UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____to_____
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive office) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant (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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Non-accelerated filer ☐ | Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the issuer’s Class A common stock as of May 4, 2022: Class A common stock, par value $0.01 – shares. Excluded from these amounts are penny warrants, which were outstanding as of May 4, 2022 for the purchase of 3,619,838 shares of Class A common stock without consideration of any withholding pursuant to the cashless exercise procedures.
TABLE OF CONTENTS
| 2 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DOLLARS IN THOUSANDS
| March 31, 2022 | December 31, 2021 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Voyage receivables, including unbilled of $ | ||||||||
| Income tax receivable | ||||||||
| Other receivables | ||||||||
| Inventories, prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Vessels and other property, less accumulated depreciation | ||||||||
| Deferred drydock expenditures, net | ||||||||
| ‘Total Vessels, Other Property and Deferred Drydock | ||||||||
| Intangible assets, less accumulated amortization | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Other assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable, accrued expenses and other current liabilities | $ | $ | ||||||
| Current installments of long-term debt | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Current portion of finance lease liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Reserve for uncertain tax positions | ||||||||
| Noncurrent operating lease liabilities | ||||||||
| Noncurrent finance lease liabilities | ||||||||
| Long-term debt | ||||||||
| Deferred income taxes, net | ||||||||
| Other liabilities | ||||||||
| Total Liabilities | ||||||||
| Equity: | ||||||||
| Common stock - Class A ($ par value; shares authorized; and shares issued and outstanding) | ||||||||
| Paid-in additional capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ||||||||
| Total Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
See notes to condensed consolidated financial statements
| 3 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
(UNAUDITED)
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Shipping Revenues: | ||||||||
| Time and bareboat charter revenues | $ | $ | ||||||
| Voyage charter revenues | ||||||||
| Operating Expenses: | ||||||||
| Voyage expenses | ||||||||
| Vessel expenses | ||||||||
| Charter hire expenses | ||||||||
| Depreciation and amortization | ||||||||
| General and administrative | ||||||||
| Loss on disposal of vessels and other property, including impairments, net | ||||||||
| Total operating expenses | ||||||||
| Operating income/(loss) | ( | ) | ||||||
| Other income, net | ||||||||
| Income/(loss) before interest expense and income taxes | ( | ) | ||||||
| Interest expense | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax benefit | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted Average Number of Common Shares Outstanding: | ||||||||
| Basic - Class A | ||||||||
| Diluted - Class A | ||||||||
| Per Share Amounts: | ||||||||
| Basic and diluted net loss - Class A | $ | ( | ) | $ | ( | ) | ||
See notes to condensed consolidated financial statements
| 4 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
DOLLARS IN THOUSANDS
(UNAUDITED)
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive (loss)/income, net of tax: | ||||||||
| Defined benefit pension and other postretirement benefit plans: | ||||||||
| Net change in unrecognized prior service costs | ( | ) | ( | ) | ||||
| Net change in unrecognized actuarial gain | - | |||||||
| Other comprehensive loss | ( | ) | ( | ) | ||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
See notes to condensed consolidated financial statements
| 5 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
DOLLARS IN THOUSANDS
(UNAUDITED)
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Items included in net income not affecting cash flows: | ||||||||
| Depreciation and amortization | ||||||||
| Loss on disposal of vessels and other property, including impairments, net | ||||||||
| Amortization of debt discount and other deferred financing costs | ||||||||
| Compensation relating to restricted stock awards and stock option grants | ||||||||
| Deferred income tax benefit | ( | ) | ( | ) | ||||
| Interest on finance lease liabilities | ||||||||
| Non-cash operating lease expense | ||||||||
| Payments for drydocking | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities, net | ( | ) | ( | ) | ||||
| Net cash provided by/(used in) operating activities | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Expenditures for vessels and vessel improvements | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Payments on debt | ( | ) | ( | ) | ||||
| Tax withholding on share-based awards | ( | ) | ( | ) | ||||
| Payments on principal portion of finance lease liabilities | ( | ) | ( | ) | ||||
| Extinguishment of debt | ( | ) | ||||||
| Deferred financing costs paid for debt | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
See notes to condensed consolidated financial statements
| 6 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
DOLLARS IN THOUSANDS
(UNAUDITED)
Common Stock (1) | Paid-in
Additional | Accumulated Deficit | Accumulated | Total | ||||||||||||||||
| Balance at December 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Other comprehensive loss | ( | ) | ( | ) | ||||||||||||||||
| Forfeitures, cancellations, issuance and vesting of restricted stock awards, net | ( | ) | ( | ) | ||||||||||||||||
| Compensation related to Class A options granted and restricted stock awards | ||||||||||||||||||||
| Balance at March 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
| Balance at December 31, 2021 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Other comprehensive loss | ( | ) | ( | ) | ||||||||||||||||
| Forfeitures, cancellations, issuance and vesting of restricted stock awards, net | ( | ) | ( | ) | ||||||||||||||||
| Compensation related to Class A options granted and restricted stock awards | ||||||||||||||||||||
| Balance at March 31, 2022 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
| (1) | ||
| (2) | ||
| (3) |
See notes to condensed consolidated financial statements
| 7 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
Note 1 — Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Overseas Shipholding Group, Inc., a Delaware corporation (the “Parent Company”), and its wholly-owned subsidiaries (collectively, the “Company” or “OSG”, “we”, “us” or “our”). The Company owns and operates a fleet of oceangoing vessels engaged primarily in the transportation of crude oil and refined petroleum products in the U.S. Flag trade.
These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by generally accepted accounting principles in the United States. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the results have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any other period.
The condensed consolidated balance sheet as of December 31, 2021 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles in the United States for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“Form 10-K”).
The World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic in March 2020. The COVID-19 pandemic is a dynamic and continuously evolving phenomenon and our disclosures throughout describe its effects on our business.
The Russian invasion of Ukraine has disrupted markets and resulted in volatile oil prices. Petroleum product flows have shifted due to governmental sanctions as well as self imposed sanctions by oil companies and traders.
Note 2 — Recently Issued Accounting Standards
In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which allows a two-bucket approach for determining the effective dates of these accounting standards. Under this approach, the buckets would be defined as follows:
Bucket 1— All public business entities (“PBEs”) that are SEC filers (as defined in U.S. GAAP), excluding smaller reporting companies (“SRCs”) (as defined by the SEC). The credit losses standard became effective January 1, 2020.
Bucket 2— All other entities, including SRCs, other PBEs that are not SEC filers, private companies, not-for-profit organizations, and employee benefit plans. The credit losses standard is to become effective January 1, 2023.
At June 30, 2019, the evaluation date for purposes of determining the applicability of the credit losses standard, the Company met the SEC definition of a smaller reporting company. Accordingly, the Company plans to adopt the credit losses standard on January 1, 2023. Management is currently reviewing the impact of the adoption of this accounting standard on the Company’s consolidated financial statements.
Note 3 - Revenue Recognition
Disaggregated Revenue
The Company has disaggregated revenue from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Consequently, the disaggregation below is based on contract type. Since the terms within these contract types are generally standard in nature, the Company does not believe that further disaggregation would result in increased insight into the economic factors impacting revenue and cash flows.
| 8 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
The following table shows the Company’s shipping revenues disaggregated by nature of the charter arrangement for the three months ended March 31, 2022 and 2021:
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Time and bareboat charter revenues | $ | $ | ||||||
| Voyage charter revenues (1) | ||||||||
| Contracts of affreightment revenues | ||||||||
| Total shipping revenues | $ | $ | ||||||
| (1) |
Voyage Receivables
As
of March 31, 2022 and December 31, 2021, contract balances from contracts with customers consisted of voyage receivables of $
Transaction Price Allocated to the Remaining Performance Obligations
As
of March 31, 2022, the Company expects to recognize revenue of approximately $
Basic earnings per common share is computed by dividing earnings by the weighted average number of common shares outstanding during the period. As management deems the exercise price for the Class A warrants of $0.01 per share to be nominal, warrant proceeds are ignored, and the shares issuable upon Class A warrant exercises are included in the calculation of basic weighted average common shares outstanding for all periods.
The computation of diluted earnings per share assumes the issuance of common stock for all potentially dilutive stock options and restricted stock units. Participating securities are defined by ASC 260, Earnings Per Share, as unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents and are included in the computation of earnings per share pursuant to the two-class method.
Class A
As of March 31, 2022, there were shares of Class A common stock issuable under outstanding restricted stock units and shares of Class A common stock issuable under outstanding options, both of which are considered to be potentially dilutive securities. As of March 31, 2021, there were shares of Class A common stock issuable under outstanding restricted stock units and shares of Class A common stock issuable under outstanding options, both of which are considered to be potentially dilutive securities.
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding: | ||||||||
| Class A common stock - basic | ||||||||
| Class A common stock - diluted | ||||||||
For the three months ended March 31, 2022 and 2021, awards under which and , respectively, may be issued related to restricted stock units and stock options, were not included in the computation of diluted earnings per share because inclusion of these awards would be anti-dilutive due to a net loss during the periods.
| 9 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
Note 5 — Fair Value Measurements and Fair Value Disclosures
The following methods and assumptions are used to estimate the fair value of each class of financial instrument:
Cash and cash equivalents and restricted cash— The carrying amounts reported in the condensed consolidated balance sheet for interest-bearing deposits approximate fair value. Investments in trading securities consist of equity securities and were measured using quoted market prices at the reporting date.
Debt— The fair values of the Company’s publicly traded and non-public debt are estimated based on similar instruments.
ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements defines fair value and establishes a framework for measuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In addition, the fair value of assets and liabilities should include consideration of non-performance risk, which for the liabilities described below includes the Company’s own credit risk.
The levels of the fair value hierarchy established by ASC 820 are as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities
Level 2 - Quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities
Financial Instruments that are not Measured at Fair Value on a Recurring Basis
The estimated fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows:
| Carrying | Fair Value | |||||||||||
| Value | Level 1 | Level 2 | ||||||||||
| March 31, 2022: | ||||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents (1) | $ | $ | $ | |||||||||
| Total | $ | $ | $ | |||||||||
| Liabilities | ||||||||||||
| Term loan, due 2024, net | $ | $ | $ | |||||||||
| Alaska tankers term loan, due 2025, net | ||||||||||||
| OSG 204 LLC term loan, due 2025, net | ||||||||||||
| OSG 205 LLC and OSG Courageous II LLC term loan, due 2027, net | ||||||||||||
| Term loan, due 2028, net | ||||||||||||
| Unsecured senior notes, net | ||||||||||||
| Total | $ | $ | $ | |||||||||
| Carrying | Fair Value | |||||||||||
| Value | Level 1 | Level 2 | ||||||||||
| December 31, 2021: | ||||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents (1) | $ | $ | $ | |||||||||
| Total | $ | $ | $ | |||||||||
| Liabilities | ||||||||||||
| Term loan, due 2024, net | $ | $ | $ | |||||||||
| Alaska tankers term loan, due 2025, net | ||||||||||||
| OSG 204 LLC term loan, due 2025, net | ||||||||||||
| OSG 205 LLC and OSG Courageous II LLC term loan, due 2027, net | ||||||||||||
| Term loan, due 2028, net | ||||||||||||
| Unsecured senior notes, net | ||||||||||||
| Total | $ | $ | $ | |||||||||
| (1) |
| 10 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis
Vessel and Intangible Assets Impairments
During the first quarter of 2022, the Company considered whether events or changes in circumstances had occurred since December 31, 2021 that could indicate the carrying amounts of the vessels, including operating right of use assets, in the Company’s fleet and the carrying value of the Company’s intangible assets may not be recoverable as of March 31, 2022. The Company concluded that no such events or changes in circumstances had occurred.
Note 6 — Taxes
For
the three months ended March 31, 2022 and 2021, the Company recorded income tax benefits of $
Share and Warrant Repurchases
During the three months ended March 31, 2022 and 2021, in connection with the vesting of restricted stock units (“RSUs”), the Company withheld and , respectively, shares of Class A common stock at average prices of $and $per share (based on the market prices on the dates of vesting), respectively, from certain members of management to cover withholding taxes.
Warrant Conversions
During
the three months ended March 31, 2022, the Company issued shares of Class A common stock as a result of the exercise of
Stock Compensation
The Company accounts for stock compensation expense in accordance with the fair value-based method required by ASC 718, Compensation – Stock Compensation. This method requires share-based payment transactions to be measured based on the fair value of the equity instruments issued.
Management Compensation — Restricted Stock Units and Stock Options
During the three months ended March 31, 2022 and 2021, the Company granted RSUs to its employees, including senior officers, covering and shares, respectively. The grant date fair value of these awards was $ and $ per RSU, respectively. Each RSU represents a contingent right to receive one share of Class A common stock upon vesting. Each award of RSUs will vest in equal installments on each of the first three anniversaries of the grant date.
During the three months ended March 31, 2022 and 2021, the Company awarded performance-based RSUs to its senior officers covering up to and shares, respectively. Each performance-based RSU represents a contingent right to receive RSUs based upon continuous employment, subject to the achievement of performance metrics through the end of a three-year performance period.
The grant date fair value of the awards, which have a market condition, was determined to be $and $per RSU, respectively.
During
the three months ended March 31, 2022, the Company awarded RSUs to its senior officers covering shares. The
grant date fair value of these awards was $. Each award of RSUs vest as follows:
During the three months ended March 31, 2021, the Company awarded performance-based RSUs to its senior officers covering shares. The grant date fair value of these awards was $ per RSU. Each performance-based RSU represents a contingent right to receive RSUs based on performance criteria tied to specific operational and financial goals that must be achieved over an 18-month performance period. Vesting is subject to certification by the Compensation Committee as to achievement of the performance measures.
| 11 |
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
Note 8 — Accumulated Other Comprehensive Income/(Loss)
The components of accumulated other comprehensive income, net of related taxes, in the condensed consolidated balance sheets follow:
| As of | March 31, 2022 | December 31, 2021 | ||||||
| Items not yet recognized as a component of net periodic benefit cost (pension and other postretirement benefit plans) | $ | $ | ||||||
| Accumulated other comprehensive income | $ | $ | ||||||
The following table presents the changes in the balances of each component of accumulated other comprehensive income/(loss), net of related taxes, during the three months ended March 31, 2022 and 2021:
| Items not yet recognized as a component of net periodic benefit cost (pension and other postretirement plans) | ||||
| Balance as of December 31, 2021 | $ | |||
| Current period change, excluding amounts reclassified from accumulated other comprehensive income | ||||
| Amounts reclassified from accumulated other comprehensive income | ( | ) | ||
| Total change in accumulated other comprehensive income | ( | ) | ||
| Balance as of March 31, 2022 | $ | |||
| Balance as of December 31, 2020 | $ | ( | ) | |
| Current period change, excluding amounts reclassified from accumulated other comprehensive loss | ||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ) | ||
| Total change in accumulated other comprehensive loss | ( | ) | ||
| Balance as of March 31, 2021 | $ | ( | ) | |
The Company includes the service cost component for net periodic benefit cost/(income) in vessel expenses and general and administrative expenses and other components in other (expense)/income, net on the condensed consolidated statements of operations.
Note 9 — Leases
Charters-out
The
Company is the lessor under its time charter contracts. Total time charter revenue for the three months ended March 31, 2022 and 2021
was equal to lease income from lease payments of $
Note 10 — Contingencies
The Company is a party, as plaintiff or defendant, to various suits in the ordinary course of business for monetary relief arising principally from personal injuries (including without limitation exposure to asbestos and other toxic materials), wrongful death, collision or other casualty and to claims arising under charter parties. A substantial majority of such personal injury, wrongful death, collision or other casualty claims against the Company are covered by insurance (subject to deductibles not material in amount). In the opinion of management, none of these claims, individually or in the aggregate, are expected to be material to the Company’s financial position, results of operations and cash flows.
| 12 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements about our beliefs, plans, objectives, goals, expectations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and similar expressions are intended to identify forward-looking statements.
All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in our forward-looking statements. Please see the section titled “Forward-Looking Statements” and Item 1A. Risk Factors of our Form 10-K. Other factors besides those listed in our quarterly reports or in our Form 10-K also could adversely affect our results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. The following highlights some of these risk factors:
| ● | public health threats, particularly the COVID-19 pandemic, which have impacted and continue to impact the Company in many ways, including those noted below, as well as by increasing operating costs to protect the health and safety of the Company’s crew members and others in the industry; | |
| ● | volatility in supply and demand in the crude oil market worldwide, which could also affect the nature and severity of certain factors listed below; | |
| ● | changing economic, political and governmental conditions in the United States or abroad, and conditions in the oil and natural gas industry, such as the Russian/Ukraine conflict, reactions to the COVID-19 pandemic, geopolitical developments, or otherwise; | |
| ● | the Company’s ability to renew its time charters when they expire or to enter into new time charters, or to replace its operating leases on favorable terms; | |
| ● | the inability to attract or retain qualified mariners; | |
| ● | changes in demand in certain specialized markets in which the Company currently trades; | |
| ● | the loss of or reduction in business with a large customer, changes in credit risk with respect to the Company’s counterparties on contracts, or the failure of counterparties to meet their obligations; | |
| ● | increasing operating costs, unexpected drydock costs or increasing capital expenses as the Company’s vessels age, including increases due to limited shipbuilder warranties or the consolidation of suppliers, or the refusal of certain customers to use vessels of a certain age; | |
| ● | the effect of the Company’s indebtedness on its ability to finance operations, pursue desirable business operations and successfully run its business in the future or to generate sufficient cash to service its indebtedness and to comply with debt covenants, allowing it to maintain capital availability; | |
| ● | the Company’s compliance with complex laws and regulations, including those seeking to reduce the spread of the COVID-19 virus, and environmental laws and regulations, including those relating to the emission of greenhouse gases and ballast water treatment; | |
| ● | the highly cyclical nature of OSG’s industry; | |
| ● | significant fluctuations in the market value of our vessels; | |
| ● | the Company’s compliance with 46 U.S.C. sections 50501 and 55101 (commonly known as the “Jones Act”) and heightened exposure to Jones Act market fluctuations, as well as stockholder citizenship requirements imposed on us by the Jones Act which result in restrictions on foreign ownership of the Company’s common stock; | |
| ● | competition within the Company’s industry and OSG’s ability to compete effectively for charters; | |
| ● | work stoppages or other labor disruptions by the unionized employees of OSG or other companies in related industries or the impact of any potential liabilities resulting from withdrawal from participation in multiemployer plans; | |
| ● | limitations on U.S. coastwise trade, the waiver, modification or repeal of the Jones Act limitations, or changes in international trade agreements; | |
| ● | the inability to clear oil majors’ risk assessment processes; and | |
| ● | the Company’s ability to use its net operating loss carryforwards. |
The Company assumes no obligation to update or revise any forward-looking statements, except as may be required by law. Forward-looking statements in this Quarterly Report on Form 10-Q and written and oral forward-looking statements attributable to the Company or its representatives after the date of this Quarterly Report on Form 10-Q are qualified in their entirety by the cautionary statement contained in this paragraph and in other reports hereafter filed by the Company with the SEC.
Business Overview
OSG is a publicly traded tanker company providing energy transportation services for crude oil and petroleum products in the U.S. Flag markets. OSG is a major operator of tankers and ATBs in the Jones Act industry. OSG’s active vessel fleet, of which 22 are U.S. Flag vessels, consists of three crude oil tankers doing business in Alaska, two conventional ATBs, two lightering ATBs, three shuttle tankers, ten MR tankers, and two non-Jones Act MR tankers that participate in the U.S. Maritime Security Program. The Company also owns and operates one Marshall Islands flagged MR tanker which trades internationally. OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in Tampa, FL. Our revenues are derived predominantly from time charter agreements for specific periods of time at fixed daily amounts. We also charter-out vessels for specific voyages where we typically earn freight revenue at spot market rates.
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The following is a discussion and analysis of our financial condition and results of operations for the three months ended March 31, 2022 and 2021. You should consider the foregoing when reviewing the condensed consolidated financial statements, including the notes thereto, and this discussion and analysis. This Quarterly Report on Form 10-Q includes industry data and forecasts that we have prepared based in part on information obtained from industry publications and surveys. Third-party industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. In addition, certain statements regarding our market position in this report are based on information derived from internal market studies and research reports. Unless we state otherwise, statements about the Company’s relative competitive position in this report are based on management’s beliefs, internal studies and management’s knowledge of industry trends.
All dollar amounts are in thousands, except daily dollar amounts and per share amounts.
Operations and Oil Tanker Markets
Our revenues are highly sensitive to patterns of supply and demand for vessels of the size and design configurations owned and operated by us and the trades in which those vessels operate. Rates for the transportation of crude oil and refined petroleum products are determined by market forces such as the supply and demand for oil, the distance that cargoes must be transported, and the number of vessels expected to be available at the time cargoes need to be transported. In the Jones Act trades within which the substantial majority of our vessels operate, demand factors for transportation are affected almost exclusively by supply and distribution decisions of oil producers, refiners and distributors based in the United States. Further, the demand for U.S. domestic oil shipments is significantly affected by the state of the U.S. and global economies, the level of imports into the U.S. from OPEC and other foreign producers, oil production in the United States, and the relative price differentials of U.S. produced crude oil and refined petroleum products as compared with comparable products sourced from or destined for foreign markets, including the cost of transportation on international flag vessels to or from those markets. The number of vessels is affected by newbuilding deliveries and by the removal of existing vessels from service, principally through storage, layup, deletions, or conversions. Our revenues are also affected by the mix of charters between spot (voyage charters which include short-term time charters) and long-term (time or bareboat charters).
The Russian Ukrainian conflict has resulted in economic sanctions against Russia which include the banning or limitation of oil imports from Russia by certain countries and self-sanctioning by many oil companies and traders. It is uncertain whether these restrictions will continue to tighten. The circumstances have resulted in the redirection of oil (crude and refined product) trade flows which are apt to continue, reflecting the need of countries that were large consumers of Russian oil to obtain other supply sources. Although the United States was not a major importer of Russian oil, it is impacted by these global events. Crude and refined products that were previously imported into the United States from non-Russian sources may not be available in prior quantities. A potential impact is more movement from domestic producing locations via pipeline and marine assets, which would have an impact on vessel demand. An increase in demand could result in higher utilization levels and potentially higher rates for Jones Act vessels.
The ongoing COVID-19 pandemic has severely impacted global and national economies. During 2020, lockdown orders, business closures and travel restrictions among many other events reduced the demand for many products, including petroleum. 2021 was characterized by the introduction of COVID-19 vaccines, business recovery and two different COVID-19 variants that all impacted overall business conditions. During the second half of 2021, there were increases in refinery operations and end user demand for transportation fuels. Demand is expected to continue to increase in 2022 to levels exceeding pre-pandemic levels. Although there has been an increase in demand, business uncertainty for our customers remains, which has resulted in a reluctance to enter into longer term transportation commitments. Customers currently favor shorter term agreements. We believe that as their visibility and confidence in the future returns there will be a resumption of more typical customer behavior and time charter activity will rebound.
The ongoing pandemic also resulted in the non-renewal of charters for vessels whose time charters ended late in 2020 and early in 2021. In response to this, we placed seven vessels in layup for most of 2021. This allowed us to reduce the operating costs associated with vessels that were without charter. We saw an increase in demand during the second half of 2021. As a result, two of the seven vessels came out of layup in September 2021 and operated in the spot market. One of these two vessels commenced a 26-month time charter in mid-November 2021. A third vessel came out of layup in December 2021 and operated in the spot market. In January 2022 and late February 2022, two more vessels came out of layup. We continued to see an increase in demand during the first quarter of 2022 and as a result, we expect our two remaining vessels in layup to return to service during the second quarter of 2022.
As a result of the COVID-19 pandemic, we have implemented procedures to protect the health and safety of our employees, crew and contractors. These procedures and protocols are those mandated or recommended by the Centers for Disease Control and Prevention, the U.S. Coast Guard, local ports and shipyards, and country- and state-specific requirements. They include such actions as providing personal protective equipment, managing the locations where crew members board and depart from our vessels, requiring crew members to disclose symptoms and the health of those they have been in contact with, mandatory quarantine periods imposed prior to joining any vessel, sanitization of the vessels, mandating face coverings when non-crew are on board, social distancing and requiring testing in certain instances. COVID-19 has also impacted planned shipyard maintenance and vetting activities, resulting in delays, rescheduling and extensions. These additional procedures and delays have resulted in increased costs, which at this point in time, have not been material but are expected to continue and may increase.
Having our vessels committed on time charters is a fundamental objective of our chartering strategy. The majority of available vessel operating days are covered with medium-term charters or contracts of affreightment. However, medium-term charters may not always be remunerative, nor prove achievable under certain market conditions. As a result, some of our vessels may operate in the spot market, which is more volatile and less predictable. In some cases, where neither time charter nor consistent spot market business is available, layup and removal of vessels from an actively available status is deemed necessary. Because shipping revenues and voyage expenses are significantly affected by the mix between voyage charters and time charters, we manage our vessels based on TCE revenues and rates, which are non-GAAP measures.
Spot market demand for Jones Act tankers and ATBs rebounded in the fourth quarter of 2021 and continued into the first quarter 2022. There was an increase of spot activity in the first quarter of 2022 with 34 spot fixtures versus 30 spot fixtures in the fourth quarter of 2021. For the 34 spot fixtures, 17 were performed by tankers and the remaining were performed by ATBs. The availability of tankers and ATBs in the spot market was significantly reduced by the end of the first quarter of 2022 due to charterers securing term contracts in favor of relying on the spot market.
Our vessels, excluding vessels in layup, were employed for 98% of available days during the first quarter of 2022, with 34 of a total 1,583 available days (available days excludes 49 days vessels were off-hire due to drydock requirements) seeing vessels idle without employment. Industry-wide, there were no firm Jones Act vessel orders as of March 31, 2022.
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Delaware Bay lightering volumes averaged 71,000 b/d in the first quarter of 2022 compared with 66,000 b/d in the first quarter of 2021. Refinery demand for crude oil has increased from the lower demand levels in the first quarter of 2021 caused by COVID-19. We have contract minimums with our refinery customers that compensate us for barrels not lightered below those minimum amounts.
Critical Accounting Policies
The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Company to make estimates in the application of its accounting policies based on the best assumptions, judgments and opinions of management. There have been no changes to the Company’s critical accounting estimates disclosed in Note 2, “Summary of Significant Accounting Policies,” to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for 2021.
Results of Vessel Operations
During the three months ended March 31, 2022, shipping revenues increased by $22,726, or 28.0%, compared to the same period in 2021. The increase primarily resulted from a 369-day decrease in layup days as we had fewer vessels in layup during the first quarter of 2022 compared to the first quarter of 2021. During the first quarter of 2022, we had two vessels in layup for the full quarter and two additional vessels that came out of layup in January 2022 and late February 2022. During the first quarter of 2021, we had seven vessels in layup. Additionally, the increase in revenues resulted from five Military Sealift Command voyages, which were longer international voyages, during the first quarter of 2022 compared to no such voyages during the same period in 2021 and an increase in Delaware Bay lightering volumes. The increase was partially offset by one less MR tanker in our fleet, Overseas Gulf Coast, which was sold during the second quarter of 2021. We continued to see an increase in demand during the first quarter of 2022 and as a result, we expect our two remaining vessels in layup to return to service during the second quarter of 2022.
Reconciliation of TCE revenues, a non-GAAP measure, to shipping revenues as reported in the consolidated statements of operations follows:
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Time charter equivalent revenues | $ | 93,925 | $ | 65,513 | ||||
| Add: Voyage expenses | 10,074 | 15,760 | ||||||
| Shipping revenues | $ | 103,999 | $ | 81,273 | ||||
The following table provides a breakdown of TCE rates achieved for the three months ended March 31, 2022 and 2021 between spot and fixed earnings and the related revenue days.
| 2022 | 2021 | |||||||||||||||
| Three Months Ended March 31, | Spot | Fixed | Spot | Fixed Earnings | ||||||||||||
| Jones Act Handysize Product Carriers: | ||||||||||||||||
| Average rate | $ | 57,368 | $ | 58,228 | $ | 24,467 | $ | 65,165 | ||||||||
| Revenue days | 411 | 545 | 148 | 477 | ||||||||||||
| Non-Jones Act Handysize Product Carriers: | ||||||||||||||||
| Average rate | $ | 44,075 | $ | 17,469 | $ | 14,958 | $ | 7,044 | ||||||||
| Revenue days | 180 | 90 | 180 | 177 | ||||||||||||
| ATBs: | ||||||||||||||||
| Average rate | $ | — | $ | 34,854 | $ | — | $ | 32,339 | ||||||||
| Revenue days | — | 178 | — | 180 | ||||||||||||
| Lightering: | ||||||||||||||||
| Average rate | $ | 74,311 | $ | — | $ | 92,524 | $ | — | ||||||||
| Revenue days | 90 | — | 73 | — | ||||||||||||
| Alaska (a): | ||||||||||||||||
| Average rate | $ | — | $ | 58,996 | $ | — | $ | 58,743 | ||||||||
| Revenue days | — | 269 | — | 238 | ||||||||||||
(a) Excludes one Alaska vessel currently in layup.
During the first quarter of 2022, TCE revenues increased by $28,412, or 43.4%, to $93,925 from $65,513 in the first quarter of 2021. The increase primarily resulted from a 369-day decrease in layup days as we had fewer vessels in layup during the first quarter of 2022 compared to the first quarter of 2021. During the first quarter of 2022, we had two vessels in layup for the full quarter and two additional vessels that came out of layup in January 2022 and late February 2022. During the first quarter of 2021, we had seven vessels in layup. Additionally, the increase in TCE revenues resulted from five Military Sealift Command voyages, which were longer international voyages, during the first quarter of 2022 compared to no such voyages during the same period in 2021 and an increase in Delaware Bay lightering volumes. The increase was partially offset by one less MR tanker in our fleet, Overseas Gulf Coast, which was sold during the second quarter of 2021. We continued to see an increase in demand during the first quarter of 2022 and as a result, we expect our two remaining vessels in layup to return to service during the second quarter of 2022.
Voyage expenses decreased by $5,686, or 36.1%, in the first quarter of 2022 to $10,074 compared to $15,760 in the first quarter of 2021, primarily related to no expenses for oil pollution mitigation services for the Alaskan tankers in the first quarter of 2022 compared to $10,309 of these expenses during the first quarter of 2021. These expenses were passed through to the charterer each month, however, the charterer is now paying the expenses directly to the vendor. Additionally, voyage expenses increased due to increases in fuel and port expenses related to more voyage charters performed by our vessels during the first quarter of 2022 compared to the same period in 2021 and freight brokerage fees due to removing vessels from layup during the first quarter of 2022.
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Vessel expenses increased by $8,991, or 28.3%, in the first quarter of 2022 to $40,798 compared to $31,807 in the first quarter of 2021, primarily due to an increase in crewing costs. The increase in crewing costs was related to fewer vessels in layup during the first quarter of 2022 compared to the first quarter of 2021.
Depreciation and amortization increased by $1,174, or 7.7%, to $16,493 in the first quarter of 2022 compared to $15,319 in the first quarter of 2021. The increase primarily resulted from an increase in amortization of drydock costs.
Our two U.S. Flag Product Carriers participate in the MSP, which is designed to ensure that militarily useful U.S. Flag vessels are available to the U.S. Department of Defense in the event of war or national emergency. We receive an annual stipend, subject in each case to annual congressional appropriations, which is intended to offset the increased cost incurred by such vessels from operating under the U.S. Flag. For 2022, we expect to receive up to $5,300 for each vessel. During 2021, the stipend we received was $5,250 for each vessel. We do not receive a stipend for any days for which either of the two vessels operate under a time charter to a U.S. government agency.
General and Administrative Expenses
During the first quarter of 2022, general and administrative expenses increased by $573, or 9.0%, to $6,938 from $6,365 in the first quarter of 2021. The increase was primarily driven by an increase in compensation and benefit costs due to annual compensation adjustments and increased staff levels.
Loss on Disposal of Vessels and Other Property, Including Impairments, Net
Loss on disposal of vessels and other property, including impairments, net was $0 for the three months ended March 31, 2022 compared to $5,493 for the three months ended March 31, 2021. The decrease was primarily a result of a loss of $5,446 we recorded for the planned disposition of the Overseas Gulf Coast based on a firm offer we received to sell it during the first quarter of 2021.
Interest Expense
Interest expense was $8,365 for the three months ended March 31, 2022 compared with $6,370 for the three months ended March 31, 2021. The increase in interest expense was primarily due to a higher rate of interest on our term loan, due 2028, which we entered into in September 2021, compared to the rate of interest we were paying during the first quarter of 2021 on our term loan, due 2023. The term loan, due 2023 was paid off with proceeds from the term loan, due 2028. The increase was partially offset by a decrease in interest expense related to prepayments of $16,000 and $3,000 we made on the Alaska tankers term loan, due 2025, and OSG 204 LLC term loan, due 2025, in September 2021 and November 2021, respectively.
Income Taxes
For the three months ended March 31, 2022 and 2021, we recorded income tax benefits of $59 and $6,169, respectively, which represented effective tax rates of 10% and 28%, respectively. The decrease in the effective tax rate for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to the tonnage tax exclusion and current state discrete expense. The effective tax rate for the three months ended March 31, 2022 was less than the statutory rate due to the tonnage tax exclusion and state expense. The effective tax rate for the three months ended March 31, 2021 was more than the statutory rate due to the tonnage tax exclusion and state benefit.
Liquidity and Sources of Capital
Our business is capital intensive. Our ability to successfully implement our strategy is dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business to meet near-term and long-term debt repayment obligations is dependent on maintaining sufficient liquidity.
Liquidity
Working capital at March 31, 2022 was approximately $(57,000) compared with approximately $(67,000) at December 31, 2021. Excluding the current portion of operating and finance lease liabilities, working capital was approximately $40,000 at March 31, 2022 compared to $37,000 at December 31, 2021. The increase in working capital was primarily due to an increase in receivables related to the timing of collection from our customers and a decrease in accounts payable, accrued expenses and other current liabilities as a result of timing of accounts payable payments made at March 31, 2022 compared to December 31, 2021.
As of March 31, 2022, we had total liquidity on a consolidated basis comprised of $76,836 of cash and cash equivalents. We manage our cash in accordance with our intercompany cash management system. Our cash and cash equivalents, as well as our restricted cash balances, generally exceed Federal Deposit Insurance Corporation insurance limits. We place our cash, cash equivalents and restricted cash in what we believe to be credit-worthy financial institutions. In addition, certain of our money market accounts invest in U.S. Treasury securities or other obligations issued or guaranteed by the U.S. government or its agencies.
As of March 31, 2022, we had total debt outstanding (net of deferred financing costs) of $439,332 and a total debt to total capitalization of 56.5%, compared to $444,740 and 56.7%, respectively, at December 31, 2021.
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Sources, Uses and Management of Capital
We generate significant cash flows through our complementary mix of time charters, voyage charters and contracts of affreightment. Net cash provided by operating activities during the three months ended March 31, 2022 was $1,785. In addition to operating cash flows, our other current potential sources of funds are proceeds from additional issuances of equity securities, additional borrowings and proceeds from the opportunistic sales of our vessels. In the past, we have also obtained funds from the issuance of long-term debt securities.
We use capital to fund working capital requirements, maintain the quality of our vessels, comply with U.S. and international shipping standards and environmental laws and regulations and repay or repurchase our outstanding loan facilities. We may also use cash generated by operations to finance capital expenditures to modernize and grow our fleet.
Item 3: Quantitative and Qualitative Disclosures about Market Risk
Not applicable due to the Company’s status as a smaller reporting company.
Item 4: Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s current disclosure controls and procedures were effective as of March 31, 2022 to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our 2021 Form 10-K, and as may be updated in our subsequent quarterly reports. The risks described in our 2021 Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. There have been no material changes in our risk factors from those disclosed in our 2021 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2022, in connection with the vesting of restricted stock awards, the Company withheld the following number of shares of Class A common stock from certain members of management to cover withholding taxes.
| Period | Total Number Shares of Class A Withheld | Average Price Paid per Share of Class A | ||||||
| January 1, 2022 through January 31, 2022 | 64 | $ | 1.79 | |||||
| February 1, 2022 through February 28, 2022 | 24,876 | $ | 1.92 | |||||
| March 1, 2022 through March 31, 2022 | 154,100 | $ | 2.10 | |||||
| 179,040 | $ | 2.07 | ||||||
Item 3. Defaults upon senior securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other information
None.
Item 6. Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| OVERSEAS SHIPHOLDING GROUP, INC. | |
| (Registrant) | |
| Date: May 9, 2022 | /s/ Samuel H. Norton |
| Samuel H. Norton | |
| Chief Executive Officer | |
| Date: May 9, 2022 | /s/ Richard Trueblood |
| Richard Trueblood | |
| Chief Financial Officer | |
| (Mr. Trueblood is the Principal Financial Officer and has been duly authorized to sign on behalf of the Registrant) |
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