Everyone, welcome to SFL's third quarter conference call. We do apologize for the problems with our service provider who has delayed the call now for more than 20 minutes. I hope you know you have been patient and are able to listen in to us still. I will start the call by briefly going through the highlights of the quarter. Following that, our CFO, Aksel Olesen, will take us through the financials, and the call will be concluded by opening up for questions. Our Chief Operating Officer, Trym Sjølie, will also be present for the Q&A session. Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. Forward-looking statements are not guarantees of future performance. These statements are based on our current plans and expectations and are inherently subject to risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors, that could cause actual results to differ includes, but are not limited to, conditions in the shipping, offshore, and credit markets. You should therefore not place undue reliance on these forward-looking statements. Please refer to our filings with the Securities and Exchange Commission for more detailed discussion on our risks and uncertainties, which may have a direct bearing on our operating results and our financial condition.
The total charter revenues were $178 million in the quarter, which was up 8% compared to the second quarter. The majority of revenues was from vessels and long-term charters at around 18% for vessels employed on short-term charters in the spot market. The EBITDA equivalent cash flow in the quarter was approximately $126 million, and over the last 12 months, the EBITDA equivalent has been $489 million. The net income came in at around $50 million in the quarter or $0.39 per share. This includes contributions from profit share arrangements and also positive mark-to-market on interest rate swaps and equity and bond investments.
The announced dividend of $0.23 per share is in line with the dividend declared for the second quarter and represents a dividend yield of around 8.8% based on closing price on Friday. This is our 75th quarterly dividend, and over the years, we have paid more than $2.5 billion in total or more than $28 per share. We have a robust charter backlog supporting continued dividend capacity going forward. Our fixed rate backlog has increased significantly over the last year and now stands at approximately $3.8 billion from owned and managed vessels after recent acquisitions and charters, providing continued cash flow visibility going forward. Importantly, the backlog figure excludes revenues from the vessels traded in the short-term market and also excludes future profit share optionality, which we have seen can contribute significantly to our net income.
We have recently announced the acquisition of four modern eco-designed Suezmax tankers in combination with long-term charters to Koch Industries. Two vessels were delivered in the third quarter and two delivered after quarter end, and full cash flow effect will therefore be from the first quarter of 2023. The transaction added $250 million to a fixed rate charter backlog and demonstrates our standing in the market as a high quality provider of transportation services, including technical management, vessel operations, and vetting for industry-leading customers. Based on market sources, the charter fee value of these vessels are already up 16% compared to our purchase price. This does not mean that anything for the near-term cash flows, but it's important for the overall risk profile for us. In early September, we announced the acquisition of two new build feeder container vessels.
This was an opportunity that came up on short notice and a result of our strong business relationship with Maersk Line, where we have done multiple repeat business transactions over the last years. We were able to step in and organize the takeout of the first vessel from the shipyard in China in a matter of only a few weeks. The structure of the charter enables us to de-risk the deal significantly over the charter period with a relatively high charter rate. To balance this, we can enjoy the benefit of purchase options below mid-cycle levels, but still with a profit share to SFL. The first vessel was delivered and entered service for Maersk end of September, and the second vessel is due in just a few days now.
We have also recently agreed to acquire a 2010-built mid-size car carrier with long-term charter to a large Korea-based logistics company. The contract runs until mid-2028 and adds $65 million in fixed rate charter revenues, in addition to potential significant benefits from the vessel's installed scrubber, where most of the economics goes to SFL. The economic return on the vessel is strong, even without leverage, but we plan to source financing for the vessel in due course, which will boost the returns from this deal. While it is a single vessel, it will be managed technically and operationally together with our two existing car carriers and our four vessels under construction, which will ensure operational efficiency. We also own two harsh environment drilling rigs, Linus and Hercules, which were chartered to subsidiaries of Seadrill for a number of years.
In connection with Seadrill's recent Chapter 11 restructuring, we agreed to take the rigs back, and the long-term drilling contract for Linus with ConocoPhillips was assigned from Seadrill to SFL at the end of the third quarter. Odfjell Technology is managing the rig for us technically and operationally, and the transition, including government approvals, was seamless and without any commercial off-hire. The charter rate is adjusted semi-annually, and currently the charter rate is approximately $199,000 per day, up from $193,000 per day from May through October. Operating expenses is currently approximately $125,000 per day. The harsh environment semi-submersible rig, Hercules, is still on charter to Seadrill while it is finalizing a drilling contract with Equinor before we deliver it to SFL in Norway in December.
This rig will be managed technically and operationally by Odfjell Drilling going forward. The rig is one of only a handful of rigs fully equipped to drill in the harshest Arctic environment, and market analysts are positive to market prospects based on recent tender activity and a tight supply-demand balance. We have seen that the international market for deepwater drilling rigs without these harsh environment features have risen quickly. The harsh market has been lagging this, but we believe prospects for 2024 and 2025 in particular is very promising. Before a new contract, the rig will have to complete a scheduled comprehensive special periodical survey, and we are considering some upgrades to the rig to make it more attractive for longer term contracts. Currently, we estimate SPS costs to approximately $50 million, plus potential contract specific upgrades.
The rig will be available for new contracts from mid the second quarter, and there is good progress on new charter opportunities. We therefore hope to be able to announce a drilling contract soon. Over the years, we have changed both fleet composition and structure, and we now have 78 maritime assets in our portfolio, and our backlog from owned and managed shipping assets stands at $3.8 billion, up from $3.7 billion in the previous quarter. Over the years, we have gone from a single asset class charter to one single customer to a diversified fleet and multiple counterparties, and the fleet composition has varied from 100% tankers to nearly 60% offshore ten years ago to container vessels now being the largest segment with 53% of the backlog.
Most of the vessels are on long-term charters, and more than 90% of charter revenues from our shipping assets came from time charter contracts and only 8% on bareboat or dry lease. In addition to fixed rate charter revenues, we have had significant contributions to cash flow from profit share over time, both relating to charter rates and fuel savings. Last 12 months, the aggregate profit share has been $28.5 million, with $11.3 million in the third quarter alone. We do not have a set mix in the portfolio, focus is on evaluating deal opportunities across the segments and try to do the right transactions from a risk-reward perspective. Over time, we believe this will balance itself out, but we try to be careful and conservative in our investments with a focus on technology and transition over time to more fuel-efficient vessels.
The strength of our counterparties and diversification is key when we assess our portfolio and quality of our contracted backlog. The list speaks for itself with market leading operators like Maersk, Hapag-Lloyd, ConocoPhillips, Phillips 66, Koch Industries, and Volkswagen, to name a few. Relatively few of our customers are intermediaries, where we have less visibility on the use of the assets and quality of operations. Strategically, this also gives us access to more deal flow opportunities, such as the repeat business with Maersk, MSC, Evergreen, and Trafigura, for example. Our strategy has therefore been to maintain a strong technical and commercial operating platform in cooperation with our sister companies in the Seatankers Group. This gives us the ability to offer a wider range of services to our customers, from structured financing to full service time charters.
With full control over vessel maintenance and performance, including energy efficiency and emission minimizing efforts, we can impact improvements to our vessels through the life of the assets, and not only be passively owning vessels employed on bareboat, where the customers may not always have an incentive to make such improvements. In addition, we can retain more of the residual value in the assets when we charter out the time on time charter basis. In the current environment, with rising, re-rising raw material costs and inflation driving replacement costs for vessels, this value is for the benefit of SFL and our stakeholders. For bareboat charter deals, the value is usually retained by the charterer through fixed price purchase options. With that, I will give the word over to our CFO, Aksel Olesen, who will take us through the financial highlights for the quarter.
Thank you, Ole Hjertaker. On this slide, there's shown a pro forma illustration of cash flow for the third quarter. Please note that this is only a guideline to assess the company's performance, and it's not in accordance with U.S. GAAP and also net of extraordinary and non-cash items. The company generated gross charter hire of approximately $178 million in the third quarter, including approximately $11 million of profit share, with approximately 82% of revenue coming from a fixed charter rate backlog, which currently stands at $3.8 billion, providing us with strong visibility on our cash flow going forward. In the third quarter, the liner fleet generated gross charter hire of approximately $98 million, including approximately $10 million in profit share contribution related to fuel savings on some of our large container vessels.
At the end of the third quarter, SFL's liner fleet backlog was approximately $2 billion, with an average remaining charter term of approximately 4.7 years, or 7.4 years if weighted by charter hire. The charter backlog includes approximately $0.5 billion of backlog from the seven car carriers. In the third quarter, SFL had a fleet of 18 crude oil product and chemical tankers, with the majority employed on long-term charters. Our tanker fleet generated approximately $42 million in gross charter hire during the quarter compared to $35 million in the previous quarter. SFL has two Supramax tankers and two smaller chemical tankers trading in the spot and short-term markets. The charter hire from these vessels was approximately $11.5 million in the third quarter compared to approximately $6.6 million in the second quarter.
The company has 15 dry bulk carriers of which nine were employed in long-term charters during the quarter. SFL generated approximately $27 million in gross charter hire from the dry bulk fleet in the third quarter, including approximately $1.2 million of profit share. Six vessels were employed in the spot and short-term market and contributed approximately $10 million in net charter hire during this quarter compared to approximately $13 million in the previous quarter. SFL owns two drilling rigs which have been chartered out to subsidiaries of Seadrill on bareboat terms. In the third quarter, the company received charter hire of approximately $10 million from the rigs. The Linus was redelivered to SFL at the end of the third quarter. We will from the fourth quarter receive full rig contract revenue from ConocoPhillips and per-rig OpEx similar to a ship on a time charter.
We also expect close to full quarterly revenue from the Hercules in the fourth quarter as the rig is expected to be redelivered at the very end of the year. This summarizes an adjusted EBITDA of approximately $126 million for the third quarter compared to $124 million in the second quarter. We move on to the profit and loss statement as reported on the U.S. GAAP. As we had described in previous earnings calls, our accounting statements are different from those of a traditional shipping company. As our business strategy focuses on long-term charter contracts, a large part of our activities are classified as capital leasing. Therefore, a significant portion of our charter revenues are excluded from U.S. GAAP operating revenues.
This includes repayment of investment in sales type, direct financing leases and leaseback assets, and revenues from entities classified as investment in associates for accounting purposes. For the third quarter, we report total operating revenues according to U.S. GAAP of approximately $167 million, which is less than the approximately $178 million of charter hire actually received for the reasons just mentioned. The company recorded profit share income of approximately $1.2 million from our Capesize dry bulk vessels, in addition to approximately $10 million from fuel saving arrangements on some of our large container vessels. Furthermore, the company recorded a $5.5 million gain related to positive mark-to-market effects related to interest rate swaps. At the quarter end, approximately 70% of our financings were fixed rate or swaps to fixed by financial hedging instruments.
With the recent rates and interest rates, we now see the benefit of a conservative approach to financing. Similar to our chartering strategy, we aim to have significant diversification in our funding base, both in terms of structure and geography, as this has proven to give us more flexibility over time. Based on our assumptions, we estimate that 1% increase in interest rates from our current levels equals approximately $0.02 per share in lower distributable cash flow per quarter and vice versa. When evaluating new investment opportunities, we take a conservative approach when assuming the interest rate cost during the life of the project, and we generally seek to fix the interest rate back-to-back with the fixed charter duration or include an interest rate adjustment in the charter rate.
In addition, the company recorded a $8.6 million gain related to positive mark-to-market effects related to equity and debt investments and an increase of $500,000 in credit loss provisions. Overall, and according to U.S. GAAP, the company reported a net profit of approximately $50 million or $0.39 per share. Moving on to the balance sheet. At quarter end, SFL had approximately $179 million of cash and cash equivalents. Furthermore, the company had marketable securities of approximately $9.3 million based on market prices at the end of the quarter. In addition, the company had five debt-free vessels at quarter end with a combined charter-free value of approximately $114 million based on average broker appraisals.
During the third quarter, SFL secured refinancing facilities for its eight K-size vessels and two Capesize vessels for $115 million and $23 million, respectively. Also, during the third quarter, the company entered into agreements for long-term financing of the two 14,000 TEU container vessels, Thalassa Patris and Thalassa Elpida, in the form of Japanese operating leases. The combined amount is $240 million, and the first vessel closed in October, whereas the second one is scheduled for December. The transaction frees up approximately $120 million compared to the previous secured financing on these two vessels. Furthermore, SFL is in advanced discussions to enter into a long-term financing facility for approximately $144 million to part finance four recently acquired Supramax tankers. This facility is expected to close later in the fourth quarter.
The approximately $275 million of remaining CapEx on our four car carriers under construction is expected to be financed by senior debt facilities similar to SFL's other assets with long-term charters. Based on the Q3 numbers, the company has a book equity ratio of approximately 29%. To conclude, the board has declared a cash dividend of $0.23 per share for the quarter. This represents a dividend yield of approximately 8.8% based on the closing share price last Friday. Following our recent investments and charter arrangements this year, we have added more than $1.4 billion to our fixed rate backlog, which now stands at $3.8 billion, providing us with strong visibility on future cash flow, debt service, and continued dividend distribution capacity.
With a strong balance sheet and significant investment capacity, SFL is very well positioned to execute on new accretive investments to continue to create shareholder value. Thank you.
I would like to thank everyone here who has helped us prepare the material for the third quarter. Unfortunately, due to the technical issues with the service provider, it's not possible to conduct a question and answer session. I will ask anyone who has questions, who want anything clarified, to contact us either through our webpage, on the contact page on the webpage www.sflcorp.com. Also there are contact details direct to several persons in the press release that you can reach out to to get these answered. With that, I would like to wrap up the conference call, and I promise you, these technical issues will not be there next quarter. Thank you.