the operating cost component, which is intended to fully pass-through to the charterer the costs of operating the ship, is set annually and adjusted at the end of each year to compensate us for the actual costs we incur in operating the ship. Drydocking expenses are budgeted in advance and are reimbursed by the charterers immediately following a drydocking. The ship management fee is a daily amount set in line with industry practice for fees charged by ship managers and is intended to compensate us for management of the ship. The hire rates for each of our ships may be reduced if the ship does not perform to certain of its specifications or if we breach our obligations under the charter. We have had no instances of hire rate reductions since the first two of our owned ships commenced operations in 2010. Off-Hire When a ship is “off-hire”—or not available for service—a time charterer generally is not required to pay the hire rate, and we remain responsible for all costs, including the cost of any LNG cargo lost as boil-off during such off-hire periods. Our time charters provide an annual allowance period for us to schedule preventative maintenance work on the ship. A ship generally will be 41 deemed off-hire under our time charters if there is a specified time outside of the annual allowance period when the ship is not available for the charterer’s use due to, among other things, operational deficiencies (including the failure to maintain a certain guaranteed speed), drydocking for repairs, maintenance or inspection, equipment breakdowns, deficiency of personnel or neglect of duty by the ship’s officers or crew, deviation from course, or delays due to accidents, quarantines, ship detentions or similar problems. We have obtained loss of hire insurance to protect us against loss of income as a result of a ship being off-hire. See “—Risk of Loss, Insurance and Risk Management— Loss of Hire Insurance”. All ships are drydocked at least once every five years as required by the ship’s classification society for a special survey. Our ships are considered to be off-hire under our time charters during such periods. Termination and Cancellation Under our existing time charters, each party has certain termination rights which include, among other things, the automatic termination of a charter upon loss of the relevant ship. Either party may elect to terminate a charter upon the occurrence of specified defaults or upon the outbreak of war or hostilities involving two or more major nations, such as the United States or the People’s Republic of China, if such war or hostilities materially and adversely affect the trading of the ship for a period of at least 30 days. In addition, our charterers have the option to terminate a charter if the relevant ship is off-hire for any reason other than scheduled drydocking for a period exceeding 90 consecutive days, or for more than 90 days or 110 days, depending on the charter, in any one- year period. Certain of our charters give the charterer a termination option for shorter periods of off-hire, if such off-hire is due to an uncured breach of our obligations to maintain the applicable ship. In addition to its termination rights, Shell has the right to convert the time charter with respect to the relevant ship into a bareboat charter upon the occurrence of specified defaults or in the event that Shell’s quality assurance review is not successfully completed upon delivery of the ship. All of the time charters applicable to our newbuildings permit the charterer to cancel the charter in the event of a prolonged delay in the delivery of the ship from the shipyard, and in certain circumstances obligate us to pay liquidated damages to the charterer in the event of a less significant delivery delay. However, the cancellation and liquidated damages provisions in our charters are structured to mirror the provisions of our contracts with the shipyard, giving us the right to receive liquidated damages from the shipyard or cancel the shipbuilding contract in the same circumstances that would trigger the charterer’s right to cancel the charter contract or receive liquidated damages because of delivery delays. The Cool Pool Three of our vessels are operating as part of the Cool Pool established in October 2015, with Dynagas and Golar. The Cool Pool was established to market certain of each company’s vessels which are currently operating in the LNG shipping spot market. The Cool Pool allows the participating owners to optimize the operation of the pool vessels through improved scheduling ability, cost efficiencies and common marketing. The objective of the Cool Pool is to serve the transportation requirements of a rapidly growing LNG shipping market by providing customers with reliable, yet flexible, and innovative solutions to meet their increasingly complex shipping requirements. The Cool Pool consists of 14 modern, high quality and essentially equivalent vessels powered by fuel efficient TFDE propulsion technology. The three owners’ initial vessels eligible for participation in the Cool Pool are as follows: GasLog: three vessels; Dynagas: three vessels; and Golar: eight vessels. Each vessel owner continues to be fully responsible for the manning and technical management of its respective vessels. The Cool Pool will focus exclusively on charters of 12 months’ duration or less. The scheduling of employment opportunities in excess of 12 months will remain the mandate of the respective vessel 42 owner. If a Cool Pool vessel is scheduled by an owner for a charter that exceeds 12 months in duration, such vessel will cease to be part of the Cool Pool. Gross pool revenues represent time charter revenues earned by GasLog vessels participating in the pool under charter agreements where GasLog contracts directly with charterers. Revenue is recognised on a monthly basis, when the vessel is made available and services are provided to the charterer during the period, the amount can be estimated reliably and collection of the related revenue is reasonably assured. Voyage expenses and commissions include the net allocation from the pool which represents GasLog’s share of the net revenues earned from the other pool participants’ vessels less the other participants’ share of the net revenues earned by GasLog’s vessels included in the pool. Each participant’s share of the net pool revenues is based on the number of pool points attributable to its vessels and the number of days such vessels participated in the pool. The Bareboat Charter On February 24, 2016, GasLog’s subsidiary, GAS-twenty six Ltd., completed the sale and leaseback of the Methane Julia Louise with Lepta Shipping. Lepta Shipping has the right to on-sell and lease back the vessel. The vessel was sold to Lepta Shipping for a total consideration approximately equivalent to its current book value. GasLog has leased back the vessel under a bareboat charter from Lepta Shipping for a period of up to 20 years. GasLog has the option to re- purchase the vessel on pre-agreed terms no earlier than the end of year ten and no later than the end of year 17 of the bareboat charter. The vessel remains on its eleven year charter with MSL. Shipbuilding Contracts We have entered into shipbuilding contracts with Samsung and Hyundai in respect of six and two newbuildings, respectively, which have an aggregate contract price of approximately $1.62 billion. As of December 31, 2015, the outstanding balance of $1.45 billion in the aggregate was payable under each contract in installments upon steel cutting, keel laying and launching of the ship, with the largest portion of the purchase price for each ship coming due upon its delivery. All of our obligations under the shipbuilding contracts are payable in U.S. dollars. As of December 31, 2015, our remaining payment obligations under the shipbuilding contracts were as follows: Amounts due in less than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts due in one to three years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts due in three to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2015(1) (in thousands of U.S. dollars) $ 720,753 566,750 163,600 $1,451,103 (1) Amounts do not reflect installments of $9.91 million paid in 2016. The shipbuilding contracts provide for the eight newbuildings to be delivered and ready for immediate operation on various dates in 2016 through 2019. The shipbuilding contracts require Samsung and Hyundai to pay us liquidated damages in the event of certain delays in the delivery of a ship unless such delays are attributable to a force majeure event, and in the event of a prolonged delay we would have the right to cancel the contract and receive a refund of any installment payments previously made on the ship. In the event that we fail to meet our payment obligations under a shipbuilding contract, we would be in default under the applicable contract and would be obligated to pay interest under the contract. If such a default by us were to continue for more than five business days, the delivery date of the applicable ship would be delayed by one day for each day that we remain in default, and if a default by us were to continue for more than 15 business days, Samsung and Hyundai would have 43 the option of cancelling the applicable shipbuilding contract and retaining any installment payments previously funded by us under the contract. In addition to our newbuildings on order, we have options with Samsung to order up to six additional LNG carriers. The option contracts expire at the end of the first quarter of 2016. Ship Management Services and Construction Supervision Management of our owned fleet, which includes plan approval for new ship orders, supervision of ship construction and planning and supervision of drydockings, as well as technical operations, crewing, training, maintenance, regulatory and classification compliance and HSSE management and reporting, is provided in-house by our wholly owned subsidiary, GasLog LNG Services, an entity incorporated in Bermuda with an office in Piraeus, Greece. In addition to management of our owned fleet, through GasLog LNG Services we provide technical ship management services for a fleet of five ships, which consists of three ships we manage on behalf of MSL, the Methane Nile Eagle, a ship in which we have a 25.0% ownership interest and the Methane Julia Louise, which we lease from Lepta Shipping. During the year ended December 31, 2015, ship management services provided to external customers accounted for approximately 0.63% of our consolidated revenues. Construction Supervision We supervise and manage the construction of our newbuildings through GasLog LNG Services. We have employees on-site in South Korea whose responsibilities include inspecting the ships under construction for non-conformities, attending trials of the ship and its machinery and equipment, consulting with the shipyard in the event of any modifications to the ship’s specifications, reviewing the shipyard’s choice of suppliers and sub-contractors and keeping our management informed of the progress of the construction. Through GasLog LNG Services, we also supervised the construction of the three LNG carriers in BG Group’s owned fleet and the Methane Nile Eagle, all of which were constructed at Samsung. Technical and Operational Management Pursuant to ship management agreements, through GasLog LNG Services we manage the day- to-day aspects of ship operations, including crewing, training, employing armed guards for transport in certain high-risk areas, insurance, maintenance and repair, procurement of supplies and equipment, regulatory and classification compliance and HSSE management and reporting, as well as drydocking under certain charters, for our owned fleet (with the exception of the Solaris) and for the five ships in our managed fleet not owned by us. We utilize certain third-party sub-contractors and suppliers in carrying out our technical management responsibilities. In the case of ships owned by BG Group, Egypt LNG and Lepta Shipping, the crewing and other operational costs are fully passed-through to the ship owner, and for our technical management services the customers pay us a management fee per ship per month. In connection with our ship management services, we also enter into consultant service agreements pursuant to which we provide specialized services relating to the management of LNG carriers. These services include the development and installation of a ship’s ship management system, which includes installing onboard hardware and software systems and providing related training to the ship’s personnel. The terms of our ship management agreements and related contracts permit the customer to terminate our services for any reason upon a short period of advance notice, and both parties have termination rights upon the occurrence of specified defaults. In the event of the loss of a ship, or the owner’s sale of a ship to a third party, the ship management agreement in respect of the ship would terminate automatically. Under our ship management agreements with BG Group, in some circumstances BG Group would be obligated to reimburse us for certain crew support and severance costs incurred as a result of a termination of the ship management agreement by BG Group. 44 Competition We operate in markets that are highly competitive and based primarily on supply and demand. Generally, competition for LNG time charters is based primarily on price, ship availability, size, age, technical specifications and condition, LNG shipping experience, quality and efficiency of ship operations, shipping industry relationships and reputation for customer service, and technical ability and reputation for operation of highly specialized ships. In addition, through the GasLog Chelsea, the GasLog Saratoga and the GasLog Salem we operate in the spot market that covers short-term charters of one year or less. Although we believe that we are one of the few independent owners that focus on newly-built, technically advanced LNG carriers and provide in-house technical management of the fleet, other independent shipping companies also own and operate, and in some cases manage, LNG carriers and have new ships under construction. There are other ship owners and managers who may also attempt to participate in the LNG market in the future. We believe that our strategy of focusing on charter contracts with initial terms of five to ten years, as well as the scale of our technical ship management operations, differentiates us to some extent from other independent owners. In addition to independent owners, some of the major oil and gas producers own LNG carriers and in the recent past they have contracted for the construction of new LNG carriers. National gas and shipping companies also have large fleets of LNG carriers that have expanded and may continue to expand. Some of these companies may compete with independent owners by using their fleets to carry LNG for third parties. Seagoing and Shore-Based Employees As of December 31, 2015 we had 161 full-time employees and contractors based in our offices in Greece, Monaco, London, New York, Singapore or the newbuildings site in South Korea. In addition to our shore-based employees and contractors, we had approximately 1,214 seafaring staff serving on our owned and managed ships. These seafarers are retained through crewing agencies based in Ukraine, the Philippines and Spain or, in the case of Greek seafarers, through short-term employment contracts. As we take delivery of our newbuildings, we expect to retain a significant number of additional seafarers qualified to man and operate our new ships, as well as additional shore-based personnel. We intend to focus our seafaring hiring efforts in the Ukrainian, Philippine and Spanish markets, where we have crewing agency agreements in place, and in Greece. LNG marine transportation is a specialized area requiring technically skilled officers and personnel with specialized training. We regard attracting and retaining motivated, well-qualified seagoing and shore-based personnel as a top priority, and we offer our people competitive compensation packages and training and development opportunities. In addition, we provide intensive onboard training for our officers and crews to instill a culture of the highest operational and safety standards. As a result, we have historically enjoyed high retention rates. In 2015, our retention rate was 96.0% for senior seagoing officers, 98.0% for other seagoing officers and 96.0% for shore staff. Although we have historically experienced high employee retention rates, the demand for technically skilled officers and crews to serve on LNG carriers has been increasing as the global fleet of LNG carriers continues to grow. This increased demand has and may continue to put inflationary cost pressure on ensuring qualified and well trained crew are available to GasLog. However, we expect that the impact of cost increases would be mitigated to some extent by certain provisions in our time charters, including automatic periodic adjustment provisions and cost review provisions. Classification, Inspection and Maintenance Every large, commercial seagoing ship must be “classed” by a classification society. The classification society certifies that the ship is “in class”, signifying that the ship has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the ship’s country of registry and the international conventions of which that 45 country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned. The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned. To ensure each ship is maintained in accordance with classification society standards and for maintenance of the class certificate, regular and extraordinary surveys of hull and machinery, including the electrical plant, and any special equipment classes are required to be performed periodically. Surveys are based on a five-year cycle that consists of annual surveys, intermediate surveys that are typically completed between the second and third years of every five-year cycle, and comprehensive special surveys (also known as class renewal surveys) that are completed at each fifth anniversary of the ship’s delivery. All areas subject to surveys as defined by the classification society are required to be surveyed at least once per five-year class cycle, unless shorter intervals between surveys are otherwise prescribed. All ships are also required to be drydocked at least once during every five-year class cycle for inspection of their underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a “recommendation” which must be rectified by the ship owner within prescribed time limits. We intend to drydock our ships at five-year intervals that coincide with the completion of the ship’s special survey. Most insurance underwriters make it a condition for insurance coverage that a ship be certified as “in class” by a classification society that is a member of the International Association of Classification Societies. All but one of our delivered ships is certified by the American Bureau of Shipping, or “ABS”; the other delivered ship is certified by the Det Norske Veritas. Each ship has been awarded International Safety Management (“ISM”) certification and is currently “in class”. Under our shipbuilding contracts, all of our contracted newbuildings must be certified prior to delivery to us. 46 The following table lists the years in which we expect to carry out the next or initial drydockings and special surveys for our owned fleet and the bareboat vessel as of December 31, 2015: Ship Name Methane Rita Andrea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Methane Jane Elizabeth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Skagen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Seattle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Santiago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Sydney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Solaris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Methane Lydon Volney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Saratoga. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Savannah(*). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Methane Shirley Elisabeth(*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Methane Heather Sally(*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Methane Julia Louise(*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Chelsea(*). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Methane Alison Victoria(*). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Singapore(*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Methane Becki Anne(*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GasLog Salem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hull No. 2072. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hull No. 2073. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hull No. 2102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hull No. 2103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hull No. 2130. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hull No. 2800. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hull No. 2801. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hull No. 2131. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Drydocking and Special Survey 2016 2016 2018 2018 2018 2018 2018 2019 2019 2019 2020 2020 2020 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2023 2023 2023 2024 (*) The GasLog Savannah, the Methane Shirley Elisabeth, the Methane Heather Sally, the Methane Julia Louise, the GasLog Chelsea, the Methane Alison Victoria, the GasLog Singapore and the Methane Becki Anne carried out their initial drydockings in our fleet in February 2015, March 2015, April 2015, April 2015, May 2015, June 2015, July 2015 and August 2015, respectively. Risk of Loss, Insurance and Risk Management The operation of any ship has inherent risks. These risks include mechanical failure, personal injury, collision, property loss or damage, ship or cargo loss or damage and business interruption due to a number of reasons, including mechanical failure, political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including explosion, spills and other environmental mishaps, and the liabilities arising from owning and operating ships in international trade. We maintain hull and machinery insurance on all our owned ships against marine and war risks in amounts that we believe to be prudent to cover such risks, as well as loss of hire insurance against loss of income as a result of a ship being off-hire or otherwise suffering a loss of operational time for events falling under our hull and machinery insurance. In addition, we maintain protection and indemnity insurance on all our owned ships up to the maximum insurable limit available at any given time. We also maintain ship manager insurance in respect of our managed fleet. While we believe that our insurance coverage will be adequate, not all risks can be insured, and there can be no guarantee that we will always be able to obtain adequate insurance coverage at reasonable rates or at all, or that any specific claim we may make under our insurance coverage will be paid. 47 Hull & Machinery Marine Risks Insurance and Hull & Machinery War Risks Insurance We maintain hull and machinery marine risks insurance and hull and machinery war risks insurance on our owned ships, which cover loss of or damage to a ship due to marine perils such as collisions, fire or lightning, and loss of or damage to a ship due to war perils such as acts of war, terrorism or piracy. Each of our ships is insured under these policies for a total amount that exceeds what we believe to be its fair market value. We also maintain hull disbursements and increased value insurance policies covering each of our owned ships, which provide additional coverage in the event of the total or constructive loss of a ship. Our marine risks insurance policies contain deductible amounts for which we will be responsible, but there are no deductible amounts under our war risks policies or our total loss policies. Loss of Hire Insurance We maintain loss of hire insurance to protect us against loss of income as a result of a ship being off-hire or otherwise suffering a loss of operational time for events falling under the terms of our hull and machinery insurance or hull and machinery/war risks insurance. Under our loss of hire policy, our insurer will pay us the hire rate agreed in respect of each ship for each day, in excess of a certain number of deductible days, for the time that the ship is out of service as a result of damage, for a maximum of 180 days. The number of deductible days for the ships in our fleet is 14 days per ship. Additionally, we buy piracy loss of hire and kidnap and ransom insurance when our ships are ordered to sail through the Indian Ocean to insure against potential losses relating to the hijacking of a ship and its crew by pirates. Protection and Indemnity Insurance Protection and indemnity insurance is typically provided by a protection and indemnity association, or “P&I association”, and covers third-party liability, crew liability and other related expenses resulting from injury to or death of crew, passengers and other third parties, loss of or damage to cargo, third-party claims arising from collisions with other ships (to the extent not recovered by the hull and machinery policies), damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, including wreck removal. Our protection and indemnity insurance covering our owned ships is provided by P&I associations that are members of the International Group of Protection and Indemnity Clubs, or “International Group”. The thirteen P&I associations that comprise the International Group insure approximately 90.0% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. Insurance provided by a P&I association is a form of mutual indemnity insurance. Our protection and indemnity insurance is currently subject to limits of $3 billion per ship per event in respect of liability to passengers and seamen, $2 billion per ship per event in respect of liability to passengers, and $1 billion per ship per event in respect of liability for oil pollution. As a member of a P&I association, we will be subject to calls payable to the P&I association based on the International Group’s claim records as well as the claim records of all other members of the P&I association of which we are a member. Safety Performance We provide intensive onboard training for our officers and crews to instill a culture of the highest operational and safety standards. During 2015, GasLog’s fleet experienced three lost time injuries and three first aid cases. 48 Permits and Authorizations We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, financial assurances and certificates with respect to our ships. The kinds of permits, licenses, financial assurances and certificates required will depend upon several factors, including the waters in which the ship operates, the nationality of the ship’s crew and the age of the ship. We have obtained all permits, licenses, financial assurances and certificates currently required to operate our ships. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of our doing business. Environmental and Other Regulation The carriage, handling, storage and regasification of LNG are subject to extensive laws and regulations relating to the protection of the environment, health and safety and other matters. These laws and regulations include international conventions and national, state and local laws and regulations in the countries where our ships now or in the future will operate, or where our ships are registered. Compliance with these laws and regulations may entail significant expenses and may impact the resale value or useful lives of our ships. Our ships may be subject to both scheduled and unscheduled inspections by a variety of governmental, quasi-governmental and private organizations, including the local port authorities, national authorities, harbor masters or equivalent, classification societies, flag state administrations (countries of registry) and charterers. Our failure to maintain permits, licenses, certificates or other authorizations required by some of these entities could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our ships or lead to the invalidation or our insurance coverage reduction. We believe that our ships are operated in material compliance with applicable environmental laws and regulations and that our ships in operation have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. In fact, each of our ships have an ENVIRO, an ENVIRO+ or a CLEAN notation from our classification societies, which denote compliance with their published guidelines concerning stringent criteria for environmental protection related to design characteristics, management and support systems, sea discharges and air emissions. Because environmental laws and regulations are frequently changed and may impose increasingly stricter requirements, however, it is difficult to accurately predict the ultimate cost of complying with these requirements or the impact of these requirements on the resale value or useful lives of our ships. Moreover, additional legislation or regulation applicable to the operation of our ships that may be implemented in the future, such as in response to a serious marine incident like the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, could negatively affect our profitability. International Maritime Regulations The IMO, the United Nations agency for maritime safety and the prevention of pollution by ships, has adopted several international conventions that regulate the international shipping industry, including the SOLAS Convention, the International Convention on Civil Liability for Oil Pollution Damage, the International Convention on Civil Liability for Bunker Oil Pollution Damage, and the MARPOL Convention. Ships that transport gas, including LNG carriers, are also subject to regulations under amendments to SOLAS implementing the International Code for Construction and Equipment of Ships Carrying Liquefied Gases in Bulk, or the “IGC Code”, and the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or the “ISM Code”. The ISM Code requires, among other things, that the party with operational control of a ship develop an extensive safety management system, including the adoption of a policy for safety and environmental protection setting forth instructions and procedures for operating its ships safely and also describing procedures for responding to emergencies. Through GasLog LNG Services, we have developed a safety management system for our ships that meets these requirements. The IGC Code prescribes design and construction standards for ships involved in the transport of gas. Compliance with the IGC Code must be evidenced by a Certificate of Fitness for the Carriage of Liquefied Gases of Bulk. Each of our ships is in compliance with the IGC Code and each of our newbuilding contracts requires that the ship receive certification that it is in compliance with 49 applicable regulations before it is delivered. Non-compliance with the IGC Code or other applicable IMO regulations may subject a ship owner or a bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected ships and may result in the denial of access to, or detention in, some ports. The MARPOL Convention establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged form. In September 1997, the IMO adopted Annex VI to MARPOL to address air pollution from ships. Annex VI came into force on May 19, 2005. It sets limits on sulfur oxide and nitrogen oxide emissions from ship exhausts and prohibits deliberate emissions of ozone depleting substances, such as chlorofluorocarbons. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions. Annex VI has been ratified by many, but not all, IMO member states. In October 2008, the Marine Environment Protection Committee, or “MEPC”, of the IMO approved amendments to Annex VI regarding particulate matter, nitrogen oxide and sulfur oxide emissions standards. These amendments became effective in July 2010. These requirements establish a series of progressive standards to further limit the sulfur content in fuel oil, which are being phased in between 2012 and 2020, and by establishing new tiers of nitrogen oxide emission standards for new marine diesel engines, depending on their date of installation. Additionally, more stringent emission standards could apply in coastal areas designated as Emission Control Areas, or “ECAs”. For example, “Tier III” emission standards apply in North American and U.S. Caribbean Sea ECAs to all marine diesel engines installed on a ship constructed after January 1, 2016. The European Union Directive 2005/EC/33, which became effective on January 1, 2010, parallels Annex VI and requires ships to use reduced sulfur content fuel for their main and auxiliary engines. Our owned ships currently in operation comply with the relevant legislation and have the relevant certificates including certificates evidencing compliance with Annex VI of the MARPOL Convention. Although the United States is not a party, many countries have ratified the International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended, or the “CLC”. Under this convention a ship’s registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject under certain circumstances to certain defenses and limitations. Ships carrying more than 2,000 gross tons of oil, and trading to states that are parties to this convention, must maintain evidence of insurance in an amount covering the liability of the owner. In jurisdictions where the CLC has not been adopted, various legislative schemes or common law impose liability either on the basis of fault or in a manner similar to the CLC. The IMO also has adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the “Bunker Convention”, which imposes liability on ship owners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel and requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime. We maintain insurance in respect of our owned ships that satisfies these requirements. Noncompliance with the ISM Code or with other IMO regulations may subject a ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected ships and may result in the denial of access to, or detention in, some ports, including United States and European Union ports. United States Oil Pollution Act and CERCLA Because our ships could trade with the United States or its territories or possessions and/or operate in U.S. waters, our operations could be impacted by OPA, which establishes an extensive regulatory and liability regime for environmental protection and cleanup of oil spills, and the Comprehensive Environmental Response, Compensation and Liability Act, or “CERCLA”, which 50 imposes liability on owners and operators of ships for cleanup and natural resource damage from the release of hazardous substances (other than oil). Under OPA, ship owners, operators and bareboat charterers are responsible parties who are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from oil spills from their ships. OPA currently limits the liability of responsible parties with respect to ships over 3,000 gross tons to the greater of $2,000 per gross ton or $17,088,000 per double hull ship and permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries. Some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for ships carrying a hazardous substance as cargo and the greater of $300 per gross ton or $0.5 million for any other ship. These limits of liability do not apply under certain circumstances, however, such as where the incident is caused by violation of applicable U.S. Federal safety, construction or operating regulations, or by the responsible party’s gross negligence or willful misconduct. In addition, a marine incident that results in significant damage to the environment, such as the Deepwater Horizon oil spill, could result in amendments to these limitations or other regulatory changes in the future. We maintain the maximum pollution liability coverage amount of $1 billion per incident for our owned ships. We also believe that we will be in substantial compliance with OPA, CERCLA and all applicable state regulations in the ports where our ships will call. OPA also requires owners and operators of ships to establish and maintain with the National Pollution Fund Center of the U.S. Coast Guard evidence of financial responsibility sufficient to meet the limit of their potential strict liability under the act. Such financial responsibility can be demonstrated by providing a guarantee from an appropriate guarantor, who can release the required guarantee to the National Pollution Fund Center against payment of the requested premium. We have purchased such a guarantee in order to provide evidence of financial responsibility and have received the mandatory certificates of financial responsibility from the U.S. Coast Guard in respect of all of our delivered ships, we intend to obtain such certificates in the future for each of our vessels, if required to have them. Clean Water Act The U.S. Clean Water Act of 1972, or “CWA”, prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. Furthermore, most U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. Federal law. The United States Environmental Protection Agency, or “EPA”, has enacted rules requiring ballast water discharges and other discharges incidental to the normal operation of certain ships within United States waters to be authorized under the Ship General Permit for Discharges Incidental to the Normal Operation of Ships, or the “VGP”. To be covered by the VGP, owners of certain ships must submit a Notice of Intent, or “NOI”, at least 30 days before the ship operates in United States waters. Compliance with the VGP could require the installation of equipment on our ships to treat ballast water before it is discharged or the implementation of other disposal arrangements, and/or otherwise restrict our ships from entering United States waters. In March 2013, the EPA published a new VGP that includes numeric effluent limits for ballast water expressed as the maximum concentration of living organisms in ballast water. The new VGP requirements also are the subject of litigation by certain environmental groups seeking more stringent ballast water requirements. In addition, the new VGP also imposes a variety of changes for non-ballast water discharges including more stringent Best Management Practices for discharges of oil-to-sea interfaces in an effort to reduce the toxicity of oil leaked into U.S. water. We have submitted NOIs for all of 51 our delivered ships and intend to submit NOIs for our ships in the future, where required, and do not believe that the costs associated with obtaining and complying with the VGP will have a significant impact on our operations. Clean Air Act The U.S. Clean Air Act of 1970, as amended by the Clean Air Act Amendments of 1977 and 1990, or the “CAA”, requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our ships may be subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas and emission standards for so-called “Category 3” marine diesel engines operating in U.S. waters. The marine diesel engine emission standards are currently limited to new engines beginning with the 2004 model year. On April 30, 2010, the EPA adopted final emission standards for Category 3 marine diesel engines equivalent to those adopted in the amendments to Annex VI to MARPOL. However, our tri-fuel diesel electric LNG carriers have the ability to burn natural gas as fuel to power the ship, which can significantly reduce relevant emissions compared with steam-powered ships. The CAA also requires states to adopt State Implementation Plans, or “SIPs”, designed to attain national health-based air quality standards in primarily major metropolitan and/or industrial areas. Several SIPs regulate emissions resulting from ship loading and unloading operations by requiring the installation of vapor control equipment. The MEPC has designated as an ECA the area extending 200 miles from the territorial sea baseline adjacent to the Atlantic/Gulf and Pacific coasts and the eight main Hawaiian Islands and the Baltic Sea, North Sea and Caribbean Sea, under the Annex VI amendments. Fuel used by vessels operating in the ECA cannot exceed 0.10% sulfur. As of January 1, 2016, NOx after-treatment requirements also apply. Our vessels can store and burn low-sulfur fuel oil or alternatively burn natural gas which contains no sulfur. Additionally, burning natural gas will ensure compliance with IMO Tier III NOx emission limitations without the need for after-treatment. Charterers must supply compliant fuel for the vessels before ordering vessels to trade in areas where restrictions apply. As a result, we do not expect such restrictions to have a materially adverse impact on our operations or costs. Other Environmental Initiatives U.S. Coast Guard regulations adopted under the U.S. National Invasive Species Act, or “NISA”, impose mandatory ballast water management practices for all ships equipped with ballast water tanks entering U.S. waters, which could require the installation of equipment on our ships to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures, and/or otherwise restrict our ships from entering U.S. waters. In June 2012, the U.S. Coast Guard rule establishing standards for the allowable concentration of living organisms in ballast water discharged in U.S. waters and requiring the phase-in of Coast Guard approved ballast water management systems, or “BWMS”, became effective. The rule requires installation of Coast Guard approved BWMS (none of which have received full approval by the Coast Guard to date) by new vessels constructed on or after December 1, 2013 and existing vessels as of their first drydocking after January 1, 2016. Several states have adopted legislation and regulations relating to the permitting and management of ballast water discharges. At the international level, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments in February 2004, or the “BWM Convention”. The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention will not enter into force until 12 months after it has been adopted by 30 states, the combined merchant fleets of which represent not less than 35.0% of the gross tonnage of the world’s merchant shipping. As of February 11, 2016, the date of the most recent related IMO report, 47 countries representing 34.35% of the world’s shipping tonnage had ratified the convention; however, the requirement for parties to hold at least 35.0% of the world’s shipping tonnage had yet to be confirmed. The IMO’s Marine Environment Protection Committee passed a resolution in 52 March 2010 encouraging the ratification of the Convention and calling upon those countries that have already ratified to encourage the installation of ballast water management systems. While we believe that our delivered ships comply with existing requirements, when these new ballast water treatment requirements are instituted, the cost of compliance could increase for ocean carriers. It is difficult to accurately predict the overall impact of such a requirement on our operations. Our vessels may also become subject to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 as amended by the Protocol to the HNS Convention, adopted in April 2010, or “HNS Convention,” if it is entered into force. The HNS Convention creates a regime of liability and compensation for damage from hazardous and noxious substances, or “HNS”, including a two-tier system of compensation composed of compulsory insurance taken out by shipowners and HNS Fund which comes into play when the insurance is insufficient to satisfy a claim or does not cover the incident. To date, the HNS Convention has not been ratified by a sufficient number of countries to enter into force. Greenhouse Gas Regulations The MEPC of IMO adopted two new sets of mandatory requirements to address greenhouse gas emissions from ships at its July 2011 meeting. The Energy Efficiency Design Index requires a minimum energy efficiency level per capacity mile and is applicable to new vessels, and the Ship Energy Efficiency Management Plan is applicable to currently operating vessels. The requirements, which entered into force in January 2013, were fully implemented by GasLog as of December 31, 2012. The IMO is also considering the development of a market-based mechanism for greenhouse gas emissions from ships, but it is impossible to predict the likelihood that such a standard might be adopted or its potential impact on our operations at this time. The European Union has indicated that it intends to propose an expansion of the existing European Union emissions trading scheme to include emissions of greenhouse gases from marine ships. Requirements to monitor, report and verify carbon dioxide emissions from vessels calling to EU ports are under contemplation for adoption by the European Parliament. In the United States, the EPA has issued a finding that greenhouse gases endanger the public health and safety and has adopted regulations under the CAA to limit greenhouse gas emissions from certain mobile sources and large stationary sources. Although the mobile source emissions do not apply to greenhouse gas emissions from ships, the EPA is considering a petition from the California Attorney General and environmental groups to regulate greenhouse gas emissions from ocean-going ships. Any passage of climate control legislation or other regulatory initiatives by the IMO, the European Union, the United States or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol, that restrict emissions of greenhouse gases could require us to make significant financial expenditures that we cannot predict with certainty at this time. We believe that LNG carriers, which have the inherent ability to burn natural gas to power the ship, and in particular LNG carriers like ours that utilize fuel-efficient diesel electric propulsion, can be considered among the cleanest of large ships in terms of emissions. Ship Security Regulations A number of initiatives have been introduced in recent years intended to enhance ship security. On November 25, 2002, the Maritime Transportation Security Act of 2002, or “MTSA”, was signed into law. To implement certain portions of the MTSA, the U.S. Coast Guard issued regulations in July 2003 requiring the implementation of certain security requirements aboard ships operating in waters subject to the jurisdiction of the United States. Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. This new chapter came into effect in July 2004 and imposes various detailed security obligations on ships and port authorities, most of which are contained in the newly created International Ship and Port Facilities Security Code, or “ISPS Code”. Among the various requirements are: • on-board installation of automatic information systems to enhance ship-to-ship and ship-to- shore communications; 53 • on-board installation of ship security alert systems; • the development of ship security plans; and • compliance with flag state security certification requirements. The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt non-U.S. ships from MTSA ship security measures, provided such ships have on board a valid “International Ship Security Certificate” that attests to the ship’s compliance with SOLAS security requirements and the ISPS Code. We have implemented the various security measures required by the IMO, SOLAS and the ISPS Code and have approved ISPS certificates and plans certified by the applicable flag state on board all our ships. C. Organizational Structure GasLog is a holding company incorporated in Bermuda. As of March 11, 2016, it has 39 subsidiaries which are incorporated in the British Virgin Islands, Monaco, Bermuda, the Marshall Islands, the United States, Singapore and England and Wales. Of our subsidiaries, 26 either own vessels in our fleet or are parties to contracts to obtain newbuild vessels. Of our subsidiaries 29 are wholly owned by us and ten are 32.9% owned by us. A list of our subsidiaries is set forth in Exhibit 8.1 to this annual report. D. Property, Plant and Equipment Other than our ships, we do not own any material property. Our vessels are subject to priority mortgages, which secure our obligations under our various credit facilities. For information on our vessels, see “Item 4. Information on the Company—B. Business Overview—Our Fleet”. For further details regarding our credit facilities, refer to “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. We occupy office space at 7 Rue du Gabian, MC 98000, Monaco, which is provided pursuant to a lease agreement between our subsidiary, GasLog Monaco S.A.M., and a third-party property owner. We also occupy office space at: (i) 69 Akti Miaouli, Piraeus, GR 185 37, Greece, which we lease through our subsidiary GasLog LNG Services from an entity controlled by Ceres Shipping; the lease agreement is disclosed and filed with the Greek authorities, and has been entered into on market rates; (ii) at 81 Kings Road, London SW3 4NX, United Kingdom, which we lease through our subsidiary GasLog Services UK Ltd.; (iii) at ~24-02B Asia Square Tower 2, Singapore, which we lease through our subsidiary, GasLog Asia PTE. Ltd.; and (iv) at 885 Third Avenue, New York, New York 10022, United States, which we lease through our subsidiary, GasLog Services U.S. Inc. For more information about the contractual arrangements for our office space in Piraeus, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions”. ITEM 4.A. UNRESOLVED STAFF COMMENTS Not applicable. 54 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this annual report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report, our actual results may differ materially from those anticipated in these forward-looking statements. Please see the section “Forward-Looking Statements” at the beginning of this annual report. We are an international owner, operator and manager of LNG carriers. Our wholly owned fleet consists of 18 LNG carriers, including ten ships in operation, six LNG carriers on order at Samsung and two LNG carriers on order at Hyundai. GasLog is also the general and controlling partner in GasLog Partners, which owns eight LNG carriers, and GasLog has agreed to lease back one vessel recently sold to Lepta Shipping, for a period of up to 20 years. We currently manage and operate 22 LNG carriers including nine of our wholly owned vessels in operation (one is managed by a subsidiary of Shell), the eight ships contributed or sold to the Partnership, the bareboat vessel, three ships owned by MSL and one additional LNG carrier in which we have a 25.0% interest. We are also supervising the construction of our newbuildings. We have secured multi-year and seasonal time charter contracts for seven of our operating ships, the eight ships owned by the Partnership, the bareboat vessel and seven of our eight newbuildings on order, while three of our ships are operating in the spot/short-term market. As of December 31, 2015 these contracts are expected to provide total contracted revenue of $3.7 billion during their initial terms, which expire between 2016 and 2029. In addition to our committed order book, we also secured additional fixed priced options from Samsung on up to six further 174,000 cbm newbuildings with delivery dates in 2018 and 2019. The option contracts expire at the end of the first quarter of 2016. We also have a 25.0% interest in an additional ship, the Methane Nile Eagle, a 2007-built LNG carrier owned by Egypt LNG and technically managed by us. It is currently operating under a 20-year time charter to a subsidiary of BG Group. On October 29, 2015, Egypt LNG and BG Group mutually agreed to lay up the Methane Nile Eagle for a period of approximately one year. The information about our owned fleet presented in this report does not include our ownership interest in the Methane Nile Eagle. We generate revenues by chartering our ships to customers on multi-year time charters, seasonal time charters and spot/short-term charters and by providing technical ship management services, including crewing, training, maintenance, regulatory and classification compliance and HSSE management and reporting through our wholly owned subsidiary GasLog LNG Services. The Group’s chief operating decision maker (the “CODM”) being the Chief Executive Officer, reviews the Group’s operating results on a consolidated basis as one operating segment. Known Trends As referenced in the Risk Factors above, in 2015, global crude oil prices were very volatile and fell significantly. Such decline in oil prices since 2014 has depressed natural gas prices and led to a narrowing of the gap in pricing in different geographic regions, which has adversely affected the length of voyages in the spot LNG shipping market and the spot rates and medium term charter rates for charters which commence in the near future. A continued decline in oil prices could adversely affect both the competitiveness of gas as a fuel for power generation and the market price of gas, to the extent that gas prices are benchmarked to the price of crude oil. Some production companies have announced delays or cancellations of certain previously announced LNG projects, which, unless offset by new projects coming on stream, could adversely affect demand for LNG charters over the next few years, while the amount of tonnage available for charter is expected to increase. Unless LNG charter market conditions improve, we may have difficulty in securing new charters at attractive rates and durations for the two vessels that could come off charter during 2016. Currently, we have a total of 1,191 open vessel days during the remainder of 2016, including 978 days for the three vessels operating in the Cool Pool. A failure to obtain charters at acceptable rates on these vessels could adversely affect our liquidity and results of operations, as well as our 55 ability to meet certain of our debt covenants. However, in 2016, we expect projects coming onstream will add approximately 40 million tonnes (annualized) of new liquefaction capacity in both Australia and the U.S. In Australia, Australia Pacific Train 1 (4.5 million tonnes per annum (“mtpa”)) and Gladstone LNG (7.7 mtpa) have shipped their first cargoes in recent weeks and are expected to ramp up production through 2016. Other Australian projects due to start up in 2016 include Gorgon (15.6 mtpa) and Australia Pacific Train 2 (4.5 mtpa), with Wheatstone (8.9 mtpa) and Prelude (3.6 mtpa) following in 2017. The infrastructure for these projects has now largely been built and the majority of the volumes for these projects have already been sold. Sabine Pass, one of five U.S. projects under construction, is expected to export its first cargo later in 2016. When construction is completed, Sabine Pass will have a total export capacity of 22.5 mtpa and will be the first U.S. project outside of Alaska to export LNG into the global market. This is a welcome development for the LNG shipping sector as it creates new suppliers, new customers and new trade routes. The majority of U.S. volumes have already been contracted. Export of LNG into the Asian and European markets should be positive for tonne mile demand. The U.S. Gulf Coast to Asia voyage is approximately 9,000 nautical miles through the Panama Canal (which is not yet open to large LNG carriers). The same voyage around Cape Horn is approximately 13,000 nautical miles. From the U.S. Gulf Coast to northwest Europe, the distance is approximately 5,000 nautical miles. In 2014 and 2015, the average global LNG voyage was approximately 4,000 nautical miles, and thus any voyage in excess of this distance will increase the global average distance and the need for LNG carriers. Angola LNG (5.2 mtpa), which has been shut down for over a year for refurbishment and enhancements, is also due to restart in 2016. The seven vessels that were chartered to Angola LNG have been operating in the spot market while the plant has been closed, and are expected to be put back into service for the project in 2016. With the expected projects coming onstream, encouraging levels of tendering activity for vessels to transport increased LNG volumes is being noted. We continue to see a future shortfall of vessels that will be required for the Australian and U.S. projects that have taken final investment decision and are currently under construction. A. Operating Results Factors Affecting Our Results of Operations We believe the principal factors that will affect our future results of operations include: • the number of LNG carriers in our owned and managed fleets; • the timely delivery of our ships under construction; • our ability to maintain good working relationships with our existing customers and our ability to increase the number of our customers through the development of new working relationships; • the performance of our charterers; • the supply-demand relationship for LNG shipping services; • our ability to successfully re-employ the ships we own, including our LNG carriers on order, at economically attractive rates; • the effective and efficient technical management of the ships under our management; • our ability to obtain acceptable debt financing in respect of our capital commitments; • our ability to obtain and maintain regulatory approvals and to satisfy technical, health, safety and compliance standards that meet our customers’ requirements; and • economic, regulatory, political and governmental conditions that affect shipping and the LNG industry, which include changes in the number of new LNG importing countries and regions, as well as structural LNG market changes impacting LNG supply that may allow greater flexibility and competition of other energy sources with global LNG use. 56 In addition to the general factors discussed above, we believe certain specific factors have impacted, or will impact, our results of operations. These factors include: • the hire rate earned by our owned ships; • unscheduled off-hire days; • the fees we receive for construction supervision and technical ship management services; • the level of our ship operating expenses, including crewing costs, insurance and maintenance costs; • our access to capital required to acquire additional ships and/or to implement our business strategy; • our level of debt, the related interest expense and the timing of required payments of principal; • mark-to-market changes in interest rate swaps and foreign currency fluctuations; and • the level of our general and administrative expenses, including salaries and costs of consultants. Principal Components of Revenues and Expenses Revenues Our revenues are driven primarily by the number of LNG carriers in our owned fleet, the amount of daily charter hire that they earn under time charters and the number of operating days during which they generate revenues. These factors, in turn, are affected by our decisions relating to ship acquisitions and disposals, the amount of time that our ships spend in drydock undergoing repairs, maintenance and upgrade work, the age, condition and technical specifications of our ships as well as the relative levels of supply and demand in the LNG carrier charter market. Under the terms of some of our time charter arrangements, the operating cost component of the daily hire rate is intended to correspond to the costs of operating the ship. Accordingly, we will receive additional revenue under certain of our time charters through an annual escalation of the operating cost component of the daily hire rate and, in the event of more material increases in a ship’s operating costs, we may be entitled to receive additional revenues under those charters. Under some of the other time charter arrangements, most of our operating costs are passed-through to the charterer in the form of an adjustment to the operating cost component of the daily hire rate. We believe these adjustment provisions provide substantial protection against significant cost increases. See “Item 4. Information on the Company—B. Business Overview—Ship Time Charters—Hire Rate Provisions” for a more detailed discussion of the hire rate provisions of our charter contracts. Our LNG carriers are employed through time charter contracts. Revenues under our time charters are recognized when services are performed, revenue is earned and the collection of the revenue is reasonably assured. The charter hire revenue is recognized on a straight-line basis over the term of the relevant time charter. We do not recognize revenue during days when the ship is off-hire, unless it is recoverable from insurers. Advance payments under time charter contracts are classified as liabilities until such time as the criteria for recognizing the revenue are met. The table below provides additional information about our contracted charter revenues based on contracts in effect as of December 31, 2015 for (a) the seven ships in our wholly owned fleet, the eight ships in the GasLog Partners’ fleet and the bareboat vessel for which we have secured time charters and (b) seven of our eight newbuildings on order. Other than the assumptions reflected in the footnotes to the table, including our assumption that our newbuildings are delivered on schedule, the table does not reflect events occurring after December 31, 2015. The table reflects only our contracted charter revenues for the ships in our owned fleet for which we have secured time charters, and it does not reflect the costs or expenses we will incur in fulfilling our obligations under the charters, nor does it include other revenues we may earn, such as revenues for technical management of customer-owned ships. In particular, the table does not reflect any time charter revenues for our one LNG carrier on order for which we have not yet secured time charter 57 contracts, revenues from the GasLog Chelsea, the GasLog Saratoga and the GasLog Salem that are operating in the Cool Pool, any additional ships we may acquire in the future, nor does it reflect the options under our time charters that permit our charterers to extend the time charter terms for successive multi-year periods. The entry into time charter contracts for the one remaining newbuilding on order which has no time charter in place, the GasLog Chelsea, the GasLog Saratoga, the GasLog Salem and any additional ships we may acquire or the exercise of options extending the terms of our existing charters, would result in an increase in the number of contracted days and the contracted revenue for our fleet in the future. Although the contracted charter revenues are based on contracted charter hire rate provisions, they reflect certain assumptions, including assumptions relating to future ship operating costs. We consider the assumptions to be reasonable as of the date of this report, but if these assumptions prove to be incorrect, our actual time charter revenues could differ from those reflected in the table. Furthermore, any contract is subject to various risks, including performance by the counterparties or an early termination of the contract pursuant to its terms. If the charterers are unable or unwilling to make charter payments to us, or if we agree to renegotiate charter terms at the request of a charterer or if contracts are prematurely terminated for any reason, we would be exposed to prevailing market conditions at the time, and our results of operations and financial condition may be materially adversely affected. Please see “Item 3. Key Information—D. Risk Factors”. For these reasons, the contracted charter revenue information presented below is not fact and should not be relied upon as being necessarily indicative of future results, and readers are cautioned not to place undue reliance on this information. Neither the Company’s independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the information presented in the table, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the information in the table. Contracted Charter Revenues and Days from Time Charters as of December 31, 2015 Contracted time charter revenues(1). . . . Total contracted days(1). . . . . . . . . . . . . . . . Total available days(2) . . . . . . . . . . . . . . . . . Total unfixed days(3) . . . . . . . . . . . . . . . . . . . Percentage of total contracted days/total available days. . . . . . . . . . . . . For the Year Ending December 31, 2016 2017 2018 2019 2020-2029 Total (in millions of U.S. dollars, except days and percentages) $450.46 6,320 7,511 1,191 $482.92 6,417 8,395 1,978 $453.29 6,015 9,186 3,171 $455.36 5,977 9,734 3,757 $1,827,33 22,248 97,011 74,763 $3,669.36 46,977 131,837 84,860 84.14% 76.44% 65.48% 61.40% 22.93% 35.63% (1) Reflects time charter revenues and contracted days for the seven of our wholly owned ships, the eight ships owned by the Partnership, the bareboat vessel, and seven of our eight newbuildings on order for which we have secured time charters. Does not include charter revenues for the vessels operating in the spot/short-term market under the Cool Pool agreement and the Methane Nile Eagle, in which we hold 25.0% minority interest. Contracted revenue calculations assume: (a) 365 revenue days per annum, with 30 off-hire days when the ship undergoes scheduled drydocking (every five years); (b) all LNG carriers on order are delivered on schedule; and (c) no exercise of any option to extend the terms of charters. For time charters that include a fixed operating cost component subject to annual escalation, revenue calculations include that fixed annual escalation. For time charters that give the charterer the option to set the charter hire rate at prevailing market rates during an initial portion of the time charter’s term, revenue calculations assume that the charterer does not elect such option. Revenue calculations for such charters include an estimate of the amount of the operating cost component and the management fee component. (2) Available days represent total calendar days after deducting 30 off-hire days when the ship undergoes scheduled drydocking. The available days for the vessels operating in the spot/short-term market are included. (3) Represents available days for ships after the expiration of existing charters (assuming charterers do not exercise any option to extend the terms of the charters) and the available days for the vessels operating in the spot/short-term market. The revenues of GasLog LNG Services, our wholly owned subsidiary, are driven primarily by the number of ships operating under our technical management and the amount of the fees we earn for each of these ships as well as the amount of fees that we may earn for plan approval and construction supervision of newbuilding LNG carriers. In addition to revenues from external 58 customers, GasLog LNG Services receives revenues for technical management, plan approval and construction supervision services provided to our owned fleet, which are eliminated on consolidation. Revenue from ship management and ship construction project supervision contracts is recognized in the statement of profit or loss when earned and when it is probable that future economic benefits will flow to us and such benefits can be measured reliably. Vessel Operating and Supervision Costs We are generally responsible for ship operating expenses, which include costs for crewing, insurance, repairs, modifications and maintenance, including drydocking, lubricants, spare parts and consumable stores and other miscellaneous expenses, as well as the associated cost of providing these items and services. However, as described above, the hire rate provisions of our time charters are intended to reflect the operating costs borne by us. Our charters contain provisions that significantly reduce our exposure to increases in operating costs, including review provisions and cost pass-through provisions. Ship operating expenses are recognized as expenses when incurred. In addition, we pay fees to GasLog LNG Services in connection with our own newbuildings on order for plan approval and construction supervision services provided by GasLog LNG Services and to cover third-party expenses incurred by GasLog LNG Services in respect of the newbuildings. These fees, other than any inter-segment profit, are capitalized as part of the asset value of our ships. The fees paid for technical ship management services, which are considered vessel operating and supervision costs of our owned fleet (and corresponding revenues of GasLog LNG Services), are eliminated on consolidation. Vessel operating and supervision costs of GasLog LNG Services include staff costs, such as salaries, social security and training for the technical management team and project specialists, and project-related expenses. Voyage Expenses and Commissions Under our time charter arrangements, charterers bear substantially all voyage expenses, including bunker fuel, port charges and canal tolls, but not commissions, which we have historically paid to unaffiliated ship brokers based on a flat fee per ship. Commissions are recognized as expenses on a pro rata basis over the duration of the period of the time charter. Depreciation of Fixed Assets The majority of our consolidated depreciation expenses relate to the cost of our ships. We depreciate the cost of our ships on the basis of two components: a vessel component and a drydocking component. The vessel component is depreciated on a straight-line basis over the expected useful life of each ship, based on the cost of the ship less its estimated residual value. We estimate the useful lives of our ships to be 35 years from the date of delivery from the shipyard. Second-hand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. Management estimates residual value of its vessels to be equal to the product of its lightweight tonnage (“LWT”), and an estimated scrap rate per LWT, which represents our estimate of the market value of the ship at the end of its useful life. We will review scrap rates on an annual basis. We must periodically drydock each of our ships for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements. All our ships are required to be drydocked for these inspections at least once every five years. At the time of delivery of a ship, we estimate the drydocking component of the cost of the ship, which represents the estimated cost of the ship’s first drydocking based on our historical experience with similar types of ships. The drydocking component of the ship’s cost is depreciated over five years, in case of new ships, and until the next drydocking for secondhand ships, unless we determine to drydock the ships at an earlier date. In the event a ship is drydocked at an earlier date, the unamortized drydocking component is written off immediately. 59 General and Administrative Expenses General and administrative expenses consist principally of personnel costs for administrative and support staff, board of directors fees, expense recognized in connection with share-based compensation, rent, utilities, travel expenses, legal expenses, other professional services and consultants, training for crew familiarization and other advisor costs. Financial Costs We incur interest expense on the outstanding indebtedness under our existing credit facilities, Bond Agreement and our swap arrangements that qualify for treatment as cash flow hedges for financial reporting purposes, which we include in our financial costs. Financial costs also include amortization of other loan issuance costs incurred in connection with establishing our credit facilities. We will incur additional interest expense and other borrowing costs in the future on our outstanding borrowings and under the undrawn or future borrowings and commitments. For a description of our credit facilities, including our loan agreements, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. Interest expense and the amortization of loan issuance costs that relate directly to a specific loan to finance an LNG carrier under construction and are incurred during the construction period are capitalized as part of the cost of the ship. Otherwise, interest expense and amortization of loan issuance costs are expensed as incurred. Financial Income Financial income consists of interest income, which will depend on the level of our cash deposits, investments and prevailing interest rates. Interest income is recognized on an accrual basis. (Loss)/Gain on Interest Rate Swaps Any gain or loss derived from the fair value of the swaps at their inception, the ineffective portion of changes in the fair value of the swaps that meet hedge accounting criteria and net interest on interest rate swaps held for trading, the movement in the fair value of the interest rate swaps that have not been designated as hedges and the amortization of the cumulative unrealized loss for the interest rate swaps that hedge accounting was discontinued are presented as gain or loss on interest rate swaps in our consolidated statements of profit or loss. Share of Profit of Associate and Joint Venture The share of profit of associate and joint venture consists of our share of profits from our 25.0% ownership interest in Egypt LNG, a Bermuda exempted company whose principal asset is the LNG carrier Methane Nile Eagle and our 33.33% ownership interest in the Cool Pool. 60 Results of Operations Year Ended December 31, 2014 Compared to Year Ended December 31, 2015 Year ended December 31, 2015 2014 Change Amounts are in thousands of U.S. Dollars Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vessel operating and supervision costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Voyage expenses and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General and administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of profit of associate and joint venture . . . . . . . . . . . . . . . . . . . . . . . Total other expenses, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit attributable to owners of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . $328,679 (70,732) (7,738) (70,695) (34,154) $ 415,078 (98,552) (14,290) (106,641) (41,282) $ 86,399 (27,820) (6,552) (35,946) (7,128) 145,360 (71,579) 274 (24,787) 1,497 154,313 (91,956) 427 (10,332) 1,216 8,953 (20,377) 153 14,455 (281) (94,595) (100,645) (6,050) 50,765 8,604 53,668 42,839 2,903 34,235 $ 42,161 $ 10,829 $(31,332) During the year ended December 31, 2015, we had an average of 18.2 ships operating in our owned fleet (including ships owned by the Partnership), having 6,097 operating days, an average of 21.7 ships operating under our technical management (including 17.2 of our owned ships) and an average of 8.3 owned ships under construction supervision. During the year ended December 31, 2014, we had an average of 12.4 ships operating in our owned fleet having 4,392 operating days, an average of 20.0 ships operating under our technical management (including 11.9 of our owned ships) and an average of 3.50 owned ships under construction supervision. Revenues: Revenues increased by 26.29%, or $86.40 million, from $328.68 million during the year ended December 31, 2014 to $415.08 million during the year ended December 31, 2015. The increase is mainly attributable to an increase in revenues by $122.02 million due to the full operation of the Methane Rita Andrea, the Methane Jane Elizabeth, the Methane Lydon Volney, the Methane Shirley Elisabeth, the Methane Heather Sally and the Methane Alison Victoria which were acquired from BG Group in April 2014 and June 2014, the acquisition of the Methane Becki Anne and the Methane Julia Louise which were both acquired from BG Group on March 31, 2015 and the deliveries of the Solaris, the GasLog Saratoga, and the GasLog Salem on June 30, 2014, December 16, 2014 and April 30, 2015, respectively. These acquisitions and deliveries resulted in an increase in operating days. The increase in revenues was partially offset by a decrease of $13.61 million in earnings of a vessel operating in the spot market and a decrease of $6.71 million in revenues from all other vessels, as well as a decrease in revenues of $10.20 million caused mainly by the off-hire days due to the drydockings of our vessels in 2015, as opposed to only one in 2014. The daily hire rate for the year ended December 31, 2014 was $73,081 as compared to $67,650 for the year ended December 31, 2015 affected by the decline in the spot market. There was also a decrease of $5.10 million in revenues from technical management services mainly due to the decrease in the average number of the managed vessels owned by third parties following the acquisition of the eight vessels from BG Group and the termination of a project with another customer. Vessel Operating and Supervision Costs: Vessel operating and supervision costs increased by 39.33%, or $27.82 million, from $70.73 million during the year ended December 31, 2014, to $98.55 million during the year ended December 31, 2015. The increase is primarily attributable to the increase in our fleet in the year ended December 31, 2015 compared to 2014, as described above and increased technical maintenance expenses mainly due to repairs undertaken during eight drydockings in 2015, as opposed to only one in 2014, partially offset by the decreased average daily 61 operating cost per vessel from $15,649 per day in 2014 to $14,847 per day in 2015, reflecting the favorable movement of the EUR/USD exchange rate affecting mainly crew wages. Voyage Expenses and Commissions: Voyage and commission expenses increased by 84.63%, or $6.55 million, from $7.74 million during the year ended December 31, 2014, to $14.29 million during the year ended December 31, 2015. The increase was mainly attributable to the increased operating days in the year ended December 31, 2015 affecting the commissions on revenue and increased voyage expenses from the vessels operating in the spot market. Depreciation: Depreciation increased by 50.83%, or $35.94 million, from $70.70 million during the year ended December 31, 2014, to $106.64 million during the year ended December 31, 2015. The increase in depreciation resulted mainly from the increase in the average number of vessels in our fleet in the year ended December 31, 2015, compared to 2014. General and Administrative Expenses: General and administrative expenses increased by 20.88%, or $7.13 million, from $34.15 million during the year ended December 31, 2014, to $41.28 million during the year ended December 31, 2015. The increase is mainly attributable to a $3.44 million increase in legal fees and other professional services including those related to the Partnership’s listing requirements, an increase of $0.93 million in personnel related expenses related to the growth of the Group, an increase of $1.02 million in share-based compensation expense, an increase of $0.51 million in board of directors’ fees, an increase of $0.40 million in rent and utilities related to the new offices in London, New York and Singapore and an increase of $0.96 million in net foreign exchange losses. The above increases were partially offset by a decrease of $0.13 million in various other expenses. Financial Costs: Financial costs increased by 28.47%, or $20.38 million, from $71.58 million during the year ended December 31, 2014, to $91.96 million during year ended December 31, 2015. The increase is mainly attributable to an increase of $26.31 million in interest expense on loans, Bond and realized loss on cash flow hedges. During the year ended December 31, 2015, we had an average of $2,362.58 million of outstanding indebtedness, including the Bond Agreement, having an aggregate weighted average interest rate of 3.32%, and during the year ended December 31, 2014, we had an average of $1,613.50 million of outstanding indebtedness with a weighted average interest rate of 3.26%. These weighted average interest rates include interest expense on loans and cash flow hedges and interest expense on Bond CCSs. Loss on Swaps: Loss on swaps decreased by $14.46 million, from $24.79 million for the year ended December 31, 2014, to $10.33 million for the year ended December 31, 2015. The decrease in loss is mainly attributable to a decrease of $7.72 million in loss from mark-to-market valuation of our interest rate swaps carried at fair value through profit or loss, which reflected a loss of $0.15 million for the year ended December 31, 2015 as compared to a loss of $7.87 million for the year ended December 31, 2014, a decrease of $1.41 million in realized loss from interest rate swaps held for trading and a decrease of $5.35 million in loss that was reclassified from equity to the statement of profit or loss related to the interest rate swaps for which hedge accounting was discontinued. In 2015, the loss derived from the fact that the LIBOR yield curve, which was used to calculate the present value of the estimated future cash flows, was lower than the agreed fixed interest rates resulting in an increase in derivative liabilities from interest rate swaps held for trading as compared to December 31, 2014. Profit for the Year: Profit increased by 5.71%, or $2.90 million, from $50.77 million for the year ended December 31, 2014, to $53.67 million for the year ended December 31, 2015 as a result of the aforementioned factors. Profit Attributable to Owners of the Group: Profit attributable to owners of the Group decreased by 74.31%, or $31.33 million, from $42.16 million for the year ended December 31, 2014, to $10.83 million for the year ended December 31, 2015. The decrease in profit attributable to owners of the Group was affected by the increase in profit attributable to the non-controlling interest (non-controlling unitholders of GasLog Partners) which reflects GasLog Partners having been operational for the full financial year in 2015 following its IPO in May 2014. 62 Year Ended December 31, 2013 Compared to Year Ended December 31, 2014 Year ended December 31, 2014 2013 Change Amounts are in thousands of U.S. Dollars Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vessel operating and supervision costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Voyage expenses and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation of fixed assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General and administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain/(loss) on swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of profit of associate and joint venture . . . . . . . . . . . . . . . . . . . . . . . . Total other expenses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $157,240 (32,058) (2,861) (29,322) (21,598) $328,679 (70,732) (7,738) (70,695) (34,154) $171,439 (38,674) (4,877) (41,373) (12,556) 71,401 (27,851) 411 11,498 1,470 (14,472) 56,929 145,360 (71,579) 274 (24,787) 1,497 (94,595) 50,765 73,959 (43,728) (137) (36,285) 27 (80,123) (6,164) Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit attributable to owners of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . — 8,604 8,604 $ 56,929 $ 42,161 $ (14,768) During the year ended December 31, 2014, we had an average of 12.4 ships operating in our owned fleet having 4,392 operating days, an average of 20.0 ships operating under our technical management (including 11.9 of our owned ships) and an average of 3.50 owned ships under construction supervision. During the year ended December 31, 2013, we had an average of 5.0 ships operating in our owned fleet having 1,808 operating days, an average of 16.9 ships operating under our technical management (including our 5.0 owned ships) and an average of 4.2 ships under construction supervision. Revenues: Revenues increased by 109.03%, or $171.44 million, from $157.24 million during the year ended December 31, 2013, to $328.68 million during the year ended December 31, 2014. The increase is mainly attributable to an increase in revenues of $92.05 million due to the deliveries of the Methane Rita Andrea, the Methane Jane Elizabeth, the Methane Lydon Volney, the Methane Shirley Elisabeth, the Methane Heather Sally, and the Methane Alison Victoria acquired from BG Group in April and June 2014, an increase of $74.59 million due to the full year’s operation during the year ended December 31, 2014 of the GasLog Shanghai, the GasLog Santiago, the GasLog Sydney, the GasLog Skagen, the GasLog Chelsea and the GasLog Seattle which were delivered on January 28, 2013, March 25, 2013, May 30, 2013, July 25, 2013, October 4, 2013 and December 9, 2013, respectively and a further increase in revenues of $12.32 million due to the delivery of the Solaris on June 30, 2014. These deliveries resulted in an increase in operating days. The increase in consolidated revenues was partially offset by $1.12 million caused by the off-hire days due to damage to the propulsion system of the GasLog Singapore, $1.51 million caused by the off-hire days due to the drydocking of the Methane Lydon Volney which took place in November 2014 and $0.55 million due to the damage to the propeller on the Methane Heather Sally and the other off- hires of $0.21 million. There was also a decrease of $4.13 million in revenues from technical management services mainly due to the decrease in the number of the managed vessels owned by third parties. Vessel Operating and Supervision Costs: Vessel operating and supervision costs increased by 120.62%, or $38.67 million, from $32.06 million during the year ended December 31, 2013, to $70.73 million during the year ended December 31, 2014. The increase is primarily attributable to an increase of $40.94 million deriving from the operating expenses of the six vessels delivered in 2013, the Solaris and the GasLog Saratoga delivered on June 30, 2014 and December 16, 2014, respectively, to the six vessels acquired from BG Group in 2014 and to the increased technical maintenance expenses due to the planned main engines overhauling for the two vessels delivered in 63 2010. In addition there was an increase of $2.61 million in employee costs related to new employees hired in order to fulfill the requirements of the fleet growth. Voyage Expenses and Commissions: Voyage and commission expenses increased by 170.63%, or $4.88 million, from $2.86 million during the year ended December 31, 2013, to $7.74 million during the year ended December 31, 2014. The increase was mainly attributable to the increased operating days in the year ended December 31, 2014 and increased voyage expenses from the GasLog Chelsea while unemployed between the spot/short-term charters. Depreciation: Depreciation increased by 141.13%, or $41.38 million, from $29.32 million during the year ended December 31, 2013, to $70.70 million during the year ended December 31, 2014. The increase in depreciation resulted from the increase in the average number of vessels in our fleet in the year ended December 31, 2014, compared to 2013. General and Administrative Expenses: General and administrative expenses increased by 58.10%, or $12.55 million, from $21.60 million during the year ended December 31, 2013, to $34.15 million during the year ended December 31, 2014. The increase is mainly attributable to a $4.65 million increase in legal fees and other professional services including external assistance for Sarbanes-Oxley Act compliance and the Partnership’s listing requirements, an increase in personnel related expenses of $3.07 million related to the growth of the Group, an increase in equity-settled compensation expense of $1.36 million, an increase in travel and accommodation expenses of $1.08 million related to the Group’s expansion in London and New York, an increase of $0.61 million in rent and utilities related to the new offices in London and New York, an increase in directors and officers insurance of $0.59 million mostly related to the additional cost derived from the Partnership’s requirements, an increase in board of director’s fees of $0.66 million and an increase in various other expenses of $0.53 million. Financial Costs: Financial costs increased by 157.02%, or $43.73 million, from $27.85 million during the year ended December 31, 2013, to $71.58 million during the year ended December 31, 2014. The increase is attributable to an increase of $29.66 million in interest expense on loans, Bond and cash flow hedges. During the year ended December 31, 2014, we had an average of $1,613.50 million of outstanding indebtedness including our Bond Agreement, having an aggregate weighted average interest rate of 3.26%, and during the year ended December 31, 2013, we had an average of $715.92 million of outstanding indebtedness with a weighted average interest rate of 3.25%. These weighted average interest rates include interest expense on loans and cash flow hedges and interest expense on Bond and CCSs. The increase in financial costs was further affected by an increase in amortization of loan fees by $11.74 million mainly deriving from the $9.02 million write off of fees relating to the repayment of the loans used to finance the GasLog Shanghai, the GasLog Santiago, the GasLog Sydney, the Methane Rita Andrea and the Methane Jane Elizabeth that were terminated during the year ended December 31, 2014. Finally there was an increase in finance costs of $2.33 million mainly deriving from the other loan fees including the termination of the aforementioned loans. Gain/(loss)on Swaps: Loss on swaps increased by $36.29 million, from $11.50 million gain for the year ended December 31, 2013 to a $24.79 million loss for the year ended December 31, 2014. The increase in loss is attributable to an increase of $27.70 million in loss from mark-to-market valuation of our interest rate swaps which are carried at fair value through profit or loss, an increase of $4.35 million in loss that was reclassified from equity to the statement of profit or loss related to the interest rate swaps for which hedge accounting was discontinued and an increase of $4.58 million in realized loss from interest rate swaps held for trading. The increase of $27.70 million in loss from mark-to-market valuation reflected a loss of $7.87 million for the year ended December 31, 2014 as compared to a gain of $19.83 million for the year ended December 31, 2013. In 2014, the loss derived from the fact that the LIBOR yield curve, which was used to calculate the present value of the estimated future cash flows, was lower than the agreed fixed interest rates resulting in an increase in derivative liabilities from interest rate swaps held for trading. Profit for the Year: Consolidated profit decreased by $10.82% or $6.16 million, from $56.93 million for the year ended December 31, 2013, to $50.77 million for the year ended December 31, 2014, as a result of the aforementioned factors. 64 Profit Attributable to Owners of the Group: Profit attributable to owners of the Group decreased by 25.94%, or $14.77 million, from $56.93 million for the year ended December 31, 2013, to $42.16 million for the year ended December 31, 2014. The decrease in profit attributable to owners of the Group was affected by the increase in profit attributable to the non-controlling interest as a result of the completion of the Partnership’s IPO in May 2014 (non-controlling unitholders of GasLog Partners). Customers For the year ended December 31, 2015, we received 83.14% of our revenues from BG Group, 11.76% of our revenues from Shell, 4.96% of our revenues from the spot/short-term market and 0.14% of our revenues from Egypt. For the year ended December 31, 2014, we received 80.10% of our revenues from BG Group, 11.66% of our revenues from Shell, 7.76% of our revenues from the spot/short-term market, 0.22% of our revenues from Egypt LNG and 0.26% from another customer. BG Group was acquired by Shell on February 15, 2016. Seasonality Since our owned ships are mainly employed under multi-year, fixed-rate charter arrangements, seasonal trends do not materially impact the revenues earned by our vessels during the year. Seasonality also does not have a significant impact on revenues earned by our management services, as we provide technical ship management and ship construction supervision services under fixed-rate agreements. Additionally, our business is not subject to seasonal borrowing requirements. B. Liquidity and Capital Resources As of December 31, 2015, GasLog has financed its capital requirements with contributions from its pre-IPO shareholders, proceeds from our IPO and the GasLog Partners’ IPO, proceeds from the 2014 and 2015 follow-on equity offerings and the private placements, operating cash flows and long- term financings including bank loans and the Bond offering. Our primary liquidity needs are to fund our ship-operating expenses, finance the purchase and construction of our newbuildings, purchase secondhand vessels, service our existing debt and pay dividends. In monitoring our working capital needs, we project our charter hire income and ships’ maintenance and running expenses, as well as debt service obligations, and seek to maintain adequate cash reserves in order to address any budget overruns, if any. We anticipate that our primary sources of funds will be available cash, cash from operations and borrowings under existing and new loan agreements. We may seek to raise additional common or other forms of equity, subject in each case to market conditions. We believe that these sources of funds will be sufficient to meet our liquidity needs, although there can be no assurance that we will be able to obtain future debt and equity financing on terms acceptable to us. Our funding and treasury activities are intended to balance investment returns in order to maintain appropriate liquidity. Cash and cash equivalents are held primarily in U.S. dollars. In June 2013 and April 2014, we entered into six CCSs to exchange interest payments and principal on maturity on the same terms as the Bond Agreement and designated the CCSs as hedges of the variability of the USD functional currency equivalent cash flows on the Bond. Refer to Note 24 to our audited consolidated financial statements included elsewhere in this annual report for details on our swap arrangements. In 2012, the Company adopted what it considers to be appropriate risk management policies to be used as a guideline in managing risks arising from our business and treasury activities. The Treasury Policies and Procedures aim to ensure that: responsibilities for treasury activities are delegated appropriately; treasury risks are identified, quantified and actively managed in a timely manner; and treasury transactions are properly authorized, controlled, reported and monitored. 65 In addition, during 2012 the Company established a set of Counterparty Risk Policies and Procedures formalizing our counterparty credit risk management process with an aim to protect against unwarranted credit exposures and to seek to manage counterparty risk. The purpose of the Counterparty Risk Policies and Procedures is to: provide general principles to guide counterparty credit risk management process; identify and actively manage counterparty risks; and delegate authority to approve additional counterparty risk on the Company. As of December 31, 2015, we had $302.99 million of cash and cash equivalents, of which $4.06 million was held in a retention account in connection with the next installment and interest payment due under the credit facilities entered into by some of our subsidiaries, $163.85 million was held in time deposits and $3.52 million was held in ship management client accounts. The funds in the ship management client accounts were held on behalf of customers of GasLog LNG Services in order to cover obligations of third party vessels under management. Moreover, as of December 31, 2015, we had $6.0 million held in time deposits with an initial duration of more than three months but less than a year that have been classified as short-term investments. In addition, as of December 31, 2015, we had $62.72 million in restricted cash in order to comply with the covenants under three of our credit facilities. As of December 31, 2015, we had an aggregate of $2.29 billion of indebtedness outstanding under twelve credit facilities, of which $645.19 million is repayable within one year, including $42.18 million under the revolving credit facility. As of December 31, 2015, GasLog had $113.74 million outstanding under the Bond Agreement that is payable in June 2018. As of December 31, 2015, GasLog had not yet drawn any of the $1.3 billion under its latest debt financing agreement to partially finance the delivery of our eight newbuildings, since the relevant funds shall be drawn upon the deliveries of the respective newbuildings, expected in 2016, 2018 and 2019. Additionally, there was an undrawn amount of $7.82 million from the revolving facility of GAS-two Ltd., which is available to be drawn under certain conditions. The total contract price for our eight newbuildings on order as of December 31, 2015, was approximately $1.62 billion, of which $170.63 million was paid as of December 31, 2015. The balance is payable under each shipbuilding contract in installments upon the attainment of certain specified milestones, with the largest portion of the purchase price for each ship coming due upon its delivery. We are scheduled to take delivery of the eight newbuildings on various dates in 2016, 2018 and 2019. As of December 31, 2015, the total remaining balance of the contract prices for the eight newbuildings was $1.45 billion of which $720.75 million is due within twelve months that will be funded with existing undrawn debt, available cash, cash from operations and other financings we may enter into. In addition, we have secured additional fixed priced options from Samsung on up to six further 174,000 cbm newbuildings with delivery dates in 2018 and 2019. The option contracts expire at the end of the first quarter of 2016. On February 18, 2016, GasLog entered into the Five Vessel Refinancing to refinance the existing indebtedness on five of its contracted vessels of up to $576.50 million for debt maturities which were due in 2016 and 2017. It is comprised of a five-year senior tranche facility of up to $396.50 million and a two-year bullet junior tranche of up to $180.0 million. The vessels covered by the Five Vessel Refinancing are the GasLog-owned Methane Lydon Volney and Methane Becki Anne and the GasLog Partners-owned Methane Alison Victoria, Methane Shirley Elisabeth and Methane Heather Sally. On February 24, 2016, GasLog’s subsidiary, GAS-twenty six Ltd., completed the ship sale and leaseback transaction with Lepta Shipping for the sale and leaseback of the Methane Julia Louise. Lepta Shipping has the right to on-sell and lease back the vessel. The vessel was sold to Lepta Shipping for a total consideration approximately equivalent to its current book value. GasLog has leased back the vessel under a bareboat charter from Lepta Shipping for a period of up to 20 years. GasLog has the option to re-purchase the vessel on pre-agreed terms no earlier than the end of year ten and no later than the end of year 17 of the bareboat charter. Following the completion of this transaction, the outstanding debt of GAS-twenty six Ltd. of $230.0 million was prepaid. 66 On February 25, 2016, a supplemental deed was signed with the lenders of the GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd. loan facility, permitting GasLog to withdraw the $21.0 million maintained in blocked accounts for each of GAS-nine Ltd. and GAS-ten Ltd., provided GasLog has provided an executed guarantee or letter of credit with a minimum duration of six months. In connection to this, on February 26, 2016, GasLog entered into two bank guarantees, issued by BNP Paribas S.A. for GAS-nine Ltd. and GAS-ten Ltd. of $21.0 million each. The bank guarantees bear interest at a margin and are available for a period of up to two years. Consequently, $42.0 million was reclassified from restricted cash to cash and cash equivalents. As our fleet expands, we will evaluate changes to the quarterly dividend consistent with our cash flow and liquidity position. Our policy is to pay dividends in amounts that will allow us to retain sufficient liquidity to fund our obligations as well as execute our business plan going forward. Our board of directors will determine the timing and amount of all dividend payments, based on various factors, including our earnings, financial condition, cash requirements and availability, restrictions in our credit facilities and the provisions of Bermuda law. Accordingly, we cannot guarantee that we will be able to pay quarterly dividends. See “Item 3. Key Information—D. Risk Factors” and “Item 8. Financial Information—A. Consolidated Financial Statements and Other Financial Information—Dividend Policy” for a discussion of risks related to our ability to pay dividends. Working Capital Position As of December 31, 2015, our current assets totaled $398.15 million while current liabilities totaled $734.39 million, resulting in a negative working capital position of $336.24 million. In February 2016, we signed a debt refinancing of up to $576.50 million with certain financial institutions to refinance $464.63 million of our current debt plus $111.87 million of our non-current debt. In addition, following the completion of the sale and leaseback of the Methane Julia Louise, $50.63 million of our current debt and $179.37 million of our non-current debt was prepaid. We anticipate that our primary sources of funds will be available cash, cash from operations and borrowings under existing and new loan agreements. We may seek to raise additional common or other forms of equity. We believe that these sources of funds will be sufficient to fund our operations, including our working capital requirements, and to make the required principal and interest payments on our indebtedness during the next 12 months; however, there can be no assurance that we will be able to obtain future debt and equity financing on terms acceptable to us. Taking into account generally expected market conditions, we anticipate that cash flow generated from operations will be sufficient to fund our operations, including our working capital requirements, and to make the required principal and interest payments on our indebtedness during the next 12 months. Cash Flows Year ended December 31, 2014 compared to the year ended December 31, 2015 The following table summarizes our net cash flows from operating, investing and financing activities for the periods indicated: Year ended December 31, 2014 2015 (in thousands of U.S. dollars) Net cash provided by operating activities . . . . . . . . . . . . . Net cash used in investing activities. . . . . . . . . . . . . . . . . . . Net cash provided by financing activities. . . . . . . . . . . . . . $ 148,288 (1,386,656) 1,346,762 $ 161,579 (704,052) 634,317 Net Cash Provided By Operating Activities Net cash provided by operating activities increased by $13.29 million, from $148.29 million during the year ended December 31, 2014, to $161.58 million during the year ended December 31, 67 2015. The increase was due to an increase of $85.69 million in revenue collections, a decrease of $1.41 million in realized losses on interest rate swaps held for trading and a decrease in cash from ship management creditors amounting to $9.10 million, partially offset by an increase of $46.88 million in payments for general and administrative expenses, operating expenses and inventories, an increase of $14.91 million in cash paid for interest and an increase of $21.12 million in cash collaterals. Net Cash Used In Investing Activities Net cash used in investing activities decreased by $682.61 million, from $1,386.66 million during the year ended December 31, 2014, to $704.05 million during the year ended December 31, 2015. The decrease is mainly attributable to a $637.16 million decrease in payments for the construction costs of newbuildings and the acquisition of second-hand vessels, the net decrease in payments for short-term investments of $46.02 million and a $0.71 million increase in dividends received from Egypt LNG, partially offset by an increase of $1.32 million in payments for other tangible assets relating mainly to depot spares. Net Cash Provided By Financing Activities Net cash provided by financing activities decreased by $712.44 million, from $1,346.76 million during the year ended December 31, 2014, to $634.32 million during the year ended December 31, 2015. The decrease is mainly attributable to a decrease of $874.47 million in proceeds from our borrowings, a decrease of $349.07 million in proceeds from equity offerings (in 2014, we received net proceeds of $310.24 million from the public offerings and private placement completed in January and April 2014 and $323.09 million from GasLog Partners’ initial public offering; in 2015, we received net proceeds of $111.38 million from the preferred stock issuance and $172.88 million from GasLog Partners’ public offering), an increase in restricted cash of $17.07 million, an increase of $37.39 million in dividend payments, an increase in payments of loan issuance costs of $3.47 million partially offset by a decrease in bank loan repayments of $553.24 million, a $13.22 million decrease in payments of treasury shares and a decrease of $2.84 million in payments of equity raising costs. Year ended December 31, 2013 compared to the year ended December 31, 2014 The following table summarizes our net cash flows from operating, investing and financing activities for the periods indicated: Net cash provided by operating activities . . . . . Net cash used in investing activities . . . . . . . . . . Net cash provided by financing activities. . . . . . $ 86,745 (935,516) 840,481 $ 148,288 (1,386,656) 1,346,762 Year ended December 31, 2013 2014 (in thousands of U.S. dollars) Net Cash Provided By Operating Activities Net cash provided by operating activities increased by $61.54 million, from $86.75 million during the year ended December 31, 2013, to $148.29 million in the year ended December 31, 2014. The increase was due to an increase of $173.82 million in revenue collections, partially offset by unfavorable changes in cash from ship management creditors amounting to $14.16 million, an increase of $46.15 million in payments for general and administrative expenses, operating expenses and inventories, an increase of $42.42 million in cash paid for interest including the payment of $4.63 million for the termination of the swap contracts related to the GasLog Shanghai, the GasLog Santiago and the GasLog Sydney facilities and $4.78 million premium paid to enter into the three CCSs, an increase of $4.58 million in realized losses on interest rate swaps held for trading and an increase of $4.97 million in movement in cash collaterals. 68 Net Cash Used In Investing Activities Net cash used in investing activities increased by $451.14 million, from $935.52 million during the year ended December 31, 2013, to $1,386.66 million during the year ended December 31, 2014. The increase is mainly attributable to a $324.56 million increase in payments for the construction costs of newbuildings and the acquisition of second-hand vessels, an increase of $1.57 million in payments for other fixed assets, the net increase in payments for short-term investments of $123.68 million, the $1.03 million decrease in dividends and return of capital received from Egypt LNG and a decrease of $0.30 million in interest income received. Net Cash Provided By Financing Activities Net cash provided by financing activities increased by $506.28 million, from $840.48 million in the year ended December 31, 2013, to $1,346.76 million in the year ended December 31, 2014. The increase is mainly attributable to an increase of $454.27 million in proceeds from our borrowings, the net proceeds of $309.15 million from the public offerings and private placement in January and April 2014, the net proceeds of $319.50 million from the GasLog Partners’ IPO and follow-on public offering, partially offset by an increase of $514.29 million in bank loan repayments, an increase of $22.83 million in restricted cash, $12.95 million payments for treasury shares, $18.85 million increase in dividend payments and $7.72 million increase in payment of loan issuance costs. Credit Facilities The following summarizes certain terms of the twelve outstanding facilities as of December 31, 2015: Lender(s) Subsidiary Party (Collateral Ship) Danish Ship Finance A/S GAS-one Ltd. (GasLog Savannah) Outstanding Principal Amount $119.65 million DNB Bank ASA, UBS AG, National Bank of Greece S.A., Commonwealth Bank of Australia and Skandinaviska Enskilda Banken AB (publ) Nordea Bank Finland Plc, London Branch, ABN AMRO Bank N.V. and Citibank International Plc, London Branch Credit Suisse AG GAS-two Ltd. (GasLog Singapore) Term loan: $85.00 million. Revolving facility: $42.18 million GAS-six Ltd. (GasLog Skagen) $120.17 million GAS-seven Ltd. (GasLog Seattle) $128.00 million $410.88 million DnB Bank ASA, Commonwealth Bank of Australia, Danish Ship Finance A/S, ING Bank N.V. and Skandinaviska Enskilda Banken AB (publ) GAS-eight Ltd. and GAS-nine Ltd.GAS-ten Ltd. (Solaris, GasLog Saratoga, GasLog Salem) Remaining Payment Installments as of December 31, 2014 18 consecutive quarterly installments in the amount of $2.06 million each, plus a balloon payment in the amount of $82.52 million due in May 2020. Term loan: 10 consecutive quarterly installments in the amount of $2.50 million each, plus a balloon payment in the amount of $60.00 million due in May 2018. Revolving facility: It is available for drawing on a fully revolving basis in minimum amounts of $5.00 million until three months prior to the maturity date in May 2018. Total revolving facility of $50.00 million. 15 consecutive quarterly installments of $2.04 million each, plus a balloon payment of $89.62 million concurrently with the last installment in 2019. 20 consecutive quarterly installments of $2.00 million, with a balloon payment of $88.00 million due with the last installment in 2020. 22 consecutive quarterly installments of $1.99 million, 24 consecutive quarterly installments of $2.03 million and 26 consecutive quarterly installments of $2.03 million with balloon payments of $87.28 million, $89.16 million and $89.16 million, respectively, due with the last installment under each tranche. Interest Rate Maturity 2020 2018 2019 2020 2021 2022 LIBOR + applicable margin LIBOR + applicable margin LIBOR + applicable margin LIBOR + applicable margin LIBOR + applicable margin 69 Subsidiary Party (Collateral Ship) GAS-fifteen Ltd. (GasLog Chelsea) Outstanding Principal Amount $86.66 million $108.50 million $305.50 million Interest Rate Maturity LIBOR + applicable margin LIBOR + applicable margin LIBOR + applicable margin 2018 2016 2016 Remaining Payment Installments as of December 31, 2014 6 semi-annual installments of $3.34 million, with a balloon payment of $66.65 million due with the last installment in 2018. Balloon payment of $108.50 million due in 2016 without intermediate payments.(1) Balloon payment of $305.50 million due in 2016 without intermediate payments.(1) $325.0 million LIBOR + applicable margin 2017 Balloon payment of $325.0 million due in March 2017 without intermediate payments.(1) $135.0 million LIBOR + applicable margin 2017 4 consecutive quarterly installments of $33.75 million, beginning June 2016 (i.e. 15 months after the signing date). $427.50 million LIBOR + applicable margin 2019 16 consecutive quarterly installments of $5.63 million and a balloon payment of $337.5 million together with the final quarterly payment. Lender(s) Citibank N.A., London Branch, Citibank International Plc. and DVB America N.V. Citibank, N.A. London Branch Citibank, N.A. London Branch (“GasLog Partners Assumed Facility”) ABN Amro Bank N.V., Commonwealth Bank of Australia, Credit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgescha¨ ft, DNB Bank ASA, London Branch and ING Bank N.V., London Branch ABN Amro Bank N.V., Credit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgescha¨ ft and DNB Bank ASA, London Branch Citibank, N.A., London Branch, Nordea Bank Finland plc, London Branch, DVB Bank America N.V., ABN Amro Bank N.V., Skandinaviska Enskilda Banken AB (publ), BNP Paribas (GasLog Partners Credit Facility) GAS-eighteen Ltd. (Methane Lydon Volney) GAS-nineteen Ltd. (Methane Alison Victoria) GAS- twenty Ltd. (Methane Shirley Elizabeth) GAS- twenty one Ltd. (Methane Heather Sally) GAS-twenty six Ltd. (Methane Julia Louise) and GAS- twenty seven Ltd. (Methane Becki Anne) GAS-twenty six Ltd. (Methane Julia Louise) and GAS- twenty seven Ltd. (Methane Becki Anne) GAS-three Ltd. (GasLog Shanghai), GAS-four Ltd.(GasLog Santiago), GAS-five Ltd. (GasLog Sydney), GAS- sixteen Ltd. (Methane Rita Andrea), GAS- seventeen Ltd. (Methane Jane Elizabeth) (1) On February 18, 2016, we entered into a $576.50 million refinancing with certain financial institutions (see details below), to refinance $464.63 million of our current debt plus $111.87 million of our non-current debt. In addition, on October 16, 2015, GasLog entered into a debt financing agreement with 14 international banks for $1.3 billion to partially finance the delivery of our eight newbuildings expected to be delivered in 2016, 2018 and 2019. The final commitments were more than two times oversubscribed from a combination of new and existing lending institutions. The financing is backed by the Export Import Bank of Korea and the Korea Trade Insurance Corporation, who are either directly lending or providing cover for over 60.0% of the facility. The loan agreement provides for four tranches of $412.46 million, $201.09 million, $206.12 million and $491.69 million. The facility will be also sub-divided into eight loans, one loan per newbuilding vessel, to be provided for each of the vessels on a pro rata basis under each of the four tranches. Each drawing under the first three tranches shall be repaid in 24 consecutive semi-annual equal installments commencing six months after the actual delivery of the relevant vessel according to a 12-year profile. Each drawing under 70 the fourth tranche shall be repaid in 20 consecutive semi-annual equal installments commencing six months after the actual delivery of the relevant vessel according to a 20-year profile, with a balloon payment together with the final installment. Amounts drawn will bear interest at LIBOR plus a margin. On February 18, 2016, GasLog entered into the Five Vessel Refinancing for debt maturities which were due in 2016 and 2017. It is comprised of a five-year senior tranche facility of up to $396.50 million and a two-year bullet junior tranche of up to $180.0 million. The vessels covered by the Five Vessel Refinancing are the GasLog-owned Methane Lydon Volney and Methane Becki Anne and the GasLog Partners-owned Methane Alison Victoria, Methane Shirley Elisabeth and Methane Heather Sally. ABN AMRO Bank N.V. and DNB (UK) Ltd. were mandated lead arrangers to the transaction. The other banks in the syndicate are: DVB Bank America N.V., Commonwealth Bank of Australia, ING Bank N.V., London Branch, Credit Agricole Corporate and Investment Bank and National Australia Bank Limited. The senior tranche facility provides for four advances of $72.50 million each and a fifth advance of $106.50 million. Each advance under the senior tranche shall be repaid in 20 quarterly equal installments commencing three months after the relevant drawdown dates for the first four advances and 12 months after the relevant drawdown date for the fifth advance, with a balloon payment together with the final installment. The junior tranche facility provides for four advances of $30.0 million each and a fifth advance of $60.0 million. Each advance under the junior tranche shall be repaid in full 24 months after the relevant drawdown dates. Amounts drawn will bear interest at LIBOR plus a margin (variable margin for the junior tranche). As of March 11, 2016, no amount was drawn under the Five Vessel Refinancing. Our credit facilities are, and in the case of the undrawn facilities, will be secured as follows: • first priority mortgages over the ships owned by the respective borrowers; • guarantees from us and our subsidiary GasLog Carriers Ltd., in the case of the GasLog Partners Credit Facility guarantees from GasLog Partners and GasLog Partners Holdings LLC, in the case of the GasLog Partners Assumed Facility, guarantees from us, GasLog Partners and GasLog Partners Holdings LLC, and in the case of the Five Vessel Refinancing, guarantees from us, GasLog Partners, GasLog Carriers Ltd. and GasLog Partners Holdings LLC; • for certain of our facilities, a pledge or a negative pledge of the share capital of the respective borrower; and • for certain of our facilities, a first priority assignment of all earnings and insurance related to the ship owned by the respective borrower. Our business is not subject to seasonal borrowing requirements. Covenants and Events of Default General Our credit facilities impose certain operating and financial restrictions on us. These restrictions generally limit our subsidiaries’ ability to, among other things: • incur additional indebtedness, create liens or provide guarantees; • provide any form of credit or financial assistance to, or enter into any non-arms’ length transactions with, us or any of our affiliates; • sell or otherwise dispose of assets, including our ships; • engage in merger transactions; • enter into, terminate or amend any charter; • amend our shipbuilding contracts; • change the manager of our ships; • undergo a change in ownership; or 71 • acquire assets, make investments or enter into any joint venture arrangements outside of the ordinary course of business. Our credit facilities (with the exception of the GasLog Partners Credit Facility) also impose specified financial covenants that apply to us and our subsidiaries on a consolidated basis. These financial covenants include the following: • our net working capital (excluding the current portion of long-term debt) must be not less than $0; • our total indebtedness divided by our total assets must not exceed 75.0%; • the ratio of EBITDA over our debt service obligations (including interest and debt repayments) on a trailing 12 months basis must be not less than 110.0%; • the aggregate amount of all unencumbered cash and cash equivalents must be not less than the higher of 3.0% of our total indebtedness and $20.0 million after the first drawdown ($50.0 million under the October 2015 Facility and the Five Vessel Refinancing); • we are permitted to pay dividends, provided that we hold unencumbered cash and cash equivalents equal to at least 4.0% of our total indebtedness, subject to no event of default having occurred or occurring as a consequence of the payment of such dividends; and • our market value adjusted net worth must at all times be not less than $350.0 million. Our credit facilities also impose certain restrictions relating to us and our other subsidiaries, including restrictions that limit our ability to make any substantial change in the nature of our business or to engage in transactions that would constitute a change of control, as defined in the relevant credit facility, without repaying all of our indebtedness in full, or to allow our largest shareholders to reduce their shareholding in us below specified thresholds. Certain of our credit facilities also contain vessel employment conditions, pursuant to which we could be required in the event of a charter termination or in certain other circumstances to deposit cash in an account held with the applicable lender until we have obtained a new time charter on terms acceptable to such lender, or under certain of our credit facilities repay the outstanding loan amount. As of December 31, 2015, in connection with the delivery of the GasLog Saratoga and the GasLog Salem, $21.0 million per vessel has been deposited in a blocked account which amount is presented under restricted cash because the spot charters that the vessels enter into from time to time are not considered approved charters by the lenders. In addition, as of December 31, 2015, $20.0 million and $0.7 million has been presented under restricted cash pursuant to the credit facilities used to finance the GasLog Savannah and the GasLog Singapore. This requirement was triggered (a) for GasLog Savannah because the vessel’s new charter party is not considered an approved charter by the lenders and (b) for GasLog Singapore because the vessel’s charterer has not exercised its option to extend its time charter within 12 months of the charter’s scheduled termination date. On February 25, 2016, a supplemental deed was signed with the lenders of the GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd. loan facility, permitting GasLog to withdraw the $21.0 million maintained in blocked accounts for each of GAS-nine Ltd. and GAS-ten Ltd., the entities which own the GasLog Saratoga and the GasLog Salem, respectively, provided GasLog has provided an executed guarantee or letter of credit with a minimum duration of six months. In connection to this, on February 26, 2016, GasLog entered into two bank guarantees, issued by BNP Paribas S.A. for GAS-nine Ltd. and GAS-ten Ltd. of $21.0 million each. The bank guarantees bear interest at a margin and are available for a period of up to two years. Consequently, $42.0 million was reclassified from restricted cash to cash and cash equivalents. Our credit facilities contain customary events of default, including nonpayment of principal or interest, breach of covenants or material inaccuracy of representations, default under other material indebtedness and bankruptcy, as well as, in certain facilities, default in the event of the cancellation, rescission, frustration or withdrawal of a charter agreement prior to its scheduled expiration. In addition, our credit facilities contain covenants requiring us and certain of our subsidiaries to maintain the aggregate of (i) the market value, on a charter exclusive basis, of the mortgaged vessel 72 or vessels and (ii) the market value of any additional security provided to the lenders, not less than 120.0% (in the case of the October 2015 Facility, 115.0% for the first two years after each drawdown and 120.0% at any time thereafter and in the case of the Five Vessel Refinancing, 115.0% until the maturity of the junior tranche and 120.0% at any time thereafter) of the then outstanding amount under the applicable facility and any related swap exposure. If we fail to comply with these covenants and are not able to obtain covenant waivers or modifications, our lenders could require us to make prepayments or provide additional collateral sufficient to bring us into compliance with such covenants, and if we fail to do so our lenders could accelerate our indebtedness. Compliance with the financial covenants is required on a semi-annual basis and we were in compliance as of December 31, 2015. GasLog Partners Credit Facility and the Five Vessel Refinancing The GasLog Partners Credit Facility and the Five Vessel Refinancing are subject to specified financial covenants that apply to us on GasLog Partners’ consolidated basis. These financial covenants include the following: • the aggregate amount of all unencumbered cash and cash equivalents must be not less than the higher of 3.0% of total indebtedness or $15.0 million; • total indebtedness divided by total assets must be less than 60.0%; • the ratio of EBITDA over debt service obligations (including interest and debt repayments) on a trailing 12 months basis must be not less than 110.0%; and • the Partnership is permitted to declare or pay any dividends or distributions, subject to no event of default having occurred or occurring as a consequence of the payment of such dividends or distributions. The GasLog Partners Credit Facility contains customary events of default, including nonpayment of principal or interest, breach of covenants or material inaccuracy of representations, default under other material indebtedness and bankruptcy as well as an event of default in the event of the cancellation, rescission, frustration or withdrawal of a charter agreement prior to its scheduled expiration. In addition, the GasLog Partners Credit Facility contains covenants requiring us and certain of our subsidiaries to maintain the aggregate of (i) the market value, on a charter exclusive basis, of the mortgaged vessel or vessels and (ii) the market value of any additional security provided to the lenders, not less than 120.0% of the then outstanding amount under the applicable facility and any related swap exposure. If GasLog Partners fails to comply with these covenants and is not able to obtain covenant waivers or modifications, its lenders could require it to make prepayments or provide additional collateral sufficient to bring it into compliance with such covenants, and if it fails to do so its lenders could accelerate our indebtedness. The GasLog Partners Credit Facility and the Five Vessel Refinancing also impose certain restrictions relating to the Partnership, including restrictions that limit its ability to make any substantial change in the nature of its business or to the corporate structure without approval from the lenders. Compliance with the financial covenants is required on a semi-annual basis. GasLog Partners was in compliance with the respective financial covenants as of December 31, 2015. Senior Unsecured Notes On June 27, 2013, we issued the NOK 500 million Bond (or $83.21 million based on the exchange rate on June 27, 2013) that will mature on June 27, 2018. On May 2, 2014, we closed a follow-on issue of the Bond of NOK 500.00 million (or $83.61 million based on the exchange rate on closing date) at a premium of $4.18 million (based on the exchange rate on closing date). The total outstanding balance of the Bond, including the follow-on issue amounts to NOK 1 billion. The Bond bears interest at NIBOR plus margin. Interest payments shall be made in arrears on a quarterly basis. The carrying amount of the Bond, net of unamortized financing costs, as of December 31, 73 2014 is $132.69 million. We may redeem the Bond in whole or in part as follows: (a) with settlement date at any time from June 27, 2016 to but not including June 27, 2017 at 105.0% of par plus accrued interests on redeemed amount, (b) with settlement date at any time from June 27, 2017 to but not including December 27, 2017 at 103.0% of par plus accrued interests on redeemed amount, and (c) with settlement date at any time from December 27, 2017 to but not including the maturity date at 101.75% of par plus accrued interests on redeemed amount. As issuer of the Bond we are required to comply with the financial covenants listed below: • total indebtedness divided by total assets must not exceed 75.0%; • the ratio of EBITDA over debt service obligations (including interest and debt repayments) on a trailing 12 months basis must be not less than 115.0%; • the aggregate amount of all unencumbered cash and cash equivalents must exceed the higher of 3.0% of total indebtedness and $20.0 million after the first drawdown; and • the Group’s market value adjusted net worth must at all times be not less than $350.0 million. In addition, we are not permitted to (i) declare or make any dividend payment or distribution, whether in cash or in kind, (ii) repurchase any of our shares or undertake other similar transactions (including, but not limited to, total return swaps related to our shares), or (iii) grant any loans or make other distributions or transactions constituting a transfer of value to our shareholders (items (i), (ii) and (iii) collectively referred to as the “Distributions”) that in aggregate exceed during any calendar year 50.0% of our consolidated net profit after taxes based on the audited annual accounts for the previous financial year (any unutilized portion of the permitted dividend pursuant to the above may not be carried forward). In the amendment to the Bond Agreement signed in November 2014, certain covenants were revised in order to reflect our growth and the anticipated growth of GasLog Partners. Under the amended agreement, (a) notwithstanding the restriction on Distributions described above, we are permitted to make Distributions up to an aggregate maximum per share, for the years 2015, 2016, 2017 and 2018 of $1.00/share, $1.10/share, $1.20/share and $1.30/share, respectively, provided that total indebtedness divided by total assets (giving pro forma effect for the Distribution) does not exceed 67.5% immediately after the Distribution is made, the ratio of EBITDA over debt service obligations on a trailing 12 months basis ending the quarter immediately prior to that in which the Distribution is made is not less than 115.0% and no event of default would result from such Distribution, (b) the amount of debt or committed debt availability that we provide to GasLog Partners cannot exceed $75.0 million and (c) we agreed to pay a one-time fee of 1.0% of the face value of the Bond. Compliance with the Bond covenants is required at all times and we were in compliance as of December 31, 2015. Quantitative and Qualitative Disclosures About Market Risk For information about our exposure to market risks, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk”. Capital Expenditures We make capital expenditures from time to time in connection with the expansion and operation of our owned fleet. In 2010 we took delivery of two LNG carriers, in 2013 we took delivery of six LNG carriers and acquired a secondhand vessel in 2014 we took delivery of two LNG carriers and acquired six secondhand vessels and in 2015 we acquired two secondhand vessels and took delivery of one LNG carrier. During the years ended December 31, 2015, 2014 and 2013, we funded $0.73 billion, $1.36 billion and $1.04 billion, respectively, of construction and delivery costs, including installment payments on newbuildings, with funds borrowed under credit facilities and the Bond, capital contributions from our pre-IPO shareholders, proceeds from our IPO and the GasLog Partners’ IPO and proceeds from follow-on equity offerings and private placements. As of December 31, 2015, our commitments for capital expenditures related to the eight contracted LNG carriers on order. The outstanding commitment for our eight newbuildings on order 74 as of December 31, 2015 was approximately $1.45 billion. Amounts are payable under each shipbuilding contract in installments upon the attainment of certain specified milestones in each ship’s construction, with the largest portion of the purchase price for each ship coming due upon its delivery. We intend to fund these commitments with borrowings under the senior secured credit facility we have entered into with an aggregate undrawn amount of $1,311.36 million on October 16, 2015, available cash and cash from operations. In the event we decide to exercise our options to order up to six additional ships from Samsung, we expect to finance the costs with cash from operations and a combination of debt and equity financing. To the extent that we are unable to draw down the amounts committed under our credit facilities, we will need to find alternative financing. If we are unable to find alternative financing, we will not be capable of funding all of our commitments for capital expenditures relating to our contracted newbuildings and secondhand vessels, which could adversely impact our ability to pay dividends to our shareholders, and materially adversely affect our results of operations and financial condition. Critical Accounting Policies The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with IFRS as issued by the IASB. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions. Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions. We have described below what we believe are our most critical accounting policies, because they generally involve a comparatively higher degree of judgment in their application. For a description of all our principal accounting policies, see Note 2 to our consolidated financial statements included elsewhere in this annual report. Ship Cost, Lives and Residual Value When determining ship cost, we recognize both the installment payments paid to the shipyard along with any directly attributable costs of bringing the ships to their working condition incurred during the construction periods as ship costs. Directly attributable costs incurred during the ship construction period consist of capitalized borrowing costs, commissions, on-site supervision costs, costs for sea trials, certain spare parts and equipment, lubricants and other ship delivery expenses. Any vendor discounts are deducted from the cost of our ships. Subsequent expenditures for conversions and major improvements are also capitalized when the recognition criteria are met. The ship cost component is depreciated on a straight-line basis over the expected useful life of each ship, based on the cost of the ship less its estimated residual value. We estimate the useful lives of our ships to be 35 years from the date of delivery from the shipyard, which we believe is within industry standards and represents the most reasonable useful life for each of our ships. Management estimated residual value of its vessels to be equal to the product of its LWT and an estimated scrap rate per LWT. Effective October 1, 2015, following management’s annual reassessment, the estimated scrap rate per LWT was decreased. This change in estimate increased depreciation expense by $0.14 million for the year ended December 31, 2015 and is expected to increase the future annual depreciation by $0.58 million. The estimated residual value of our ships may not represent the fair market value at any one time partly because market prices of scrap values tend to fluctuate. We might revise our estimate of the residual values of our ships in the future in response to changing market conditions. An increase in the estimated useful lives of our ships or in their residual value would have the effect of decreasing the annual depreciation charge and extending it into later periods. A decrease in 75 the useful life of our ships or their residual value would have the effect of increasing the annual depreciation charge and possibly resulting in an impairment charge. When we are faced with regulations that place significant limitations on the ability of any of our ships to trade on a worldwide basis, we adjust the ship’s useful life to end at the date such regulations become effective. We must periodically drydock each of our ships for inspection, repairs and any modifications to comply with industry certification or governmental requirements. All our ships are required to be drydocked for these inspections at least once every five years. At the time of delivery of a ship, we estimate the drydocking component of the cost of the ship, which represents the estimated cost of the ship’s first drydocking based on our historical experience with similar types of ships. The drydocking component of the ship’s cost is depreciated over five years, in case of new ships, and until the next drydocking for secondhand ships unless we intend to drydock the ships at an earlier date. In the event a ship is drydocked at an earlier date, the unamortized drydocking component is written off immediately. We use judgment when estimating the period between drydockings performed, which can result in adjustments to the estimated amortization of the drydocking expense. If a ship is disposed of before its next drydocking, the remaining balance of the deferred drydock is written off and forms part of the gain or loss recognized upon disposal of ships in the period of disposal. We expect that our ships will be required to be drydocked approximately 60 months after their delivery from the shipyard and thereafter every 60 months our ships will be required to undergo special or intermediate surveys and be drydocked for major repairs and maintenance that cannot be performed while the ships are operating. We amortize our estimated drydocking expenses for the first special survey over five years, in case of new ships, and until the next drydocking for secondhand ships, unless management intends to drydock the vessels earlier as circumstances arise. Costs that will be capitalized as part of the future drydockings will include a variety of costs incurred directly attributable to the drydock and costs incurred to meet classification and regulatory requirements, as well as expenses related to the dock preparation and port expenses at the drydock shipyard, general shipyard expenses, expenses related to hull, external surfaces and decks, expenses related to machinery and engines of the vessel, as well as expenses related to the testing and correction of findings related to safety equipment on board. Drydocking costs do not include vessel operating expenses such as replacement parts, crew expenses, provisions, lubricants consumption, insurance, management fees or management costs during the drydocking period. Expenses related to regular maintenance and repairs of our vessels are expensed as incurred, even if such maintenance and repair occurs during the same time period as our drydocking. Ordinary maintenance and repairs that do not extend the useful life of the asset are expensed as incurred. Impairment of Vessels At the end of each reporting period we perform an assessment of whether there is any indication that our vessels may be impaired by considering both internal and external sources of information. If any such indication exists, the recoverable amount of vessels is estimated in order to determine the extent of the impairment loss, if any. Recoverable amount is the higher of fair value less costs to sell and value in use. The table below sets forth in U.S. dollars (i) the historical acquisition cost of our vessels and (ii) the carrying value of each of our vessels as of December 31, 2014 and December 31, 2015. 76 Vessel Acquisition Date GasLog Savannah(5) . . . . . . . . . . . May 2010 GasLog Singapore(5) . . . . . . . . . . . July 2010 GasLog Shanghai . . . . . . . . . . . . . . January 2013 GasLog Santiago . . . . . . . . . . . . . . March 2013 GasLog Sydney . . . . . . . . . . . . . . . . May 2013 GasLog Skagen . . . . . . . . . . . . . . . . July 2013 GasLog Chelsea(2) . . . . . . . . . . . . . October 2013 GasLog Seattle. . . . . . . . . . . . . . . . . December 2013 Methane Rita Andrea(3)(5) . . . . . . April 2014 Methane Jane Elizabeth(3)(5) . . . . April 2014 Methane Lydon Volney(3)(5) . . . . April 2014 Methane Alison Victoria(4)(5) . . . June 2014 Methane Shirley Elisabeth(4)(5) . . June 2014 Methane Heather Sally(4)(5) . . . . . June 2014 Solaris . . . . . . . . . . . . . . . . . . . . . . . . . June 2014 GasLog Saratoga . . . . . . . . . . . . . . December 2014 Methane Julia Louise(2)(5) . . . . . . March 2015 Methane Becki Anne(2)(5) . . . . . . . March 2015 GasLog Salem . . . . . . . . . . . . . . . . . April 2015 Total . . . . . . . . . . . . . . . . . . . . . . . . . . Cargo capacity (cbm) Acquisition cost Carrying values(1) (in thousands of U.S. dollars) December 31, December 31, 2015 2014 155,000 155,000 155,000 155,000 155,000 155,000 153,600 155,000 145,000 145,000 145,000 145,000 145,000 145,000 155,000 155,000 170,000 170,000 155,000 $ 229,795 227,252 189,233 189,111 195,429 195,338 162,338 201,198 156,613 156,613 156,613 156,610 156,599 156,599 201,849 204,146 232,334 232,334 204,343 $ 200,743 199,398 178,962 179,659 186,671 187,420 156,031 195,161 152,367 152,339 154,731 153,395 153,493 153,684 198,768 203,695 — — — $ 196,788 195,644 173,661 174,361 181,194 181,949 154,383 189,521 146,707 146,743 149,226 149,966 150,387 150,468 193,235 198,112 228,959 229,017 200,403 $3,604,347 $2,806,517 $3,390,724 (1) Our vessels are stated at carrying values (see Note 6 to our consolidated financial statements included elsewhere in this annual report). For the years ended December 31, 2014 and December 31, 2015, no impairment was recorded. However, as described below, the value in use for each of these ten vessels was higher than the carrying amount of these vessels and consequently, no impairment loss was recognized. (2) The vessel was built in 2010. (3) The vessels were built in 2006. (4) The vessels were built in 2007. (5) Indicates vessels for which we believe, as of December 31, 2015, the basic charter-free market value is lower than the vessel’s carrying value. We believe that the aggregate carrying value of these vessels exceeds their aggregate basic charter- free market value by $220.91 million, as of December 31, 2015. However, as described below, the value in use for each of the ten vessels was higher than the carrying amount of these vessels and consequently, no impairment loss was recognized. Except where indicated, the market value of each vessel individually, and all vessels in the aggregate, exceeds the carrying value of that vessel, and all vessels in the aggregate, as of December 31, 2014 and December 31, 2015. 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 approximate market values for our vessels that have been received from shipbrokers, which are also commonly used and accepted by our lenders for determining compliance with the relevant covenants in our credit facilities. Vessel values can be highly volatile, so that our estimates may not be indicative of the current or future basic market value of our vessels or prices that we could achieve if we were to sell them. As of December 31, 2015, for the ten vessels with carrying amounts higher than the estimated charter-free market value we concluded that events and circumstances triggered the existence of potential impairment of these vessels. As a result, the Group performed the impairment assessment of the Group’s vessels by comparing the discounted projected net operating cash flows for these vessels to their carrying value. The significant factors and assumptions the Group used in its discounted projected net operating cash flow analysis included, among others, operating revenues, off-hire revenues, drydocking costs, operating expenses, management fees estimates and the discount rate. Revenue assumptions were based on contracted time charter rates up to the end of life of the 77 current contract of each vessel as well as the estimated average time charter equivalent rates for the remaining life of the vessel after the completion of its current contract. The estimated daily time charter equivalent rates used for non-contracted revenue days are based on a combination of (i) recent charter market rates, (ii) conditions existing in the LNG market as of December 31, 2015, (iii) historical average time charter rates, based on publications by independent third party maritime research services, and (iv) estimated future time charter rates, based on publications by independent third party maritime research services that provide such forecasts. Recognizing that the LNG industry is cyclical and subject to significant volatility based on factors beyond our control, management believes the use of revenue estimates, based on the combination of factors (i) to (iv) above, to be reasonable as of the reporting date. In addition, the Group used an annual operating expenses escalation factor and estimates of scheduled and unscheduled off-hire revenues based on historical experience. All estimates used and assumptions made were in accordance with the Group’s internal budgets and historical experience of the shipping industry. The value in use for the ten vessels calculated as per above was higher than the carrying amount of these vessels and consequently, no impairment loss was recognized. In connection with the impairment testing of our vessels as of December 31, 2015, for the ten vessels with carrying amounts higher than the estimated charter-free market value, we performed a sensitivity analysis on the most sensitive and/or subjective assumption that has the potential to affect the outcome of the impairment exercise, the projected charter hire rate used to forecast future cash flows for non-contracted days. The following table summarizes the average results of the sensitivity analysis that we performed. Average charter party rate used $66,693 Average break even charter party rate $58,551 Variance (Amount) $8,143 Variance (%) 12% Fair Value of Derivative Financial Instruments Our risk management policies permit the use of derivative financial instruments to manage interest rate risk and foreign exchange risk. Changes in fair value of derivative financial instruments that are not designated as cash flow hedges for accounting purposes are recognized in the consolidated profit or loss. A substantial majority of the fair value of our derivative instruments and the change in fair value of our derivative instruments from period to period result from our use of interest rate swap agreements. The fair value of our interest rate swap agreements is the estimated amount that we would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates and the current credit worthiness of both us and the swap counterparties. The estimated amount is the present value of estimated future cash flows, being equal to the difference between the benchmark interest rate and the fixed rate in the interest rate swap agreement, multiplied by the notional principal amount of the interest rate swap agreement at each interest reset date. The fair value of our interest rate and currency swap agreements at the end of each period are most significantly affected by the interest rate implied by market-observable data such as LIBOR yield curve, and forward foreign exchange rates. While the fair value of our interest and currency swap agreements are typically more sensitive to changes in short-term rates, significant changes in the long-term benchmark interest and foreign exchange rates also materially impact our interest and currency swap agreements. The fair value of our interest and currency swap agreements are also affected by changes in our specific credit risk and counterparties’ risk included in the discount factor. The estimate of the Group’s credit risk is based on the credit rating of other companies in the LNG industry where publicly available, the rating of the global transportation industry where the shipping industry is included and the feedback that the Group receives from its lenders as part of the margin setting for the new loan agreements. The counterparties’ credit risk is estimated either by using the credit 78 default swap rates obtained from public information or, if not available, by using the credit rating of the counterparties. The LIBOR yield curve and our specific credit risk are expected to vary over the life of the interest rate swap agreements. The larger the notional amount of the interest rate swap agreements outstanding and the longer the remaining duration of the interest rate swap agreements, the larger the impact of any variability in these factors will be on the fair value of our interest rate swaps. We economically hedge the interest rate exposure on a significant amount of our long-term debt and for long durations. As such, we have historically experienced, and we expect to continue to experience, material variations in the period-to-period fair value of our derivative instruments. Although we measure the fair value of our derivative instruments utilizing the inputs and assumptions described above, if we were to terminate the agreements at the reporting date, the amount we would pay or receive to terminate the derivative instruments may differ from our estimate of fair value. If the estimated fair value differs from the actual termination amount, an adjustment to the carrying amount of the applicable derivative asset or liability would be recognized in profit or loss for the current period. Such adjustments could be material. See Note 24 to our consolidated financial statements included elsewhere in this annual report for the effects on the change in fair value of our derivative instruments on our consolidated statements of profit or loss. Classification of the Partnership Interests The non-controlling interests in the Partnership comprise the portion of the Partnership’s common units that are not directly or indirectly held by GasLog (21,660,000 units as of December 31, 2015). Under the terms of the Partnership Agreement, the Partnership is required to distribute 100.0% of available cash (as defined in the Partnership Agreement) with respect to each quarter within 45 days of the end of the quarter to the partners. Available cash can be summarized as cash and cash equivalents less an amount equal to cash reserves established by the Partnership’s board of directors to (i) provide for the proper conduct of the business of the Partnership (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership) subsequent to such quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which any Partnership group member is a party or by which it is bound or its assets are subject and/or (iii) provide funds for certain distributions relating to future periods. In reaching a judgment as to whether the non-controlling interests in the Partnership should be classified as liabilities or equity interests, management has considered the wide discretion of the Partnership’s board of directors to determine whether any portion of the amount of cash available to the Partnership constitutes available cash and that it is possible that there could be no available cash. In the event that there is no available cash, as determined by the Partnership’s board of directors, the Partnership does not have a contractual obligation to make a distribution. Accordingly, management has concluded that the non-controlling interests do not represent a contractual obligation on the Partnership to deliver cash and therefore should be classified as equity within the financial statements. Measurement of Share-based Compensation The Group used an accepted valuation methodology to value the Stock Appreciation Rights or Stock Options. The inputs are based on observable market data and management’s estimates. Details of the valuation methodology and significant assumptions used are set out in Note 20 of the consolidated financial statements included elsewhere in this annual report. Impairment of Goodwill We review goodwill for impairment at least annually. For the purpose of impairment testing, goodwill has been allocated to the cash-generating unit representing our management company, GasLog LNG Services, which was acquired by us in 2005. 79 In order to determine whether goodwill has been impaired, we estimate the value-in-use of the cash-generating unit to which goodwill has been allocated. The value-in-use calculation requires us to estimate the future cash flows expected to arise from the cash-generating unit and also a suitable discount rate in order to calculate present value representing recoverable amount of the cash- generating unit. In determining the value-in-use of the cash-generating unit as of December 31, 2015, we used cash flow projections based on financial budgets approved by management. Growth assumptions were based on estimates and considered the number of ships expected to be under our management for which contracts were in place at the end of each year. The key assumptions used in the value-in-use calculations are as follows: • average inflation of 1.0% per annum; • a pre-tax discount rate of 11.0% per annum; • annual growth rate of 1.0%; and • 1 euro = 1.15 U.S. dollars. We assessed the recoverable amount of goodwill at the end of each annual reportable period and concluded that goodwill associated with our cash-generating unit was not impaired. We believe that any reasonably possible further change in the key assumptions on which the recoverable amount is based would not cause the carrying amount of the cash-generating unit to exceed its recoverable amount. Recent Accounting Pronouncements See Note 2 to our consolidated financial statements included elsewhere in this report. C. Research and Development, Patents and Licenses, etc. We incur from time to time expenditures relating to inspections for acquiring new vessels. Such expenditures are insignificant and are expensed as they are incurred. D. Trend Information LNG Supply The global seaborne trade of LNG cargoes was approximately 250 mtpa in 2015. This lower than expected growth came as a halt in production at Yemen partially offset startup of two terminals in Australia and one in Indonesia. Looking ahead, based on the public announcements of LNG producers, new LNG production volumes should become available in the 2016-2018 timeframe from projects in Australia, Malaysia, Cameroon and the United States. Of these countries, Australia and the United States are set to experience significant production growth and are expected to be in the top three global LNG exporters (along with Qatar) by 2020. Very large gas discoveries offshore East Africa and in Canada may drive significant future LNG exports from these regions. In 2016, we expect projects coming onstream will have approximately 40 mtpa of new liquefaction nameplate capacity (annualized) in both Australia and the U.S. In Australia, Australia Pacific Train 1 (4.5 mtpa) and Gladstone LNG (7.7 mtpa) have shipped their first cargoes in recent weeks and are expected to ramp up production to full capacity through 2016. Other Australian projects due to start up in 2016 include Gorgon (15.6 mtpa) and Australia Pacific Train 2 (4.5 mtpa), with Wheatstone (8.9 mtpa) and Prelude (3.6 mtpa) following in 2017. The infrastructure for these projects has now largely been built and the majority of the volumes for these projects have already been sold. Sabine Pass, one of five U.S. projects under construction, is expected to export its first cargo later in 2016. When construction is completed, Sabine Pass will have a total export capacity of 22.5 mtpa and will be the first U.S. project outside of Alaska to export LNG into the global market. This is a welcome development for the LNG shipping sector as it creates new suppliers, new customers and new trade routes. The majority of U.S. volumes have already been contracted. Export of LNG into the Asian and European markets should be positive for tonne mile demand. The U.S. 80 Gulf Coast to Asia voyage is approximately 9,000 nautical miles through the Panama Canal (which is not yet open to large LNG carriers). The same voyage around Cape Horn is approximately 13,000 nautical miles. From the U.S. Gulf Coast to northwest Europe, the distance is approximately 5,000 nautical miles. In 2014 and 2015, the average global LNG voyage was approximately 4,000 nautical miles, and thus any voyage in excess of this distance will increase the global average distance and the need for LNG carriers. Angola LNG (5.2 mtpa), which has been shut down for over a year for refurbishment and enhancements, is also due to restart in 2016. The seven vessels that were chartered to Angola LNG have been operating in the spot market while the plant has been closed, and are expected to be put back into service for the project in 2016. With the expected projects coming onstream, encouraging levels of tendering activity for vessels to transport increased LNG volumes is being noted. We continue to see a future shortfall of vessels that will be required for the Australian and U.S. projects that have taken final investment decision and are currently under construction. LNG Demand In 2015, Egypt, Jordan, Pakistan and Poland all imported their first LNG cargoes. In 2016, Colombia, Ghana, Malta and Uruguay are all expected to commence LNG imports. This encouraging increase in the number of importers and therefore LNG trade routes is being driven by low LNG prices, availability of supply and the fast and flexible import solution that floating storage and regasification units provide. LNG Chartering Activity The significant fall in oil prices since 2014 has led to substantial declines in the price of LNG and a lack of pricing differential between the Eastern and Western hemispheres. These factors, among others, have in turn led to a significant shortening of the average duration of spot charters fixed during 2015, as well as a significant decline in average rates for new spot and shorter-term LNG charters commencing promptly. In addition, some production companies have announced delays or cancellations of certain previously announced (but early stage) LNG projects, which, unless offset by new projects coming on stream, could adversely affect demand for LNG charters over the next few years, while the amount of tonnage available for charter is expected to increase. Approximately 247 charters of LNG vessels were fixed in 2015, compared with 218 in 2014. This significant increase in chartering activity is a positive sign for the developing LNG shipping market. Our ability to participate in any future market growth will depend on our ability to access the equity and debt markets. Global LNG Fleet As of December 31, 2015, the global fleet of dedicated LNG carriers stood at 427 ships. In 2015, 27 LNG carriers were delivered, and 17 orders were placed. This high level of ordering was driven in part by the significant developments in plans for new liquefaction projects, particularly in the United States. We believe that the development of new LNG supply projects and growing global demand for natural gas should support the existing order backlog for vessels and should also drive a need for more LNG carriers in the future. In addition, LNG project developers are typically large multinational oil and gas companies that have high standards for safety and reliability and a preference for modern LNG carriers with fuel-efficient ship design and propulsion, which should support our ability to obtain new charters over new or less experienced operators. However, various factors, including changes in prices and demand for LNG can materially affect the competitive dynamics that currently exist. The statements in this “Trend Information” section are forward-looking statements based on management’s current expectations and certain material assumptions and, accordingly, involve risk 81 and uncertainties that could cause actual results, performance and outcomes to differ materially from those expressed herein. See “Item 3. Key Information—D. Risk Factors” of this annual report. E. Off-Balance Sheet Arrangements As of December 31, 2015, we do not have any transactions, obligations or relationships that should be considered off-balance sheet arrangements. F. Tabular Disclosure of Contractual Obligations Our contractual obligations as of December 31, 2015 were: Payments Due by Period Borrowing obligations(1) . . . . . . . . . . . . . . . . . . . . Interest on borrowing obligations and swaps(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan arrangement fees and commitments . . Shipbuilding contracts . . . . . . . . . . . . . . . . . . . . . . Operating lease obligations . . . . . . . . . . . . . . . . . Purchase of depot spares(3) . . . . . . . . . . . . . . . . . Reimbursement expenses(4) . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total $2,407,774 250,620 8,872 1,451,103 6,435 7,340 3,801 Less than 1 year 1-3 years 3-5 years (Expressed in thousands of U.S. dollars) $ 645,194 $ 769,678 $703,022 78,276 4,722 720,753 1,804 — — 113,860 4,086 566,750 2,614 — — 50,463 64 163,600 1,239 5,340 3,801 More than 5 years $289,880 8,021 — — 778 2,000 — $4,135,945 $1,450,749 $1,456,988 $927,529 $300,679 (1) The table does not include obligations under the loan agreement we entered into on October 16, 2015 with 14 international banks, for $1,311.36 million. The loan agreement provides for four tranches of $412.46 million, $201.09 million, $206.12 million and $491.69 million. The facility will be also sub-divided into eight loans, one loan per newbuilding vessel, to be provided for each of the vessels on a pro rata basis under each of the four tranches. Each drawing under the first three tranches shall be repaid in 24 consecutive semi-annual equal installments commencing six months after the actual delivery of the relevant vessel according to a 12-year profile. Each drawing under the fourth tranche shall be repaid in 20 consecutive semi-annual equal installments commencing six months after the actual delivery of the relevant vessel according to a 20-year profile, with a balloon payment together with the final installment. (2) Our interest commitment on long-term debt is calculated based on an assumed average applicable interest rate ranging from 2.46% to 5.10%, which takes into account average LIBOR of 0.55%, and the applicable margin spreads in our various debt agreements and our fixed-rate interest rate swaps associated with each debt. (3) Following the acquisition of the eight vessels from MSL, GasLog through its subsidiaries is guarantor for the acquisition from MSL of depot spares with an aggregate value of $8.0 million of which depot spares with value $0.66 million have been acquired as of December 31, 2015. The remaining spares should be acquired before the end of the initial term of the charter party agreements. (4) Following execution of a letter agreement between GasLog and MSL, GasLog will reimburse MSL the sum of $2.65 million for value as of November 1, 2015, adjusted for future value through January 2020 up to $3.80 million, allowing for the future use of the reimbursement amount against the funding of specific MSL projects, such as costs associated with change orders on LNG newbuildings and or modifications of existing vessels as agreed between the parties. As of December 31, 2015, the outstanding commitment was $2.67 million. 82 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management The following table sets forth information regarding our directors and executive officers. The business address of each of our executive officers and directors listed below is Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco. Our telephone number at that address is +377 97 97 51 15. Members of our board of directors are elected annually, and each director elected holds office for a one-year term. The following directors have been determined by our board of directors to be independent: Paul J. Collins, William M. Friedrich, Dennis M. Houston, Donald J. Kintzer and Anthony S. Papadimitriou. Officers are elected from time to time by vote of our board of directors and hold office until a successor is elected. Name Age Position Peter G. Livanos . . . . . . . . . . . . . . . . . . . . . . . Paul A. Wogan. . . . . . . . . . . . . . . . . . . . . . . . . Bruce L. Blythe . . . . . . . . . . . . . . . . . . . . . . . . Paul J. Collins. . . . . . . . . . . . . . . . . . . . . . . . . . William M. Friedrich . . . . . . . . . . . . . . . . . . . Dennis M. Houston . . . . . . . . . . . . . . . . . . . . Donald J. Kintzer . . . . . . . . . . . . . . . . . . . . . . Julian R. Metherell. . . . . . . . . . . . . . . . . . . . . Anthony S. Papadimitriou . . . . . . . . . . . . . . Philip Radziwill . . . . . . . . . . . . . . . . . . . . . . . . Simon P. Crowe . . . . . . . . . . . . . . . . . . . . . . . . Graham Westgarth . . . . . . . . . . . . . . . . . . . . . 57 Chairman and Director 53 Chief Executive Officer and Director 71 Director 79 Director 67 Director 64 Director 68 Director 52 Director 60 Director 35 Director 48 Chief Financial Officer 61 Chief Operating Officer Certain biographical information about each of these individuals is set forth below. Peter G. Livanos is our Chairman and a member of our board of directors. Mr. Livanos founded our subsidiary GasLog LNG Services in 2001 and has been a director of our subsidiary GasLog Partners since the closing of its initial public offering in May 2014. He has served as our Chairman since the Company was incorporated in July 2003 and he held the role of chief executive officer (“CEO”) from January 2012 until January 2013. Mr. Livanos is the chairman and sole shareholder of Ceres Shipping, an international shipping group. He also serves as chairman of several of Ceres Shipping’s subsidiaries, including DryLog Ltd., a company engaged in dry bulk shipping investments. In 1989 Mr. Livanos formed Seachem Tankers Ltd., which in 2000 combined with Odfjell ASA (later renamed Odfjell SE). He served on the board of directors of Odfjell SE until 2008. Mr. Livanos was appointed to the board of directors of Euronav NV, an independent owner and operator of oil tankers in 2005 and served until December 2015. Between April 2009 and July 2014 he was appointed Vice-Chairman of Euronav and from July 2014 to December 2015 he served as Chairman. Mr. Livanos is a graduate of Columbia University. He is the first cousin of Philip Radziwill, a member of our board of directors. Paul A. Wogan has served as our CEO since January 2013 and has been a member of our board of directors since our annual general meeting in May 2015. From 2008 until February 2012, Mr. Wogan served as senior independent director of Clarksons PLC. From 2000 to 2008, Mr. Wogan worked for Teekay Corporation, where from November 2003 to March 2008 he served as president of Teekay Tanker Services, with responsibility for the company’s fleet of crude and product tankers. Prior to joining Teekay Corporation, Mr. Wogan served as chief executive officer of Seachem Tankers Ltd. Mr. Wogan is also a director of The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited and from 2009 to 2014 was a non-executive director of Sure Wind Marine Ltd., a company that owns and operates vessels that provide services to the offshore wind industry. Mr. Wogan is a graduate of Exeter University and has an MBA from Cranfield School of Management. Bruce L. Blythe has been a member of our board of directors since October 2011. Mr. Blythe has been involved in the shipping industry for over 20 years, having served as an advisor to the Livanos family since 1994. For over 30 years, Mr. Blythe has served as an advisor on finance and 83 strategy to the chairman and chief executive officer of Ford Motor Company and to the Ford family, and prior to his service as an advisor he was employed in various strategic and financial positions at Ford Motor Company. Mr. Blythe serves as a director of Ceres Shipping, our largest shareholder, as well as Drylog Ltd. Mr. Blythe holds an M.B.A. in finance and transportation and a B.A. in business administration from Pennsylvania State University. Paul J. Collins has been a member of our board of directors since October 2011. Mr. Collins retired as Vice Chairman and member of the Management Committee of Citigroup Inc. in September 2000. From 1985 to 1998, Mr. Collins served as a director of Citicorp and its principal subsidiary Citibank; from 1988 to 1998 he served as vice chairman of those entities. Mr. Collins currently serves as a trustee of the University of Wisconsin Foundation. He is also a member of the Advisory Board of Welsh, Carson, Anderson & Stowe, a private equity firm. He was previously a director of Kimberly-Clark Corporation, Nokia Corporation, BG Group and Enstar Group and a member of the Supervisory Board of Actis Capital LLP. Mr. Collins is a graduate of the University of Wisconsin and holds an M.B.A. from the Harvard Business School. William M. Friedrich has been a member of our board of directors since October 2011 and currently serves as our senior independent director. From 1995 until his retirement in 2008, Mr. Friedrich was employed at BG Group. Mr. Friedrich held several senior executive positions during his 14 year tenure at BG Group, including serving as executive director and deputy chief executive from 2000 until 2008, with primary responsibility for BG Group’s overall strategy function as well as oversight of the company’s business development activities and various company-wide organizational and human resource matters. Between 2000 and 2005, his position at BG Group also included the role of General Counsel. Prior to joining BG Group, Mr. Friedrich was a partner at Shearman & Sterling LLP. He holds a J.D. from Columbia Law School and a B.A. from Union College. Dennis M. Houston has been a member of our board of directors since June 2013. At the time he joined our board, Mr. Houston had approximately 40 years of experience in the downstream sector of the oil and gas industry. Mr. Houston retired from Exxon Mobil on May 31, 2010, after over 35 years with Exxon and then Exxon Mobil. His positions at retirement were Executive Vice President Refining & Supply Company, Chairman and President of ExxonMobil Sales & Supply LLC, and Chairman of Standard Tankers Bahamas Limited. Mr. Houston serves as a director of PBF Energy Inc., Argus Media Limited L.L.C. and ABS Group and is an active member of several other energy related organizations. He holds a B.S. in Chemical Engineering from the University of Illinois and an Honorary Doctorate of Public Administration Degree from Massachusetts Maritime Academy. Donald J. Kintzer has been a member of our board of directors since November 2014. He is a retired partner of PricewaterhouseCoopers LLP, or “PwC”, having retired in 2008 after an association of over 31 years. He was admitted to the partnership in 1988 and served in various roles and locations during his career. From 2005 to 2008, he was the leader (managing partner) of PwC’s West Region (U.S.) Advisory practice and a member of PwC’s national (U.S.) leadership team. Mr. Kintzer is a member of the board of directors of California Bank of Commerce and a member of the board of governors of Lawrence Livermore National Security, LLC and Los Alamos National Security, LLC. He was also a member of the board of directors of GasLog Partners and its audit committee until March 2015, and served as a member of its conflicts committee until his appointment to our board in November 2014 and as audit committee chairman until March 2015. He is a certified public accountant (inactive) and a member of the American Institute of Certified Public Accountants and the California Society of CPAs. Mr. Kintzer received an A.B. from Lafayette College and an M.B.A. from Pennsylvania State University. Prior to graduate school, Mr. Kintzer served as an officer in the United States Air Force. Mr. Kintzer was appointed chairman of our Audit & Risk Committee in March 2015. Julian R. Metherell has been a member of our board of directors since October 2011. Mr. Metherell was the chief financial officer and a director of Genel Energy plc, a leading independent oil and gas exploration and production company operating in the Kurdistan Region of Iraq. Genel Energy plc is the successor to Vallares Plc, a publicly listed acquisition company which 84 Mr. Metherell co-founded in April 2011. From 1999 to 2011, Mr. Metherell was a partner at The Goldman Sachs Group, Inc., where he served as chief executive officer of the UK investment banking division. Prior to joining Goldman Sachs, Mr. Metherell was a director in the European energy group at Dresdner Kleinwort, a London-based investment bank. Mr. Metherell is a graduate of Manchester University, where he received a B.Sc. degree, and of Cambridge University, where he received an M.B.A. Anthony S. Papadimitriou has been a member of our board of directors since November 2011, when he was designated by the Onassis Foundation to serve as one of our directors. Mr. Papadimitriou is the managing partner of the law firm A.S. Papadimitriou and Partners, a position he has held since 1990. From 1986 until 2005, Mr. Papadimitriou served as legal counsel for Olympic Shipping & Management S.A, an affiliate of the Onassis Foundation, and since 1995 he has been the coordinator of the Executive Committee of the commercial activities controlled by the Onassis Foundation. In addition, Mr. Papadimitriou has been a member of the board of directors of the Alexander S. Onassis Public Benefit Foundation since 1988, serving as the president of the board since 2005. Mr. Papadimitriou also serves as a director of Global Finance S.A., a Greek investment firm. Mr. Papadimitriou is a graduate of the Athens University Law School and holds a postgraduate degree in maritime and transport law from the University Aix-en-Provence, a B.Sc. from the London School of Economics and a Ph.D. from the National and Kapodistrian University of Athens. Mr. Papadimitriou was appointed to the Board of GasLog Partners in May 2015. Philip Radziwill has been a member of our board of directors since October 2011. Mr. Radziwill also serves as an advisor of SCP Clover Maritime, a company that manages assets and investments of the Radziwill family, including the family’s investment in the Company. From 2006 to 2009, Mr. Radziwill was employed in the equity group at Moore Capital Management LLC, a private investment management firm based in New York, where he focused on a long/short equity strategy within the energy industry. Prior to joining Moore Capital Management, Mr. Radziwill was employed as an investment banker at Goldman, Sachs & Co. within the Industrial & Natural Resources group. Mr. Radziwill is a graduate of Brown University. He is the first cousin of Peter G. Livanos, our Chairman. Simon P. Crowe has served as our chief financial officer (“CFO”) since April 2013. He has also served as CFO of our subsidiary GasLog Partners since its inception. From 2009 until 2012, Mr. Crowe was chief financial officer of Subsea 7, an engineering, construction and services contractor to the offshore energy industry. Subsea 7 is a global business, listed on the Norwegian Stock Exchange that employs 12,000 people and operates in over 15 countries. Prior to 2009, Mr. Crowe worked for Transocean Ltd., the world’s largest offshore drilling contractor, most recently as vice president, strategy and planning, and prior to that as Finance Director for Transocean Ltd.’s Europe and Africa operations. Mr. Crowe is a member of the Chartered Institute of Management Accountants. Mr. Crowe holds a degree in physics from the University of Liverpool. Graham Westgarth has served as our chief operating officer (“COO”) since June 2013. He previously served as our Executive Vice President, Operations and Strategy, from January 2013 until June 2013. He has also served as COO of our subsidiary GasLog Partners since its inception. From 1999 through 2012, Mr. Westgarth was a member of the Senior Leadership team of Teekay Shipping, most recently serving as executive vice president of innovation, technology and projects of Teekay Shipping, which included commercial and operational responsibility for a number of floating storage and offloading vessels. From 2001 to 2010, Mr. Westgarth served as president of Teekay Marine Services with responsibility for 5,000 sea and shore staff and the technical management of 200 vessels. During this period he also served as chief executive officer of Teekay Petrojarl following its acquisition by Teekay Corporation. Mr. Westgarth was the chairman of INTERTANKO, an industry organization, which represents 80.0% of the world’s independent tanker owners and operators between 2009 and 2014. He is an ex-Master Mariner and graduate of the Columbia University Senior Executive Development Program. 85 Board Leadership Structure Our board leadership structure consists of our Chairman, the senior independent director and the chairmen of our board committees. Our operational management is headed by our CEO. Mr. Wogan, as CEO, is responsible for the day-to-day operations of the Company, which includes decisions relating to the Company’s general management and control of its affairs and business and works with our board in developing our business strategy. The board of directors does not have a policy mandating that the roles of CEO and Chairman be held by separate individuals, but believes that at this time the separation of such roles is appropriate and beneficial to shareholders. William M. Friedrich, who serves as our senior independent director, acts as a liaison to facilitate communication between independent directors and our Chairman to ensure that the board functions in an effective manner. B. Compensation of Directors and Senior Management Our non-executive directors receive: • an annual fee of $120,000; • an additional annual fee of $20,000 to the senior independent director; • additional annual fees of $100,000 to the Chairman of the board, $50,000 to the chairman of the audit and risk committee and $20,000 to the chairmen of the compensation committee, corporate governance and nominating committee and HSSE committee; • additional annual fees of $25,000 to each member of the audit and risk committee and $10,000 to each member of the compensation committee, corporate governance and nominating committee and HSSE committee (in each case other than the chairmen of such committees); and • additional annual fees of $20,000 to each board member who also serves as a board member of GasLog Partners (in lieu of direct compensation from GasLog Partners for such service). The aggregate annual fees paid to non-executive directors in 2015 was $2.44 million. The board of directors may determine that a portion of the above fees will be paid in shares rather than cash. In addition, our directors receive reimbursement for their out-of-pocket expenses including travel costs. We do not have any service contracts with our directors that provide for benefits upon termination of their services. For 2015, our executive officers were Paul Wogan, Simon Crowe and Graham Westgarth. Compensation for our executive officers in 2015 consisted of base salary and employee benefits that are generally provided to employees, including eligibility to receive a cash incentive bonus pursuant to our Management Incentive Plan, or “MIP”. The MIP provides all shore-based personnel (which includes our executive officers) an opportunity to earn a cash incentive payment based on a target percentage of the participant’s annual base salary, subject to the achievement of pre-established individual and Company performance objectives, as well as a factor based on Company discretion. Each participant’s target percentage of annual base salary and the weightings assigned to the individual and Company performance objectives and the Company discretionary component are dependent on the participant’s organization (band) level. No amounts will be paid under the MIP to any participant who fails to achieve 50.0% of his or her target individual performance objectives. In 2015, the Company performance objectives were measured against three equally-weighted key business indicators: Free Cash Flow per Share, Absolute Return on Invested Capital and three-year rolling average Relative Total Shareholder Return. In addition, Company performance is evaluated against a safety factor based on Personal Safety, Significant Incidents and Leading Indicators, in which a failure to meet the safety target may result in a reduction of the Company performance payout factor. Under the individual and Company performance objectives, stretch goals are established, which, if met, can result in a payout of up to 120.0% of the individual’s target payout. The Company discretionary component may not increase an individual’s payment to more than 200.0% of his or her target payout. The amounts paid to our executive officers in 2015 pursuant to 86 the MIP were determined based on the following weightings: individual performance (30.0%), Company performance (50.0%) and Company discretion (20.0%). The aggregate amount of cash compensation, including cash incentive compensation, paid to our executive officers for the year ended December 31, 2015 was $3.69 million. In addition, each of our executive officers was eligible to receive equity-based compensation awards in accordance with the 2013 Omnibus Incentive Compensation Plan, or the “Plan”. On April 1, 2015, we granted our executive officers an aggregate of 305,859 stock options and 88,492 restricted stock units under the Plan, with an aggregate fair value as of the grant date of $3.45 million. The stock options have an exercise price per share of $19.48 and will vest in three equal annual installments, beginning on the first anniversary of the grant date, subject to the recipient’s continued service. The restricted stock units vest on the third anniversary of the grant date, subject to the recipient’s continued service. The stock options and the restricted stock units may be settled in cash or common shares, or a combination thereof, at our discretion. We generally determine during the February meeting of the board of the directors each year which individuals, if any, will be eligible to receive equity-based compensation awards under the Plan for such year and the amount of awards each participant will be eligible to receive. In addition, we intend to grant such awards on April 1 of such year (or, should April 1 of such year fall on a weekend or bank holiday, on the first business day thereafter). We did not set aside or accrue any amounts in the year ended December 31, 2015 to provide pension, retirement or similar benefits to our directors or executive officers. C. Board Practices Our board of directors consists of ten members. The board of directors may change the number of directors to not less than three, nor more than fifteen. Each director shall be elected to serve until the next annual meeting of shareholders or until his successor is elected or appointed, except in the event of removal, death, disability, disqualification or resignation. A vacancy on the board created by removal, death, disability, disqualification or resignation of a director, or as a result of an increase in the size of the board, may be filled by the shareholders or by the board of directors. We are a “foreign private issuer” under the securities laws of the United States and the rules of the NYSE. Under the securities laws of the United States, “foreign private issuers” are subject to different disclosure requirements than U.S. domiciled registrants, as well as different financial reporting requirements. Under the NYSE rules, a “foreign private issuer” is subject to less stringent corporate governance requirements. Subject to certain exceptions, the rules of the NYSE permit a “foreign private issuer” to follow its home country practice in lieu of the listing requirements of the NYSE, including (i) the requirement that a majority of the board of directors consist of independent directors, (ii) the requirement that the nominating committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities, (iii) the requirement that the compensation committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities and (iv) the requirement of an annual performance evaluation of the nominating and corporate governance and compensation committees. Five of our ten directors qualify as independent. We have one or more non-independent directors serving as committee members on our compensation committee and our corporate governance and nominating committee. As a result, non-independent directors may, among other things, participate in fixing the compensation of our management, making share and option awards and resolving governance issues regarding our Company. Accordingly, in the future you may not have the same protections afforded to shareholders of companies that are subject to all of the NYSE corporate governance requirements. 87 Committees of the Board of Directors Audit and Risk Committee Our audit and risk committee consists of Messrs. Collins, Friedrich, Houston and Kintzer with Mr. Kintzer serving as the committee chairman. Mr. Collins served as the committee chairman from November 2011 until March 2015. Our board of directors has affirmatively determined that each of these individuals meets the definition of “independent director” for purposes of serving on an audit committee under applicable SEC and NYSE rules. Mr. Collins and Mr. Kintzer each qualifies as an “audit committee financial expert”. The audit and risk committee is responsible for: • the appointment and compensation (subject to any required shareholder approval or authorization) and retention and oversight of independent auditors and determining whether any non-audit services will be performed by such auditor; • assisting the board of directors in overseeing our financial reporting process, the integrity of our financial statements, the independent auditors’ qualifications, independence and performance, the performance of our internal audit and financial risk management departments and our compliance with legal and regulatory requirements; • annually reviewing the independent auditors’ report describing the auditing firm’s internal quality-control procedures, and any material issues raised by the most recent internal quality- control review, or peer review, of the auditing firm; • discussing with management and the independent auditors, and making recommendations to our board regarding the approval of, the annual audited financial statements and any periodic financial statements; • discussing earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies, with management and the independent auditors; • discussing policies with respect to financial risk assessment and risk management and monitoring our financial risk and risk management systems; • meeting periodically and separately with management, our internal audit department and the independent auditors; • reviewing with the independent auditors any audit problems or difficulties and management’s responses; • setting clear hiring policies for employees or former employees of the independent auditors; • annually reviewing the adequacy of the audit and risk committee’s written charter; • periodically reviewing the budget, responsibilities and organizational structure of the internal audit department; • establishing procedures for the consideration of all related-party transactions, including matters involving potential conflicts of interest; • reporting regularly to the full board of directors; and • handling such other matters that are specifically delegated to the audit and risk committee by the board of directors from time to time. Compensation Committee Our compensation committee consists of Messrs. Blythe, Collins, Metherell and Radziwill, with Mr. Metherell serving as the committee chairman. The compensation committee is responsible for: • making recommendations to the full board of directors with respect to the compensation of directors, senior management, the head of internal audit and other managerial employees reporting to the CEO; • overseeing and making recommendations to the full board of directors with respect to any of the Company’s long-term incentive plans, including any equity-based compensation plans to be adopted; and 88 • handling such other matters that are specifically delegated to the compensation committee by the board of directors from time to time. Corporate Governance and Nominating Committee Our corporate governance and nominating committee consists of Messrs. Blythe, Friedrich, Livanos and Papadimitriou, with Mr. Friedrich serving as the committee chairman. The corporate governance and nominating committee is responsible for: • identifying and recommending candidates, consistent with criteria approved by the full board of directors, for nomination to be elected by shareholders at annual meetings and for approval of the board of directors to fill board vacancies as and when they arise between annual meetings, as well as putting in place short- and long-term succession plans for senior management and the CEO direct reports; • developing and recommending to the full board of directors corporate governance guidelines applicable to the Company and keeping such guidelines under review; • overseeing self-evaluations conducted by the board of directors and its committees and overseeing evaluations of senior management; and • handling such other matters that are specifically delegated to the corporate governance and nominating committee by the board of directors from time to time. Health, Safety, Security and Environmental Committee Our health, safety, security and environmental, or “HSSE”, committee consists of Messrs. Houston, Livanos and Wogan, with Mr. Houston serving as the committee chairman. The HSSE committee is responsible for: • overseeing the Company’s top-level HSSE policies (including those relating to operational risks); • reviewing the Company’s HSSE policies (including those relating to operational risks) on an annual basis and recommending changes to such policies to the Company’s management team; • based on reports from management, evaluating the effectiveness of the Company’s systems to achieve the established HSSE policies; • receiving reports from management relating to any serious accidents or fatalities and reviewing recommended actions to be taken by management in connection therewith; • overseeing whether the Company’s HSSE policies take appropriate account of internal and external developments and expectations; • evaluating and overseeing the quality of reporting systems required by third parties on HSSE related matters; and • assessing the systems within the Company for ensuring compliance with HSSE related laws, regulations and policies. Senior Independent Director Mr. Friedrich, an independent director, currently serves as our senior independent director. Our senior independent director is responsible for: • presiding at board and shareholder meetings if the Chairman of the board is absent; • meeting with the other members of the board without the Chairman present on at least an annual basis in order to evaluate and appraise the performance of the Chairman; • chairing the corporate governance and nominating committee when considering succession to the role of the Chairman of the board; • chairing meetings of our independent directors; 89 • acting as a liaison, if required, to facilitate communication between independent directors and our Chairman, Chief Executive Officer and any member of senior management; and • performing such other functions as the board may direct or request from time to time. Corporate Governance The board of directors and our Company’s management engage in an ongoing review of our corporate governance practices in order to oversee our compliance with the applicable corporate governance rules of the NYSE and the SEC. We have adopted a Code of Business Conduct and Ethics for all directors, officers, employees and agents of the Company. This document and other important information on our governance are posted on our website and may be viewed at http://www.gaslogltd.com. The information contained on or connected to our website is not a part of this annual report. We will also provide a paper copy of any of these documents upon the written request of a shareholder at no cost. Shareholders may direct their requests to the attention of our General Counsel, c/o GasLog Monaco S.A.M., Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco. D. Employees As of December 31, 2015, we had 161 full-time employees and contractors, based in our offices in Greece, Monaco, London, New York, Singapore or the newbuildings site in South Korea. In addition to our shore-based employees and contractors, we had approximately 1,214 seafaring staff serving on our owned and managed ships. These seafarers are retained through crewing agencies based in Ukraine, the Philippines and Spain or, in the case of Greek seafarers, through short-term employment contracts. As we take delivery of our newbuildings, we expect to retain a significant number of additional seafarers qualified to man and operate our new ships, as well as additional shore-based personnel. We intend to focus our seafaring hiring efforts in the Ukrainian, Philippine and Spanish markets, where we have crewing agency agreements in place, and in Greece. LNG marine transportation is a specialized area requiring technically skilled officers and personnel with specialized training. We regard attracting and retaining motivated, well-qualified seagoing and shore-based personnel as a top priority, and we offer our people competitive compensation packages. In addition, we provide intensive onboard training for our officers and crew to instill a culture of the highest operational and safety standards. As a result, we have historically enjoyed high retention rates. In 2015, our retention rate was 96.0% for senior seagoing officers, 98.0% for other officers and 96.0% for shore staff. Although we have historically experienced high employee retention rates, the demand for technically skilled officers and crews to serve on LNG carriers has been increasing as the global fleet of LNG carriers continues to grow. This increased demand has and may continue to put inflationary cost pressure on ensuring qualified and well trained crew are available to us. However, we expect that the impact of cost increases would be mitigated to some extent by certain provisions in our time charters, including automatic periodic adjustment provisions and cost review provisions. E. Share Ownership The common shares beneficially owned by our directors and executive officers and/or entities affiliated with these individuals is disclosed in “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders” below. For information regarding arrangements for involving the employees in the capital of the Company, see “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Senior Management”. 90 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders The following table sets forth certain information regarding the beneficial ownership of our outstanding common shares and Preference Shares as of March 11, 2016 held by: • each of our executive officers; • each of our directors; • all our directors and officers as a group; and • each holder known to us to beneficially own 5.0% or more of our shares; Beneficial ownership is determined in accordance with SEC rules. Percentage computations are based on an aggregate of 80,496,499 common shares and 4,600,000 Preference Shares outstanding as of March 11, 2016. Each issued and outstanding common share will entitle the shareholder to one vote. Information for certain holders is based on their latest filings with the SEC or information delivered to us. Except as noted below, the address of all shareholders, officers and directors identified in the table and the accompanying footnotes below is in care of our principal executive offices. Name of Beneficial Owner Directors and officers Peter G. Livanos(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paul A. Wogan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bruce L. Blythe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paul J. Collins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . William M. Friedrich . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dennis M. Houston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Donald J. Kintzer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Julian R. Metherell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Anthony S. Papadimitriou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Philip Radziwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Simon P. Crowe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Graham Westgarth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . All directors and officers as a group. . . . . . . . . . . . . . . . . . . . . . . . . . . Other 5.0% beneficial owners Alexander S. Onassis Foundation(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fairview Capital Investment Management, LLC(3) . . . . . . . . . . . . . Common Shares Beneficially Owned Number Preference Shares Beneficially Owned Percent Percent Number 32,731,818 * * * * * * * * — * * 33,082,073 40.66% — — — — * — * — — — — — 41.10% * * * * * * * * * — * * 6,987,004 5,519,705 8.68% — 6.86% — — — — — * — * — — — — — * — — (1) By virtue of common shares held (a) directly, (b) indirectly through Blenheim Holdings Ltd., or “Blenheim Holdings”, in which Mr. Livanos has a majority ownership interest, (c) indirectly through several entities whose share capital is owned by Mr. Livanos and (d) by several entities of which Mr. Livanos and/or members of his family are beneficiaries and for which Mr. Livanos serves as an officer and/or a board member. Mr. Livanos disclaims beneficial ownership of the shares held by the entities referenced in (d). Mr. Livanos can effectively control the Company through direct and indirect ownership interests. Mr. Livanos’s ownership interest changed in connection with the purchase by Blenheim Holdings of certain outstanding manager shares in January 2012, and a transfer by Blenheim Holdings of 657,090 shares to one of its minority shareholders in March 2014 in exchange for such shareholder’s interest in Blenheim Holdings. (2) By virtue of common shares held indirectly through its wholly owned subsidiary, Olympic LNG Investments Ltd. A portion of the shares were acquired from the Company in a private placement in January 2014. The Alexander S. Onassis Public Benefit Foundation is the sole beneficiary of the assets and income of the Onassis Foundation, and as a result may be deemed to have indirect beneficial ownership of the shares. (3) Based on information contained in the Schedule 13G filed with the SEC on February 11, 2016, Fairview Capital Investment Management, LLC has shared voting and dispositive power over 5,519,705 common shares with Fairview Capital, Andrew F. Mathieson, Scott W. Clark, and Darlington Partners L.P. * Less than 1.0%. 91 In March 2012, we completed a registered public offering of our common shares and our common shares began trading on the NYSE. Our major shareholders have the same voting rights as our other shareholders. As of March 4, 2016, we had approximately 13,493 shareholders. Holders of our Preference Shares generally have no voting rights except (i) in respect of amendments to the Memorandum of Association which would adversely vary the rights of the Preference Shares or, (ii) in the event that the Company proposes to issue any parity shares if the cumulative dividends payable on issued and outstanding Preference Shares are in arrears or any senior shares or (iii) in the event of a proposed amalgamation or merger of the Company. However, if and whenever dividends payable on the Preference Shares are in arrears for six or more quarterly periods, whether or not consecutive, holders of Preference Shares (voting together as a class with all other classes or series of parity securities upon which like voting rights have been conferred and are exercisable) will be entitled to elect one additional director to serve on our board of directors, and the size of our board of directors will be increased as needed to accommodate such change (unless the size of our board of directors already has been increased by reason of the election of a director by holders of parity securities upon which like voting rights have been conferred and with which the Preference Shares voted as a class for the election of such director). The right of such holders of Preference Shares to elect a member of our board of directors will continue until such time as all accumulated and unpaid dividends on the Preference Shares have been paid in full. B. Related Party Transactions Relationship with GasLog Partners GasLog Partners was formed by us in January 2014 to own, operate and acquire LNG carriers engaged in LNG transportation under long-term charters, which we define as charters of five full years or more. In May 2014, the Partnership completed its initial public offering and its common units began trading on the NYSE. The Partnership conducts its operations through its vessel-owning subsidiaries and as of March 11, 2016, had a fleet of eight LNG carriers. As of March 11, 2016, we hold a 32.90% interest in the Partnership and, as a result of our ownership of the general partner, and the fact that the general partner elects the majority of the Partnership’s directors in accordance with the Partnership Agreement, we have the ability to control the Partnership’s affairs and policies. Quarterly Cash Dividends We are entitled to distributions on our general and limited partner interests in GasLog Partners. These interests consist of common units, subordinated units, incentive distribution rights and general partner interests. Under the Partnership Agreement, during the subordination period, the holders of the common units will have the right to receive distributions of available cash from operating surplus in an amount equal to the minimum quarterly distribution of $0.375 per unit per quarter, plus any arrearages in the payment of minimum quarterly distribution on the common units from prior quarters, before any distributions of available cash from operating surplus may be made on the subordinated units. The amount of the minimum quarterly distribution is $0.375 per unit or $1.50 per unit on an annualized basis and is made in the following manner, during the subordination period: • first, 98.0% to the common unitholders, pro rata, and 2.0% to the general partner until each common unit has received a minimum quarterly distribution of $0.375; • second, 98.0% to the common unitholders, pro rata, and 2.0% to the general partner, until each common unit has received an amount equal to any arrearages in payment of the minimum quarterly distribution on the common units for prior quarters during the subordination period; and • third, 98.0% to the holders of subordinated units, pro rata, and 2.0% to the general partner until each subordinated unit has received a minimum quarterly distribution of $0.375. We currently hold all of the incentive distribution rights in GasLog Partners. Incentive distribution rights represent the right to receive an increasing percentage of quarterly distributions of 92 available cash from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved. If for any quarter: • GasLog Partners has distributed available cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum quarterly distribution; and • GasLog Partners has distributed available cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution; then, GasLog Partners will distribute any additional available cash from operating surplus for that quarter among the unitholders and the general partner in the following manner: • first, 98.0% to all unitholders, pro rata, and 2.0% to the general partner, until each unitholder receives a total of $0.43125 per unit for that quarter; • second, 85.0% to all unitholders, pro rata, 2.0% to the general partner and 13.0% to the holders of the incentive distribution rights, pro rata, until each unitholder receives a total of $0.46875 per unit for that quarter; • third, 75.0% to all unitholders, pro rata, 2.0% to the general partner and 23.0% to the holders of the incentive distribution rights, pro rata, until each unitholder receives a total of $0.5625 per unit for that quarter; and • thereafter, 50.0% to all unitholders, pro rata, 2.0% to the general partner and 48.0% to the holders of the incentive distribution rights, pro rata. In each case, the amount of the target distribution set forth above is exclusive of any distributions to common unitholders to eliminate any cumulative arrearages in payment of the minimum quarterly distribution. The percentage interests set forth above assume that the general partner maintains its 2.0% general partner interest and that the Partnership does not issue additional classes of equity securities. As holder of the 2.0% general partner interest in GasLog Partners, we are entitled to 2.0% of all distributions made by GasLog Partners prior to its liquidation. The general partner, our wholly owned subsidiary, has the right, but not the obligation, to contribute a proportionate amount of capital to GasLog Partners to maintain its 2.0% general partner interest if the Partnership issues additional units. We received total distributions from GasLog Partners of $19.12 million in 2015. Omnibus Agreement On May 12, 2014, we entered into an omnibus agreement with GasLog Partners and certain of its subsidiaries. The following discussion describes certain provisions of the omnibus agreement. Noncompetition; Five-Year Vessel Restricted Business Opportunities Under the omnibus agreement, we have agreed, and have caused our controlled affiliates (other than GasLog Partners, its general partner and its subsidiaries) to agree, not to acquire, own, operate or charter any LNG carrier with a cargo capacity greater than 75,000 cbm engaged in oceangoing LNG transportation under a charter for five full years or more. For purposes of this section, we refer to these vessels, together with any related charters, as “Five-Year Vessels” and to all other LNG carriers, together with any related charters, as “Non-Five-Year Vessels”. In the event that we acquire, operate or put under charter a Five-Year Vessel, then we will be required, within 30 calendar days after the consummation of the acquisition or the commencement of the operations or charter, to notify GasLog Partners and offer it the opportunity to purchase such Five-Year Vessel at fair market value. The restrictions in this paragraph will not prevent us or any of our controlled affiliates (other than GasLog Partners and its subsidiaries) from: (1) acquiring, owning, operating or chartering Non-Five-Year Vessels; 93 (2) acquiring one or more Five-Year Vessels if we promptly offer to sell the vessel to GasLog Partners for the acquisition price plus any administrative costs (including re-flagging and reasonable legal costs) associated with the transfer to GasLog Partners at the time of the acquisition; (3) putting a Non-Five-Year Vessel under charter for five full years or more if we offer to sell the vessel to GasLog Partners for fair market value (x) promptly after the time it becomes a Five-Year Vessel and (y) at each renewal or extension of that charter for five full years or more; (4) acquiring one or more Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those vessels; provided, however, that: (a) if less than a majority of the value of the business or assets acquired is attributable to Five-Year Vessels, as determined in good faith by our board of directors, we must offer to sell such vessels to GasLog Partners for their fair market value plus any additional tax or other similar costs that we incur in connection with the acquisition and the transfer of such vessels to GasLog Partners separate from the acquired business; and (b) if a majority or more of the value of the business or assets acquired is attributable to Five-Year Vessels, as determined in good faith by our board of directors, we must notify GasLog Partners of the proposed acquisition in advance. Not later than 30 days following receipt of such notice, GasLog Partners will notify us if it wishes to acquire such vessels in cooperation and simultaneously with us acquiring the Non-Five-Year Vessels. If GasLog Partners does not notify us of its intent to pursue the acquisition within 30 days, we may proceed with the acquisition and then offer to sell such vessels to GasLog Partners as provided in (a) above; (5) acquiring a non-controlling equity ownership, voting or profit participation interest in any company, business or pool of assets; (6) acquiring, owning, operating or chartering any Five-Year Vessel if GasLog Partners does not fulfill its obligation to purchase such vessel in accordance with the terms of any existing or future agreement; (7) acquiring, owning, operating or chartering a Five-Year Vessel subject to the offers to GasLog Partners described in paragraphs (2), (3) and (4) above pending its determination whether to accept such offers and pending the closing of any offers it accepts; (8) providing ship management services relating to any vessel; (9) owning or operating any Five-Year Vessel that we owned on the closing date of GasLog Partners’ IPO and that was not part of its fleet as of such date; or (10) acquiring, owning, operating or chartering a Five-Year Vessel if GasLog Partners has previously advised us that it consents to such acquisition, ownership, operation or charter. If we or any of our controlled affiliates (other than GasLog Partners, its general partner or its subsidiaries) acquires, owns, operates or charters Five-Year Vessels pursuant to any of the exceptions described above, we may not subsequently expand that portion of our business other than pursuant to those exceptions. However, such Five-Year Vessels could eventually compete with GasLog Partners’ vessels upon their re-chartering. In addition, under the omnibus agreement GasLog Partners has agreed, and has caused its subsidiaries to agree, to acquire, own, operate or charter Five-Year Vessels only. The restrictions in this paragraph will not: (1) prevent GasLog Partners or any of its subsidiaries from owning, operating or chartering any Non-Five-Year Vessel that was previously a Five-Year Vessel while owned by GasLog Partners or any of its subsidiaries; 94 (2) prevent GasLog Partners or any of its subsidiaries from acquiring Non-Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those vessels; provided, however, that: (a) if less than a majority of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by GasLog Partners, the Partnership must offer to sell such vessels to us for their fair market value plus any additional tax or other similar costs that GasLog Partners incurs in connection with the acquisition and the transfer of such vessels to us separate from the acquired business; and (b) if a majority or more of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by GasLog Partners, the Partnership must notify us of the proposed acquisition in advance. Not later than 30 days following receipt of such notice, we must notify GasLog Partners if we wish to acquire the Non-Five-Year Vessels in cooperation and simultaneously with GasLog Partners acquiring the Five-Year Vessels. If we do not notify GasLog Partners of our intent to pursue the acquisition within 30 days, the Partnership may proceed with the acquisition and then offer to sell such vessels to us as provided in (a) above; (3) prevent GasLog Partners or any of its subsidiaries from acquiring, owning, operating or chartering any Non-Five-Year Vessels subject to the offer to us described in paragraph (2) above, pending our determination whether to accept such offer and pending the closing of any offer we accept; or (4) prevent GasLog Partners or any of its subsidiaries from acquiring, owning, operating or chartering Non-Five-Year Vessels if we have previously advised the Partnership that we consent to such acquisition, ownership, operation or charter. If GasLog Partners or any of its subsidiaries acquires, owns, operates or charters Non-Five-Year Vessels pursuant to any of the exceptions described above, neither the Partnership nor any subsidiary may subsequently expand that portion of its business other than pursuant to those exceptions. During the 30-day period after our notice and offer of an opportunity to purchase a Five-Year Vessel, we and GasLog Partners will negotiate in good faith to reach an agreement on the fair market value (and any applicable break-up costs) of the relevant vessel. If we do not reach an agreement within such 30-day period, a mutually-agreed upon investment banking firm, ship broker or other expert advisor will be engaged to determine the fair market value (and any applicable break-up costs) of the relevant vessel and other outstanding terms, and GasLog Partners will have the option, but not the obligation, to purchase the relevant vessel on such terms. GasLog Partners’ ability to consummate the acquisition of such Five-Year Vessel from us will be subject to obtaining any consents of governmental authorities and other non-affiliated third parties and to all agreements existing with respect to such Five-Year Vessel. Under the omnibus agreement, we will indemnify GasLog Partners against losses arising from the failure to obtain any consent or governmental permit necessary to own or operate the fleet in substantially the same manner that the vessels were owned and operated by us immediately prior to the Partnership’s acquisition of such vessels. See “—Indemnification”. Upon a change of control of GasLog Partners or its general partner, the noncompetition provisions of the omnibus agreement will terminate immediately. Upon a change of control of GasLog, the noncompetition provisions of the omnibus agreement applicable to us will terminate at the time that is the later of the date of the change of control and the date on which all of our outstanding subordinated units have converted to common units. On the date on which a majority of GasLog Partners’ directors ceases to consist of directors that were (1) appointed by the Partnership’s general partner prior to its first annual meeting of unitholders and (2) recommended for election by a majority of the Partnership’s appointed directors, the noncompetition provisions applicable to us shall terminate immediately. 95 LNG Carrier Purchase Options Under the omnibus agreement, GasLog Partners has the option to purchase from us: (i) the Solaris and Hull Nos. 2072, 2073, 2102 and 2103 within 36 months after we notify the Partnership’s board of directors of the vessel’s acceptance by her charterer, (ii) the GasLog Seattle and the Methane Lydon Volney within 36 months after the closing of our IPO on May 12, 2014 and (iii) as provided for under the addendum to the omnibus agreement dated April 21, 2015 among GasLog, GasLog Partners, the general partner and GasLog Partners Holdings LLC, the Methane Becki Anne and the right to acquire GAS-twenty six Ltd. with its long-term bareboat charter of (and right to acquire) the Methane Julia Louise (which is subject to a multi-year charter to MSL) within 36 months after the completion of their acquisition by GasLog on March 31, 2015. In addition, on April 21, 2015, we signed an agreement with MSL to acquire its newbuildings Hull Nos. 2130, 2800 and 2131 to be chartered to MSL upon deliveries in 2018 and 2019 respectively, for average initial terms of approximately 9.5 years. Within 30 days of the commencement of each charter, we will be required to offer GasLog Partners an opportunity to purchase each vessel at fair market value as determined pursuant to the omnibus agreement. In each case, GasLog Partners’ option to purchase is at fair market value as determined pursuant to the omnibus agreement. If we and GasLog Partners are unable to agree upon the fair market value of any of these optional vessels, the respective fair market values will be determined by a mutually acceptable investment banking firm, ship broker or other expert advisor, and GasLog Partners will have the right, but not the obligation, to purchase the vessel at such price. GasLog Partners’ ability to consummate the acquisition of such vessels from us will be subject to obtaining any consents of governmental authorities and other non-affiliated third parties and to all agreements existing as of the closing date in respect of such vessels. On the date on which a majority of GasLog Partners’ directors ceases to consist of directors that were (1) appointed by the Partnership’s general partner prior to its first annual meeting of unitholders and (2) recommended for election by a majority of the Partnership’s appointed directors, the LNG carrier purchase options shall terminate immediately. Rights of First Offer Under the omnibus agreement, we and our subsidiaries have granted to GasLog Partners a right of first offer on any proposed sale, transfer or other disposition of any Five-Year Vessels or Non- Five-Year Vessels owned by us. Under the omnibus agreement, GasLog Partners and its subsidiaries have agreed to grant a similar right of first offer to us for any Five-Year Vessels they might own. These rights of first offer will not apply to a (i) sale, transfer or other disposition of vessels between any affiliated subsidiaries or pursuant to the terms of any current or future charter or other agreement with a charter party or (ii) merger with or into, or sale of substantially all of the assets to, an unaffiliated third party. Prior to engaging in any negotiation regarding any vessel disposition with respect to a Five-Year Vessel with an unaffiliated third party or any Non-Five-Year Vessel, we or GasLog Partners, as the case may be, will deliver a written notice to the other relevant party setting forth the material terms and conditions of the proposed transaction. During the 30-day period after the delivery of such notice, we and GasLog Partners, as the case may be, will negotiate in good faith to reach an agreement on the transaction. If we do not reach an agreement within such 30-day period, we or GasLog Partners, as the case may be, will be able within the next 180 calendar days to sell, transfer, dispose or re-charter the vessel to a third party (or to agree in writing to undertake such transaction with a third party) on terms generally no less favorable to us or GasLog Partners, as the case may be, than those offered pursuant to the written notice. Our ability to consummate the acquisition of such Five-Year Vessel from GasLog Partners will be subject to obtaining any consents of governmental authorities and other non-affiliated third parties and to all agreements existing in respect of such Five-Year Vessel. Upon a change of control of GasLog Partners or its general partner, the right of first offer provisions of the omnibus agreement will terminate immediately. Upon a change of control of us, the right of first offer provisions applicable to GasLog under the omnibus agreement will terminate 96 at the time that is the later of the date of the change of control and the date on which all of GasLog Partners’ outstanding subordinated units have converted to common units. On the date on which a majority of GasLog Partners’ directors ceases to consist of directors that were (i) appointed by the Partnership’s general partner prior to its first annual meeting of unitholders and (ii) recommended for election by a majority of the Partnership’s appointed directors, the provisions related to the rights of first offer granted to the Partnership by us shall terminate immediately. For purposes of the omnibus agreement, a “change of control” means, with respect to any “applicable person”, any of the following events: (a) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the applicable person’s assets to any other person, unless immediately following such sale, lease, exchange or other transfer such assets are owned, directly or indirectly, by the applicable person; (b) the consolidation or merger of the applicable person with or into another person pursuant to a transaction in which the outstanding voting securities of the applicable person are changed into or exchanged for cash, securities or other property, other than any such transaction where (i) the outstanding voting securities of the applicable person are changed into or exchanged for voting securities of the surviving person or its parent and (ii) the holders of the voting securities of the applicable person immediately prior to such transaction own, directly or indirectly, not less than a majority of the outstanding voting securities of the surviving person or its parent immediately after such transaction; and (c) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Securities Exchange Act of 1934, or the “Exchange Act”), other than us or our affiliates with respect to the general partner, being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50.0% of all of the then outstanding voting securities of the applicable person, except in a merger or consolidation which would not constitute a change of control under clause (b) above. Indemnification Under the omnibus agreement, we will indemnify GasLog Partners after the closing of its IPO for a period of five years (and we will indemnify the Partnership for a period of at least three years after its purchase of any vessels subject to purchase options, if applicable) against certain environmental and toxic tort liabilities with respect to the vessels that are contributed or sold to the Partnership to the extent arising prior to the time such vessels were contributed or sold to the Partnership. Liabilities resulting from a change in law after the closing of the IPO are excluded from the environmental indemnity. There is an aggregate cap of $5 million on the amount of indemnity coverage provided by us for environmental and toxic tort liabilities. No claim may be made unless the aggregate dollar amount of all claims exceeds $500,000, in which case we are liable for claims only to the extent such aggregate amount exceeds $500,000. We will also indemnify GasLog Partners for liabilities related to: • certain defects in title to GasLog Partners’ initial fleet and any failure to obtain, prior to the time they were contributed to the Partnership, certain consents and permits necessary to conduct the Partnership’s business, which liabilities arise within three years after the closing of the Partnership’s IPO; and • certain tax liabilities attributable to the operation of the assets contributed or sold to the Partnership prior to the time they were contributed or sold. Restrictive Covenant Agreement On April 4, 2012, Peter G. Livanos and Blenheim Holdings entered into a Restrictive Covenant Agreement with us, pursuant to which Mr. Livanos is prohibited from directly or indirectly owning, operating or managing LNG vessels, other than pursuant to his involvement with us. The restrictions will terminate in the event that Mr. Livanos ceases to beneficially own at least 20.0% of our issued and outstanding share capital. Notwithstanding these restrictions, Mr. Livanos is permitted to engage in the following activities: 97 • passive ownership (a) of minority interests in any business that is not primarily engaged in owning, operating or managing LNG vessels or (b) constituting less than 5.0% of any publicly listed company; and • non-passive participation in a business that acquires an interest in the ownership, operation or management of LNG vessels, provided that as promptly as reasonably practicable either (A) the business enters into an agreement to dispose of such competitive activity and such disposition is completed within a reasonable time, or (B) Mr. Livanos’s participation in such business is changed so as to satisfy the exception for passive ownership of minority interests in a business that is not primarily engaged in a competitive activity. The restrictions described above do not apply to transactions by independent fund managers not acting under the direction or control of Mr. Livanos or Blenheim Holdings. As noted above, Mr. Livanos and Blenheim Holdings are permitted under the terms of the restrictive covenant agreement to dispose of our common shares in the following circumstances: • pursuant to any transfer by Blenheim Holdings to its shareholders (including any division of the ownership interests in Blenheim Holdings of Mr. Livanos and members of the Radziwill family), provided that the transferee or transferees agree to be bound by the share transfer restrictions of the restrictive covenant agreement; • pursuant to any private sale to a strategic investor in the Company, provided that the strategic investor agrees to be bound by the share transfer restrictions of the restrictive covenant agreement; • in connection with any sale or transfer that would result in a change in control of the Company, provided that such change in control has been approved by our board of directors; and • in transactions relating to shares acquired following the effective date of the restrictive covenant agreement. For purposes of the restrictive covenant agreement, a “change of control” means Mr. Livanos and Blenheim Holdings cease to beneficially own, in the aggregate, at least 38.0% of the issued and outstanding share capital of the Company. The share transfer restrictions described above will terminate as to any person that ceases to beneficially own, or does not beneficially own, at least 20.0% of our issued and outstanding share capital. Registration Rights Agreement On April 4, 2012, we entered into a registration rights agreement with certain of our shareholders, pursuant to which we granted such shareholders and their transferees the right, under certain circumstances and subject to certain restrictions, including restrictions included in the lock-up agreements to which they will be a party, to require us to register under the Securities Act of 1933, as amended, our common shares held by those persons. Under the registration rights agreement, certain of our shareholders and their transferees have the right to request us to register the sale of shares held by them on their behalf and may require us to make available shelf registration statements permitting sales of shares into the market from time to time over an extended period. While these demand registration rights are subject to certain timing and other restrictions, there is no limit on the number of times a shareholder may exercise such rights. In addition, those persons have the ability to exercise certain piggyback registration rights in connection with registered offerings initiated by us. In March 2014, in response to a Demand Registration Request (as defined in the Registration Rights Agreement), the Company filed a Registration Statement on Form F-3 registering the common shares entitled to registration rights in addition to other common shares held by the Company’s directors and officers. 98 Subscription Agreements On January 16, 2014, we entered into subscription agreements with certain of our directors and officers for a concurrent private placement of 2,317,460 common shares at a price of $15.75 per share. Indemnification Agreements We have entered into indemnification agreements with our directors and officers which provide, among other things, that we will indemnify our directors and officers, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines, settlements and fees that they may be required to pay in actions or proceedings to which they are or may be made a party by reason of such person’s position as a director, officer, employee or other agent of the Company, subject to, and to the maximum extent permitted by, applicable law. Office Space and Related Arrangements Through our subsidiary GasLog LNG Services, we lease our office space in Piraeus, Greece from an entity controlled by Ceres Shipping, Nea Dimitra Ktimatikh Kai Emporikh S.A. The lease agreement is filed with the Greek authorities, and has been entered into on market rates. GasLog LNG Services has also entered into an agreement with Seres S.A., an entity controlled by the Livanos family, for the latter to provide catering services to the staff based in our Piraeus office. Amounts paid pursuant to the agreement are generally less than €10 per person per day, but are slightly higher on special occasions. In addition, GasLog LNG Services has entered into an agreement with Seres S.A. for the latter to provide telephone and documentation services for our staff based in Piraeus. Amounts paid pursuant to the agreement are less than €100,000 per year. Egypt LNG We have a 25.0% ownership interest in Egypt LNG, whose principal asset is the LNG carrier Methane Nile Eagle, which is currently operating under a 20-year time charter with a subsidiary of BG Group. Through our subsidiary GasLog LNG Services, we supervised the construction of the Methane Nile Eagle, which was delivered from the shipyard in 2007. Pursuant to a ship management agreement between GasLog LNG Services and Egypt LNG, the vessel has operated under our technical management since its delivery. From January 1, 2015 to December 31, 2015, we received a total of approximately $0.61 million in revenues from Egypt LNG in respect of our vessel management services. On October 29, 2015, Egypt LNG and BG Group mutually agreed to lay up the Methane Nile Eagle for a period of approximately one year. The charterer continues to pay charter hire costs adjusted for net savings in operating expenses and insurance as a result of the vessel being laid up. Shipbuilding Commissions Pursuant to commission agreements with Samsung, commissions due from the shipyard in relation to the GasLog Shanghai, the GasLog Santiago, the GasLog Sydney, the GasLog Skagen, the GasLog Seattle, the Solaris, the GasLog Saratoga and the GasLog Salem, such commissions were paid by Samsung to DryLog Investments Ltd., an affiliate of Ceres Shipping. Upon receipt of the commissions, DryLog Investments Ltd. forwarded the payments to our ship-owning subsidiaries, after deducting handling fees for each payment. In the aggregate, these handling fees amounted to less than $100,000 for the aforementioned vessels. Unisea Maritime Ltd. Consulting Services Agreement GasLog entered into a consulting agreement with Unisea Maritime Ltd (“Unisea”), an entity controlled by the Livanos family, in consideration of the consulting services performed by Unisea in respect of the recently concluded sale and leaseback transaction for the Methane Julia Louise. Under the terms of the consulting agreement, GasLog agreed to pay a brokerage commission fee equal to 99 0.25% of the agreed charter rates under the sale and leaseback transaction plus reasonable expenses (in line with the Company’s policies). The brokerage commission fee was paid in advance for the full 20—year period of the bareboat charter, discounted to the date of the agreement at an annual discount rate of 7.5%. Other Transactions For a description of additional related party transactions, see Note 19 to our consolidated financial statements included elsewhere in this annual report. Procedures for Review and Approval of Related Party Transactions Related party transactions, which means transactions in which the Company or one of its subsidiaries is a participant and any of the Company’s directors, executive officers or significant shareholders, or any members of their immediate families or entities controlled by them, have a direct or indirect interest, will be subject to review and approval or ratification by our audit and risk committee in accordance with the Related Party Transaction Policy adopted by such committee. C. Interests of Experts and Counsel Not applicable. ITEM 8. FINANCIAL INFORMATION A. Consolidated Statements and Other Financial Information See “Item 18. Financial Statements” below. Legal Proceedings We have not been involved in any legal proceedings that we believe may have a significant effect on our business, financial position, results of operations or liquidity, and we are not aware of any proceedings that are pending or threatened that may have a material effect on our business, financial position, results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally property damage and personal injury claims. We expect that these claims would be covered by insurance, subject to customary deductibles. However, those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. Preference Shares Dividend Requirements Dividends on Preference Shares are payable quarterly on each of January 1, April 1, July 1 and October 1, as and if declared by our board of directors out of legally available funds for such purpose. The dividend rate for the Preference Shares is 8.75% per annum per $25.00 of liquidation preference per share (equal to $2.18750 per annum per share). The dividend rate for the Preference Shares is 8.50% per annum per $25.00 of liquidation preference per share (equal to $2.125 per annum per share). The dividend rates are not subject to adjustment. We paid dividends to holders of our Preference Shares of $0.510417 per share on July 1, 2015 and $0.546875 per share on October 1, 2015 and January 1, 2016.Our Preference Shares dividend payment obligations impact our future liquidity needs. Common Shares Dividend Policy We paid our first cash dividend since becoming a public company in March 2012 on December 17, 2012 in an amount of $0.11 per share. We have subsequently paid dividends to holders of our common shares of $0.11 per share on March 25, 2013, June 11, 2013 and September 13, 2013, $0.12 per share on December 9, 2013, March 25, 2014, June 11, 2014 and 100 September 8, 2014, and $0.14 per share on December 5, 2014, March 13, 2015, August 20 and November 19, 2015. As our fleet expands, we will evaluate changes to the quarterly dividend consistent with our cash flow and liquidity position. Our policy is to pay dividends in amounts that will allow us to retain sufficient liquidity to fund our obligations as well as execute our business plan going forward. The declaration and payment of any dividend is subject to the discretion of our board of directors and the requirements of Bermuda law. In addition, our credit facilities impose limitations on our ability to pay dividends. Our board of directors will determine the timing and amount of all dividend payments, based on various factors, including our earnings, financial condition, cash requirements and availability, restrictions in our credit facilities and the provisions of Bermuda law. Accordingly, we cannot guarantee that we will be able to pay quarterly dividends. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business” for a discussion of risks related to our ability to pay dividends. Set out below is a table showing the dividends declared on our common shares in 2011, 2012, 2013, 2014 and 2015. Year ended December 31, Common share dividend declared . . . . . . . . . . . . . . . . . Preference share dividend declared . . . . . . . . . . . . . . . $8.50 — 2011 2014 2013 2012 (Expressed in millions of U.S. dollars) $45.08 — $ 7.38 $28.29 — $6.91 — $39.84 2015 Total $128.62 $ 7.38 B. Significant Changes See “Item 18. Financial Statements—Note 28. Subsequent Events” below. ITEM 9. THE OFFER AND LISTING Trading on the New York Stock Exchange Since our IPO in the United States in 2012, our common shares have been listed on the NYSE under the symbol “GLOG”. The following table shows the high and low closing sales prices for our common shares during the indicated periods. Price Range High Low Year ended December 31, 2012 (March 30, 2012 to December 31, 2012) . . . . . . . . . . . . Year ended December 31, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter 2016 (January 1, 2016 to March 11, 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . October 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . November 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 2016 (March 1, 2016 to March 11, 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12.54 17.41 31.89 23.41 24.30 31.89 31.54 21.98 20.53 23.41 19.16 12.75 11.71 13.56 11.89 12.75 11.45 8.77 9.50 11.71 $ 8.95 11.93 15.95 7.46 16.24 22.78 22.01 15.95 16.64 19.18 9.02 7.46 5.78 9.02 9.66 11.35 7.46 5.78 6.35 9.57 101 Our Preference Shares have been trading on the New York Stock Exchange under the symbol “GLOG PR A” since March 31, 2015. The following table shows the high and low closing sales prices for our Preference Shares during the indicated periods. Price Range High Low 2015 (March 31, 2015 to December 31, 2015). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter 2016 (January 1, 2016 to March 11, 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . October 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . November 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 2016 (March 1, 2016 to March 11, 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.10 25.99 26.10 24.87 22.70 25.60 24.59 24.87 23.84 20.44 20.64 22.70 $18.38 25.15 22.04 18.38 13.75 22.04 23.20 22.00 18.38 13.75 16.82 21.20 ITEM 10. ADDITIONAL INFORMATION A. Share Capital Our authorized share capital consists of 500,000,000 shares, par value $0.01 per share. As of December 31, 2015, the share capital consisted of 80,496,499 issued and outstanding common shares, par value $0.01 per share, 496,627 treasury shares and 4,600,000 Preference Shares. Pursuant to our bye-laws, subject to any resolution of the shareholders to the contrary, our board of directors is authorized to issue any of our authorized but unissued common shares. There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote our shares. B. Memorandum of Association We are an exempted company incorporated under the laws of Bermuda. We are registered with the Registrar of Companies in Bermuda under registration number 33928. We were incorporated on July 16, 2003 under the name Gaslog Ltd. We effected a change of name from “Gaslog Ltd.” to “GasLog Ltd.” on August 23, 2011 in compliance with the Companies Act. Our registered office is located at Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda. The objects of our business are unrestricted, and the Company has the capacity of a natural person. We can therefore undertake activities without restriction on our capacity. Common Shares Holders of our common shares have no pre-emptive, redemption, conversion or sinking fund rights. Holders of our common shares are entitled to one vote per share on all matters submitted to a vote of holders of common shares. Unless a different majority is required by law or by our bye- laws, resolutions to be approved by holders of our common shares require approval by a simple majority of votes cast at a meeting at which a quorum is present. In the event of our liquidation, dissolution or winding up, the holders of our common shares are entitled to share equally and ratably in our assets, if any, remaining after the payment of all of our debts and liabilities, subject to any liquidation preference on any issued and outstanding preference shares. 102 Preference Shares Pursuant to Bermuda law and our bye-laws, our board of directors by resolution may establish one or more series of preference shares having such number of shares, designations, dividend rates, relative voting rights, conversion or exchange rights, redemption rights, liquidation rights and other relative participation, optional or other special rights, qualifications, limitations or restrictions as may be fixed by the board without any further shareholder approval. Of the Company’s 500 million authorised shares 4.6 million have been designated 8.75% Series A Cumulative Redeemable Perpetual Preference Shares. Dividend Rights Under Bermuda law, a company may not declare or pay dividends if there are reasonable grounds for believing that: (i) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii) the realizable value of its assets would thereby be less than its liabilities. Under our bye-laws, each common share is entitled to dividends if, as and when dividends are declared by our board of directors. Any cash dividends payable to holders of our common shares listed on the NYSE will be paid to American Stock Transfer & Trust Company, LLC, our transfer agent in the United States for disbursement to those holders. Variation of Rights If at any time we have more than one class of shares, the rights attaching to any class, unless otherwise provided for by the terms of issue of the relevant class, may be varied with the sanction of a resolution passed by a majority of the issued shares of such class. Our bye-laws specify that the creation or issue of shares ranking equally with existing shares will not, unless expressly provided by the terms of issue of existing shares, vary the rights attached to existing shares. Transfer of Shares Our board of directors may in its absolute discretion and without assigning any reason refuse to register the transfer of a share that is not fully paid. Our board of directors may also refuse to recognize an instrument of transfer of a share unless it is accompanied by the relevant share certificate and such other evidence of the transferor’s right to make the transfer as our board of directors shall reasonably require. In addition, our board of directors may refuse to register the transfer of a share unless all applicable consents, authorizations and permissions of any governmental body or agency in Bermuda have been obtained. Subject to these restrictions, a holder of common shares may transfer the title to all or any of his common shares by completing a form of transfer in the form set out in our bye-laws (or as near thereto as circumstances admit) or in such other common form as the board may accept. The instrument of transfer must be signed by the transferor and transferee, although in the case of a fully paid share our board of directors may accept the instrument signed only by the transferor. Meetings of Shareholders We are required to convene at least one general meeting of shareholders each calendar year. Bermuda law provides that a special general meeting of shareholders may be called by the board of directors of a company and must be called upon the request of shareholders holding not less than 10.0% of the paid-up capital of the company carrying the right to vote at general meetings. Bermuda law also requires that shareholders be given at least five days’ advance notice of a general meeting, but an unintentional failure notice to any person does not invalidate the proceedings at a meeting. Our bye-laws provide that the Chairman or our board of directors may convene an annual general meeting or a special general meeting. Under our bye-laws, at least 10 days’ notice of an annual general meeting or a special general meeting must be given to each shareholder entitled to vote at such meeting. This notice requirement is subject to the ability to hold such meetings on shorter notice if such notice is agreed: (i) in the case of an annual general meeting, by all of the 103 shareholders entitled to attend and vote at such meeting; or (ii) in the case of a special general meeting, by a majority in number of the shareholders entitled to attend and vote at the meeting holding not less than 95.0% in nominal value of the shares entitled to vote at such meeting. The quorum required for a general meeting of shareholders is one or more persons present in person throughout the meeting and representing in person or by proxy in excess of 50.0% of all issued and outstanding common shares. General meetings can be convened at a location in or outside of Bermuda. Our bye-laws provide that our board of directors may, but is not required to, make arrangements permitting shareholders to participate in general meetings by such telephonic, electronic or other communications facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously. Access to Books and Records and Dissemination of Information Members of the general public have a right to inspect public documents of the Company available at the office of the Registrar of Companies in Bermuda. These documents include the Company’s memorandum of association, including its objects and powers, and certain alterations to the memorandum of association. Our shareholders have the additional right to inspect the bye-laws of the Company, minutes of general meetings and the Company’s audited financial statements, which must be presented to the annual general meeting. The Company’s register of members is also open to inspection by shareholders and by members of the general public without charge. The register of members is required under Bermuda law to be open for inspection for not less than two hours in any business day (subject to the ability of a company to close the register of members for not more than thirty days in a year). The Company is required to maintain its share register in Bermuda but may, subject to the provisions of the Companies Act, establish a branch register outside of Bermuda. The Company is required to keep at its registered office a register of directors and officers that is open for inspection for not less than two hours in any business day by members of the public without charge. Bermuda law does not, however, provide a general right for shareholders to inspect or obtain copies of any other corporate records. Election and Removal of Directors Our bye-laws provide that our board shall consist of no less than three directors and no more than fifteen directors, as the board of directors may from time to time determine. Our board of directors consists of ten directors. Any shareholder wishing to propose for election as a director someone who is not an existing director or is not proposed by our board must give notice of the intention to propose the person for election. Where a director is to be elected at an annual general meeting, that notice must be given not less than 90 days nor more than 120 days before the anniversary of the last annual general meeting prior to the giving of the notice or, in the event the annual general meeting is called for a date that is not 30 days before or after such anniversary, the notice must be given not later than 10 days following the earlier of the date on which notice of the annual general meeting was posted to shareholders or the date on which public disclosure of the date of the annual general meeting was made. Where a director is to be elected at a special general meeting that notice must be given not later than 10 days following the earlier of the date on which notice of the special general meeting was posted to shareholders or the date on which public disclosure of the date of the special general meeting was made. A director may be removed by the shareholders, provided notice of the shareholders’ meeting convened to remove the director is given to the director. The notice must contain a statement of the intention to remove the director and must be served on the director not less than 14 days before the meeting. The director is entitled to attend the meeting and be heard on the motion for his or her removal. Holders of our Preference Shares generally have no voting rights except (i) in respect of amendments to the Memorandum of Association which would adversely vary the rights of the Preference Shares (ii) in the event that the Company proposes to issue any parity shares if the cumulative dividends payable on issued and outstanding Preference Shares are in arrears or any 104 senior shares or (iii) in the event of a proposed amalgamation or merger of the Company. However, if and whenever dividends payable on the Preference Shares are in arrears for six or more quarterly periods, whether or not consecutive, holders of Preference Shares (voting together as a class with all other classes or series of parity securities upon which like voting rights have been conferred and are exercisable) will be entitled to elect one additional director to serve on our board of directors, and the size of our board of directors will be increased as needed to accommodate such change (unless the size of our board of directors already has been increased by reason of the election of a director by holders of parity securities upon which like voting rights have been conferred and with which the Preference Shares voted as a class for the election of such director). The right of such holders of Preference Shares to elect a member of our board of directors will continue until such time as all accumulated and unpaid dividends on the Preference Shares have been paid in full. Proceedings of Board of Directors Our bye-laws provide that our business is to be managed and conducted by our board of directors. Bermuda law requires that our directors be individuals, but there is no requirement in our bye-laws or Bermuda law that directors hold any of our shares. There is also no requirement in our bye-laws or Bermuda law that our directors must retire at a certain age. The remuneration of our directors is determined by the board of directors, and there is no requirement that a specified number or percentage of “independent” directors must approve any such determination. Our directors may also be paid all travel, hotel and other expenses properly incurred by them in connection with our business or their duties as directors. Director Conflicts of Interest Any conflict of interest question involving one or more of the Company’s directors will be resolved by the audit and risk committee of the board of directors. In the event that a director has a direct or indirect interest in any contract or arrangement with the Company, provided that the director discloses such interest as required by Bermuda law, such director is entitled under our bye-laws to vote in respect of any such contract or arrangement in which he or she is interested unless he or she is disqualified from voting by the Chairman of our board of directors. In the event that the Chairman has disclosed a direct or indirect interest in a contract or arrangement with us, the determination as to whether the Chairman and any other interested director should be disqualified from voting will be made by a majority of the disinterested directors. Bermuda law prohibits any director (including the spouse or children of the director or any company of which such director, spouse or children own or control more than 20.0% of the capital or loan debt) from borrowing from us (except loans made to directors who are bona fide employees or former employees pursuant to an employees’ share scheme) unless shareholders holding 90.0% of the total voting rights have consented to the loan. Indemnification of Directors and Officers Section 98 of the Companies Act provides generally that a Bermuda company may indemnify its directors, officers and auditors against any liability which by virtue of any rule of law would otherwise be imposed on them in respect of any negligence, default, breach of duty or breach of trust, except in cases where such liability arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the company. Section 98 further provides that a Bermuda company may indemnify its directors, officers and auditors against any liability incurred by them in defending any proceedings, whether civil or criminal, in which judgment is awarded in their favor or in which they are acquitted or granted relief by the Supreme Court of Bermuda pursuant to section 281 of the Companies Act. We have adopted provisions in our bye-laws that provide that we shall indemnify our officers and directors in respect of their actions and omissions, except in respect of their fraud or dishonesty. Our bye-laws provide that the shareholders waive all claims or rights of action that they might have, 105 individually or in right of the Company, against any of the Company’s directors or officers for any act or failure to act in the performance of such director’s or officer’s duties, except in respect of any fraud or dishonesty of such director or officer. Section 98A of the Companies Act permits us to purchase and maintain insurance for the benefit of any officer or director in respect of any loss or liability attaching to him in respect of any negligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer or director. We have purchased and maintain directors’ and officers’ liability insurance for such purpose. We have also entered into indemnification agreements with our directors and officers. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions”. Amendment of Memorandum of Association and Bye-laws Bermuda law provides that the memorandum of association of a company may be amended by a resolution passed at a general meeting of shareholders. Our bye-laws provide that no bye-law shall be rescinded, altered or amended, and no new bye-law shall be made, unless it shall have been approved by a resolution of our board of directors and by a resolution of our shareholders including the affirmative votes of at least a majority of all issued and outstanding shares. Under Bermuda law, the holders of an aggregate of not less than 20.0% in par value of a company’s issued share capital or any class thereof have the right to apply to the Supreme Court of Bermuda for an annulment of any amendment of the memorandum of association adopted by shareholders at any general meeting, other than an amendment which alters or reduces a company’s share capital as provided in the Companies Act. Where such an application is made, the amendment becomes effective only to the extent that it is confirmed by the Bermuda court. An application for an annulment of an amendment of the memorandum of association must be made within twenty-one days after the date on which the resolution altering the company’s memorandum of association is passed and may be made on behalf of persons entitled to make the application by one or more of their number as they may appoint in writing for the purpose. No application may be made by shareholders voting in favor of the amendment. Amalgamations, Mergers and Business Combinations The amalgamation or merger of a Bermuda company with another company or corporation (other than certain affiliated companies) requires the amalgamation or merger agreement to be approved by the company’s board of directors and by its shareholders. Unless the company’s bye- laws provide otherwise, the approval of 75.0% of the shareholders voting at such meeting is required to approve the amalgamation or merger agreement, and the quorum for such meeting must be two persons holding or representing more than one-third of the issued shares of the company. Our bye- laws provide that a merger or an amalgamation must only be approved by the affirmative votes of a majority of the votes attaching to all issued and outstanding shares entitling the shareholder to vote on such resolutions. Under Bermuda law, in the event of an amalgamation or merger of a Bermuda company with another company or corporation, a shareholder of the Bermuda company who did not vote in favor of the amalgamation or merger and who is not satisfied that fair value has been offered for such shareholder’s shares may, within one month of notice of the shareholders’ meeting, apply to the Supreme Court of Bermuda to appraise the fair value of those shares. Shareholder Suits Class actions and derivative actions are generally not available to shareholders under Bermuda law. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud 106 against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it. When the affairs of a company are being conducted in a manner that is oppressive or prejudicial to the interests of some part of the shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of the company’s affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company. Our bye-laws contain a provision which provides that in the event any dispute arises concerning the Companies Act or out of our bye-laws, including whether there has been a breach of the Companies Act or our bye-laws by an officer or director, any such dispute shall be subject to the exclusive jurisdiction of the Supreme Court of Bermuda. In addition, our bye-laws contain a provision by virtue of which our shareholders waive any claim or right of action that they have, both individually and on our behalf, against any director or officer in relation to any action or failure to take action by such director or officer, except in respect of any fraud or dishonesty of such director or officer. Capitalization of Profits and Reserves Pursuant to our bye-laws, our board of directors may (i) capitalize any part of the amount of our share premium or other reserve accounts or any amount credited to our profit and loss account or otherwise available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares pro rata (except in connection with the conversion of shares) to the shareholders; or (ii) capitalize any sum standing to the credit of a reserve account or sums otherwise available for dividend or distribution by paying up in full, partly paid or nil paid shares of those shareholders who would have been entitled to such sums if they were distributed by way of dividend or distribution. Calls on Shares and Forfeiture In the event of any issuance by the Company of shares that are not fully paid, our board of directors may make such calls as it thinks fit upon the holders of such partly paid shares in respect of any amounts unpaid on such shares (and not made payable at fixed times by the terms and conditions of issue). If a call on partly paid shares is not paid on or before the day appointed for payment thereof, the holder of such shares may at the discretion of our board of directors be liable to pay the Company interest on the amount of such call and our board of directors may direct the secretary of the Company to forward such shareholder a notice in writing demanding payment. If the requirements of such notice are not complied with, any such share may at any time thereafter, until the payment of all amounts due, be forfeited by a resolution of our board of directors to that effect, and such share shall thereupon become the property of the Company and may be disposed of as our board of directors shall determine. Untraced Shareholders Our bye-laws provide that our board of directors may forfeit any dividend or other monies payable in respect of any shares that remain unclaimed for six years from the date when such monies became due for payment. In addition, we are entitled to cease sending dividend warrants and checks by post or otherwise to a shareholder if such instruments have been returned undelivered to, or left uncashed by, such shareholder on at least two consecutive occasions or, following one such occasion, reasonable enquires have failed to establish the shareholder’s new address. This entitlement ceases if the shareholder claims a dividend or cashes a dividend check or a warrant. Certain Provisions of Bermuda Law We have been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange control purposes. This designation allows us to engage in transactions in currencies other than the Bermuda dollar, and there are no exchange control restrictions on our ability to transfer 107 funds (other than funds denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to U.S. residents who are holders of our common shares. The Bermuda Monetary Authority has given its consent for the issue and free transferability of all our common shares to and between non-residents of Bermuda for exchange control purposes, provided that our shares remain listed on an appointed stock exchange, which includes the NYSE. Approvals or permissions given by the Bermuda Monetary Authority do not constitute a guarantee by the Bermuda Monetary Authority as to our performance or our creditworthiness. Accordingly, in giving such consent or permissions, the Bermuda Monetary Authority shall not be liable for the financial soundness, performance or default of our business or for the correctness of any opinions or statements expressed in this annual report. Certain issues and transfers of common shares involving persons deemed resident in Bermuda for exchange control purposes require the specific consent of the Bermuda Monetary Authority. In accordance with Bermuda law, share certificates are only issued in the names of companies, partnerships or individuals. In the case of a shareholder acting in a special capacity (for example as a trustee), certificates may, at the request of the shareholder, record the capacity in which the shareholder is acting. Notwithstanding such recording of any special capacity, we are not bound to investigate or see to the execution of any such trust. We will take no notice of any trust applicable to any of our shares, whether or not we have been notified of such trust. C. Material Contracts The following is a summary of each material contract, other than contracts entered into in the ordinary course of business, to which we or any of our subsidiaries is a party, for the two years immediately preceding the date of this annual report. Such summaries are not intended to be complete and reference is made to the contracts themselves, which are exhibits to this annual report. (a) Registration Rights Agreement among GasLog Ltd. and the shareholders named therein, dated as of April 4, 2012; please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Registration Rights Agreement”. (b) Facility Agreement dated December 23, 2011, relating to a $435,000,000 loan facility among GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd. as borrowers, DnB Bank ASA, Commonwealth Bank of Australia, Danish Ship Finance A/S, ING Bank N.V. and Skandinaviska Enskilda Banken AB (publ) as mandated lead arrangers, the financial institutions listed in Schedule 1 thereto as lenders, the financial institutions listed in Schedule 1 thereto as hedging providers and DnB Bank ASA as bookrunner, agent and security agent; please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. (c) Master Time Charter Party among GAS-one Ltd., GAS-two Ltd., GAS-three Ltd., GAS- four Ltd., GAS-five Ltd., GAS-six Ltd. and Methane Services Limited, dated May 9, 2011; please see “Item 4. Information on the Company—B. Business Overview—Ship Time Charters”. (d) Appendix to the Private Agreement of Professional Hiring (English translation), dated December 1, 2010 and October 1, 2011, between Nea Dimitra Ktimatikh Kai Emporikh S.A. and GasLog LNG Services Ltd.; please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Office Space and Related Arrangements”. (e) Form of Indemnification Agreement for the Company’s directors and certain officers; please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Indemnification Agreements”. (f) Restrictive Covenant Agreement among GasLog Ltd., Peter G. Livanos and Blenheim Holdings Ltd., dated April 4, 2012; please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Restrictive Covenant Agreement”. 108 (g) GasLog Ltd. 2013 Omnibus Incentive Compensation Plan; please see “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Senior Management—Equity Compensation Plans”. (h) Facility Agreement for up to $450,000,000 Loan Facility dated November 12, 2014 among GAS-three Ltd., GAS-four Ltd., GAS-five Ltd., GAS-sixteen Ltd. and GAS-seventeen Ltd. as borrowers, Citibank, N.A., London Branch, Nordea Bank Finland Plc, London Branch, DVB Bank America N.V., ABN Amro Bank N.V., Skandinaviska Enskilda Banken AB (Publ) and BNP Paribas, as mandated lead arrangers, the financial institutions listed in Schedule 1 thereto as lenders, Citibank, N.A., London Branch as bookrunner and security agent, and Citibank International Limited as agent and security trustee; please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources— Credit Facilities”. (i) Corporate Guarantee between GasLog Partners LP and Citibank, N.A., London Branch, dated November 12, 2014; please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. (j) Facilities Agreement for $1,311,356,340 Loan Facilities dated October 16, 2015 between GAS-eleven Ltd., GAS-twelve Ltd., GAS-thirteen Ltd., Gas-fourteen Ltd., GAS-twenty two Ltd., GAS-twenty three Ltd., GAS-twenty four Ltd., GAS-twenty five Ltd., as borrowers, Citibank, N.A., London Branch, Nordea Bank AB, London Branch, The Export-Import Bank of Korea, Bank of America, National Association, BNP Paribas, Credit Agricole Corporate and Investment Bank, Credit Suisse AG, HSBC Bank plc, ING Bank N.V., London Branch, KEB Hana Bank, London Branch, KfW IPEX-Bank GmbH, National Australia Bank Limited, Oversea-Chinese Banking Corporation Limited, Societe Generale and The Korea Development Bank as mandated lead arrangers with Nordea Bank AB, London Branch as agent, security agent, global co-ordinator and bookrunner and Citibank N.A., London Branch as export credit agent, global co-oordinator, bookrunner and export credit agent co-ordinator, guaranteed by GasLog Ltd. and GasLog Carriers Ltd.; please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. (k) Senior Facility Agreement dated February 18, 2016, relating to a $396,500,000 loan facility among GAS-eighteen Ltd., GAS-nineteen Ltd., GAS-twenty Ltd., GAS-twenty one Ltd. and GAS-twenty seven Ltd. as borrowers, ABN AMRO Bank N.V. and DNB (UK) Ltd. as mandated lead arrangers, original lenders and bookrunners, DVB Bank America N.V. as mandated lead arranger and original lender, Commonwealth Bank of Australia, ING Bank N.V., London Branch, Credit Agricole Corporate and Investment Bank, National Australia Bank Limited as original lenders and DNB Bank ASA, London Branch as agent and security agent; please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. (l) Junior Facility Agreement dated February 18, 2016, relating to a $180,000,000 loan facility among GAS-eighteen Ltd., GAS-nineteen Ltd., GAS-twenty Ltd., GAS-twenty one Ltd. and GAS-twenty seven Ltd. as borrowers, ABN AMRO Bank N.V. and DNB (UK) Ltd. as mandated lead arrangers, original lenders and bookrunners, DVB Bank America N.V. as mandated lead arranger and original lender, Commonwealth Bank of Australia, ING Bank N.V., London Branch, as original lenders and DNB Bank ASA, London Branch as agent and security agent; please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. (m) Form of Corporate Guarantee between GasLog Ltd. and DNB Bank ASA, London Branch (provided in respect of the Junior Facility Agreement and the Senior Facility Agreement, each dated February 18, 2016); please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. (n) Form of Corporate Guarantee between GasLog Partners LP and DNB Bank ASA, London Branch, (provided in respect of the Junior Facility Agreement and the Senior Facility 109 Agreement, each dated February 18, 2016); please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. D. Exchange Controls and Other Limitations Affecting Security Holders Under Bermuda law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common shares. We have been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange control purposes. This designation allows us to engage in transactions in currencies other than the Bermuda dollar, and there are no exchange control restrictions on our ability to transfer funds (other than funds denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to U.S. residents who are holders of our common shares. Under Bermuda law, “exempted” companies are companies formed for the purpose of conducting business outside Bermuda from a principal place of business in Bermuda. As an exempted company, we may not, without a license or consent granted by the Minister of Finance, participate in certain business transactions, including transactions involving Bermuda landholding rights and the carrying on of business of any kind, for which we are not licensed in Bermuda. E. Tax Considerations Bermuda Tax Considerations The following discussion summarizes the material Bermuda tax consequences to us of our activities and, subject to the limitations described above, to you as a holder of our shares. At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by us or by our shareholders in respect of our shares. We have obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 of Bermuda, as amended, that, in the event that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall not, until March 31, 2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations except insofar as such tax applies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned or leased by us in Bermuda. Given the limited duration of the Bermuda Minister of Finance’s assurance, we cannot assure you that we will not be subject to any Bermuda tax after March 31, 2035. Material U.S. Federal Income Tax Considerations The following discussion summarizes the material U.S. Federal income tax consequences to us of our activities and, subject to the limitations described above, to you as a holder of our common shares or Preference Shares. The following discussion of U.S. Federal income tax matters is based on the Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the U.S. Department of the Treasury, all of which are subject to change, possibly with retroactive effect. This discussion does not address any U.S. state or local taxes. You are encouraged to consult your own tax advisor regarding the particular U.S. Federal, state and local and foreign income and other tax consequences of acquiring, owning and disposing of our common shares or Preference Shares that may be applicable to you. U.S. Taxation of Our Operating Income We have elected to treat a majority of our subsidiaries as disregarded entities for U.S. Federal income tax purposes. The entities that are considered disregarded entities for U.S. Federal income tax purposes should be treated as branches rather than corporations for U.S. Federal income tax purposes. Currently, no election has been filed to treat GasLog LNG Services Ltd., GasLog Services 110 UK Ltd., GasLog Asia Pte. Ltd., GasLog Investments Ltd., GasLog Monaco S.A.M., GasLog Shipping Limited, GasLog Shipping Company Ltd., and Egypt LNG Shipping Ltd. as disregarded entities for U.S. Federal income tax purposes. As a result, these entities and GasLog Services U.S. Inc. will continue to be treated as corporations for U.S. Federal income tax purposes. U.S. Taxation of Shipping Income Subject to the discussion of “effectively connected” income below, unless we are exempt from U.S. Federal income tax under the rules contained in Section 883 of the Code, we will be subject to U.S. Federal income tax under the rules of Section 887 of the Code, which would impose on us a 4% U.S. income tax in respect of our U.S. source gross transportation income (without the allowance for deductions). For this purpose, U.S. source gross transportation income includes 50% of the shipping income that is attributable to transportation that begins or ends (but that does not both begin and end) in the United States. Shipping income attributable to transportation exclusively between non-U.S. ports is generally not subject to any U.S. income tax. For this purpose, “shipping income” means income that is derived from: (i) the use of ships; (ii) the hiring or leasing of ships for use on a time, operating or bareboat charter basis; (iii) the participation in a pool, partnership, strategic alliance, joint operating agreement or other joint venture we directly or indirectly own or participate in that generates such income; or (iv) the performance of services directly related to those uses. Under Section 883 of the Code and the regulations thereunder, we will be exempt from U.S. Federal income tax on our U.S. source gross transportation income if: (i) we are organized in a foreign country (the “country of organization”) that grants an “equivalent exemption” to corporations organized in the United States; and (ii) either (a) more than 50% of the value of our shares is owned, directly or indirectly, by individuals who are “residents” of our country of organization or of another foreign country that grants an equivalent exemption to corporations organized in the United States (the “50% Ownership Test”), or (b) our shares are “primarily and regularly traded on an established securities market” in our country of organization, in another country that grants an equivalent exemption to U.S. corporations, or in the United States (the “Publicly-Traded Test”). We are currently not entitled to this exemption under Section 883 for any tax year. As a result, we are subject to the 4% U.S. Federal income tax under Section 887 on our U.S. source gross transportation income (subject to the discussion of “effectively connected income” below). For 2015, the accrued U.S. source gross transportation tax was $0.01 million. Because we are unable to qualify for the exemption under Section 883, our U.S. source gross transportation income in future years that is considered to be “effectively connected” with the conduct of a U.S. trade or business is subject to the U.S. corporate income tax currently imposed at rates of up to 35% (net of applicable deductions). In addition, we may be subject to the 30% U.S. “branch profits” tax on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business. Our U.S. source gross transportation income would be considered effectively connected with the conduct of a U.S. trade or business only if: (i) we had, or were considered to have, a fixed place of business in the United States involved in the earning of U.S. source gross transportation income; and 111 (ii) substantially all of our U.S. source gross transportation income was attributable to regularly scheduled transportation, such as the operation of a ship that followed a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States. We believe that we will not meet these conditions because we will not have, or permit circumstances that would result in having, such a fixed place of business in the United States or any ship sailing to or from the United States on a regularly scheduled basis. In addition, income attributable to transportation that both begins and ends in the United States is not subject to the tax rules described above. Such income is subject to either a 30% gross-basis tax or to U.S. corporate income tax on net income at rates of up to 35% (and the branch profits tax discussed above). Although there can be no assurance, we do not expect to engage in transportation that produces shipping income of this type. Taxation of Gain on Sale of Shipping Assets Regardless of whether we qualify for the exemption under Section 883 of the Code, we will not be subject to U.S. income taxation with respect to gain realized on a sale of a ship, provided the sale is considered to occur outside of the United States (as determined under U.S. tax principles). In general, a sale of a ship will be considered to occur outside of the United States for this purpose if title to the ship (and risk of loss with respect to the ship) passes to the buyer outside of the United States. We expect that any sale of a ship will be so structured that it will be considered to occur outside of the United States. Taxation of United States Holders You are a “U.S. holder” if you are a beneficial owner of our common shares or Preference Shares and you are a U.S. citizen or resident, a U.S. corporation (or other U.S. entity taxable as a corporation), an estate the income of which is subject to U.S. Federal income taxation regardless of its source, or a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. Federal income tax purposes. If a partnership holds our common shares or Preference Shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common shares or Preference Shares, you should consult your tax advisor. Distributions on Our Common Shares and Preference Shares Subject to the discussion of “passive foreign investment companies”, or “PFICs”, below, any distributions with respect to our common shares or Preference Shares that you receive from us generally will constitute dividends to the extent of our current or accumulated earnings and profits (as determined under U.S. tax principles). Distributions in excess of our earnings and profits will be treated first as a nontaxable return of capital to the extent of your tax basis in our common shares or Preference Shares (on a dollar-for-dollar basis) and thereafter as capital gain. Because we are not a U.S. corporation, if you are a U.S. corporation (or a U.S. entity taxable as a corporation), you will not be entitled to claim a dividends-received deduction with respect to any distributions you receive from us. Dividends paid with respect to our common shares or Preference Shares will generally be treated as “passive category income” for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes. If you are an individual, trust or estate, dividends you receive from us should be treated as “qualified dividend income” taxed at a maximum preferential rate of 15% or 20%, depending on the income level of the individual, provided that: 112 (i) our common shares or Preference Shares are readily tradable on an established securities market in the United States (such as the NYSE); (ii) we are not a PFIC for the tax year during which the dividend is paid or the immediately preceding tax year (see the discussion below under “—PFIC Status and Significant Tax Consequences”); (iii) you own our common shares or Preference Shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares or Preference Shares become ex-dividend; (iv) you are not under an obligation to make related payments with respect to positions in substantially similar or related property; and (v) certain other conditions are met. Special rules may apply to any “extraordinary dividend”. Generally, an extraordinary dividend is a dividend in an amount that is equal to (or in excess of) 10% of your adjusted tax basis (or fair market value in certain circumstances) in a share of our common shares (5% in the case of Preference Shares). If we pay an extraordinary dividend on our common shares or Preference Shares that is treated as “qualified dividend income” and if you are an individual, estate or trust, then any loss derived by you from a subsequent sale or exchange of such common shares or Preference Shares will be treated as long-term capital loss to the extent of such dividend. There is no assurance that dividends you receive from us will be eligible for the preferential tax rates applicable to qualified dividend income. Dividends you receive from us that are not eligible for the preferential tax rates will be taxed at ordinary income rates. Sale, Exchange or Other Disposition of Common Shares and Preference Shares Provided that we are not a PFIC for any tax year, you generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares or Preference Shares in an amount equal to the difference between the amount realized by you from such sale, exchange or other disposition and your tax basis in such shares. Such gain or loss will be treated as long-term capital gain or loss if your holding period is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as U.S. source income or loss, as applicable, for U.S. foreign tax credit purposes. Your ability to deduct capital losses against ordinary income is subject to limitations. Unearned Income Medicare Contribution Tax Each U.S. holder who is an individual, estate or trust is generally subject to a 3.8% Medicare tax on the lesser of (i) such U.S. holder’s “net investment income” for the relevant taxyear, and (ii) the excess of such U.S. holder’s modified adjusted gross income for the tax year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). For this purpose, net investment income generally includes dividends on and capital gains from the sale, exchange or other disposition of our common shares or Preference Shares, subject to certain exceptions. You are encouraged to consult your own tax advisor regarding the applicability of the Medicare tax to your income and gains from your ownership of our common shares or Preference Shares. PFIC Status and Significant Tax Consequences In General Special U.S. income tax rules apply to you if you hold shares in a non-U.S. corporation that is classified as a PFIC for U.S. income tax purposes. In general, under Section 1297 of the Code, we will be treated as a PFIC in any tax year in which, after applying certain look-through rules, either: (i) at least 75% of our gross income including our proportionate share of the gross income of our vessel-owning subsidiaries for such tax year consists of passive income (e.g., dividends, 113 interest, capital gains and rents derived other than in the active conduct of a rental business); or (ii) at least 50% of the average value of our assets including our proportionate share of the assets of our vessel-owning subsidiaries during such tax year that produce, or are held for the production of, passive income. Income we earn, or are deemed to earn, in connection with the performance of services will not constitute passive income. By contrast, rental income will generally constitute passive income (unless we are treated under certain special rules as deriving our rental income in the active conduct of a trade or business). There are legal uncertainties involved in determining whether the income derived from time chartering activities constitutes rental income or income derived from the performance of services. In Tidewater Inc. v. United States, 565 F.2d 299 (5th Cir. 2009), the Fifth Circuit held that income derived from certain time chartering activities should be treated as rental income rather than services income for purposes of a provision of the Code relating to foreign sales corporations. In recently published guidance, however, the IRS stated that it disagreed with the holding in Tidewater, and specified that time charters should be treated as service contracts. Since we have chartered all our ships to unrelated charterers on the basis of time charters and since we expect to continue to do so, we believe that we are not a PFIC. We have received an opinion from our counsel, Cravath, Swaine & Moore LLP, that (i) the income we receive from time chartering activities and assets engaged in generating such income should not be treated as passive income or assets, respectively, and (ii) for the tax year during which our initial public offering occurred and each tax year thereafter, we should not be a PFIC. This opinion is based and its accuracy is conditioned on representations, valuations and projections provided by us regarding the nature of our assets, income and charters to our counsel. While we believe these representations, valuations and projections to be accurate, the shipping market is volatile and no assurance can be given that they will continue to be accurate. Moreover, we have not sought, and we do not expect to seek, an IRS ruling on this matter. As a result, the IRS or a court could disagree with our position. No assurance can be given that this result will not occur. In addition, although we intend to conduct our affairs in a manner to avoid, to the extent possible, being classified as a PFIC with respect to any tax year, we cannot assure you that the nature of our operations will not change in the future, or that we can avoid PFIC status in the future. If we were to be treated as a PFIC for any tax year, you generally would be subject to one of three different U.S. Federal income tax regimes, as discussed below, depending on whether or not you make certain elections. Additionally, for each year during which you own our common shares or Preference Shares, we are a PFIC and the total value of all PFIC stock that you directly or indirectly own exceeds certain thresholds, you will be required to file IRS Form 8621 with your U.S. Federal income tax return to report your ownership of our common shares or Preference Shares. Taxation of U.S. Holders Making a Timely QEF Election If we were a PFIC and if you make a timely election to treat us as a “Qualifying Electing Fund” for U.S. tax purposes (a “QEF Election”), you would be required to report each year your pro rata share of our ordinary earnings and our net capital gain for our tax year that ends with or within your tax year, regardless of whether we make any distributions to you. Such income inclusions would not be eligible for the preferential tax rates applicable to qualified dividend income (as discussed above under “Taxation of United States Holders—Distributions on Our Common Shares and Preference Shares”). Your adjusted tax basis in our common shares or Preference Shares would be increased to reflect such taxed but undistributed earnings and profits. Distributions of earnings and profits that had previously been taxed would result in a corresponding reduction in your adjusted tax basis in our common shares or Preference Shares and would not be taxed again once distributed. You generally would recognize capital gain or loss on the sale, exchange or other disposition of our common shares or Preference Shares. Even if you make a QEF Election for one of our tax years, if we were a PFIC for a prior tax year during which you held our common shares or Preference Shares and for which you did not make a timely QEF Election, you would also be 114 subject to a more adverse regime described below under “—Taxation of U.S. Holders That Make No Election”. You would make a QEF Election by completing and filing IRS Form 8621 with your U.S. income tax return for the year for which the election is made in accordance with the relevant instructions. If we were to become aware that we were to be treated as a PFIC for any tax year, we would notify all U.S. holders of such treatment and would provide all necessary information to any U.S. holder who requests such information in order to make the QEF Election described above with respect to us. Taxation of U.S. Holders Making a Timely “Mark-to-Market” Election Alternatively, if we were to be treated as a PFIC for any tax year and, as we believe, our common shares or Preference Shares are treated as “marketable stock”, you would be allowed to make a “mark-to-market” election with respect to our common shares or Preference Shares, provided you complete and file IRS Form 8621 with your U.S. income tax return for the year for which the election is made in accordance with the relevant instructions. If that election is made, you generally would include as ordinary income in each taxyear the excess, if any, of the fair market value of our common shares or Preference Shares at the end of the tax year over your adjusted tax basis in our common shares or Preference Shares. You also would be permitted an ordinary loss in respect of the excess, if any, of your adjusted tax basis in our common shares or Preference Shares over its fair market value at the end of the tax year (but only to the extent of the net amount previously included in income as a result of the mark-to-market election). Your tax basis in our common shares or Preference Shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our common shares or Preference Shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common shares or Preference Shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by you. Taxation of U.S. Holders That Make No Election Finally, if we were treated as a PFIC for any tax year and if you did not make either a QEF Election or a mark-to-market election for that year, you would be subject to special rules with respect to (i) any excess distribution (that is, the portion of any distributions received by you on our common shares or Preference Shares in a tax year in excess of 125% of the average annual distributions received by you in the three preceding tax years, or, if shorter, your holding period for our common shares or Preference Shares) and (ii) any gain realized on the sale, exchange or other disposition of our common shares or Preference Shares. Under these special rules: (i) the excess distribution or gain would be allocated ratably over your aggregate holding period for our common shares or Preference Shares; (ii) the amount allocated to the current tax year would be taxed as ordinary income; and (iii) the amount allocated to each of the other tax years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other tax year. U.S. Federal Income Taxation of Non-U.S. Holders You are a “non-U.S. holder” if you are a beneficial owner of our common shares or Preference Shares (other than a partnership for U.S. tax purposes) and you are not a U.S. holder. Distributions on Our Common Shares and Preference Shares You generally will not be subject to U.S. income or withholding taxes on a distribution received from us with respect to our common shares or Preference Shares, unless the income arising from such distribution is effectively connected with your conduct of a trade or business in the 115 United States. If you are entitled to the benefits of an applicable income tax treaty with respect to that income, that income generally is taxable in the United States only if it is attributable to a permanent establishment maintained by you in the United States. Sale, Exchange or Other Disposition of Our Common Shares and Preference Shares You generally will not be subject to U.S. income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common shares or Preference Shares, unless: (i) the gain is effectively connected with your conduct of a trade or business in the United States. If you are entitled to the benefits of an applicable income tax treaty with respect to that gain, that gain generally is taxable in the United States only if it is attributable to a permanent establishment maintained by you in the United States; or (ii) you are an individual who is present in the United States for 183 days or more during the tax year of disposition and certain other conditions are met. Gain that is effectively connected with the conduct of a trade or business in the United States (or so treated) generally will be subject to U.S. Federal income tax (net of certain deductions) at regular U.S. Federal income tax rates. If you are a corporate non-U.S. holder, your earnings and profits that are attributable to the effectively connected income (subject to certain adjustments) may be subject to an additional U.S. branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable tax treaty). United States Backup Withholding and Information Reporting In General In general, if you are a non-corporate U.S. holder, dividend payments (or other taxable distributions) made within the United States will be subject to information reporting requirements and backup withholding tax if you: (i) fail to provide an accurate taxpayer identification number; (ii) are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. Federal income tax returns; or (iii) in certain circumstances, fail to comply with applicable certification requirements. If you are a non-U.S. holder, you may be required to establish your exemption from information reporting and backup withholding by certifying your status on IRS Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY, as applicable. If you sell our common shares or Preference Shares to or through a U.S. office or broker, the payment of the sales proceeds is subject to both U.S. backup withholding and information reporting unless you certify that you are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell our common shares or Preference Shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to that payment. However, U.S. information reporting requirements (but not backup withholding) will apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell our common shares or Preference Shares through a non-U.S. office of a broker that is a U.S. person or has certain other connections with the United States. Backup withholding tax is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under backup withholding rules that exceed your income tax liability by accurately completing and timely filing a refund claim with the IRS. Tax Return Disclosure U.S. individuals that hold certain specified foreign financial assets (which include shares in a foreign corporation) are subject to U.S. return disclosure obligations (and related penalties for failure to disclose). Such U.S. individuals are required to file IRS Form 8938 with their U.S. Federal 116 income tax returns. You are encouraged to consult your own tax advisors concerning the filing of IRS Form 8938. F. Dividends and Paying Agents Not applicable. G. Statement by Experts Not applicable. H. Documents on Display We are subject to the informational requirements of the Exchange Act. In accordance with these requirements, we file reports and other information as a foreign private issuer with the SEC. You may inspect and copy our public filings without charge at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. You may obtain copies of all or any part of such materials from the SEC upon payment of prescribed fees. You may also inspect reports and other information regarding companies, such as us, that file electronically with the SEC without charge at a web site maintained by the SEC at http://www.sec.gov. I. Subsidiary Information Not applicable. ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to various market risks, including interest rate and foreign currency exchange risks. The Group makes use of derivative financial instruments such as interest rate swaps to maintain the desired level of exposure arising from these risks. A discussion of our accounting policies for derivative financial instruments is included in Note 24 to our audited consolidated financial statements included elsewhere in this report. Further information on our exposure to market risk is included in Note 22 to our audited consolidated financial statements included elsewhere in this report. The following analyses provide quantitative information regarding our exposure to market risks. Interest Rate Risk We are subject to market risks relating to changes in interest rates because we, through our subsidiaries, have floating rate debt outstanding. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service our debt. From time to time, we have used interest rate swaps to reduce our exposure to market risk from changes in interest rates. The principal objective of these contracts is to minimize economic risks and costs associated with our floating rate debt and not for speculative or trading purposes. We expect to continue to use interest rate swaps in the future as we deem appropriate to manage our exposure to interest rate risk. The aggregate principal amount of our outstanding floating rate debt as of December 31, 2015 was $1.39 billion. As an indication of the extent of our sensitivity to interest rate changes, an increase in LIBOR by 10 basis points would have decreased our profit during the years ended December 31, 2015 and 2014 by approximately 2.46% or $1.32 million and 1.34% or $0.68 million, respectively, based upon our debt level during such years. We expect our sensitivity to interest rate changes to increase in the future as a result of increased future borrowings under our current and future loan agreements. Borrowings under these floating rate debt facilities will be used to finance a portion of the contract prices of our newbuildings on order. 117 Interest Rate Swaps The principal terms of the interest rate swaps are disclosed in Note 24 to our consolidated financial statements included elsewhere in this annual report. As of December 31, 2015 and 2014, the notional amount of the swaps designated as cash flow hedging instruments was $389.57 million and $476.15 million, respectively, and the notional amount of the swaps held for trading was $516.81 million and $491.43 million, respectively. Under these swap transactions, the bank counterparty effects quarterly floating-rate payments to the Company for the relevant amount based on the three-month U.S. dollar LIBOR, and the Company effects quarterly payments to the bank on the relevant amount at the respective fixed rates. Foreign Currency Exchange Risk We generate all of our revenue in U.S. dollars, and the majority of our expenses, including debt repayment obligations under our credit facilities and a portion of our administrative expenses, are denominated in U.S. dollars. However, a portion of the ship operating expenses, primarily crew wages of officers, and a large portion of our administrative expenses are denominated in euros. As of December 31, 2015 and 2014, approximately $17.45 million and $13.55 million, respectively, of our outstanding liabilities were denominated in euros. Depreciation in the value of the U.S. dollar relative to the euro will increase the U.S. dollar cost of us paying expenses denominated in euros. Accordingly, there is a risk that currency fluctuations will have a negative effect on our cash flows. As an indication of the extent of our sensitivity to changes in exchange rate, a 10.0% increase in the average euro/dollar exchange rate would have decreased our profit and cash flows during the years ended December 31, 2015 and 2014 by approximately $7.81 million and $6.89 million, respectively, based upon our expenses during such years. We do not currently hedge movements in currency exchange rates, but our management monitors exchange rate fluctuations on a continuous basis. We may seek to hedge this currency fluctuation risk in the future. We expect our exposure to movements in currency exchange rates to increase in the future as our fleet increases. Inflation and Cost Increases We do not expect inflation to have a significant impact on us in the current economic environment and foreseeable future, other than potentially in relation to crew costs. LNG transportation is a specialized area and the number of LNG carriers has increased rapidly in recent years. As a result, there has been an increased demand for qualified crews, which has and will continue to put inflationary pressure on crew costs. The impact of cost increases would be mitigated to some extent by certain provisions in our time charters, including review provisions and cost pass- through provisions. ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES Not applicable. 118 PART II ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES There has been no material default in the payment of principal, interest, sinking or purchase fund installments or any other material default relating to the Group’s debt. There have been no arrears in payment of dividends on, or material delinquency with respect to, any class of preference shares of the Group. ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS None. ITEM 15. CONTROLS AND PROCEDURES A. Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2015. Based on our evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2015. B. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act and for the assessment of the effectiveness of internal control over financial reporting. Our internal controls over financial reporting are designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with IFRS, and that our receipts and expenditures are being made in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of the inherent limitations of internal controls over financial reporting, misstatements may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting using criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control-Integrated Framework (2013 framework). Based on the evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2015. The Company’s independent registered public accounting firm has issued an attestation report on the Company’s internal control over financial reporting. C. Attestation Report of the Registered Public Accounting Firm The effectiveness of the Company’s internal control over financial reporting as of December 31, 2015 has been audited by Deloitte LLP, an independent registered public accounting firm, as stated in their report which appears below. 119 To the Board of Directors and Shareholders of GasLog Ltd. Hamilton, Bermuda We have audited the internal control over financial reporting of GasLog Ltd. and subsidiaries (the “Group”) as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2015 of the Group and our report dated March 14, 2016 expressed an unqualified opinion on those financial statements. /s/ Deloitte LLP London, United Kingdom March 14, 2016 120 D. Changes in Internal Control over Financial Reporting During the period covered by this annual report, we have made no changes to our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. ITEM 16. [RESERVED] ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT Paul J. Collins and Donald J. Kintzer, whose biographical details are included in “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management”, each qualifies as an “audit committee financial expert”. Our board of directors has affirmatively determined that Mr. Collins and Mr. Kintzer meet the definition of “independent director” for purposes of serving on an audit committee under applicable SEC and NYSE rules. ITEM 16.B. CODE OF ETHICS We have adopted a Code of Business Conduct and Ethics for all directors, officers, employees and agents of the Company, a copy of which is posted on our website and may be viewed at http://www.gaslogltd.com. The information contained on or connected to our website is not a part of this annual report. We will also provide a paper copy of this document upon the written request of a shareholder at no cost. Shareholders may direct their requests to the attention of our General Counsel, c/o GasLog Monaco S.A.M., Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco. No waivers of the Code of Business Conduct and Ethics have been granted to any person during the fiscal year ended December 31, 2015. ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES Deloitte LLP, an independent registered public accounting firm, has audited our annual financial statements acting as our independent auditor for the fiscal years ended December 31, 2014 and December 31, 2015. The chart below sets forth the total amount billed and accrued for Deloitte LLP for services performed in 2014 and 2015 respectively and breaks down these amounts by the category of service. The fees paid to our principal accountant were approved in accordance with the pre-approval policies and procedures described below. Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.86 — $1.86 $2.31 0.01 $2.32 2015 2014 (Expressed in millions of U.S. Dollars) Audit Fees Audit fees represent compensation for professional services rendered for the audit of the consolidated financial statements of the Company and the audit of the financial statements for its individual subsidiary companies, fees for the review of the quarterly financial information, as well as in connection with the review of registration statements and related consents and comfort letters, and any other services required for SEC or other regulatory filings. Included in the audit fees for 2014 are fees of $0.32 million, related to the Partnership’s IPO completed in May 2014 and the fees of $0.15 million related to the Partnership’s follow-on offering completed in September 2014. Included in the audit fees for 2015 are fees of $0.09 million related to our public offering of 4,600,000 Preference Shares completed in April 2015 and $0.17 million to the Partnership’s follow-on offering completed in June 2015. 121 Tax Fees Tax fees relate to services provided in connection with U.S. corporate tax filings and tax advisory services. Audit-Related Fees No audit-related fees were billed by our principal accountant in 2014 and 2015. All Other Fees No other fees were billed by our principal accountant in 2014 and 2015. Pre-approval Policies and Procedures Our audit and risk committee is responsible for the appointment, compensation (subject to any required shareholder approval or authorization), retention and oversight of the work of the independent auditors. The audit and risk committee is also responsible for reviewing and approving in advance the retention of the independent auditors for the performance of all audit and lawfully permitted non-audit services. ITEM 16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES None. ITEM 16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS Set forth below are all purchases of our common shares by us and our affiliated purchasers for the period ended December 31, 2015. Period September 2015(1) . . . . . . . . . . . . . . . . December 2015(1). . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . Total Number of Shares Purchased Average Price Paid per Share ($) 119,984 787,376 907,360 14.95 8.87 9.67 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs — — — — — — (1) Entities controlled by Peter Livanos, for his own benefit and the benefit of his immediate family members, acquired these shares in open-market transactions. Mr. Livanos may be deemed to beneficially own these shares as a result of his control of these entities. These shares are reflected in Mr. Livanos’ share ownership included in “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders”. ITEM 16.F. CHANGE IN COMPANY’S CERTIFYING ACCOUNTANT Not Applicable ITEM 16.G. CORPORATE GOVERNANCE Statement of Significant Differences Between Our Corporate Governance Practices and the New York Stock Exchange Corporate Governance Standards for U.S. Non-Controlled Issuers Overview Pursuant to certain exceptions for foreign private issuers, we are not required to comply with certain of the corporate governance practices followed by U.S. companies under the NYSE listing standards. However, pursuant to Section 303.A.11 of the NYSE Listed Company Manual and the requirements of Form 20-F, we are required to state any significant ways in which our corporate 122 governance practices differ from the practices required by the NYSE for U.S. companies. We believe that our established practices in the area of corporate governance are in line with the spirit of the NYSE standards and provide adequate protection to our shareholders. The significant differences between our corporate governance practices and the NYSE standards applicable to listed U.S. companies are set forth below. Independence of Directors The NYSE rules do not require a listed company that is a foreign private issuer to have a board of directors that is comprised of a majority of independent directors. Under Bermuda law, we are not required to have a board of directors comprised of a majority of directors meeting the independence standards described in the NYSE rules. Accordingly, our board of directors is not required to be and is not comprised of a majority of independent directors. However, our board of directors has determined that half of our directors, specifically Paul J. Collins, William M. Friedrich, Dennis M. Houston, Donald J. Kintzer and Anthony S. Papadimitriou, satisfy the independence standards established by the NYSE as applicable to us. Corporate Governance, Nominating and Compensation Committee Pursuant to NYSE Rules 303A.04 and 303A.05, the NYSE requires that a listed U.S. company have a nominating/corporate governance committee and a compensation committee, each composed entirely of independent directors. As permitted under Bermuda law, we have one or more non- independent directors serving as committee members on our compensation committee and our corporate governance and nominating committee. NYSE Rules 303A.02 and 303A.05 contain independence requirements for compensation committee directors and compensation committee advisers for U.S. listed companies, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Bermuda law does not have similar requirements, therefore we may not adhere to these new requirements. ITEM 16.H. MINE SAFETY DISCLOSURE Not applicable. 123 PART III ITEM 17. FINANCIAL STATEMENTS Not applicable. ITEM 18. FINANCIAL STATEMENTS Reference is made to pages F-1 through F-55 included herein by reference. ITEM 19. EXHIBITS Exhibit No. Description 1.1 1.2 1.3 2.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 Amended Memorandum of Association of GasLog Ltd.(1) Bye-laws of GasLog Ltd.(1) Amendment to the Bye-laws of GasLog Ltd.(2) Specimen Share Certificate(1) Form of Registration Rights Agreement(1) Facility Agreement dated December 23, 2011, relating to a $435,000,000 loan facility among GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd. as borrowers, DnB Bank ASA, Commonwealth Bank of Australia, Danish Ship Finance A/S, ING Bank N.V. and Skandinaviska Enskilda Banken AB (publ) as mandated lead arrangers, the financial institutions listed in Schedule 1 thereto as lenders, the financial institutions listed in Schedule 1 thereto as hedging providers and DnB Bank ASA as bookrunner, agent and security agent(1)* Master Time Charter Party among GAS-one Ltd., GAS-two Ltd., GAS-three Ltd., GAS- four Ltd., GAS-five Ltd., GAS-six Ltd. and Methane Services Limited, dated May 9, 2011(1)* Appendix to the Private Agreement of Professional Hiring (English translation), dated December 1, 2010 and October 1, 2011, between Nea Dimitra Ktimatikh Kai Emporikh S.A. and GasLog LNG Services Ltd.(1) Form of Indemnification Agreement for the Company’s directors and certain officers Form of Restrictive Covenant Agreement(1) GasLog Ltd. 2013 Omnibus Incentive Compensation Plan(3) Facility Agreement for up to $450,000,0000 Loan Facility dated November 12, 2014 among GAS-three Ltd., GAS-four Ltd., GAS-five Ltd., GAS-sixteen Ltd. and GAS- seventeen Ltd. as borrowers, Citibank, N.A., London Branch, Nordea Bank Finland Plc, London Branch, DVB Bank America N.V., ABN Amro Bank N.V., Skandinaviska Enskilda Banken AB (Publ) and BNP Paribas, as mandated lead arrangers, the financial institutions listed in Schedule 1 thereto as lenders, Citibank, N.A., London Branch as bookrunner and security agent, and Citibank International Limited as agent and security trustee(4)* 4.9 Corporate Guarantee between GasLog Partners LP and Citibank, N.A., London Branch, dated November 12, 2014(4) 124 Exhibit No. 4.10 4.11 4.12 4.13 4.14 8.1 12.1 12.2 13.1 13.2 23.1 23.2 Description Facilities Agreement for $1,311,356,340 Loan Facilities dated October 16, 2015 between GAS-eleven Ltd., GAS-twelve Ltd., GAS-thirteen Ltd., Gas-fourteen Ltd., GAS-twenty two Ltd., GAS-twenty three Ltd., GAS-twenty four Ltd., GAS-twenty five Ltd., as borrowers, Citibank, N.A., London Branch, Nordea Bank AB, London Branch, The Export-Import Bank of Korea, Bank of America, National Association, BNP Paribas, Credit Agricole Corporate and Investment Bank, Credit Suisse AG, HSBC Bank plc, ING Bank N.V., London Branch, KEB Hana Bank, London Branch, KfW IPEX-Bank GmbH, National Australia Bank Limited, Oversea-Chinese Banking Corporation Limited, Societe Generale and The Korea Development Bank as mandated lead arrangers with Nordea Bank AB, London Branch as agent, security agent, global co- ordinator and bookrunner and Citibank N.A., London Branch as export credit agent, global co-oordinator, bookrunner and export credit agent co-ordinator, guaranteed by GasLog Ltd. and GasLog Carriers Ltd. Senior Facility Agreement dated February 18, 2016, relating to a $396,500,000 loan facility among GAS-eighteen Ltd., GAS-nineteen Ltd., GAS-twenty Ltd., GAS-twenty one Ltd. and GAS-twenty seven Ltd. as borrowers, ABN AMRO Bank N.V. and DNB (UK) Ltd. as mandated lead arrangers, original lenders and bookrunners, DVB Bank America N.V. as mandated lead arranger and original lender, Commonwealth Bank of Australia, ING Bank N.V., London Branch, Credit Agricole Corporate and Investment Bank, National Australia Bank Limited as original lenders and DNB Bank ASA, London Branch as agent and security agent. Junior Facility Agreement dated February 18, 2016, relating to a $180,000,000 loan facility among GAS-eighteen Ltd., GAS-nineteen Ltd., GAS-twenty Ltd., GAS-twenty one Ltd. and GAS-twenty seven Ltd. as borrowers, ABN AMRO Bank N.V. and DNB (UK) Ltd. as mandated lead arrangers, original lenders and bookrunners, DVB Bank America N.V. as mandated lead arranger and original lender, Commonwealth Bank of Australia, ING Bank N.V., London Branch, as original lenders and DNB Bank ASA, London Branch as agent and security agent. Form of Corporate Guarantee between GasLog Ltd. and DNB Bank ASA, London Branch (provided in respect of the Junior Facility Agreement and the Senior Facility Agreement, each dated February 18, 2016); please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. Form of Corporate Guarantee between GasLog Partners LP and DNB Bank ASA, London Branch (provided in respect of the Junior Facility Agreement and the Senior Facility Agreement, each dated February 18, 2016); please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities”. List of Subsidiaries of GasLog Ltd. Rule 13a-14(a)/15d-14(a) Certification of GasLog Ltd.’s Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certification of GasLog Ltd.’s Chief Financial Officer GasLog Ltd. Certification of Paul Wogan, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002 GasLog Ltd. Certification of Simon Crowe, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002 Consent of Deloitte Hadjipavlou, Sofianos & Cambanis S.A. Consent of Deloitte LLP (1) Previously filed as an exhibit to GasLog Ltd.’s Registration Statement on Form F-1 (File No. 333-179034), declared effective by the SEC on March 29, 2012, and hereby incorporated by reference to such Registration Statement. 125 (2) Previously filed as an exhibit to GasLog Ltd.’s Report on Form 6-K (File No. 001-35466), filed with the SEC on May 24, 2013, and hereby incorporated by reference to such Report. (3) Previously filed as an exhibit to GasLog Ltd.’s Registration Statement on Form S-8 (File No. 333-187020), filed with the SEC on March 4, 2013, or an amendment thereto, and hereby incorporated by reference to such Registration Statement. (4) Previously filed as an exhibit to GasLog Partners LP’s Annual Report on Form 20-F (File No. 001-36433), filed with the SEC on February 17, 2015, and hereby incorporated by reference to such Report. * Confidential material has been redacted and complete exhibits have been separately filed with the Securities and Exchange Commission. The registrant hereby agrees to furnish to the SEC upon request a copy of any instrument relating to long-term debt that does not exceed 10% of the total assets of the Company and its subsidiaries. 126 The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf. SIGNATURE GASLOG LTD., By /s/ PAUL WOGAN Name: Paul Wogan Title: Chief Executive Officer Dated: March 14, 2016 127 [THIS PAGE INTENTIONALLY LEFT BLANK] INDEX TO CONSOLIDATED FINANCIAL STATEMENTS GASLOG LTD. Page Report of Independent Registered Public Accounting Firm—Deloitte LLP. . . . . . . . . . . . . . . . . . . . . F-2 Report of Independent Registered Public Accounting Firm—Deloitte Hadjipavlou, Sofianos & Cambanis S.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated statements of financial position as of December 31, 2014 and 2015. . . . . . . . . . . . . . . F-3 F-4 Consolidated statements of profit or loss for the years ended December 31, 2013, 2014 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5 Consolidated statements of comprehensive income or loss for the years ended December 31, 2013, 2014 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6 Consolidated statements of changes in equity for the years ended December 31, 2013, 2014 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated statements of cash flow for the years ended December 31, 2013, 2014 and 2015. . F-7 F-8 Notes to the consolidated financial statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of GasLog Ltd. Hamilton, Bermuda We have audited the accompanying consolidated statements of financial position of GasLog Ltd. and subsidiaries (the “Group”) as of December 31, 2014 and 2015, and the related consolidated statements of profit or loss, comprehensive income or loss, changes in equity, and cash flow for each of the two years in the period ended December 31, 2015. These financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of GasLog Ltd. and subsidiaries as of December 31, 2014 and 2015, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2015, in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Group’s internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 14, 2016 expressed an unqualified opinion on the Group’s internal control over financial reporting. /s/ Deloitte LLP London, United Kingdom March 14, 2016 F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of GasLog Ltd. Hamilton, Bermuda We have audited the accompanying consolidated statement of profit or loss, comprehensive income or loss, changes in equity, and cash flow for the year ended December 31, 2013 of Gaslog Ltd. and its subsidiaries (the “Group”). These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, the Group’s results of operations and cash flows for the year ended December 31, 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. /s/ Deloitte Hadjipavlou, Sofianos & Cambanis S.A. Athens, Greece February 28, 2014 F-3 GasLog Ltd. and its Subsidiaries Consolidated statements of financial position As of December 31, 2014 and 2015 (All amounts expressed in thousands of U.S. Dollars) Assets Non-current assets Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment in associate and joint venture . . . . . . . . . . . . . . . . . . Deferred financing costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vessels under construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current assets Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends receivable and due from related parties . . . . . . . . . Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments and other current assets . . . . . . . . . . . . . . . . . . . . . . Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity and liabilities Equity Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributed surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treasury shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity attributable to owners of the Group . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current liabilities Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ship management creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts due to related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other payables and accruals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Borrowings, current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current liabilities Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . Borrowings, non-current portion. . . . . . . . . . . . . . . . . . . . . . . . . . . . Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity and liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Note December 31, 2014 December 31, 2015 3 5 9 24 6 6 8 19 7 7 10 10 10 11 10 11 4 7 19 24 13 12 24 12 9,511 6,603 6,120 5,785 1,174 2,809,517 142,776 2,981,486 14,317 1,869 4,953 4,443 28,103 22,826 211,974 288,485 3,269,971 — 810 923,470 (12,002) (12,576) 29,689 929,391 323,646 1,253,037 9,668 1,285 181 16,149 57,647 116,431 201,361 35,751 1,778,845 977 1,815,573 3,269,971 9,511 6,274 17,998 28,957 61 3,400,270 178,405 3,641,476 16,079 1,345 6,496 2,519 6,000 62,718 302,988 398,145 4,039,621 46 810 1,020,292 (8,829) (12,491) 1,846 1,001,674 506,246 1,507,920 12,391 3,524 163 14,243 67,084 636,987 734,392 58,531 1,737,500 1,278 1,797,309 4,039,621 The accompanying notes are an integral part of these consolidated financial statements. F-4 GasLog Ltd. and its Subsidiaries Consolidated statements of profit or loss For the years ended December 31, 2013, 2014 and 2015 (All amounts expressed in thousands of U.S. Dollars, except per share data) Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vessel operating and supervision costs . . . . . . . . . . . . . . . . . . . . . . . . . Voyage expenses and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain/(loss) on swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of profit of associate and joint venture . . . . . . . . . . . . . . . . . . Total other expenses, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit for the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Attributable to: Owners of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Note 2013 2014 2015 14 15 6 16 17 17 24 5 157,240 (32,058) (2,861) (29,322) (21,598) 71,401 (27,851) 411 11,498 1,470 (14,472) 56,929 328,679 (70,732) (7,738) (70,695) (34,154) 145,360 (71,579) 274 (24,787) 1,497 415,078 (98,552) (14,290) (106,641) (41,282) 154,313 (91,956) 427 (10,332) 1,216 (94,595) 50,765 (100,645) 53,668 56,929 — 56,929 42,161 8,604 50,765 10,829 42,839 53,668 0.04 Earnings per share—basic and diluted. . . . . . . . . . . . . . . . . . . . . . . . . . 27 0.91 0.54 The accompanying notes are an integral part of these consolidated financial statements. F-5 GasLog Ltd. and its Subsidiaries Consolidated statements of comprehensive income or loss For the years ended December 31, 2013, 2014 and 2015 (All amounts expressed in thousands of U.S. Dollars) Profit for the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income/(loss): Items that may not be reclassified subsequently to profit or loss: Actuarial gain/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Items that may be reclassified subsequently to profit or loss: Effective portion of changes in fair value of cash flow hedges, net of amounts recycled to profit or loss. . . . . . . . . . . . . . . . . . . . . . . Recycled loss of cash flow hedges reclassified to profit or loss in relation to derivatives no longer designated as hedges . . . . . . . . . Other comprehensive income/(loss) for the year. . . . . . . . . . . . . . . . . . Total comprehensive income for the year . . . . . . . . . . . . . . . . . . . . . . . . Attributable to: Owners of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Note 2013 2014 2015 56,929 50,765 53,668 62 (202) 26 24 24 4,773 (13,191) (849) 2,293 7,128 6,641 1,290 (6,752) 467 64,057 44,013 54,135 64,057 32,103 — 11,910 11,296 42,839 64,057 44,013 54,135 The accompanying notes are an integral part of these consolidated financial statements. F-6 GasLog Ltd. and its Subsidiaries Consolidated statements of changes in equity For the years ended December 31, 2013, 2014 and 2015 (All amounts expressed in thousands of U.S. Dollars, except per share data) Balance as of January 1, 2013 . . . . . . . . . . . Dividend paid ($0.45 per share) . . . . . . . . . Share-based compensation (Note 20) . . . . Profit for the year. . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total comprehensive income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance as of December 31, 2013 . . . . . . . Net proceeds from public offerings and private placement (Note 4) . . . . . . . . . . . Net proceeds from GasLog Partners LP (“GasLog Partners”) public offerings (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend paid (Note 11) . . . . . . . . . . . . . . . . Share-based compensation (Note 20) . . . . Settlement of share-based compensation Treasury shares, net (Note 10) . . . . . . . . . . Profit for the year. . . . . . . . . . . . . . . . . . . . . . . Other comprehensive (loss)/income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total comprehensive (loss)/income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance as of December 31, 2014 . . . . . . . Net proceeds from issuance of preferred stock (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . Net proceeds from GasLog Partners’ public offering (Note 4) . . . . . . . . . . . . . . . Dividend paid (common and preferred shares) (Note 11) . . . . . . . . . . . . . . . . . . . . . Share-based compensation, net of accrued dividend (Note 20) . . . . . . . . . . . Settlement of share-based compensation Profit for the year. . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total comprehensive income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance as of December 31, 2015 . . . . . . . Share Capital (Note 10) Preferred stock Contributed Surplus (Note 10) Reserves (Note 11) Treasury shares (Note 10) (Accumulated deficit)/ retained earnings Attributable to owners of the Group Non - controlling interest Total 629 — — — — — 629 181 — — — — — — — — 810 — — — — — — — — 810 — — — — — — — — — — — — — — — — — 46 — — — — — — — 46 621,879 (6,915) — — (11,049) — 493 — — — 7,128 7,128 614,964 (3,428) 308,506 — — — — — — — — — (8,188) (21,373) — 56,929 603,271 (28,288) 493 56,929 — 7,128 56,929 27,368 64,057 639,533 — 603,271 (28,288) — 493 — 56,929 — — — 7,128 64,057 — 639,533 — 308,687 — 308,687 — — — — — — — — 1,856 (372) — — — — — (12,576) — — — (39,840) — — — 42,161 — 319,036 (7,300) — — — 8,604 (39,840) 1,856 (372) (12,576) 42,161 319,036 (47,140) 1,856 (372) (12,576) 50,765 — (10,058) — (10,058) — — 923,470 (12,002) (12,576) 110,607 — (13,785) — — — — — — — — 2,791 (85) — 467 467 — — — — 85 — — — 1,020,292 (8,829) (12,491) — (10,058) 3,306 (6,752) 42,161 29,689 32,103 11,910 44,013 929,391 323,646 1,253,037 — — 110,653 — 110,653 — 171,831 171,831 (38,672) (52,457) (32,070) (84,527) — — 10,829 — 10,829 1,846 2,791 — 10,829 — — 42,839 2,791 — 53,668 467 — 467 11,296 42,839 54,135 1,001,674 506,246 1,507,920 The accompanying notes are an integral part of these consolidated financial statements. F-7 GasLog Ltd. and its Subsidiaries Consolidated statements of cash flow For the years ended December 31, 2013, 2014 and 2015 (All amounts expressed in thousands of U.S. Dollars) Cash flows from operating activities: Profit for the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: Depreciation of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of profit of associate and joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unrealized foreign exchange (gains)/losses on cash and cash equivalents and short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unrealized (gain)/loss on interest rate swaps held for trading including ineffective portion of cash flow hedges and loss at inception. . . . . . . . . . . . . . . . . . . Recycled loss of cash flow hedges reclassified to profit or loss . . . . . . . . . . . . . . . . . . . Non-cash defined benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share-based compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2013 2014 2015 56,929 50,765 53,668 29,322 (1,470) (411) 27,851 70,695 106,641 (1,216) (1,497) (427) (274) 91,956 71,579 (1,013) 218 518 (19,520) 2,293 81 493 94,555 7,836 6,641 (202) 1,856 138 1,290 26 2,872 207,617 255,466 336 16,678 (7,257) (2,931) 983 (4,675) (1,838) (5,455) 1,413 30 24,306 108,336 (21,591) 86,745 (2,054) 1,924 (1,543) (3,127) (23,172) 220 9,654 212,299 240,495 (64,011) (78,916) 148,288 161,579 Movements in operating assets and liabilities: Increase in trade and other receivables including related parties, net. . . . . . . . . . . . . (Increase)/decrease in prepayments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Increase)/decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Decrease/(increase) in other non-current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase in other non-current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase in accounts payable and other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . Cash provided by operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash flows from investing activities: Dividends received from associate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,675 Payments for tangible fixed assets and vessels under construction . . . . . . . . . . . . . . . . (1,038,153) (1,364,283) (728,446) — Return of contributed capital from associate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55) (89,823) (74,592) Purchase of short-term investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,007 66,220 Maturity of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial income received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 260 Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (935,516) (1,386,656) (704,052) Cash flows from financing activities: Proceeds from bank loans and bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,026,200 1,480,473 606,000 (656,944) (103,709) Bank loan repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22,501) (25,969) Payment of loan issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment of equity raising costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,839) Proceeds from public offerings and private placement (net of underwriting 360 — (44,969) 145,047 559 (142,649) (14,782) — (4,679) 1,640 — — 970 discounts and commissions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from GasLog Partners’ public offerings and issuance of general partners units (net of underwriting discounts and commissions) . . . . . . . . . . . . . . . . Proceeds from issuance of preferred stock (net of underwriting discounts and commissions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of treasury shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from stock options exercise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 310,240 — — (22,826) (39,892) — 323,087 172,875 — — (13,221) 273 — (28,288) — 111,378 — — (47,140) (84,527) The accompanying notes are an integral part of these consolidated financial statements. F-8 GasLog Ltd. and its Subsidiaries Consolidated statements of cash flow For the years ended December 31, 2013, 2014 and 2015 (All amounts expressed in thousands of U.S. Dollars) 2013 2014 2015 Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 840,481 1,346,762 634,317 (830) Effects of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . (Decrease)/increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,014 103,798 211,974 Cash and cash equivalents, beginning of the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,978 Cash and cash equivalents, end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,798 211,974 302,988 Non-cash investing and financing activities (Note 25) Capital expenditures—net (receivable)/payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity raising costs included in liabilities at the end of the year . . . . . . . . . . . . . . . . . . . . . Loan issuance costs included in liabilities at the end of the year . . . . . . . . . . . . . . . . . . . . . 1,110 (218) (7,180) 108,176 12,576 59 247 (691) — 2,494 7,999 174 903 The accompanying notes are an integral part of these consolidated financial statements. F-9 GasLog Ltd. and its Subsidiaries Notes to the consolidated financial statements For the years ended December 31, 2013, 2014 and 2015 (All amounts expressed in thousands of U.S. Dollars, except share and per share data) 1. Organization and Operations GasLog Ltd. (“GasLog”) was incorporated in Bermuda on July 16, 2003. GasLog and its subsidiaries (the “Group”) are primarily engaged in the ownership, operation and management of vessels in the liquefied natural gas (“LNG”) market, providing maritime services for the transportation of LNG on a worldwide basis and LNG vessel management services. The Group conducts its operations through its vessel-owning subsidiaries and through its vessel management services subsidiary. The Group’s operations are carried out from offices in Piraeus, London, New York, Singapore and Monaco. The registered office of GasLog is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. GasLog’s chairman, Peter G. Livanos, is GasLog’s largest shareholder through his ownership of Ceres Shipping Ltd. (“Ceres Shipping”), which controls Blenheim Holdings Ltd. As of December 31, 2015, entities controlled by members of the Livanos family, including GasLog’s chairman, are deemed to beneficially own approximately 40.7% of GasLog’s issued and outstanding common shares. As a result of his ownership of GasLog’s common shares, Mr. Livanos can effectively control the outcome of most matters on which GasLog’s shareholders are entitled to vote. On May 12, 2014, GasLog Partners LP (“GasLog Partners” or the “Partnership”), a subsidiary of GasLog, completed its initial public offering (the “GasLog Partners’ IPO”) with the sale and issuance of 9,660,000 common units (including 1,260,000 units in relation to the overallotment option exercised in full by the underwriters), resulting in net proceeds of $186,029 and representing a 48.2% ownership interest. Concurrently with the GasLog Partners’ IPO, the Partnership acquired from GasLog a 100% ownership interest in GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd., the entities that own the GasLog Shanghai, the GasLog Santiago and the GasLog Sydney, in exchange for (i) 162,358 common units and 9,822,358 subordinated units issued to GasLog representing a 49.8% ownership interest and all of the incentive distribution rights (“IDRs”) that entitle GasLog to increasing percentages of the cash that the Partnership distributes in excess of $0.43125 per unit per quarter, (ii) 400,913 general partner units issued to GasLog Partners GP LLC (the “general partner”), a wholly owned subsidiary of GasLog, representing a 2.0% general partner interest and (iii) $65,695 of cash consideration paid directly to GasLog from the GasLog Partners’ IPO proceeds. On September 29, 2014, the Partnership acquired from GasLog 100% of the ownership interests in GAS-sixteen Ltd. and GAS-seventeen Ltd., the entities that own the 145,000 cbm LNG carriers, the Methane Rita Andrea and the Methane Jane Elizabeth, respectively, for an aggregate purchase price of $328,000. On July 1, 2015, the Partnership acquired from GasLog 100% of the ownership interests in GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd., the entities that own three 145,000 cbm LNG carriers, the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally, respectively, for an aggregate purchase price of $483,000. As of December 31, 2015, GasLog holds a 32.9% interest (including the 2% interest through general partner units) in GasLog Partners and, as a result of its ownership of the general partner and the fact that the general partner elects the majority of the Partnership’s directors in accordance with the Partnership Agreement, GasLog has the ability to control the Partnership’s affairs and policies. Consequently, GasLog Partners is consolidated in the Group’s financial statements. F-10 The accompanying consolidated financial statements include the financial statements of GasLog and its subsidiaries. Unless indicated otherwise, the subsidiaries listed below were 100% held (either directly or indirectly) by GasLog. As of December 31, 2015 the Group’s structure is as follows: Name Place of incorporation Date of incorporation Principal activities Cargo capacity (cbm) Vessel Delivery date BVI Bermuda Bermuda Subsidiaries: GasLog Investments Ltd. . . . . . . . . . GasLog Carriers Ltd. . . . . . . . . . . . . . GasLog Shipping Company Ltd. . . GasLog Partners GP LLC . . . . . . . . Marshall Islands GasLog Services UK Ltd. . . . . . . . . England and Wales GasLog Services US Inc. . . . . . . . . . GasLog Asia Pte Ltd. . . . . . . . . . . . . GasLog LNG Services Ltd. . . . . . . . GasLog Monaco S.A.M. . . . . . . . . . . GAS-one Ltd. . . . . . . . . . . . . . . . . . . . . GAS-two Ltd. . . . . . . . . . . . . . . . . . . . . GAS-six Ltd. . . . . . . . . . . . . . . . . . . . . . GAS-seven Ltd. . . . . . . . . . . . . . . . . . . GAS-eight Ltd. . . . . . . . . . . . . . . . . . . . GAS-nine Ltd.. . . . . . . . . . . . . . . . . . . . GAS-ten Ltd. . . . . . . . . . . . . . . . . . . . . . GAS-eleven Ltd. . . . . . . . . . . . . . . . . . GAS-twelve Ltd. . . . . . . . . . . . . . . . . . GAS-thirteen Ltd. . . . . . . . . . . . . . . . . GAS-fourteen Ltd.. . . . . . . . . . . . . . . . GAS-fifteen Ltd. . . . . . . . . . . . . . . . . . GAS-eighteen Ltd. . . . . . . . . . . . . . . . GAS-twenty two Ltd.. . . . . . . . . . . . . GAS-twenty three Ltd. . . . . . . . . . . . GAS-twenty four Ltd. . . . . . . . . . . . . GAS-twenty five Ltd.. . . . . . . . . . . . . GAS-twenty six Ltd.. . . . . . . . . . . . . . GAS-twenty seven Ltd. . . . . . . . . . . . GasLog Shipping Limited. . . . . . . . . Delaware Singapore Bermuda Monaco Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda BVI July 2003 February 2008 January 2006 January 2014 May 2014 May 2014 May 2015 Holding company Holding company Holding company Holding company Service company Service company Service company August 2004 Vessel management services February 2010 February 2008 February 2008 February 2011 March 2011 March 2011 June 2011 June 2011 December 2012 December 2012 July 2013 July 2013 August 2013 January 2014 May 2014 May 2014 June 2014 June 2014 January 2015 January 2015 July 2003 Service company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Dormant 32.9% interest subsidiaries: GasLog Partners LP . . . . . . . . . . . . . . Marshall Islands GasLog Partners Holdings LLC . . Marshall Islands GAS-three Ltd. . . . . . . . . . . . . . . . . . . . GAS-four Ltd. . . . . . . . . . . . . . . . . . . . . GAS-five Ltd. . . . . . . . . . . . . . . . . . . . . GAS-sixteen Ltd. . . . . . . . . . . . . . . . . . GAS-seventeen Ltd. . . . . . . . . . . . . . . GAS-nineteen Ltd. . . . . . . . . . . . . . . . GAS-twenty Ltd. . . . . . . . . . . . . . . . . . GAS-twenty one Ltd.. . . . . . . . . . . . . Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda Bermuda January 2014 April 2014 April 2010 April 2010 February 2011 January 2014 January 2014 April 2014 April 2014 April 2014 Holding company Holding company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company Vessel-owning company — — — — — — — — — 155,000 155,000 155,000 155,000 155,000 155,000 155,000 174,000 174,000 174,000 174,000 153,600 145,000 174,000 174,000 174,000 174,000 170,000 170,000 — — — 155,000 155,000 155,000 145,000 145,000 145,000 145,000 145,000 — — — — — — — — — GasLog Savannah GasLog Singapore GasLog Skagen GasLog Seattle Solaris GasLog Saratoga GasLog Salem Hull No. 2072 Hull No. 2073 Hull No. 2102 Hull No. 2103 GasLog Chelsea Methane Lydon Volney Hull No. 2130 Hull No. 2131 Hull No. 2800 Hull No. 2801 Methane Julia Louise Methane Becki Anne — — — — — — — — — — May 2010 July 2010 July 2013 December 2013 June 2014 December 2014 April 2015 Q1 2016(1) Q2 2016(1) Q3 2016(1) Q4 2016(1) October 2013 April 2014 Q1 2018(1) Q1 2019(1) Q1 2018(1) Q1 2018(1) March 2015 March 2015 — — — GasLog Shanghai GasLog Santiago GasLog Sydney Methane Rita Andrea Methane Jane Elizabeth Methane Alison Victoria Methane Shirley Elisabeth Methane Heather Sally — — January 2013 March 2013 May 2013 April 2014 April 2014 June 2014 June 2014 June 2014 25% interest associates: Egypt LNG Shipping Ltd. . . . . . . . . Bermuda May 2010 Vessel-owning company 145,000 Methane Nile Eagle December 2007 33.33% joint venture: The Cool Pool Limited(2) . . . . . . . . . Marshall Islands September 2015 Service company — — — (i) For newbuildings, expected delivery quarters are presented. (ii) On October 1, 2015, GasLog, Dynagas Ltd. (“Dynagas”) and Golar LNG Ltd. (“Golar”) signed an LNG carrier pooling agreement (the “LNG Carrier Pool” or “Pool Agreement”) to market their vessels, which are currently operating in the LNG shipping spot market. The LNG Carrier Pool—named the “Cool Pool”—initially consists of 14 modern, high quality and essentially equivalent vessels powered by fuel efficient tri fuel diesel electric (“TFDE”) propulsion technology. The three owners’ initial vessels participation in the Cool Pool are as follows: Dynagas: three vessels; GasLog: three vessels; and Golar: eight vessels. Each vessel owner continues to be fully responsible for the manning and technical management of their respective vessels. For the operation of the Cool Pool, a Marshall Islands service company named “The Cool Pool Limited” or the “Pool Manager”, was incorporated in September 2015. All entities in the Group have a December 31st year end. During 2015 the Group employed an average of 158 employees (2014: 142 and 2013: 119). GasLog’s common shares are traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “GLOG”. GasLog’s 8.75% Series A Cumulative Redeemable Perpetual Preference Shares (“Preference Shares”) are traded on the NYSE under the ticker symbol “GLOG PR A”. F-11 2. Significant Accounting Policies Statement of compliance The consolidated financial statements of GasLog and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (the “IFRS”) as issued by the International Accounting Standards Board (the “IASB”). Basis of preparation and approval The consolidated financial statements have been prepared on the historical cost basis, except for the revaluation of derivative financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Going concern In considering going concern, management has reviewed the Group’s future cash requirements, covenant compliance and earnings projections. As of December 31, 2015, the Group’s current assets totaled $398,145 while current liabilities totaled $734,392, resulting in a negative working capital position of $336,247. In February 2016, the Group signed a debt refinancing of up to $576,500 with certain financial institutions (Note 28), to refinance $464,625 of its current debt plus $111,875 of its non-current debt. In addition, following the completion of the sale and leaseback of the Methane Julia Louise (Note 28), $50,625 of current debt and $179,375 of non-current debt was prepaid. Management anticipates that the Group’s primary sources of funds will be available cash, cash from operations and borrowings under existing and new loan agreements. The Group may also seek to raise additional equity. Management believes that these sources of funds will be sufficient for the Group to meet its liquidity needs and comply with its banking covenants for at least twelve months from the end of the reporting period and therefore it is appropriate to prepare the financial statements on a going concern basis. The principal accounting policies are set out below. The financial statements are expressed in U.S. dollars (“USD”), which is the functional currency of the Group’s subsidiaries because their vessels operate in international shipping markets in which revenues and expenses are primarily settled in USD, and the Group’s most significant assets and liabilities are paid for and settled in USD. On March 14, 2016, the financial statements were authorized on behalf of GasLog’s board of directors for issuance and filing. Basis of consolidation The consolidated financial statements incorporate the financial statements of GasLog and entities controlled by GasLog (its subsidiaries). Control is achieved where GasLog: • has power over the investee; • is exposed, or has rights, to variable returns from its involvement with the investee; and • has the ability to use its power to affect its returns. Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated financial statements from the date control is obtained and up to the date control ceases. Acquisitions of businesses are accounted for using the acquisition method. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. The other investors in subsidiaries in which the Group has less than 100% interest hold a non- controlling interest in the net assets of these subsidiaries. Non-controlling interest is stated at the non-controlling interest’s proportion of the net assets of the subsidiaries where the Group has less than 100% interest. Subsequent to initial recognition the carrying amount of non-controlling interest is increased or decreased by the non-controlling interest’s share of subsequent changes in the equity F-12 of such subsidiaries. Total comprehensive income is attributed to a non-controlling interest even if this results in the non-controlling interest having a deficit balance. Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non- controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Group. Goodwill Goodwill arising in a business combination is recognized as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date fair value of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognized immediately in the consolidated statement of profit or loss as a bargain purchase gain. Goodwill is not amortized but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Investment in associates An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The results, assets and liabilities of associates are included in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. An impairment assessment of investments in associates is performed when there is an indication that the asset has been impaired or the impairment losses recognized in prior years no longer exist. When the Group’s share of losses exceeds the carrying amount of the investment, the investment is reported at nil value and recognition of losses is discontinued except to the extent of the Group’s commitment. Investment in joint ventures A joint arrangement is an arrangement where two or more parties have joint control. Joint control is established by a contractual arrangement that requires unanimous agreement on decisions made on relevant activities. Without the presence of joint control, joint arrangements do not exist. Under IFRS 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. The F-13 arrangement is a joint operation when the contractual agreement provides rights to assets and obligations for liabilities for those parties sharing joint control. The joint arrangement is a joint venture when the agreement grants rights to the arrangement’s net assets. The Cool Pool Limited is a joint venture. Interests in joint ventures are accounted for using the equity method (see Investment in associates above), after initially being recognized at cost in the consolidated statement of financial position. Accounting for revenues and related operating expenses The Group’s revenues comprise revenues from time charters for the charter hire of its vessels, gross pool revenues, management fees, project supervision income and other income earned during the period in accordance with existing contracts. Revenue from vessel management and vessel construction project supervision contracts is recognized when earned and when it is probable that future economic benefits will flow to the Group and such a benefit can be measured reliably. Pool revenues are recognized on a gross basis representing time charter revenues earned by GasLog vessels participating in the pool under charter agreements where GasLog contracts directly with charterers. Revenue is recognised on a monthly basis, when the vessel is made available and services are provided to the charterer during the period, the amount can be estimated reliably and collection of the related revenue is reasonably assured. A time charter represents a contract entered into for the use of a vessel for a specific period of time and a specified daily charter hire rate. Time charter revenue is recognized as earned on a straight-line basis over the term of the relevant time charter starting from the vessel’s delivery to the charterer, except for the off-hire period, when a charter agreement exists, the vessel is made available and services are provided to the charterer and collection of the related revenue is reasonably assured. Unearned revenue includes cash received prior to the balance sheet date relating to services to be rendered after the balance sheet date. Accrued revenue represents income recognized in advance as a result of the straight-line revenue recognition in respect of charter agreements that provide for varying charter rates. Time charter hires received in advance are classified as liabilities until the criteria for recognizing the revenue as earned are met. Under a time charter arrangement the vessel operating expenses such as management fees, crew wages, provisions and stores, technical maintenance and insurance expenses and broker’s commissions are paid by the vessel owner, whereas voyage expenses such as bunkers, port expenses, agents’ fees, and extra war risk insurance are paid by the charterer. Accounting for voyage expenses and commissions Vessel operating costs and voyage expenses and commissions are expensed as incurred, with the exception of commissions, which are recognized on a pro-rata basis over the duration of the period of the time charter. Bunkers consumption represents mainly bunkers consumed during vessels unemployment and off-hire. Furthermore and in relation to the vessels participating in the Cool Pool, voyage expenses and commissions include the net allocation from the pool which represents GasLog’s share of the net revenues earned from the other pool participants’ vessels less the other participants’ share of the net revenues earned by GasLog’s vessels included in the pool. Each participant’s share of the net pool revenues is based on the number of pool points attributable to its vessels and the number of days such vessels participated in the pool. Financial income and costs Interest income is recognized on an accrual basis. Dividend income is recognized when the right to receive payment is established. Interest expense, other borrowing costs and realized loss on interest rate swaps are recognized on an accrual basis. Interest expense and other borrowing costs incurred during the vessel F-14 construction period, and relating directly to the vessel, are capitalized as part of the cost of the vessel. Foreign currencies Transactions in currencies other than the USD are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in other currencies are retranslated into USD at the rates prevailing at that date. All resulting exchange differences are recognized in the consolidated statement of profit or loss in the period in which they arise. Borrowing costs Borrowing costs, including interest expense and amortization of loan issuance costs, directly attributable to a loan to finance a vessel under construction, and representing an asset that takes a substantial period of time to get ready for its intended use or sale, are added to the cost of the vessel until such time as the vessel is substantially ready for its intended use or sale. All other borrowing costs are expensed as incurred. Deferred financing costs for undrawn facilities Commitment, arrangement, structuring, legal and agency fees incurred for obtaining new loans or refinancing existing facilities are recorded as deferred loan issuance costs and classified contra to debt, while the fees incurred for the undrawn facilities are classified under non-current assets in the statement of financial position and are reclassified contra to debt on the drawdown dates. Deferred financing costs are deferred and amortized to financial costs over the term of the relevant loan, using the effective interest method. When the relevant loan is terminated or extinguished, the unamortized loan fees are written-off in the consolidated statement of profit or loss. Vessels under construction Vessels under construction are presented at cost less identified impairment losses, if any. Costs include shipyard installment payments and other vessel costs incurred during the construction period that are directly attributable to the acquisition or construction of the vessels. Upon completion of the construction, the vessels are presented on the statement of financial position in accordance with the “Tangible fixed assets: Property, plant and equipment” policy as described below. Tangible fixed assets: Property, plant and equipment Tangible fixed assets are stated at cost less accumulated depreciation and any accumulated impairment loss. The initial cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition. The cost of a LNG vessel is split into two components, a “vessel component” and a “drydocking component”. Depreciation for the vessel component is calculated on a straight-line basis, after taking into account the estimated residual values, over the estimated useful life of this major component of the vessels. Residual values are based on management’s estimation about the amount that the Group would currently obtain from disposal of its vessels, after deducting the estimated costs of disposal, if the vessels were already of the age and in the condition expected at the end of their useful life. The LNG vessels are required to undergo a drydocking overhaul every five years to restore their service potential and to meet their classification requirements that cannot be performed while the vessels are operating. The drydocking component is estimated at the time of a vessel’s delivery from the shipyard or acquisition from the previous owner and is measured based on the estimated cost of the first drydocking subsequent to its acquisition, based on the Group’s historical experience with similar types of vessels. For subsequent drydockings actual costs are capitalized when incurred. F-15 The drydocking component is depreciated over the period of five years in case of new vessels, and until the next drydocking for secondhand vessels. Costs that will be capitalized as part of the future drydockings will include a variety of costs incurred directly attributable to the drydock and costs incurred to meet classification and regulatory requirements, as well as expenses related to the dock preparation and port expenses at the drydock shipyard, drydocking shipyard expenses, expenses related to hull, external surfaces and decks, and expenses related to machinery and engines of the vessel, as well as expenses related to the testing and correction of findings related to safety equipment on board. Drydocking costs do not include vessel operating expenses such as replacement parts, crew expenses, provisions, lubricants consumption, insurance, management fees or management costs during the drydocking period. Expenses related to regular maintenance and repairs of vessels are expensed as incurred, even if such maintenance and repair occurs during the same time period as drydocking. The expected useful lives of all long-lived assets are as follows: Vessel LNG vessel component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 years Drydocking component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years Furniture, computer, software and other office equipment . . 3-5 years Leasehold improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 years (or remaining term of the lease) Management estimates the useful life of its vessels to be 35 years from the date of initial delivery from the shipyard. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. The useful lives of all assets and the depreciation method are reviewed annually to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and equipment. The residual value is also reviewed at each financial period-end. If expectations differ from previous estimates, the changes are accounted for prospectively in profit or loss in the period of the change and future periods. Ordinary maintenance and repairs that do not extend the useful life of the asset are expensed as incurred. When assets are sold, they are derecognized and any gain or loss resulting from their disposal is included in profit or loss. Impairment of tangible fixed assets All assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in the consolidated statement of profit or loss. The recoverable amount is the higher of an asset’s fair value less cost of disposal and “value in use”. The fair value less cost of disposal is the amount obtainable from the sale of an asset in an arm’s length transaction less the costs of disposal, while “value in use” is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash-generating unit. Each vessel is considered to be a separate cash- generating unit. The fair value of the vessels is estimated from market-based evidence by appraisal that is normally undertaken by professionally qualified brokers. Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present F-16 obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Inventories Inventories represent lubricants on board the vessel and in the event of vessels unemployment the bunkers on board the vessel. Inventories are stated at the lower of cost calculated on a first in, first out basis, and net realizable value. Financial instruments Financial assets and liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument. All financial instruments are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. • Cash and cash equivalents Cash represents cash on hand and deposits with banks which are repayable on demand. Cash equivalents represent short-term, highly liquid investments which are readily convertible into known amounts of cash with original maturities of three months or less at the time of purchase that are subject to an insignificant risk of change in value. • Restricted cash Restricted cash comprises cash held that is not available for use by the Group including cash held in blocked accounts in order to comply with the covenants under the Group’s credit facilities. • Short-term investments Short-term investments represent short-term, highly liquid time deposits placed with financial institutions which are readily convertible into known amounts of cash with original maturities of more than three months but less than 12 months at the time of purchase that are subject to an insignificant risk of change in value. • Trade receivables Trade receivables are carried at the amount expected to be received from the third party to settle the obligation. Bad debts are written off during the period in which they are identified. An estimate is made for doubtful receivables based on a review of all outstanding amounts at each reporting date. • Borrowings Borrowings are measured at amortized cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement of the borrowings is recognized in the statement of profit or loss over the term of the borrowings. • Derivative financial instruments The Group enters into a variety of derivative financial instruments to economically hedge its exposure to interest rate and foreign exchange rate risks, including interest rate swaps and cross currency swaps. Derivative financial instruments are initially recognized at fair value, and are subsequently remeasured to their fair value at each reporting date. The resulting changes in fair value are F-17 recognized in the consolidated statement of profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in the consolidated statement of profit or loss depends on the nature of the hedge relationship. Derivatives are presented as assets when their valuation is favorable to the Group and as liabilities when unfavorable to the Group. The Group’s criteria for classifying a derivative instrument in a hedging relationship include: (1) the hedging instrument is expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to the hedged risk; (2) the effectiveness of the hedge can be reliably measured; (3) there is adequate documentation of the hedging relationships at the inception of the hedge; and (4) for cash flow hedges, the forecasted transaction that is the hedged item in the hedging relationship must be considered highly probable. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the consolidated statement of profit or loss. Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to the consolidated statement of profit or loss in the periods when the hedged item affects profit or loss, in the same line item as the recognized hedged item. Hedge accounting is discontinued when the Group terminates the hedging relationship, when the hedging instrument expires or is sold, terminated or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss accumulated in equity at that time remains in equity and is recognized in the consolidated statement of profit or loss when the hedged item affects the consolidated statement of profit or loss. When a forecast transaction designated as the hedged item in a cash flow hedge is no longer expected to occur, the gain or loss accumulated in equity is recycled immediately to the consolidated statement of profit or loss. Segment Information The information provided to the Group’s chief operating decision maker (the “CODM”) being the Chief Executive Officer, to review the Group’s operating results and allocate resources, is on a consolidated basis for a single reportable segment. Furthermore, when the Group charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable. Share-based compensation Share-based compensation to employees and others providing similar services are measured at the fair value of the equity instruments on the grant date. Details regarding the determination of the fair value of share-based transactions are set out in Note 20. The fair value determined at the grant date of the equity-settled share-based compensation is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in the consolidated statement of profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share-based compensation reserve. Critical accounting judgments and key sources of estimation uncertainty The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Group’s management evaluates whether estimates should be made on an ongoing basis, utilizing historical experience, consultation with experts and other methods management considers reasonable in the particular circumstances. However, uncertainty about these assumptions and estimates could result in F-18 outcomes that could require a material adjustment to the carrying amount of the assets or liabilities in the future. Critical accounting judgments: In the process of applying GasLog’s accounting policies, management has made the following judgments, apart from those involving estimations, that had the most significant effect on the amounts recognized in the consolidated financial statements. Classification of the non-controlling interests: The non-controlling interests in the Partnership comprise the portion of the Partnership’s common units that are not directly or indirectly held by GasLog (21,660,000 units as of December 31, 2015). Under the terms of the partnership agreement, the Partnership is required to distribute 100% of available cash (as defined in the partnership agreement) with respect to each quarter within 45 days of the end of the quarter to the partners. Available cash can be summarized as cash and cash equivalents less an amount equal to cash reserves established by the Partnership’s board of directors to (i) provide for the proper conduct of the business of the Partnership (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership) subsequent to such quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which any Partnership member is a party or by which it is bound or its assets are subject and/or (iii) provide funds for certain distributions relating to future periods. In reaching a judgment as to whether the non-controlling interests in the Partnership should be classified as liabilities or equity interests, management has considered the wide discretion of the board of directors of the Partnership to determine whether any portion of the amount of cash available to the Partnership constitutes available cash and that it is possible that there could be no available cash. In the event that there is no available cash, as determined by the Partnership’s board of directors, the Partnership does not have a contractual obligation to make a distribution. Accordingly, management has concluded that the non-controlling interests do not represent a contractual obligation on the Partnership to deliver cash and therefore should be classified as equity within the financial statements. Key sources of estimation uncertainty are as follows: Vessel lives and residual value: Vessels are stated at cost, less accumulated depreciation. The estimates and assumptions that have the most significant effect on the vessel carrying amount relate to the estimation of the useful life of an LNG vessel of 35 years and the residual value. An increase in the estimated useful life of a vessel or in its residual value would have the effect of decreasing the annual depreciation charge and an increase in the estimated useful life of a vessel would also extend the annual depreciation charge into later periods. A decrease in the useful life of a vessel or its residual value would have the effect of increasing the annual depreciation charge. Management estimated residual value of its vessels to be equal to the product of its lightweight tonnage (“LWT”) and an estimated scrap rate per LWT. Effective October 1, 2015, following management’s annual reassessment, the estimated scrap rate per LWT was decreased. This change in estimate increased depreciation expense by $144 for the year ended December 31, 2015 and is expected to increase the future annual depreciation by $577. If regulations place significant limitations over the ability of a vessel to trade on a worldwide basis, the vessel’s useful life will be adjusted to end at the date such regulations become effective. The estimated residual value of a vessel may not represent the fair market value at any one time partly because market prices of scrap rates tend to fluctuate. Vessel cost: The Group recognizes drydocking costs as a separate component of the vessel’s carrying amount and amortizes the drydocking cost on a straight-line basis over the estimated period until the next drydocking. If the vessel is disposed of before the next drydocking, the remaining balance of the drydock is written-off and forms part of the gain or loss recognized upon disposal of vessels in the period of disposal. The Group expects that its vessels will be required to be drydocked in approximately 60 months after their delivery from the shipyard, and thereafter every 60 months F-19 will be required to undergo special or intermediate surveys and drydocked for major repairs and maintenance that cannot be performed while the vessels are operating. The Group amortizes its estimated drydocking expenses for the first special survey over five years, in case of new vessels, and until the next drydocking for secondhand vessels unless the Group intends to drydock the vessels earlier as circumstances arise. Management estimates the drydocking component on acquisition of a vessel, as costs to be incurred during the first drydocking at the drydock yard, subsequent to its acquisition, for a special survey and parts and supplies used in making such repairs that meet the recognition criteria, based on historical experience with similar types of vessels. For subsequent drydockings actual costs are capitalized when incurred. Impairment of vessels: The Group evaluates the carrying amounts of its vessels to determine whether there is any indication that those vessels have suffered an impairment loss. If any such indication exists, the recoverable amount of vessels is estimated in order to determine the extent of the impairment loss, if any. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. The projection of cash flows related to vessels is complex and requires management to make various estimates including future charter rates, vessel operating expenses and the discount rate. All of these items have been historically volatile. In assessing the fair value less cost to sell of the vessel, the Group obtains vessel valuations from independent and internationally recognized ship brokers on an annual basis or when there is an indication that an asset or assets may be impaired. If an indication of impairment is identified, the need for recognizing an impairment loss is assessed by comparing the carrying amount of the vessel to the higher of the fair value less cost to sell and the value in use. The Group’s estimates of basic market value assume that the vessels are all in seaworthy condition without a need for repair and if inspected would be certified in class without notations of any kind. The Group’s estimates are based on approximate market values for vessels that have been received from shipbrokers, which are also commonly used and accepted by the Group’s lenders for determining compliance with the relevant covenants in its credit facilities. Vessel values can be highly volatile, so that the estimates may not be indicative of the current or future basic market value of the Group’s vessels or prices that could be achieved if it were to sell them. As of December 31, 2015, the carrying amounts of ten vessels were higher than the estimated charter free market value and the Group concluded that events and circumstances triggered the existence of potential impairment of these vessels. As a result, the Group performed the impairment assessment of the Group’s vessels by comparing the discounted projected net operating cash flows for these vessels to their carrying value. The significant factors and assumptions the Group used in its discounted projected net operating cash flow analysis included, among others, operating revenues, off-hire revenues, drydocking costs, operating expenses, management fees estimates and the discount rate. Revenue assumptions were based on contracted time charter rates up to the end of life of the current contract of each vessel as well as the estimated average time charter equivalent rates for the remaining life of the vessel after the completion of its current contract. The estimated daily time charter equivalent rates used for non-contracted revenue days are based on a combination of (i) recent charter market rates, (ii) conditions existing in the LNG market as of December 31, 2015, (iii) historical average time charter rates, based on publications by independent third party maritime research services, and (iv) estimated future time charter rates, based on publications by independent third party maritime research services that provide such forecasts. Recognizing that the LNG industry is cyclical and subject to significant volatility based on factors beyond the Group’s control, management believes the use of revenue estimates, based on the combination of factors (i) to (iv) above, to be reasonable as of the reporting date. In addition, the Group used an annual operating expenses escalation factor and estimates of scheduled and unscheduled off-hire revenues based on historical experience. All estimates used and assumptions made were in accordance with the Group’s internal budgets and historical experience of the shipping industry. The value in use for the ten F-20 vessels calculated as per above was higher than the carrying amount of these vessels and consequently, no impairment loss was recognized. Measurement of share-based compensation: As described in Note 20, the Group used an accepted valuation methodology to value the Stock Appreciation Rights or Stock Options. The inputs are based on observable market data and management’s estimates. Details of the valuation methodology and significant assumptions used are set out in Note 20. Impairment of goodwill: Determining whether goodwill is impaired requires an estimation of the recoverable amount, which is the higher of fair value less costs to sell and value in use, of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit(s) and a suitable discount rate in order to calculate present value. Details of the impairment analysis are set out in Note 3. No impairment loss was recognized for any of the periods presented. Fair value of derivative financial instruments: The Group’s risk management policies permit the use of derivative financial instruments to manage interest rate risk and foreign exchange risk. Changes in fair value of derivative financial instruments that are not designated as cash flow hedges for accounting purposes are recognized in the consolidated statement of profit or loss. A substantial majority of the Group’s derivative instruments activity relates to the use of interest rate swaps. The fair value of the Group’s interest rate swap agreements is the estimated amount that the Group would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates and the current credit worthiness of both the Group and the swap counterparties. The estimated amount is the present value of estimated future cash flows, being equal to the difference between the benchmark interest rate and the fixed rate in the interest rate swap agreement, multiplied by the notional principal amount of the interest rate swap agreement at each interest reset date. The fair value of the Group’s interest and currency swap agreements at the end of each period are most significantly affected by the interest rate implied by market-observable data such as LIBOR yield curve, and forward foreign exchange rates. While the fair value of the Group’s interest and currency swap agreements are typically more sensitive to changes in short-term rates, significant changes in the long-term benchmark interest and foreign exchange rates also materially impact interest and currency swap agreements. The fair value of the Group’s interest rate and currency swap agreements are also affected by changes in its specific credit risk and counterparties’ risk included in the discount factor. The estimate of the Group’s credit risk is based on the credit rating of other companies in the LNG industry where publicly available, the rating of the global transportation industry where the shipping industry is included and the feedback that the Group receives from its lenders as part of the margin setting for the new loan agreements. The counterparties’ credit risk is estimated either by using the credit default swap rates obtained from public information or, if not available, by using the credit rating of the counterparties. The LIBOR yield curve and the Group’s specific credit risk are expected to vary over the life of the interest rate swap agreements. The larger the notional amount of the interest rate swap agreements outstanding and the longer the remaining duration of the interest rate swap agreements, the larger the impact of any variability in these factors will be on the fair value of the Group’s interest rate swaps. The Group economically hedges the interest rate exposure on a significant amount of its long-term debt and for long durations. As such, the Group has historically experienced, and expects to continue to experience, material variations in the period-to-period fair value of its derivative instruments. Although the Group measures the fair value of its derivative instruments utilizing the inputs and assumptions described above, if it were to terminate the agreements at the reporting date, the amount the Group would pay or receive to terminate the derivative instruments may differ from the estimate of fair value. If the estimated fair value differs from the actual termination amount, an adjustment to the carrying amount of the applicable derivative asset or liability would be recognized in profit or loss for the current period. Such adjustments could be material. See Note 24 for the F-21 effects on the change in fair value of its derivative instruments on the consolidated statements of profit or loss. Adoption of new and revised IFRS Standards and amendments in issue not yet adopted At the date of authorization of these financial statements, the following standards and amendments relevant to the Group were in issue but not yet effective: In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, which applies to all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. IFRS 15 specifies how and when an IFRS reporter will recognize revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard supersedes IAS 18 Revenue, IAS 11 Construction Contracts and a number of revenue-related interpretations. The standard was amended in September 2015 to delay the effective date to annual periods beginning on or after January 1, 2018 but early adoption is permitted. Management is currently evaluating the impact of this standard on the Group’s consolidated financial statements. In July 2014, the IASB issued the complete version of IFRS 9 Financial Instruments. IFRS 9 specifies how an entity should classify and measure financial assets and financial liabilities. The new standard requires all financial assets to be subsequently measured at amortized cost or fair value depending on the business model of the legal entity in relation to the management of the financial assets and the contractual cash flows of the financial assets. The standard also requires a financial liability to be classified as either at fair value through profit or loss or at amortized cost. In addition a new hedge accounting model was introduced, that is designed to be more closely aligned with how entities undertake risk management activities when hedging financial and non-financial risk exposures. The standard is effective for accounting periods beginning on or after January 1, 2018 but early adoption is permitted. Management is currently evaluating the impact of this standard on the Group’s consolidated financial statements. In September 2014, the IASB published Sale or Contribution of Assets between an Investor and its Associate or Joint Venture as amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investment in Associate and Joint Ventures. The amendments address a conflict between the requirements of IFRS 10 and IAS 28 and clarify that in a transaction involving an associate or joint venture the extent of gain or loss recognition depends on whether the assets sold or contributed constitute a business. They are effective for annual periods beginning on or after January 1, 2016, with earlier application being permitted. Management anticipates that these amendments will not have a material impact on the Group’s financial statements. In January 2016, the IASB issued IFRS 16 Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, i.e. the customer (“lessee”) and the supplier (“lessor”). IFRS 16 eliminates the classification of leases by lessees as either operating leases or finance leases and, instead, introduces a single lessee accounting model. Applying that model, a lessee is required to recognise: (a) assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value; and (b) depreciation of lease assets separately from interest on lease liabilities in the statement of profit or loss. Lessors continue to classify their leases as operating leases or finance leases, and to account for those two types of leases differently. IFRS 16 supersedes the previous leases Standard, IAS 17 Leases, and related Interpretations. The standard is effective from January 1, 2019, with early adoption permitted only with concurrent adoption of IFRS 15 Revenue from Contracts with Customers. Management is currently evaluating the impact of this standard on the Group’s financial statements. The impact of all other IFRS standards and amendments issued but not yet adopted is not expected to be material. F-22 3. Goodwill Goodwill resulted from the acquisition in 2005 of Ceres LNG Services Ltd., the vessel management company, which represents a cash-generating unit. On September 30, 2011, Ceres LNG Services Ltd. was renamed “GasLog LNG Services Ltd.” As of December 31, 2015, the Group assessed the recoverable amount of goodwill, and concluded that goodwill associated with the Group’s vessel management company was not impaired. The recoverable amount of the vessel management operations is determined based on a value-in-use calculation which uses cash flow to be generated based on financial budgets approved by management. The key assumptions used in the value-in-use calculations are as follows: (i) Average inflation of 1.0% per annum; (ii) A pre-tax discount rate of 11.0% per annum; (iii) Annual growth rate of 1.0%; and (iv) 1 Euro = USD 1.15. Growth is based on the number of vessels expected to be under management based on the shipbuilding contracts in place at the end of the year and the long-term strategy of the Group. Management believes that any reasonably possible further change in the key assumptions on which recoverable amount is based would not cause the carrying amount of the cash-generating unit to exceed its recoverable amount. 4. Equity Transactions On January 22, 2014, GasLog completed a follow-on public offering of 10,925,000 common shares, including 1,425,000 common shares issued upon the exercise in full by the underwriters of their option to purchase additional shares. The public offering price was $15.75 per share. GasLog also sold 2,317,460 common shares at the public offering price in a private placement to certain of its directors and officers and one of its major shareholders. The net proceeds from the public offering and the concurrent private placement, after deducting underwriting discounts and offering expenses, were $199,016. On April 16, 2014, GasLog completed a follow-on public offering of 4,887,500 common shares, including 637,500 common shares issued upon the exercise in full by the underwriters of their option to purchase additional shares. The public offering price was $23.75 per share. The net proceeds from the public offering, after deducting underwriting discounts and other offering expenses, were approximately $109,940. On May 12, 2014, the Partnership completed its IPO with the sale and issuance of 9,660,000 common units, resulting in net proceeds of $186,029 and representing a 48.2% ownership interest (Note 1). GasLog Partners used the net IPO proceeds to (a) pay $65,695 directly to GasLog as cash consideration for the contribution of GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd., (b) prepay $82,634 of debt plus accrued interest of $416 and (c) make a payment of $2,285 (including $271 accrued interest) to settle the mark-to-market loss on termination of one interest rate swap and reduction of a second interest rate swap in connection with the aforementioned debt prepayment. The balance of $35,000 was retained by the Partnership for general corporate purposes. The net proceeds from the GasLog Partners’ IPO of $186,029 were received in cash and have been allocated to non-controlling interest. On September 29, 2014, GasLog Partners completed a follow-on public offering of 4,500,000 common units at a public offering price of $31.00 per unit. The net proceeds from this offering after deducting underwriting discounts and other offering expenses were $133,007 and have been allocated to non-controlling interest. On April 7, 2015, GasLog completed a public offering of 4,600,000 Preference Shares (including 600,000 shares issued upon the exercise in full by the underwriters of their option to purchase additional Preference Shares), par value $0.01 per share, liquidation preference $25.00 per share, which priced at $25.00 per share. The net proceeds from the offering after deducting underwriting discounts, commissions and other offering expenses were $110,653. F-23 On June 26, 2015, GasLog Partners completed a public offering of 7,500,000 common units at a public offering price of $23.90 per unit. The net proceeds from this offering after deducting underwriting discounts and other offering expenses, were $171,831. In connection with the offering, the Partnership issued 153,061 general partner units to its general partner in order for GasLog to retain its 2.0%. The balance of non-controlling interest as of December 31, 2014 and 2015 is as follows: 2014 2015 Non-controlling interest As of January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net proceeds from the Partnership’s IPO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net proceeds from the Partnership’s equity offering (September 2014) . . . Net proceeds from the Partnership’s equity offering (June 2015) . . . . . . . . . Dividend declared and paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit allocated to non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income allocated to non-controlling interest . . . . . . . As of December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,029 133,007 — 323,646 — — — 171,831 (32,070) 42,839 — (7,300) 8,604 3,306 323,646 506,246 The profit allocation to non-controlling interest is based on the distribution policy for available cash stated in the Partnership Agreement and is illustrated in the table below: Marginal Percentage Interest in Distributions Total Quarterly Distribution Target Amount Minimum Quarterly Distribution. . . . . . . . . . First Target Distribution . . . . . . . . . . . . . . . . . . Second Target Distribution . . . . . . . . . . . . . . . Third Target Distribution . . . . . . . . . . . . . . . . . Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Above $0.375 up to $0.43125 $0.43125 up to $0.46875 $0.46875 up to $0.5625 $0.5625 $0.375 Unitholders General Partner Holders of IDRs 98.0% 98.0% 85.0% 75.0% 50.0% 0% 2.0% 2.0% 0% 2.0% 13.0% 2.0% 23.0% 2.0% 48.0% 2014 2015 Allocation of GasLog Partners’ profit(*) Partnership’s profit attributable to: Common unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Subordinated unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IDRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,198 8,713 18,135 5,540 291 1,301 — 2,406 14,544 65,040 Partnership’s profit allocated to GasLog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partnership’s profit allocated to non-controlling interest . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,940 8,604 22,201 42,839 14,544 65,040 * Includes profits of: (i) GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. earned after the GasLog Partners’ IPO on May 12, 2014, (ii) GAS-sixteen Ltd. and GAS-seventeen Ltd. for the period after their transfer to the Partnership on September 29, 2014 and (iii) GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. for the period after their transfer to the Partnership on July 1, 2015. 5. Investment in Associate and Joint Venture The Group participates in the following associate and joint venture: F-24 Name Country of incorporation % of ownership interest 2014 2015 Nature of relationship Measurement method Principal activity Egypt LNG Shipping Ltd.(1) . . . . . . . . . . Bermuda The Cool Pool Limited(2). . . . . . . . . . . . . Marshall Islands — 33.33% Joint venture Equity method Service company 25% 25% Associate Equity method Vessel-owning company (1) Egypt LNG Shipping Ltd. owns and operates a 145,000 cubic meter LNG vessel built in 2007. (2) The Cool Pool Limited is the commercial manager of the Cool Pool (Note 1). Investment in associate and joint venture consist of the following: Associate 2014 2015 Joint Venture 2014 2015 As of January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of profit of associate and joint venture . . . . . . . . . . . . . Dividend declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,326 — 1,497 (1,220) — 6,603 — — 1,216 — (1,600) — 6,603 6,219 — — 55 — — 55 During the year ended December 31, 2013, the Group’s associate, Egypt LNG Shipping Ltd., distributed $1,440 in excess of its accumulated retained earnings. The portion of such distribution related to the Group was $360. Summarized financial information in respect of the associate and the joint venture is set out below: Current Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group’s share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Associate 2014 2015 Joint Venture 2014 2015 23,732 (15,634) 22,047 — 5,489 (14,589) — (5,324) 138,969 (120,656) 131,440 — (114,023) — 26,411 6,603 24,875 — 6,219 — — — 165 55 Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total comprehensive income for the year . . . . . Group’s share in profit. . . . . . . . . . . . . . . . . . . . . . . . 2013 18,619 5,880 5,880 Associate 2014 18,554 5,986 5,986 2015 Joint Venture 2014 2015 2013 18,694 — — 8,336 — — 4,863 — — 4,863 — — 1,470 1,497 1,216 — — — — — Dividend declared. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group’s share in dividend. . . . . . . . . . . . . . . . . . . . . (6,560) (4,880) (6,400) — — 1,640 1,220 1,600 — — F-25 6. Tangible Fixed Assets and Vessels Under Construction The movements in tangible fixed assets and vessels under construction are reported in the following table: Cost As of January 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer from vessels under construction . . . . . . . . . . . . . . . As of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer from vessels under construction . . . . . . . . . . . . . . . Fully amortized drydocking component. . . . . . . . . . . . . . . . . As of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated depreciation As of January 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fully amortized drydocking component. . . . . . . . . . . . . . . . . As of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net book value As of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Office property and other tangible assets Total tangible fixed assets Total vessels under construction 3,084 2,115 — 5,199 7,116 — — 1,591,821 944,917 405,575 2,942,313 493,049 204,345 (8,137) 120,295 428,056 (405,575) 142,776 239,974 (204,345) — Vessels 1,588,737 942,802 405,575 2,937,114 485,933 204,345 (8,137) 3,619,255 12,315 3,631,570 178,405 60,448 70,149 130,597 106,071 (8,137) 228,531 2,806,517 3,390,724 1,653 546 2,199 570 — 2,769 3,000 9,546 62,101 70,695 132,796 106,641 (8,137) 231,300 — — — — — — 2,809,517 3,400,270 142,776 178,405 Vessels with an aggregate carrying amount of $3,390,724 as of December 31, 2015 (December 31, 2014: $2,806,517) have been pledged as collateral under the terms of the Group’s loan agreements (Note 12). On April 10, 2014, GasLog acquired three 145,000 cbm steam-powered LNG carriers and on June 4, 2014, June 11, 2014, and June 25, 2014, acquired another three 145,000 cbm steam-powered LNG carriers from a subsidiary of BG Group plc (“BG Group”) for an aggregate cost of $936,000 (from which $930,000 was paid at closing of these deliveries while the payment of the remaining $6,000 will be made upon receipt of the relevant spares and before the end of the initial term of the charter party agreements) and chartered those vessels back to Methane Services Limited (“MSL”), a subsidiary of the BG Group, for an average six year initial terms. The vessels acquired are the 2006 built Methane Rita Andrea, the Methane Jane Elizabeth and the Methane Lydon Volney, and the 2007 built Methane Shirley Elisabeth, the Methane Heather Sally and the Methane Alison Victoria. GasLog supervised the construction of all six vessels at Samsung Heavy Industries Co. Ltd. (“Samsung”) shipyard in Korea, for BG Group and has provided technical management for the ships since delivery. On March 31, 2015, GasLog acquired two 170,000 cbm tri-fuel diesel electric LNG carriers from a subsidiary of BG Group for an aggregate cost of $460,000 and chartered those vessels back to MSL for periods of 9 and 11 years respectively, with further options by the charterer to extend the term of the time charter for each vessel by either three or five years. The vessels acquired are the 2010-built Methane Becki Anne and Methane Julia Louise. GasLog supervised their construction and has technically managed both ships since their delivery to BG Group in 2010. They have tri-fuel diesel electric propulsion and on-board reliquefaction plants, which enable the vessels to operate on gas at a wider range of speed more efficiently. F-26 The acquisition of the aforementioned vessels was treated as an asset acquisition based on the absence of processes attached to the inputs. In addition, management considered that the charter party agreements entered into approximate market rates and has concluded that the contracted daily charter rate approximates the fair value on the transaction completion dates, taking into account that the rates agreed with BG Group were in arms’ length negotiations and managements’ understanding of the market. Considering the above, the purchase price was allocated in total to vessel cost. Vessels under construction In 2011, GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd. entered into shipbuilding contracts with Samsung for the construction of three LNG Carriers (155,000 cubic meters each). The Solaris, the GasLog Saratoga and the GasLog Salem, were delivered on June 30, 2014, December 16, 2014 and April 30, 2015, respectively. In January 2013, GAS-eleven Ltd. and GAS-twelve Ltd. entered into shipbuilding contracts with Samsung for the construction of two LNG carriers (174,000 cubic meters each). The vessels are expected to be delivered in the first half of 2016. In August 2013, GAS-thirteen Ltd. and GAS-fourteen Ltd. entered into shipbuilding contracts with Samsung for the construction of two LNG carriers (174,000 cubic meters each). The vessels are expected to be delivered in the second half of 2016. In May 2014, GAS-twenty two Ltd. and GAS-twenty three Ltd. entered into shipbuilding contracts with Samsung for the construction of two LNG carriers (174,000 cubic meters each). The vessels are expected to be delivered in the first quarter of 2018 and 2019, respectively. In June 2014, GAS-twenty four Ltd. and GAS-twenty five Ltd. entered into shipbuilding contracts with Hyundai Heavy Industries Co., Ltd. (“Hyundai”) for the construction of two LNG carriers (174,000 cubic meters each). The vessels are expected to be delivered in the first quarter of 2018. Vessels under construction represent scheduled advance payments to the shipyards as well as certain capitalized expenditures. As of December 31, 2015, the Group has paid to the shipyard $170,634 for the vessels that are under construction and expects to pay the remaining installments as they come due upon each vessel’s keel laying, launching and delivery (Note 21(b)). The vessels under construction costs as of December 31, 2014 and 2015 are comprised of: Progress shipyard installments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Onsite supervision costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shipyard commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Critical spare parts, equipment and other vessel delivery expenses . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of the following: Current accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time deposits (with original maturities of three months or less) . . . . . . . . . Ship management client accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2014 2015 140,824 1,796 (197) 353 170,634 4,289 — 3,482 142,776 178,405 As of December 31, 2014 2015 93,437 117,252 1,285 135,613 163,851 3,524 211,974 302,988 F-27 Ship management client accounts represent amounts provided by the clients of GasLog LNG Services Ltd. in order to enable the Group to cover obligations of vessels under management. A compensating balance is held as a current liability. Included in Current accounts there is an amount of $4,056 held in retention accounts as of December 31, 2015 (December 31, 2014: $3,202), with respect to the next installments and interest due for the loan facilities of GAS-two Ltd., GAS-nine Ltd and GAS-ten Ltd. As of December 31, 2015, an amount of $62,718 is classified as restricted cash comprising of cash held in blocked accounts in order to comply with the covenants under three of the Group’s credit facilities (Note 12) (December 31, 2014: $22,826). 8. Trade and Other Receivables An analysis of the trade and other receivables is as follows: Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VAT receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2014 2,088 939 1,237 8,843 1,210 2015 4,246 1,113 4,405 3,155 3,160 14,317 16,079 As of December 31, 2014 and 2015, no material receivable balances were past due or impaired, and therefore no allowance was necessary. 9. Other Non-current Assets An analysis of other non-current assets is as follows: Accrued revenue from straight-line revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash collaterals on swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2014 2015 2,526 2,610 649 5,785 1,886 26,343 728 28,957 Cash collaterals on swaps represent cash deposited for the Group’s interest rate swaps and cross currency swaps (“CCSs”) being the difference between their fair value and an agreed threshold. 10. Share Capital GasLog’s authorized share capital consists of 500,000,000 shares with a par value $0.01 per share. As of December 31, 2015, the share capital consisted of 80,496,499 issued and outstanding common shares, par value $0.01 per share, 496,627 treasury shares issued and held by GasLog and 4,600,000 Preference Shares issued and outstanding (December 31, 2014: 80,493,126 issued and outstanding common shares, par value $0.01 per share and 500,000 treasury shares issued). The F-28 movements in the number of shares, the share capital, the Preference Shares, the contributed surplus and the treasury shares are reported in the following table: Number of common shares Number of shares Number of treasury shares Number of Preference Shares Amounts Share capital Preferred stock Contributed surplus Treasury shares Outstanding as of January 1, 2013 Dividend declared deducted from Contributed surplus due to accumulated deficit . . . . . . . . . . . . . 62,863,166 — Outstanding as of December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,863,166 Issuance of shares (Note 4) . . . . . . . 18,129,960 Purchase of treasury shares . . . . . . . (520,614) Treasury shares distributed for awards exercised in the year (Note 20) . . . . . . . . . . . . . . . . . . . . . . . 20,614 Outstanding as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,493,126 — — — — 520,614 — 629 — — — 629 — 181 — — (20,614) — — 500,000 — 810 Issuance of preference shares (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . Dividends declared deducted from Contributed surplus due to accumulated deficit . . . . . . . . . . . . . — — Treasury shares distributed for awards vested in the year (Note 20). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,373 (3,373) — 4,600,000 — — — — — — Outstanding as of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,496,499 496,627 4,600,000 810 — — — — — — — 46 — — 46 621,879 (6,915) 614,964 — — — 308,506 — — (13,221) — 645 923,470 (12,576) 110,607 (13,785) — — — 85 1,020,292 (12,491) The treasury shares were acquired by GasLog in 2014 from the open market, in relation to the share-based compensation (Note 20). 11. Equity attributable to owners of the Group The Group’s net capital comprises of share capital, preferred stock, contributed surplus, treasury shares, retained earnings and reserves. At December 31, 2014 and 2015, the Group had equity of $929,391 and $1,001,674, respectively. F-29 The movements in reserves are reported in the following table: Balance as of January 1, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effective portion of changes in fair value of cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recycled loss of cash flow hedges reclassified to profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share-based compensation (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance as of December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effective portion of changes in fair value of cash flow Hedging (21,820) 4,773 2,293 — — (14,754) hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,191) Recycled loss of cash flow hedges reclassified to profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,641 Employee benefits Share-based compensation reserve Total reserves 32 — — — 62 94 — — 10,739 (11,049) — — 493 — 4,773 2,293 493 62 11,232 (3,428) — (13,191) — 6,641 Hedging reserve allocated to non-controlling interest (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share-based compensation (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . Settlement of share-based compensation . . . . . . . . . . . . . . . . . . . . . Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effective portion of changes in fair value of cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recycled loss of cash flow hedges reclassified to profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share-based compensation (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . Settlement of share-based compensation . . . . . . . . . . . . . . . . . . . . . Actuarial gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance as of December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,306) — — — — — — (202) — 1,856 (372) — (24,610) (108) 12,716 (3,306) 1,856 (372) (202) (12,002) (849) 1,290 — — — — — — — 26 — (849) — 2,791 (85) — 1,290 2,791 (85) 26 (24,169) (82) 15,422 (8,829) Dividend distribution On February 27, 2014, the board of directors declared a quarterly cash dividend of $0.12 per common share which was paid on March 25, 2014 to shareholders as of March 10, 2014 for a total amount of $9,133. On May 13, 2014, the board of directors declared a quarterly cash dividend of $0.12 per common share which was paid on June 11, 2014 to shareholders as of May 27, 2014 for a total amount of $9,719. On August 19, 2014, the board of directors declared a quarterly cash dividend of $0.12 per common share which was paid on September 8, 2014 to shareholders as of September 2, 2014 for a total amount of $9,720. On November 19, 2014, the board of directors declared a quarterly cash dividend of $0.14 per common share which was paid on December 5, 2014 to shareholders as of December 1, 2014 for a total amount of $11,268. On February 26, 2015, the board of directors declared a quarterly cash dividend of $0.14 per common share which was paid on March 13, 2015 to shareholders as of March 10, 2015 for a total amount of $11,270. On May 5, 2015, the board of directors declared a quarterly cash dividend of $0.14 per common share which was paid on May 21, 2015 to shareholders as of May 18, 2015 for a total amount of $11,270. On June 19, 2015, the board of directors declared the initial dividend on the Preference Shares of $0.510417 per share or $2,347 in the aggregate payable on July 1, 2015 to holders as of June 30, 2015. GasLog paid the declared dividend to the transfer agent in June 2015. F-30 On August 5, 2015, the board of directors declared a quarterly cash dividend of $0.14 per common share which was paid on August 20, 2015 to shareholders as of August 17, 2015 for a total amount of $11,270. On September 18, 2015, the board of directors declared a dividend on the Preference Shares of $0.546875 per share or $2,515 in the aggregate payable on October 1, 2015 to holders of record as of September 30, 2015. GasLog paid the declared dividend to the transfer agent in September 2015. On November 4, 2015, the board of directors declared a quarterly cash dividend of $0.14 per common share which was paid on November 19, 2015 to shareholders as of November 16, 2015 for a total amount of $11,270. On November 17, 2015, the board of directors declared a dividend on the Preference Shares of $0.546875 per share or $2,515 in the aggregate payable on January 4, 2016 to holders of record as of December 31, 2015. GasLog paid the declared dividend to the transfer agent on December 29, 2015. 12. Borrowings An analysis of the borrowings is as follows: Amounts due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: unamortized deferred loan issuance costs . . . . . . . . . . . . . . . . . . . . . . . Borrowings, current portion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts due after one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plus: unamortized premium(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: unamortized deferred loan issuance costs . . . . . . . . . . . . . . . . . . . . . . . Borrowings, non-current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2014 2015 121,824 (5,393) 645,193 (8,206) 116,431 1,804,658 3,504 (29,317) 636,987 1,762,580 2,573 (27,653) 1,778,845 1,737,500 1,895,276 2,374,487 (1) Refer to “Senior Unsecured Notes” disclosed below for details on the premium. Bank Loans-secured (a) Danish Ship Finance A/S loan In March 2008 GAS-one Ltd. entered into a bank loan facility of up to $174,033 with Danish Ship Finance A/S in order to partially finance the construction of an LNG vessel. On March 9, 2012, GAS-one Ltd. entered into an amending and restating agreement with Danish Ship Finance A/S. The amendment defines that the guarantors are GasLog and GasLog Carriers Ltd. The balance outstanding as of December 31, 2015 was $119,649 (2014: $127,901) and is repayable in 18 consecutive quarterly installments of $2,063 together with a final balloon payment of $82,516 payable concurrently with the last installment in May 2020. The loan bears interest at LIBOR plus a margin. GAS-one Ltd. is also required to maintain at all times minimum liquidity of $1,500 and was in compliance as of December 31, 2015. As of December 31, 2015, pursuant to the aforementioned credit facility $20,000 has been presented under restricted cash due to the vessel’s new charter party is not considered an approved charter by the lenders. The amount held is classified as a current asset and will be restricted until GAS-one Ltd. enters into an acceptable by the lenders replacement charter (Note 7). (b) DNB Bank ASA, UBS AG, National Bank of Greece S.A., Commonwealth Bank of Australia and Skandinaviska Enskilda Banken AB (publ) loan On May 17, 2013, GAS-two Ltd. signed a loan agreement with DNB Bank ASA, acting through its London Branch, UBS AG, National Bank of Greece S.A., Commonwealth Bank of Australia and Skandinaviska Enskilda Banken AB (publ) for a term loan facility of up to $110,000 and a revolving F-31 credit facility of up to $50,000 for the purpose of refinancing the facility of GAS-two Ltd. with DnB Nor Bank ASA, National Bank of Greece and UBS AG which was due to mature in March 2014 (“existing facility”) and for general corporate purposes. The revolving credit facility is available for drawing on a fully revolving basis provided the total facility amount drawn post drawdown does not exceed 72.5% of the vessel’s value, drawings must be in minimum amounts of $5,000 and can be made until three months prior to the maturity date in May 2018. On May 28, 2013, GAS-two Ltd. drew down $110,000 from the term loan facility and repaid the outstanding amount of the existing facility of $101,443. On September 25, 2013, GAS-two Ltd. drew down $39,494 from the revolving credit facility. On January 27, 2014, GAS-two Ltd. drew down $2,681 from the revolving credit facility with DNB Bank ASA, acting through its London Branch, UBS AG, National Bank of Greece S.A., Commonwealth Bank of Australia and Skandinaviska Enskilda Banken AB (publ). As of December 31, 2015, the undrawn amount from the revolving facility was $7,825 and the balance outstanding was $42,175 which is classified under current liabilities. The balance outstanding as of December 31, 2015 of the term loan was $85,000 and is repayable in 10 consecutive quarterly installments of $2,500 together with a final balloon payment of $60,000 payable concurrently with the last installment in May 2018. The loan bears interest at LIBOR plus a margin. GAS-two Ltd. is also required to maintain at all times minimum liquidity of $1,500 and was in compliance as of December 31, 2015. As of December 31, 2015, GAS-two Ltd. has classified in restricted cash an amount of $718 representing the 90% of its free cash pursuant to a specific clause in its loan agreement requiring such restricted cash in the event that the charterer has not exercised its option to extend the charter, with effect on and from 12 months prior to expiry of the charter. The amount held is classified as a current asset and will be restricted until GAS-two Ltd. enters into a replacement charter (Note 7). (c) DnB Bank ASA and Export-Import Bank of Korea On March 14, 2012, GAS-three Ltd. and GAS-four Ltd. entered into a loan agreement of up to $272,500 with DnB Bank ASA and the Export-Import Bank of Korea in order to partially finance the acquisition of two LNG vessels. On January 18, 2013 and March 19, 2013, GAS-three Ltd. and GAS-four Ltd. drew down $272,500 in total from the loan facility for the financing of the GasLog Shanghai and the GasLog Santiago. Both loans bore interest at LIBOR plus a margin. In connection with GasLog Partners’ IPO on May 12, 2014, the credit facility was amended to, among other things, permit GasLog to contribute GAS-three Ltd. and GAS-four Ltd. to the Partnership and add GasLog Partners Holdings LLC, as a guarantor. On November 19, 2014, the outstanding amount of $246,432 for both tranches under the credit facility, was fully repaid. (d) Nordea Bank Finland PLC, ABN Amro Bank N.V. and Citibank International PLC syndicated loan On October 3, 2011, GAS-five Ltd. and GAS-six Ltd. entered into a loan agreement of up to $277,000 with Nordea Bank Finland PLC, ABN Amro Bank N.V. and Citibank International PLC in order to partially finance the acquisition of two LNG vessels. The loan agreement provided for two equal tranches that were drawn on May 24, 2013 and July 19, 2013 for the financing of the GasLog Sydney and the GasLog Skagen, respectively. In connection with the GasLog Partners’ IPO on May 12, 2014, the credit facility entered was amended to, among other things, (1) divide the facility into two separate facilities on substantially the same terms as the initial facility, with one of the facilities executed by GAS-five Ltd. for the portion allocated to the GasLog Sydney, (2) permit GasLog’s contribution of GAS-five Ltd. to the Partnership and (3) add GasLog Partners Holdings LLC as a guarantor and remove GasLog Carriers Ltd., a wholly owned subsidiary of GasLog, as guarantor in connection with the GAS-five Ltd. facility. In connection with these amendments, the Partnership prepaid $82,634 of the new GAS-five Ltd. facility with proceeds of the initial public offering. On November 19, 2014, the outstanding amount of $48,225 under the GAS-five Ltd credit facility was fully repaid. The balance outstanding as of December 31, 2015 of the GAS-six Ltd. credit facility was $120,169 and is repayable in 15 consecutive quarterly installments of $2,037 together with a final balloon payment of $89,618 payable concurrently with the last installment in July 2019. The loan F-32 bears interest at LIBOR plus a margin. The borrower is required to have a minimum liquidity of $1,500 following the loan drawdown date and was in compliance as of December 31, 2015. (e) Credit Suisse AG On January 18, 2012, GAS-seven Ltd. entered into a loan agreement of up to $144,000 with Credit Suisse AG, for the purpose of financing one of the newbuilding vessels. The agreement provides for a single tranche that was drawn on December 4, 2013 for the financing of the GasLog Seattle. The loan bears interest at LIBOR plus a margin. The balance outstanding as of December 31, 2015 was $128,000 and is repayable in 20 consecutive quarterly installments of $2,000 together with a final balloon payment of $88,000 payable concurrently with the last installment in December 2020. (f) DnB Bank ASA, Commonwealth Bank of Australia, Danish Ship Finance A/S, ING Bank N.V. and Skandinaviska Enskilda Banken AB (publ) On December 23, 2011, GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd. entered into a loan agreement (the “Principal Agreement”) for a senior secured credit facility of up to $435,000 with DnB Bank ASA, Commonwealth Bank of Australia, Danish Ship Finance A/S, ING Bank N.V. and Skandinaviska Enskilda Banken AB (publ) for the purpose of financing three of the newbuilding vessels. The loan agreement provides for three tranches, to be drawn upon delivery of each newbuilding vessel. On June 24, 2014, GAS-eight Ltd. drew down $143,000 from the loan facility, to partially finance the delivery of the Solaris, on December 10, 2014, GAS-nine Ltd. drew down $146,000 from the loan facility to partially finance the delivery of the GasLog Saratoga and on April 24, 2015, GAS-ten Ltd. drew down $146,000 from the loan facility to partially finance the delivery of the GasLog Salem. The balance outstanding as of December 31, 2015 of the GAS-eight Ltd. tranche was $131,060 and is repayable in 22 consecutive quarterly installments of $1,990 with balloon payments of $87,280, the balance outstanding as of December 31, 2015 of the GAS-nine Ltd. tranche was $137,880 and is repayable in 24 consecutive quarterly installments of $2,030 with balloon payments of $89,160 and the balance outstanding as of December 31, 2015 of the GAS-ten Ltd. tranche was $141,940 and is repayable in 26 consecutive quarterly installments of $2,030 with balloon payments of $89,160. The loan bears interest at LIBOR plus a margin. Each of the borrowers is required to have a minimum liquidity of $1,500 following the loan drawdown date and was in compliance as December 31, 2015. On October 23, 2014, GasLog received a waiver letter from DNB Bank ASA, acting as agent of the loan facility of GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd., relating to the failure of GAS-nine Ltd. and GAS-ten Ltd. to secure relevant charter parties as required by the aforementioned loan facility. The waiver permits (subject to proper documentation being executed) the drawdown of the relevant tranches notwithstanding that the charter arrangements have not been secured. Subsequent to the waiver letter, on December 2, 2014 a supplemental deed was signed with the lenders which among other amendments to the Principal Agreement requested for an amount of $21,000 per vessel to be maintained in blocked accounts until the time that an acceptable charter party agreement has been entered into after the delivery date of the respective vessels. As of December 31, 2015, the amounts held in blocked accounts of $42,000 were classified as restricted cash under current assets (Note 7). As the aforementioned waiver did not result in substantially different terms to the Principal Agreement, the amendments are considered a modification of the existing terms. Consequently the additional fees incurred during the year ended December 31, 2014 which amounted to $250 have been accounted as deferred financing fees and will be amortized over the remaining term of the loan facility. (g) Citibank N.A., London Branch, Citibank International Plc. and DVB America N.V. On September 25, 2013, GAS-fifteen Ltd. signed a loan agreement with Citibank N.A., London Branch and Citibank International Plc., for a term loan facility of $100,000 to partially finance the F-33 acquisition of the GasLog Chelsea drawn on September 26, 2013. In October 2013, Citibank International Plc., the existing lender of the GAS-fifteen Ltd. facility, transferred $50,000 of the outstanding facility to DVB Bank America N.V. There was no other change to the terms of the original agreement. The balance outstanding as of December 31, 2015 was $86,660 and is repayable in six semi-annual installments of $3,335 together with a final balloon payment of $66,650 payable concurrently with the last installment in September 2018. The loan bears interest at LIBOR plus a margin. GAS-fifteen Ltd. is also required to maintain at all times minimum liquidity of $1,500 and was in compliance as of December 31, 2015. (h) Citibank, N. A. London Branch On April 1, 2014, in connection with the acquisition of the three LNG carriers from BG Group (Note 6), GAS-sixteen Ltd., GAS-seventeen Ltd. and GAS-eighteen Ltd. signed a loan agreement of $325,500 with Citibank, N.A. London Branch acting as security agent and trustee for and on behalf of the other finance parties. The loan had a two year maturity without intermediate payments bearing interest at LIBOR plus a margin and was drawn on April 9, 2014, to partially finance the deliveries of the Methane Rita Andrea, the Methane Jane Elizabeth and the Methane Lydon Volney. In connection with the closing of the Partnership’s acquisition of the two entities that own the Methane Rita Andrea and the Methane Jane Elizabeth on September 29, 2014, GasLog entered into a supplemental deed to the facility agreement dated April 1, 2014 that, among other things, permitted the Partnership (or its subsidiary) to acquire GAS-sixteen Ltd. and GAS-seventeen Ltd. from GasLog and required, as a condition precedent to such acquisition, the Partnership and GasLog Partners Holdings LLC to guarantee the obligors obligations under the facility. The debt of $217,000 was assumed by the Partnership for the acquisition of GAS-sixteen Ltd. and GAS- seventeen Ltd. On October 9, 2014, the Partnership prepaid $25,000 from the proceeds of the follow-on equity offering. The assumed balance of $192,000 was fully repaid on November 19, 2014. The balance outstanding as of December 31, 2015 related to GAS-eighteen Ltd. was $108,500 and is repayable in full in April 2016 without intermediate payments. GAS-eighteen Ltd, is also required to maintain at all times minimum liquidity of $1,500 and was in compliance as of December 31, 2015. On May 14, 2014, in connection with the acquisition of the three additional LNG carriers from BG Group (Note 6), GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. signed a loan agreement of $325,500 with Citibank N.A. London Branch, acting as security agent and trustee for and on behalf of the other finance parties. The loan has a two year maturity without intermediate payments bearing interest at LIBOR plus a margin and $108,500 was drawn on June 3, 2014, on June 10, 2014 and on June 24, 2014 to partially finance the deliveries of the Methane Shirley Elisabeth, the Methane Heather Sally and the Methane Alison Victoria respectively. In connection with the closing of the Partnership’s acquisition of the three entities that own the Methane Shirley Elisabeth, the Methane Heather Sally and the Methane Alison Victoria on July 1, 2015, GasLog Partners and GasLog Partners Holdings LLC were added as corporate guarantors in addition to GasLog, for the respective loan facility, replacing a previous guarantor, GasLog Carriers Ltd. The debt of $325,500 was assumed by the Partnership of GAS-nineteen Ltd., GAS-twenty Ltd. and GAS- twenty one Ltd. Using the proceeds of the equity offering completed in June 2015, GasLog Partners prepaid $10,000 of the GAS-nineteen Ltd. tranche on September 4, 2015, $5,000 of the GAS-twenty Ltd. tranche on December 10, 2015 and $5,000 of the GAS-twenty one Ltd. tranche on December 29, 2015. The aggregate balance outstanding under the facility as of December 31, 2015, was $305,500 and repayable in full in June 2016 without intermediate payments. Each of the borrowers is required to have a minimum liquidity of $1,500 following the loan drawdown date and was in compliance as of December 31, 2015. (i) Citibank, Nordea Bank Finland plc, London Branch, DVB Bank America N.V., ABN Amro Bank N.V., Skandinaviska Enskilda Banken AB and BNP Paribas On November 12, 2014, GAS-three Ltd., GAS-four Ltd., GAS-five Ltd., GAS-sixteen Ltd., GAS-seventeen Ltd, GasLog Partners and GasLog Partners Holdings LLC entered in a loan agreement with Citibank acting as security agent and trustee for and on behalf of the other finance F-34 parties mentioned above, for a credit facility for up to $450,000 (the “GasLog Partners’ Credit Facility”) for the purpose of refinancing in full the existing debt facilities. The agreement provides for a single tranche that was drawn on November 18, 2014. The credit facility bears interest at LIBOR plus a margin. The aforementioned refinancing was considered an extinguishment of the existing debt facilities. Consequently, the unamortized loan fees of $9,019 were written off to profit or loss for the year ended December 31, 2014. The balance outstanding as of December 31, 2015 was $427,500 and is repayable in 16 equal quarterly installments of $5,625 each and a final balloon payment of $337,500 payable concurrently with the last quarterly installment in November 2019. On May 8, 2015, the Partnership entered into a supplemental deed relating to its Citibank N.A. loan facility, in which the lenders unanimously approved such changes to the facility agreement as were required to reflect the changes to the charters of three vessels agreed with BG Group on April 21, 2015. As the aforementioned deed did not result in substantially different terms to the original loan agreement, the amendments were considered a modification of the existing terms. Consequently, the additional fees of $515 incurred during the year ended December 31, 2015 have been accounted for as deferred financing fees and will be amortized over the remaining term of the loan facility with the effective interest method. (j) ABN Amro Bank N.V., Commonwealth Bank of Australia, Credit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgescha¨ ft and DNB Bank ASA, London Branch and ING Bank N.V., London Branch On March 25, 2015, GAS-twenty six Ltd. and GAS-twenty seven Ltd., entered into a senior secured term loan facility of up to $325,000 with ABN Amro Bank N.V., Commonwealth Bank of Australia, Credit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgescha¨ ft, DNB Bank ASA, London Branch and ING Bank N.V., London Branch, and a subordinated term loan facility of up to $135,000 with ABN Amro Bank N.V., Credit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgescha¨ ft and DNB Bank ASA, London Branch for the purpose of financing the acquisition of the Methane Becki Anne and the Methane Julia Louise (Note 6). The available amounts were fully drawn on March 31, 2015. Both facilities bear interest at LIBOR plus a margin and each of the borrowers is required to have a minimum liquidity of $1,500 following the loan drawdown date and was in compliance as of December 31, 2015. The balance outstanding as of December 31, 2015 of the senior secured term loan facility was $325,000 and is repayable in one bullet installment on the final maturity date in March 2017. The balance outstanding as of December 31, 2015 of the subordinated term loan facility was $135,000 and is repayable in four consecutive quarterly installments of $33,750, beginning 15 months after the signing date (June 2016). Securities covenants and guarantees The obligations under the aforementioned facilities, with the exception of the subordinated term loan facility, are or with respect to the undrawn facility will be secured by a first priority mortgage over the vessels, a pledge of the share capital of the respective vessel owning companies and a first priority assignment of earnings related to the vessels, including charter revenue, management revenue and any insurance and requisition compensation. In relation to the subordinated term loan facility drawn with Gas-twenty six Ltd. and GAS-twenty seven Ltd., this is secured by second priority mortgage and assignments. Obligations under the GasLog Partners’ Credit Facility are facilities guaranteed by the Partnership and GasLog Partners Holdings LLC, obligations under the GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. loan agreement are guaranteed by GasLog, the Partnership and GasLog Partners Holdings LLC, while obligations under the remaining facilities are guaranteed by GasLog and GasLog Carriers Ltd. The facilities include customary respective covenants, and among other restrictions the facilities include a fair market value covenant pursuant to which the majority lenders may request additional security under the facilities if the aggregate fair market value of the collateral vessels (without taking into account any charter arrangements) were to fall below 120% of the aggregate outstanding principal balance under the facilities and any negative marked-to market value arising under any hedging transaction. The Group was in compliance with the required minimum security coverage as of December 31, 2015 with the F-35 exception of a marginal breach of $375 in relation to GAS-eighteen Ltd. (the owner of the Methane Lydon Volney). The majority lenders under the relevant facility have confirmed that they have no intention to exercise their right to request additional security. Committed Loan Facilities On October 16, 2015, GasLog entered into a debt financing agreement with 14 international banks for $1,311,356 to partially finance the delivery of the eight newbuildings expected to be delivered in 2016, 2018 and 2019. The financing is backed by the Export Import Bank of Korea (“KEXIM”) and the Korea Trade Insurance Corporation (“K-Sure”), who are either directly lending or providing cover for over 60% of the facility. The loan agreement provides for four tranches of $412,458, $201,094, $206,115 and $491,690. The facility will be also sub-divided into eight loans, one loan per newbuilding vessel, to be provided for each of the vessels on a pro rata basis under each of the four tranches. Each drawing under the first three tranches shall be repaid in 24 consecutive semi-annual equal installments commencing six months after the actual delivery of the relevant vessel according to a 12-year profile. Each drawing under the fourth tranche shall be repaid in 20 consecutive semi-annual equal installments commencing six months after the actual delivery of the relevant vessel according to a 20-year profile, with a balloon payment together with the final installment. Amounts drawn will bear interest at LIBOR plus a margin. The obligations under the aforementioned facilities will be secured by a first priority mortgage over the vessels, a pledge of the share capital of the respective vessel owning companies and a first priority assignment of earnings related to the vessels, including charter revenue, management revenue and any insurance and requisition compensation. Obligations under the facilities are guaranteed by GasLog and GasLog Carriers Ltd. The facilities include customary respective covenants, and among other restrictions the facilities include a fair market value covenant pursuant to which an event of default could occur under the facilities if the aggregate fair market value of the collateral vessels (without taking into account any charter arrangements) were to fall below 115% of the aggregate outstanding principal balance for the first two years after each drawdown and below 120% at any time thereafter. The financial covenants are applicable on a Group level and are substantially the same as those of the remaining GasLog facilities. As of December 31, 2015, commitment, arrangement, coordination, agency, bookrunner and legal fees of $17,874 for obtaining the financing are classified under Deferred financing cost in the statement of financial position and will be reclassified contra to debt on the drawdown dates. Senior Unsecured Notes On June 27, 2013, GasLog issued a senior unsecured bond of NOK 500,000 (or $83,206 based on the exchange rate on June 27, 2013) that will mature on June 27, 2018. On May 2, 2014, GasLog closed a follow-on issue of the Norwegian bond of NOK 500,000 (or $83,612 based on the exchange rate on closing date) at a premium of $4,180 (based on the exchange rate on closing date). The total outstanding balance of the Norwegian bond, including the follow-on issue (the “Bond”) amounts to NOK 1 billion. The Bond bears interest at NIBOR plus margin. Interest payments shall be made in arrears on a quarterly basis. GasLog may redeem the Bond in whole or in part as follows (Call Option): (a) with settlement date at any time from June 27, 2016 to but not including June 27, 2017 at 105.00% of par plus accrued interest on redeemed amount, (b) with settlement date at any time from June 27, 2017 to but not including December 27, 2017 at 103.00% of par plus accrued interest on redeemed amount, and (c) with settlement date at any time from December 27, 2017 to but not including the maturity date at 101.75% of par plus accrued interests on redeemed amount. The carrying amount of the Bond, net of unamortized financing costs and unamortized premium, as of December 31, 2015 was $112,185, while its fair value was $115,406 based on a NOK/USD exchange rate of 0.1137 as of December 31, 2015. F-36 Corporate guarantor financial covenants GasLog Partners’ financial covenants GasLog Partners as corporate guarantor for the GasLog Partners Credit Facility is subject to specified financial covenants on a consolidated basis. These financial covenants include the following as defined in the agreements: (i) the aggregate amount of all unencumbered cash and cash equivalents must be not less than the higher of 3% of total indebtedness or $15,000; (ii) total indebtedness divided by total assets must be less than 60%; (iii) the ratio of EBITDA over debt service obligations (including interest and debt repayments) on a trailing 12 months’ basis must be not less than 110%; and (iv) the Partnership is permitted to declare or pay any dividends or distributions, subject to no event of default having occurred or occurring as a consequence of the payment of such dividends or distributions. The GasLog Partners Credit Facility also imposes certain restrictions relating to GasLog Partners, including restrictions that limit its ability to make any substantial change in the nature of its business or to change the corporate structure without approval from the lenders. Compliance with the financial covenants is required on a semi-annual basis. GasLog Partners was in compliance with the respective financial covenants as of December 31, 2015. GasLog’s financial covenants GasLog, as corporate guarantor for the loan facilities listed above except for the GasLog Partners Credit Facility, is subject to specified financial covenants on a consolidated basis. GasLog Carriers Ltd. is not subject to any financial covenants. The financial covenants include the following: (i) net working capital (excluding the current portion of long-term debt) must be not less than $0; (ii) total indebtedness divided by total assets must not exceed 75%; (iii) the ratio of EBITDA over debt service obligations (including interest and debt repayments) on a trailing 12 months basis must be not less than 110%; (iv) the aggregate amount of all unencumbered cash and cash equivalents must be not less than the higher of 3% of total indebtedness or $20,000 after the first drawdown; (v) GasLog is permitted to pay dividends, provided that the Group holds unencumbered cash and cash equivalents equal to at least 4% of its total indebtedness subject to no event of default having occurred or occurring as a consequence of the payment of such dividends; and (vi) the Group’s market value adjusted net worth must at all times be not less than $350,000. The credit facilities also impose certain restrictions relating to GasLog, including restrictions that limit its ability to make any substantial change in the nature of its business or to engage in transactions that would constitute a change of control, as defined in the relevant credit facility, without repaying all of the Group’s indebtedness in full, or to allow the Group’s largest shareholders to reduce their shareholding in GasLog below specified thresholds. GasLog as issuer of the Bond is required to comply with the financial covenants (ii), (iii), (iv) and (vi) listed above. In addition, the NOK denominated bond agreement signed on June 25, 2013, between GasLog and the bond trustee, as amended, or the “Bond Agreement”, includes a dividend restriction according to which the Group may not (i) declare or make any dividend payment or distribution, whether in cash or in kind, (ii) repurchase any of the Group’s shares or undertake other similar transactions (including, but not limited to, total return swaps related to the Group’s shares), or (iii) grant any loans or make other distributions or transactions constituting a transfer of value to the Group’s shareholders (items (i), (ii) and (iii) collectively referred to as the “Distributions”) that F-37 in aggregate exceed during any calendar year 50% of the Group’s consolidated net profit after taxes based on the audited annual accounts for the previous financial year (any unutilized portion of the permitted dividend pursuant to the above may not be carried forward). On November 14, 2014, GasLog signed an amendment to its Bond Agreement to revise the covenants to reflect GasLog’s growth and the anticipated growth of GasLog Partners. Under the amended agreement (a) GasLog is permitted to make Distributions up to an aggregate maximum per share, for the years 2015, 2016, 2017 and 2018 of $1.00/share, $1.10/share, $1.20/share and $1.30/share, respectively, provided that total indebtedness divided by total assets (giving pro forma effect for the Distribution) does not exceed 67.5% immediately after the Distribution is made, the ratio of EBITDA over debt service obligations on a trailing 12 months basis ending the quarter immediately prior to that in which the Distribution is made is not less than 115.0% and no event of default would result from such Distribution, (b) the amount of debt or committed debt availability that GasLog provides to GasLog Partners cannot exceed $75,000, and (c) GasLog has agreed to pay a one-time fee of 1.0% of the face value of the Bond. As the above mentioned amendments to the covenants did not result in substantially different terms to the Bond Agreement, the amendments are considered a modification of the terms of the Bond Agreement. Consequently, the additional fees incurred during the year ended December 31, 2014 which amounted to $2,557 have been accounted as deferred financing fees and will be amortized over the remaining term of the Bond Agreement. Compliance with the loan financial covenants is required on a semi-annual basis while compliance for the Bond covenants is required at all times. The Group was in compliance with all financial covenants as of December 31, 2015. Loan Repayment Schedule The maturity table below reflects the principal repayments of the loans outstanding as of December 31, 2015 based on the repayment schedule of the respective loan facilities (as described above): As of December 31, 2015 Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than three years . . . . . . . . . . . . . . . . . . . . . . . Later than three year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . Later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 645,193 769,678 703,022 289,880 2,407,773 The weighted average interest rate for the outstanding loan facilities as of December 31, 2015 was 3.32% (December 31, 2014: 3.30%) excluding the fixed interest rate for the interest rate swaps where hedge accounting is not applicable (Note 24). After excluding the unamortised deferred loan issuance costs the carrying amount of the Group’s bank debt recognized in the consolidated financial statements approximates its fair value since the debt bears interest at a variable interest rate. F-38 13. Other Payables and Accruals An analysis of other payables and accruals is as follows: As of December 31, 2014 2015 Social contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unearned revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued legal and professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued board of directors’ fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued employee costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued off-hire. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued crew costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued financing cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued brokerage commission on vessels’ acquisition . . . . . . . . . . . . Other accruals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,297 24,180 1,511 585 4,141 10,913 3,030 4,523 476 6,087 — 904 57,647 1,085 30,159 1,030 593 4,955 3,781 5,244 6,207 76 7,713 4,600 1,641 67,084 The unearned revenue represents charter hires received in advance in December 2015 relating to hire period of January 2016, for 14 vessels (December 2014: 11 vessels). 14. Vessel Operating and Supervision Costs An analysis of vessel operating and supervision costs is as follows: For the year ended December 31, 2014 2013 2015 Employee costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Crew wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Technical maintenance expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions and stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vessels’ tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,178 16,019 5,344 1,966 1,864 — 702 985 32,058 7,789 36,577 12,753 3,199 4,882 188 2,645 2,699 70,732 8,771 49,254 20,364 4,962 7,407 375 3,010 4,409 98,552 15. Voyage Expenses and Commissions An analysis of voyage expenses and commissions is as follows: For the year ended December 31, 2014 2013 2015 Brokers’ commissions on revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . Bunkers consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustment for net pool allocation (Note 19). . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,385 1,476 — 2,861 3,554 4,184 — 7,738 4,678 9,577 35 14,290 Bunkers consumption represents mainly bunkers consumed during vessels unemployment and off-hire. F-39 16. General and Administrative Expenses An analysis of general and administrative expenses is as follows: For the year ended December 31, 2014 2013 2015 Employee costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Board of directors’ fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rent and utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Travel and accommodation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legal and professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign exchange differences, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . Directors’ and officers’ liability insurance . . . . . . . . . . . . . . . . . . . . Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,276 1,266 493 1,167 1,202 2,996 (661) 557 1,302 21,598 16,344 1,926 1,856 1,780 2,277 7,578 (271) 1,142 1,522 34,154 17,276 2,439 2,872 2,180 2,161 11,014 689 729 1,922 41,282 17. Net Financial Income and Costs An analysis of financial income and costs is as follows: For the year ended December 31, 2014 2013 2015 Financial Income Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Costs Amortization and write-off of deferred loan issuance costs and premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense on loans and realized loss on cash flow 411 411 274 274 427 427 3,620 15,362 11,355 hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,415 43,743 68,253 Interest expense on Bond and realized loss on cross currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other financial costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total financial costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,204 612 9,533 2,941 27,851 71,579 11,331 1,017 91,956 During the year ended December 31, 2014, an amount of $9,019 representing the write-off of the unamortized deferred loan issuance costs in connection with the refinancing of the Partnership’s credit facilities (Note 12) is included in Amortization and write-off of deferred loan issuance costs. 18. Contingencies Various claims, suits and complaints, including those involving government regulations, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, environmental claims, agents and insurers and from claims with suppliers relating to the operations of the Group’s vessels. Currently, management is not aware of any such claims or contingent liabilities requiring disclosure in the consolidated financial statements. F-40 19. Related Party Transactions The Group had the following balances with related parties which have been included in the consolidated statements of financial position: Dividends receivable and due from related parties Dividends receivable from associate (Note 5) . . . . . . . . . . . . . . . . . . . . . Commission for newbuildings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Due from Cool Pool Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 789 — 80 1,869 925 — 249 171 1,345 As of December 31, 2014 2015 Pursuant to a commission agreement with Samsung, commissions due from the shipyard in relation to the newbuilding orders was paid by Samsung to DryLog Investments Ltd., an affiliate of Ceres Shipping. Upon receipt of the commissions, DryLog Investments Ltd. forwared the payments to the vessel-owning subsidiaries, after deducting handling fees for each payment. The outstanding receivable as of December 31, 2015 is $0 (December 31, 2014: $789). Following the delivery of GasLog Salem in April 2015, this agreement is no longer in effect. The amount due from Cool Pool Limited represents net revenue invoiced to GasLog which has not yet been collected. Current Liabilities As of December 31, 2014 2015 Ship management creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts due to related parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 181 60 163 Ship management creditors’ liability comprises cash collected from Egypt LNG Shipping Ltd. to cover the obligations of its vessel under the Group’s management. Amounts due to related parties of $163 (December 31, 2014: $181) are expenses paid by a related party on behalf of the Group and payables to other related parties for the office lease and other operating expenses. The Group had the following transactions with related parties which have been included in the consolidated statements of profit or loss for the years ended December 31, 2013, 2014 and 2015: Company Details (a) (b) (b) (c) (d) (d) (e) (e) (f) Vessel management Egypt LNG Shipping Ltd. Office rent and utilities Nea Dimitra Property Other office services Nea Dimitra Property Ceres Monaco S.A.M. Office rent and utilities Euronav (UK) Agencies Ltd. Office rent and utilities Euronav (UK) Agencies Ltd. Seres S.A. Seres S.A. C Transport Maritime Professional services Catering Consultancy services Claims and insurance fee S.A.M. Seaflight Aviation Limited Chartwell Management Inc. (g) (g) (h) Unisea Maritime Ltd. (i) (j) (j) (j) Blenheim Holdings Ltd. Cool Pool Limited Cool Pool Limited Cool Pool Limited Travel expenses Travel expenses Office rent and utilities Professional services Pool gross revenues Pool gross bunkers Adjustment for net pool allocation F-41 Statement of income account 2013 2014 2015 Revenues General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses General and administrative expenses Revenues Voyage expenses and commissions Voyage expenses and commissions 714 687 — 27 — — 151 53 86 36 134 — — — — — 731 758 57 — 150 109 195 53 110 607 704 — — 646 — 196 42 54 — — 163 348 — 50 — 38 — 2,469 — 1,838 35 — (a) One of the Group’s subsidiaries, GasLog LNG Services Ltd. provides vessel management services to Egypt LNG Shipping Ltd., the LNG vessel owning company, in which another subsidiary, GasLog Shipping Company Ltd., holds a 25% ownership interest. (b) Through its subsidiary GasLog LNG Services Ltd., the Group leases office space in Piraeus, Greece, from an entity controlled by Ceres Shipping, Nea Dimitra Ktimatikh Kai Emporikh S.A. During the year ended December 31, 2014, the Group reimbursed Nea Dimitra for part of the renovation costs of the Piraeus office spaces. (c) Through its subsidiary GasLog Monaco S.A.M., the Group makes payments to Ceres Monaco S.A.M., an affiliate of Ceres Shipping, for its office space in Monaco. Ceres Monaco S.A.M. leases operating space pursuant to a service agreement with a third-party property owner, and the Group occupies a portion of the leased space. In connection with the office space arrangements, the subsidiary GasLog Monaco S.A.M. has entered into a service level agreement with Ceres Monaco S.A.M. The service level agreement was terminated in April 2012 when GasLog Monaco S.A.M. signed a rent agreement directly with the third party property owner. The amount charged in the year ended December 31, 2013 relates to reimbursement of some expenses paid by Ceres Monaco S.A.M. on behalf of GasLog Monaco S.A.M. During the year ended December 31, 2014, no expenses were paid by Ceres Monaco S.A.M. (d) Through its subsidiary GasLog Services (UK) Ltd., the Group makes payments to Euronav (UK) Agencies Ltd. (“Euronav UK”), a subsidiary of Euronav NV, whose major shareholder was Mr. Livanos until November 2015, for the use of its office space in London. Euronav UK leases operating space pursuant to a service agreement with a third-party property owner and the Group occupies a portion of the leased space. The Group pays Euronav UK £223 per year for the office space plus a stamp duty, which reflects a pro rata portion of the fees payable to the third-party property owner determined based on the amount of occupied space. In addition, as of December 31, 2014, the Group reimbursed Euronav UK for part of the legal fees and other professional charges relating to the execution of the lease agreement. (e) GasLog LNG Services has also entered into an agreement with Seres S.A., an entity controlled by the Livanos family, for the latter to provide catering services to the staff based in the Piraeus office. Amounts paid pursuant to the agreement are generally less than Euro 10 per person per day, but are slightly higher on special occasions. In addition, GasLog LNG Services has entered into an agreement with Seres S.A. for the latter to provide human resources, telephone and documentation services for the staff based in Piraeus. (f) The Group through one of its subsidiaries, GasLog LNG Services Ltd., procured insurance for the vessels through C Transport Maritime SAM, an affiliate of Ceres Shipping, which has a dedicated insurance function. From July 1, 2011, this relationship is covered by a service agreement under which GasLog LNG Services Ltd. pays C Transport Maritime S.A.M. $10 per owned vessel per annum and $3 per managed vessel per annum. The service agreement was terminated in 2015. (g) Seaflight Aviation Limited and Chartwell Management Inc. are entities controlled by the Livanos family, which provide travel services to GasLog’s directors and officers. (h) Through GasLog the Group made payments to Unisea Maritime Ltd. (“Unisea Maritime”), an affiliate of Ceres Shipping, for the use of its office space in London. Unisea Maritime leased operating space pursuant to a service agreement with a third-party property owner and the Group occupied a portion of the leased space from January to August 2014. The Group paid Unisea Maritime £4 per month for its office space in London, which reflects a pro rata portion of the fees payable to the third-party owner determined based on the amount of occupied space. (i) Blenheim Holdings Ltd. that is controlled by Ceres Shipping (Note 1), requested reimbursement of professional expenses provided in 2015. (j) GasLog recognized gross revenues and voyage expenses of $2,469 and $1,838, respectively, from the operation of its vessels to the Cool Pool during the year ended December 31, 2015. The aforementioned pool results were further adjusted by $35 to include the net allocation from the pool in accordance with the profit sharing terms specified in the Pool Agreement. Compensation of key management personnel The remuneration of directors and key management was as follows: For the year ended December 31, 2014 2013 2015 Remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short-term benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense recognized in respect of share-based compensation . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,979 118 349 5,446 6,140 50 1,245 7,435 6,627 94 1,173 7,894 F-42 20. Share-Based Compensation Omnibus Incentive Compensation Plan On May 17, 2013, GasLog granted to executives, managers and certain employees of the Group, Restricted Stock Units (“RSU”) and Stock Appreciation Rights or Stock Options (collectively, the “SARs”) in accordance with its 2013 Omnibus Incentive Compensation Plan (the “Plan”). The RSUs will vest on April 29, 2016 while the SARs will vest incrementally with one-third of the SARs vesting on each of April 29, 2014, 2015 and 2016. The compensation cost for the SARs is recognized on an accelerated basis as though each separately vesting portion of the SARs is a separate award. Prior to the exercise date the holders will not have any voting rights and will not be entitled to dividends or other distributions. The grant date was determined to be May 17, 2013, being the date the Group provided each concerned employee with the relevant agreements, which include information about the grant date, vesting and exercise periods, number of RSUs and SARs awarded, the exercise price in the case of SARs, and other information and which were signed by the employee as evidence of acceptance. Awards Number Grant date Expiry date Exercise price RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,792 May 17, 2013 n/a 325,943 May 17, 2013 April 29, 2023 n/a 13.26 Fair value at grant date 11.95 2.3753 On April 1, 2014, GasLog granted to executives, managers and certain employees of the Group, 76,251 RSUs and 286,746 SARs in accordance with the Plan. The RSUs will vest on March 31, 2017 while the SARs will vest incrementally with one-third of the SARs vesting on each of March 31, 2015, 2016 and 2017. The compensation cost for the SARs is recognized on an accelerated basis as though each separately vesting portion of the SARs is a separate award. Prior to the exercise date the holders will not have any voting rights and will not be entitled to dividends or other distributions. Awards Number Grant date Expiry date Exercise price RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . SARs . . . . . . . . . . . . . . . . . . . . . . . . . . 76,251 April 1, 2014 286,746 April 1, 2014 March 31, 2024 n/a n/a 24.00 Fair value at grant date 22.58 6.0035 On April 1, 2015, GasLog granted to executives, managers and certain employees of the Group, 88,492 RSUs and 305,859 SARs in accordance with the Plan. The RSUs will vest on March 31, 2018 while the SARs will vest incrementally with one-third of the SARs vesting on each of March 31, 2016, 2017 and 2018. The compensation cost for the SARs is recognized on an accelerated basis as though each separately vesting portion of the SARs is a separate award. Prior to the exercise date the holders will not have any voting rights and will not be entitled to dividends or other distributions. Awards Number Grant date Expiry date Exercise price RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . SARs . . . . . . . . . . . . . . . . . . . . . . . . . . 88,492 April 1, 2015 305,859 April 1, 2015 March 31, 2025 n/a n/a 19.48 Fair value at grant date 19.48 5.6352 In accordance with the terms of the Plan, there are only service condition requirements. The awards will be settled in cash or in shares at the sole discretion of the compensation committee of the board of directors. These awards have been treated as equity settled because the Group has no present obligation to settle in cash. The amount to be settled for each SAR exercised is computed in each case, as the excess, if any, of the fair market value (the closing price of shares) on the exercise date over the exercise price of the SAR. Fair value The fair value of the SARs has been calculated based on the Modified Black-Scholes-Merton method. Expected volatility was based on historical share price volatility for the period since the Group’s initial public offering. The expected dividend is based on management’s expectations of F-43 future payments on the grant date. The significant assumptions used to estimate the fair value of the SARs are set out below: Inputs into the model Grant date share closing price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exercise price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected volatility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risk-free interest rate for the period similar to the expected term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2013 2014 2015 $ 13.26 $ 13.26 $ 24.00 $ 24.00 $ 19.48 $ 19.48 29.31% 29.42% 39.3% 6 years 6 years 6 years 1.08% 2.03% 1.48% The fair value of the RSUs in accordance with its 2013 Plan was determined by using the grant date closing price of $13.26 per share and adjusting for the effect of the expected dividends to which holders of RSUs are not entitled using a risk-free interest rate of 0.4% for the three years until the expiry of the RSUs, which resulted in a fair value of $11.95 per RSU. The fair value of the RSUs in accordance with its 2014 Plan was determined by using the grant date closing price of $24.00 per share and adjusting for the effect of the expected dividends which holders of RSUs are not entitled using a risk-free interest rate of 0.91% for the three years until the expiry of the RSUs which resulted in a fair value of $22.58 per RSU. The fair value of the RSUs in accordance with its 2015 Plan was determined by using the grant date closing price of $19.48 per share and was not further adjusted since the holders are entitled to dividends. Movement in RSUs and SARs The summary of RSUs and SARs is presented below: Weighted average exercise price per share Weighted average share price at the date of exercise Number of awards Weighted average contractual life Aggregate fair value RSUs Outstanding as of January 1, 2014 . . . . . . . . . 64,792 Granted during the year . . . . . . . . . . . . . . . . . . . 76,251 Forfeited during the year . . . . . . . . . . . . . . . . . . (1,374) Outstanding as of December 31, 2014 . . . . . 139,669 88,492 Granted during the year . . . . . . . . . . . . . . . . . . . (3,373) Vested during the year . . . . . . . . . . . . . . . . . . . . Forfeited during the year . . . . . . . . . . . . . . . . . . (7,820) Outstanding as of December 31, 2015 . . . . . 216,968 SARs Outstanding as of January 1, 2014 . . . . . . . . . 325,943 Granted during the year . . . . . . . . . . . . . . . . . . . 286,746 (20,614) Exercised during the year . . . . . . . . . . . . . . . . . (1,722) Forfeited during the year . . . . . . . . . . . . . . . . . . Outstanding as of December 31, 2014 . . . . . 590,353 Granted during the year . . . . . . . . . . . . . . . . . . . 305,859 (7,247) Expired during the year . . . . . . . . . . . . . . . . . . . (15,737) Forfeited during the year . . . . . . . . . . . . . . . . . . Outstanding as of December 31, 2015 . . . . . 873,228 — — — — — — — — 13.26 24.00 13.26 24.00 18.45 19.48 15.98 19.47 18.81 — — — — — — — — — — 26.89 — — — — — — 2.33 — — 1.82 — — — 1.38 9.33 — — — 8.78 — — — 8.28 774 1,722 (31) 2,465 1,724 (54) (149) 3,986 774 1,722 (49) (10) 2,437 1,724 (24) (81) 4,056 As of December 31, 2015, 291,676 SARs have vested but not been exercised. On April 1, 2015, GasLog Partners granted to its executives, Restricted Common Units (“RCUs”) and Performance Common Units (“PCUs”) in accordance with its 2015 Long-Term Incentive Plan (the “GasLog Partners’ Plan”). The RCUs and PCUs will vest on March 31, 2018 F-44 subject to the recipients’ continued service; vesting of the PCUs is also subject to the achievement of certain performance targets in relation to total unitholder return. Specifically, the performance measure is based on the total unitholder return (“TUR”) achieved by the Partnership during the performance period, benchmarked against the TUR of a selected group of peer companies. TUR above the 75th percentile of the peer group results in 100% of the award vesting; TUR between the 50th-75th percentile of the peer group results in 50% of award vesting; TUR below the 50th percentile of the peer group results in none of the award vesting. The holders are entitled to cash distributions that are accrued and will be settled on vesting. Awards Number Grant date Fair value at grant date RCUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PCUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,999 April 1, 2015 16,999 April 1, 2015 $24.12 $24.12 In accordance with the terms of the GasLog Partners’ Plan, the awards will be settled in cash or in common units at the sole discretion of the board of directors or such committee as may be designated by the board to administer the GasLog Partners’ Plan. These awards have been treated as equity settled because the Partnership has no present obligation to settle them in cash. Fair value The fair value of the RCUs and PCUs in accordance with the GasLog Partners’ Plan was determined by using the grant date closing price of $24.12 per common unit and was not further adjusted since the holders are entitled to cash distribution. Movement in RCUs and PCUs The summary of RCUs and PCUs is presented below: Number of awards Weighted average contractual life Aggregate fair value RCUs Outstanding as of January 1, 2015 . . . . . . . . . . . . . . . . . . . . . . Granted during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outstanding as of December 31, 2015. . . . . . . . . . . . . . . . . . . PCUs Outstanding as of January 1, 2015 . . . . . . . . . . . . . . . . . . . . . . Granted during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outstanding as of December 31, 2015. . . . . . . . . . . . . . . . . . . — 16,999 16,999 — 16,999 16,999 — — 2.25 — — 2.25 — 410 410 — 410 410 The total expense recognized in respect of share-based compensation for the year ended December 31, 2015 was $2,872 (December 31, 2014: $1,856 and December 31, 2013: $493). The total accrued cash distribution as of December 31, 2015 is $81 (December 31, 2014: $0) and is included under “Other non-current liabilities”. 21. Commitments (a) On December 31, 2014 and 2015 the Group had the following commitments as lessee relating to buildings under operating leases: Not later than one year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than three years . . . . . . . . . . . . . . . . . . . . . Later than three years and not later than five years . . . . . . . . . . . . . . . . . . . . More than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total operating lease commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2014 1,005 1,134 694 1,154 3,987 2015 1,804 2,614 1,239 778 6,435 F-45 The rental expense relating to operating leases for the year ended December 31, 2015 was $1,493 (December 31, 2014: $1,081 and December 31, 2013: $623). (b) Commitments relating to the vessels under construction (Note 6) on December 31, 2014 and 2015 payable to Samsung and Hyundai were as follows: As of December 31, 2014 2015 Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than three years . . . . . . . . . . . . . . . Later than three years and not later than five years . . . . . . . . . . . . . . Total vessel construction commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239,285 1,437,433 — 720,753 566,750 163,600 1,676,718 1,451,103 GasLog has issued performance guarantees in favor of Samsung and Hyundai for the outstanding commitments relating to the vessels under construction. (c) Future gross minimum revenues upon collection of hire under non-cancellable time charter agreements for vessels in operation as of December 31, 2014 and December 31, 2015 are as follows (30 off-hire days are assumed when each vessel will undergo scheduled drydocking; in addition early delivery of the vessels by the charterers or any exercise of the charterers’ options to extend the terms of the charters are not accounted for): Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than three years . . . . . . . . . . . . . . . Later than three years and not later than five years . . . . . . . . . . . . . . Later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total future gross minimum charter hire . . . . . . . . . . . . . . . . . . . . . . . . . . As of December 31, 2014 2015 356,320 639,118 472,672 156,710 399,093 679,971 449,594 277,653 1,624,820 1,806,311 Future gross minimum lease revenues disclosed in the above table excludes the revenues of the vessels that are under construction as of December 31, 2015 (Note 6). For these vessels, the following charter party agreements have been signed: • In January 2013, GAS-eleven Ltd. and GAS-twelve Ltd. signed time charter agreements with a subsidiary of BG Group for the employment of the vessels for ten years starting from the date of their delivery, with charterer options to extend the agreements for additional periods. • In August 2013, GAS-thirteen Ltd. and GAS-fourteen Ltd. signed time charter agreements with a subsidiary of BG Group for the employment of the vessels for seven years starting from the date of their delivery, with charterer options to extend the agreements for additional periods. • In April 2015, GAS-twenty two Ltd., GAS-twenty three Ltd. and GAS-twenty four Ltd. signed time charter agreements with a subsidiary of BG Group for the employment of the vessels for average initial terms of approximately 9.5 years, commencing mid-2018 and early 2019. (d) Related to the acquisition of the six vessels from a subsidiary of BG Group in 2014 and another two vessels in 2015, the Group is committed to purchase depot spares from BG Group with an aggregate value of $8,000, of which depot spares with value $660 have been purchased and paid as of December 31, 2015 and are included in Tangible fixed assets (Note 6). The remaining spares should be acquired before the end of the initial term of the charter party agreements. (e) On November 2, 2015, following execution of a letter agreement between GasLog and MSL reimbursing MSL the sum of $2,654 for value as of November 1, 2015, adjusted for future value through January 2020 up to $3,801, allowing for the future use of the reimbursement amount against the funding of specific MSL projects, such as costs associated with change orders on LNG newbuildings and or modifications of existing vessels as agreed between the parties. As of December 31, 2015, the outstanding commitment is $2,673. F-46 (f) Other Guarantees: As of December 31, 2015, GasLog LNG Services Ltd. has provided bank guarantees as follows: • Up to $1,250 (December 31, 2014: $1,250) to third parties relating to the satisfactory performance of its ship management activities; • $789 (December 31, 2014: $878) relating to the social security fund for Greek seamen; and • Bank guarantee of $10 (December 31, 2014: $10) to the Greek Ministry of Finance relating to the satisfactory performance of the obligations arising under Greek laws 89/1967, 378/1968 as amended by law 814/1978. 22. Financial Risk Management The Group’s activities expose it to a variety of financial risks, including market price risk, liquidity risk and credit risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group makes use of derivative financial instruments such as interest rate swaps to moderate certain risk exposures. Market risk Interest rate risk: Interest rate risk is the risk that interest costs will fluctuate due to changes in market interest rates. The Group’s financial income and operating cash flows fluctuate based on changes in market interest rates as the Group has loans that bear interest at floating rates. The Group uses interest rate swaps to manage its exposure to interest rate movements on bank borrowings. At December 31, 2015, the Group has hedged 43.61% of its variable rate interest exposure relating to its existing loan facilities and the Bond by swapping the variable rate to a fixed rate (December 31, 2014: 53.90%). The fair value of the interest rate swaps as of December 31, 2015 was estimated as a net liability of $16,561 (December 31, 2014: $15,444). The effective movement in the fair value of the interest rate swaps designated as cash flow hedging instruments (Note 24) amounting to $979 loss (December 31, 2014: $6,515 loss and December 31, 2013: $6,083 gain) was recognized directly in equity. Interest rate sensitivity analysis: The interest rate swap agreements described below are subject to market risk as they are recorded at fair value in the statement of financial position at year end. The fair value of interest rate swaps liabilities increases when interest rates decrease and decreases when interest rates increase. As of December 31, 2015, if interest rates had increased or decreased by 10 basis points with all other variables held constant, the positive/(negative) impact, respectively, on the fair value of the interest rate and cross currency swaps would have amounted to approximately $3,349 (December 31, 2014: $4,405 and December 31, 2013: $4,520). This amount would have affected other comprehensive income by $1,483 (December 31, 2014: $2,192 and December 31, 2013: $1,526) and the loss on swaps by $1,866 (December 31, 2014: $2,213 and December 31, 2013: $2,994). During the year ended December 31, 2015, if interest rates had increased or decreased by 10 basis points with all other variables held constant, the increase/(decrease), respectively, in interest expense on the un-hedged portion of the Group’s loans would have amounted to approximately $1,315 (December 31, 2014: $678 and December 31, 2013: $221). Other price risk: The decrease in the fair value of Egypt LNG Shipping Ltd., in response to unfavorable market conditions resulting in a decrease in charter rates and vessel values, could negatively impact the value of the Group’s investment in associate. Therefore, management might conclude that impairment is necessary in the future. Currency risk: Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Group’s functional currency. The Group is exposed to foreign exchange risk arising from various currency exposures F-47 primarily with respect to general and crew costs denominated in Euros. The Group has entered into cross currency swaps (Note 24) to hedge its currency exposure from the Bond. In addition, management monitors the exchange rate fluctuations on a continuous basis. As an indication of the extent of the Group’s sensitivity to changes in exchange rate, a 10% increase in the average euro/dollar exchange rate would have decreased the Group’s profit and cash flows during the year ended December 31, 2015 by $7,813, based upon its expenses during the year (December 31, 2014: $6,893 and December 31, 2013: $4,118). Liquidity risk Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group minimizes liquidity risk by maintaining sufficient cash and cash equivalents and by having available adequate amounts of undrawn credit facilities. The Group is not significantly exposed to liquidity risk resulting from the commitments under the vessel construction contracts as bank facilities have been contracted to meet the obligations. The following tables detail the Group’s expected cash flows for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. Variable future interest payments were determined based on an average LIBOR plus the margins applicable to the Group’s loans at the end of each year presented. Weighted average effective interest rate Less than 1 month 1-3 months 3-12 months 1-5 years 5+ years Total December 31, 2014 Trade and other accounts payable. . . . . . . . . . . . . . . . . . . . . . . Due to related parties . . . . . . . . . . Other payables and accruals*. . . Other non-current liabilities . . . . Variable interest loans. . . . . . . . . . Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2015 Trade and other accounts payable. . . . . . . . . . . . . . . . . . . . . . . Due to related parties . . . . . . . . . . Other payables and accruals*. . . Other non-current liabilities . . . . Variable interest loans. . . . . . . . . . Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,134 181 3,065 — 2.71% 4,954 961 — 29,167 — 65,272 — 2,314 1,573 — 1,235 — 93,886 7,427 — — — — — — — 977 9,668 181 33,467 977 1,400,500 399,054 1,963,666 — 169,023 159,282 15,334 97,714 104,121 1,559,782 400,031 2,176,982 11,877 163 7,584 — 2.97% 7,223 322 — 28,370 — 68,141 — 2,763 192 — 971 — 624,498 8,480 — — — 518 — — — 760 12,391 163 36,925 1,278 1,467,432 297,551 2,464,845 — 141,960 130,717 26,847 99,596 634,141 1,598,667 298,311 2,657,562 * Excludes Unearned revenue as it is not a financial liability. The amounts included above for variable interest rate instruments is subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period. The following tables detail the Group’s expected cash flows for its derivative financial liabilities. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that are settled on a net basis. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as F-48 illustrated by the yield curves existing at the end of the reporting period. The undiscounted contractual cash flows are based on the contractual maturities of the derivatives. December 31, 2014 Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . Cross currency swaps . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2015 Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . Cross currency swaps . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less than 1 month 540 — 540 152 — 152 1-3 months 3-12 months 1-5 years 5+ years Total 3,010 448 3,458 2,266 883 3,149 10,693 1,858 12,551 7,053 3,102 10,155 3,954 35,221 39,175 7,355 53,960 61,315 (1,274) 16,923 — 37,527 (1,274) 54,450 (47) 16,779 — 57,945 (47) 74,724 The Group expects to be able to meet its current obligations resulting from financing and operating its vessels using the liquidity existing at year end, the refinancing signed in February 2016 (Note 28), the proceeds from the sale and leaseback transaction completed in February 2016 (Note 28) and cash generated by operating activities. The Group expects to be able to meet its long- term obligations resulting from financing its vessels through cash generated from operations. Credit risk Credit risk is the risk that a counterparty will fail to discharge its obligations and cause a financial loss. The Group is exposed to credit risk in the event of non-performance by any of its counterparties. To limit this risk, the Group deals exclusively with financial institutions and customers with high credit ratings. As of December 31, 2014 2015 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends receivable and due from related parties. . . . . . . . . . . . . . . . . . . . . . Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211,974 28,103 14,317 1,869 22,826 1,174 302,988 6,000 16,079 1,345 62,718 61 For the year ended December 31, 2015, 83.1% of the Group’s revenue was earned from BG Group and 11.8% from Royal Dutch Shell plc (“Shell”). For the year ended December 31, 2014, 80.1% of the Group’s revenue was earned from BG Group and 11.7% from Shell and for the year ended December 31, 2013, approximately all of the Group’s revenue was mainly earned from BG Group and accounts receivable were not collateralized; however, management believes that the credit risk is partially offset by the creditworthiness of the Group’s counterparties. BG Group was acquired by Shell on February 15, 2016. This acquisition does not impact the contractual obligations under the existing charter party agreements. The Group did not experience significant credit losses on its accounts receivable portfolio during the three years ended December 31, 2015. The carrying amount of financial assets recorded in the consolidated financial statements represents the Group’s maximum exposure to credit risk. Management monitors exposure to credit risk, and they believe that there is no substantial credit risk arising from the Group’s counterparties. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. 23. Capital Risk Management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholders value. F-49 The Group monitors capital using a gearing ratio, which is total debt divided by total equity plus total debt. The gearing ratio is as follows: Borrowings, current portion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Borrowings, non-current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total debt and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,431 1,778,845 1,895,276 1,253,037 636,897 1,737,500 2,374,397 1,507,920 3,148,313 3,882,317 Gearing ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.20% 61.16% As of December 31, 2014 2015 24. Derivative Financial Instruments The fair value of the derivative assets is as follows: Derivative assets designated and effective as hedging instruments carried at fair value Interest rate swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative assets carried at fair value through profit or loss (FVTPL) Interest rate swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments, non-current asset . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The fair value of the derivative liabilities is as follows: As of December 31, 2014 2015 87 1,087 1,174 1,174 1,174 — 61 61 61 61 As of December 31, 2014 2015 Derivative liabilities designated and effective as hedging instruments carried at fair value Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cross currency swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative liabilities carried at fair value through profit or loss 8,327 35,282 8,410 56,152 (FVTPL) Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments, current liability . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments, non-current liability . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,291 51,900 16,149 35,751 51,900 8,212 72,774 14,243 58,531 72,774 Interest rate swap agreements The Group enters into interest rate swap agreements which convert the floating interest rate exposure into a fixed interest rate in order to hedge a portion of the Group’s exposure to fluctuations in prevailing market interest rates. Under the interest rate swaps, the bank counterparty effects quarterly floating-rate payments to the Group for the notional amount based on the three- month U.S. dollar LIBOR, and the Group effects quarterly payments to the bank on the notional amount at the respective fixed rates. F-50 Interest rate swaps designated as cash flow hedging instruments The principal terms of the interest rate swaps designated as cash flow hedging instruments were as follows: Subsidiary Counterparty Trade Date Effective Date Termination Date Fixed Interest Rate Notional Amount December 31, 2014 December 31, 2015 GAS-two Ltd. GAS-two Ltd. GAS-six Ltd. GAS-nine Ltd. GAS-nine Ltd. GAS-ten Ltd. GAS-ten Ltd. GAS-fifteen Ltd.(3) DNB Bank ASA SEB(1) Nordea Bank Finland Nov 2011 July 2013 CBA(2) DNB Bank ASA SEB(1) ING Bank N.V. Citibank Sept 2013 Feb 2014 April 2018 Sept 2013 Feb 2014 April 2018 July 2018 April 2014 Dec 2014 Dec 2019 April 2014 Dec 2014 Dec 2019 Feb 2020 April 2014 Feb 2015 Feb 2020 May 2014 Feb 2015 Sept 2018 July 2014 Sept 2014 1.69% 1.66% 2.04% 2.23% 2.24% 2.25% 2.23% 0.66%/2.89% 31,667 31,667 69,485 62,500 62,500 62,500 62,500 93,330 — — 65,074 59,024 59,024 59,893 59,893 86,660 476,149 389,568 (1) Skandinavinska Enskilda Banken AB (publ) (2) Commonwealth Bank of Australia (3) The fixed interest rate is agreed at 0.66% until September 2016 and at 2.89% from September 2016 to September 2018. The derivative instruments listed above qualified as cash flow hedging instruments for accounting purposes as of December 31, 2015. For the year ended December 31, 2015, the effective portion of changes in the fair value of derivatives designated as cash flow hedging instruments amounting to $7,279 loss has been recognized in Other comprehensive income (December 31, 2014: $9,885 loss, December 31, 2013: $2,459 gain). For the year ended December 31, 2015, a loss of $6,300, was recycled to profit or loss representing the realized loss on interest rate swaps in relation to the interest expenses component of the hedge (December 31, 2014: $3,370 loss, December 31, 2013: $3,624 loss). Interest rate swaps held for trading The principal terms of the interest rate swaps held for trading were as follows: Subsidiary Counterparty Trade Date Effective Date Termination Date Fixed Interest Rate Notional Amount December 31, 2014 December 31, 2015 GAS-eight Ltd. GAS-eight Ltd. GAS-eight Ltd. GAS-eight Ltd. GAS-eight Ltd. GAS-eight Ltd. GAS-one Ltd.(1) GAS-one Ltd.(1) GAS-six Ltd.(1) GAS-seven Ltd.(1) GAS-seven Ltd.(1) GAS-two Ltd.(1) GAS-two Ltd.(2) GAS-two Ltd.(2) Feb 2012 Mar 2014 Mar 2021 SEB Feb 2012 Mar 2014 Mar 2021 ING Bank N.V. May 2012 Mar 2014 Mar 2021 SEB May 2012 Mar 2014 Mar 2021 ING Bank N.V. May 2012 Mar 2014 Mar 2021 DNB Bank ASA CBA May 2012 Mar 2014 Mar 2021 Danish Ship Finance Oct 2011 Nov 2011 May 2020 June 2013 Aug 2013 May 2020 Danish Ship Finance July 2019 ABN-AMRO Bank May 2012 July 2013 Nov 2020 Mar 2012 Nov 2013 Credit Suisse AG April 2014 May 2014 May 2019 Credit Suisse AG Sept 2013 Feb 2014 April 2018 CBA Sept 2013 Feb 2014 April 2018 DNB Bank ASA Sept 2013 Feb 2014 April 2018 SEB 2.26% 2.26% 2.05% 2.05% 2.05% 2.06% 2.10% 2.03% 1.72% 2.23% 1.77% 1.69% 1.69% 1.66% 41,684 41,684 13,416 13,416 13,416 13,416 68,516 59,385 58,831 102,000 34,000 31,667 — — 491,431 39,263 39,263 12,636 12,636 12,636 12,636 64,095 55,554 55,096 96,000 32,000 28,333 28,333 28,333 516,814 (1) During the year ended December 31, 2015, the amount of the cumulative loss from the period that these hedges were effective that was recycled to profit or loss was $1,129 (December 31, 2014: $6,641, including the effect from the interest rate swaps of GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. terminated in 2014, December 31, 2013: $2,293). F-51 (2) In 2015, hedge accounting for these interest rate swaps was discontinued because the effectiveness criteria were not met. The amount of the cumulative loss from the period that the hedges were effective, that was recycled to profit or loss for the year ended December 31, 2015 was $161. The derivative instruments listed above were not designated as cash flow hedging instruments. The change in the fair value of these contracts for the year ended December 31, 2015 amounted to a net loss of $149 (December 31, 2014: $7,873 loss, December 31, 2013: $19,829 gain), which was recognized against profit or loss in the period incurred and is included in Gain/(loss) on swaps. During the year ended December 31, 2015, the net loss of $149 derived mainly from the fact that the LIBOR yield curve, which was used to calculate the present value of the estimated future cash flows, was lower than the agreed fixed interest rates resulting in an increase in derivative liabilities from interest rate swaps held for trading. Cross currency swap agreements The Group enters into CCSs which convert the floating interest rate exposure and the variability of the USD functional currency equivalent cash flows into a fixed interest rate and principal on maturity, in order to hedge the Group’s exposure to fluctuations deriving from its senior unsecured notes. In June 2013, GasLog entered into three CCSs to exchange interest payments and principal on maturity on the same terms as the NOK Bond (Note 12), thereby hedging the variability of the USD functional currency equivalent cash flows on the Bond. In April 2014, GasLog entered into three CCSs to exchange interest payments and principal on maturity on the same terms as the additional NOK Bond (Note 12), thereby hedging the variability of the USD functional currency equivalent cash flows on the Bond. The CCSs qualified as cash flow hedging instruments for accounting purposes. The principal terms of the CCSs designated as cash flow hedging instruments were as follows: Company Counterparty Trade Date Effective Date Termination Date GasLog Ltd. DNB Bank ASA June 2013 June 2013 June 2018 GasLog Ltd. SEB June 2013 June 2013 June 2018 GasLog Ltd. Nordea Bank Finland June 2013 June 2013 June 2018 GasLog Ltd. DNB Bank ASA April 2014 May 2014 June 2018 GasLog Ltd. SEB April 2014 May 2014 June 2018 GasLog Ltd. Nordea Bank Finland April 2014 May 2014 June 2018 Fixed Interest Rate 7.40% 7.41% 7.43% 5.99% 5.99% 5.99% Notional Amount December 31, 2014 December 31, 2015 27,732 27,731 27,743 27,871 27,871 27,871 27,732 27,731 27,743 27,871 27,871 27,871 166,819 166,819 For the year ended December 31, 2015, the effective portion of changes in the fair value of CCSs amounting to a loss of $23,584 has been recognized in Other comprehensive income (December 31, 2014: $37,722 loss, December 31, 2013: $2,388 loss). For the year ended December 31, 2015, a loss of $2,714 was recycled to profit or loss representing the realized loss on CCSs in relation to the interest expenses component of the hedge (December 31, 2014: $60 gain, December 31, 2013: $106 loss). Additionally, for the year ended December 31, 2015, a gain of $21,000, was recognized in Other comprehensive income in relation to the retranslation of the Bond in U.S. dollars as of December 31, 2015 (December 31, 2014: $31,106 gain, December 31, 2013: $972 gain). F-52 An analysis of Gain/(loss) on swaps is as follows: For the year ended December 31, 2014 2015 2013 Inception loss for cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unrealized gain/(loss) on interest rate swaps held for trading. . . . Realized loss on interest rate swaps held for trading. . . . . . . . . . . . . Recycled loss of cash flow hedges reclassified to profit or loss. . . Ineffective portion of cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (318) 19,829 (5,729) (2,293) 9 — (7,873) (10,310) (6,641) 37 — (149) (8,904) (1,290) 11 11,498 (24,787) (10,332) Fair value measurements The fair value of the Group’s financial assets and liabilities approximate to their carrying amounts at the reporting date. The fair value of the interest rate swaps at the end of reporting period was determined by discounting the future cash flows using the interest rate yield curves at the end of reporting period and the credit risk inherent in the contract. The fair value of the CCSs at the end of the reporting period was determined by discounting the future cash flows that are estimated based on forward exchange rates and contract forward rates, discounted at a rate that reflects the credit risk of the counterparties. The Group uses its judgment to make assumptions that are primarily based on market conditions for the estimation of the counterparty risk and the Group’s own risk that are considered for the calculation of the fair value of the interest rate and cross currency swaps. The interest rate swaps and CCSs meet Level 2 classification, according to the fair value hierarchy as defined by IFRS 13 Fair Value Measurement. There were no financial instruments in Levels 1 or 3 and no transfers between Levels 1, 2 or 3 during the periods presented. The definitions of the levels, provided by IFRS 13 are based on the degree to which the fair value is observable: • Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or liabilities; • Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and • Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). 25. Non-cash Items on Statements of Cash Flows As of December 31, 2015, there were capital expenditures for vessels and vessels under construction of $12,576 that have not been paid during the year ended December 31, 2015 and were included in current liabilities (December 31, 2014: $7,999, December 31, 2013: $691, net receivable). As of December 31, 2015, there were equity raising costs of $59 that have not been paid during the year ended December 31, 2015 and were included in current liabilities (December 31, 2014: $174, December 31, 2013: $0). As of December 31, 2015, there were loan issuance costs of $247 that have not been paid during the year ended December 31, 2015 and were included in current liabilities (December 31, 2014: $903, December 31, 2013: $2,494). 26. Taxation Under the laws of the countries of the Group’s domestication/incorporation and/or vessels’ registration, the Group is not subject to tax on international shipping income. However, it is subject F-53 to registration and tonnage taxes, which are included in vessel operating and supervision costs in the consolidated statement of profit or loss. Under the United States Internal Revenue Code of 1986, as amended (the “Code”), the U.S. source gross transportation income of a ship-owning or chartering corporation, such as GasLog, is subject to a 4% U.S. Federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the Treasury Regulations promulgated thereunder. U.S. source gross transportation income consists of 50% of the gross shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States. The Group did not qualify for this exemption for the three years ended December 31, 2015; however, the effect on the results is insignificant. 27. Earnings per share (“EPS”) Basic earnings per share was calculated by dividing the net profit for the year attributable to the owners of the common shares by the weighted average number of common shares issued and outstanding during the year. Diluted EPS is calculated by dividing the profit for the year attributable to the owners of the Group by the weighted average number of all potential ordinary shares assumed to have been converted into common shares, unless such potential ordinary shares have an antidilutive effect. The following reflects the earnings and share data used in the basic and diluted earnings per share computations: For the year ended December 31, 2014 2015 2013 Basic earnings per share Profit for the year attributable to owners of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Dividends on preferred stock . . . . . . . . . . . . . . . . . . . . Profit for the year available to owners of the Group . . Weighted average number of shares outstanding, basic Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted earnings per share Profit for the year available to owners of the Group used in the calculation of diluted EPS. . . . . . . . . . . . . . . Weighted average number of shares outstanding, basic Dilutive potential ordinary shares. . . . . . . . . . . . . . . . . . . . . . Weighted average number of shares used in the calculation of diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted earnings per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,929 — 56,929 62,863,665 42,161 — 42,161 78,633,820 10,829 7,379 3,450 80,496,314 0.91 0.54 0.04 56,929 62,863,665 — 42,161 78,633,820 166,372 3,450 80,496,314 114,106 62,863,665 78,800,192 80,610,420 0.91 0.54 0.04 The Group excluded the dilutive effect of 576,014 SARs and 83,751 RSUs in calculating diluted EPS for the year ended December 31, 2015, as they were anti-dilutive (December 31, 2014: 285,024 SARs and 74,877 RSUs). 28. Subsequent Events On February 18, 2016, GasLog entered into a credit agreement to refinance the existing indebtedness on five of its contracted vessels of up to $576,500 (the “Five Vessel Refinancing”) for debt maturities which were due in 2016 and 2017. It is comprised of a five-year senior tranche facility of up to $396,500 and a two-year bullet junior tranche of up to $180,000. The vessels covered by the Five Vessel Refinancing are the GasLog-owned Methane Lydon Volney and Methane Becki Anne and the GasLog Partners-owned Methane Alison Victoria, Methane Shirley Elisabeth and Methane Heather Sally. ABN AMRO Bank N.V. and DNB (UK) Ltd. were mandated lead arrangers F-54 to the transaction. The other banks in the syndicate are: DVB Bank America N.V., Commonwealth Bank of Australia, ING Bank N.V., London Branch, Credit Agricole Corporate and Investment Bank and National Australia Bank Limited. On February 24, 2016, GasLog’s subsidiary, GAS-twenty six Ltd., completed the ship sale and leaseback transaction with a subsidiary of Mitsui Co. Ltd. (“Mitsui”) for the sale and leaseback of the Methane Julia Louise. Mitsui has the right to on-sell and lease back the vessel. The vessel was sold to Mitsui for a total consideration approximately equivalent to its current book value. GasLog has leased back the vessel under a bareboat charter from Mitsui for a period of up to 20 years. GasLog has the option to re-purchase the vessel on pre-agreed terms no earlier than the end of year ten and no later than the end of year 17 of the bareboat charter. GasLog Partners retains its option to purchase the special purpose entity that controls the charter revenues of this vessel. This entity, together with the revenues from the charter, continues to be eligible for dropdown into GasLog Partners. The vessel remains on its eleven year charter with MSL. This transaction does not meet the held for sale classification criteria under IFRS 5 Non-current assets held for sale. Following the completion of this transaction, the outstanding debt of GAS-twenty six Ltd. of $230,000 was prepaid. In connection to the aforementioned sale and leaseback transaction, GasLog entered into a consulting agreement with Unisea Maritime (Note 19), under the terms of which GasLog agreed to pay a brokerage commission fee equal to 0.25% of the agreed charter rates under the sale and leaseback transaction plus reasonable expenses (incurred in line with the Group policies). The brokerage commission fee was paid in advance for the full 20-year period of the bareboat charter, discounted to the date of the agreement at an annual discount rate of 7.5%. On February 24, 2016, the board of directors declared a quarterly cash dividend of $0.14 per common share paid on March 17, 2016 to shareholders of record as of March 7, 2016. On February 25, 2016, a supplemental deed was signed with the lenders of the GAS-eight Ltd., GAS-nine Ltd. and GAS-ten Ltd. loan facility, permitting GasLog to withdraw the $21,000 maintained in blocked accounts for each of GAS-nine Ltd. and GAS-ten Ltd. (Note 12), provided GasLog has an executed guarantee or letter of credit with a minimum duration of six months. In connection to this, on February 26, 2016, GasLog entered into two bank guarantees, issued by BNP Paribas S.A. for GAS-nine Ltd. and GAS-ten Ltd. of $21,000 each. The bank guarantees bear interest at a margin and are available for a period of up to two years. Consequently, $42,000 was reclassified from Restricted cash to Cash and cash equivalents. F-55 [THIS PAGE INTENTIONALLY LEFT BLANK] 

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