0001104659-20-122150.txt : 20201106
0001104659-20-122150.hdr.sgml : 20201106
20201106073018
ACCESSION NUMBER: 0001104659-20-122150
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 15
CONFORMED PERIOD OF REPORT: 20201106
ITEM INFORMATION: Results of Operations and Financial Condition
ITEM INFORMATION: Other Events
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20201106
DATE AS OF CHANGE: 20201106
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: International Seaways, Inc.
CENTRAL INDEX KEY: 0001679049
STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400]
IRS NUMBER: 980467117
STATE OF INCORPORATION: 1T
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-37836
FILM NUMBER: 201292399
BUSINESS ADDRESS:
STREET 1: 600 THIRD AVENUE
STREET 2: 39TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 10016
BUSINESS PHONE: 2129534100
MAIL ADDRESS:
STREET 1: 600 THIRD AVENUE
STREET 2: 39TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 10016
FORMER COMPANY:
FORMER CONFORMED NAME: OSG International, INC
DATE OF NAME CHANGE: 20160707
8-K
1
tm2035158-1_8k.htm
FORM 8-K
(Exact Name of Registrant
as Specified in Charter)
1-37836-1
Commission File Number
Marshall Islands
98-0467117
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
600 Third Avenue,
39th Floor
New York, New York10016
(Address of Principal
Executive Offices) (Zip Code)
Registrant's telephone
number, including area code(212) 578-1600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company x
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 provided pursuant to Section 13(a) of the Exchange Act. x
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class
Symbol
Name of each exchange on which registered
Common Stock (no par value)
INSW
New York Stock Exchange
8.5% Senior Notes due 2023
INSW - PA
New York Stock Exchange
Section 2 – Financial Information
Item 2.02
Results of Operations
and Financial Condition.
The following information, including the Exhibit
to this Form 8-K, is being furnished pursuant to Item 2.02 — Results of Operations and Financial Condition of Form 8-K.
This information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of
1934 and is not incorporated by reference into any Securities Act of 1933 registration statements.
On November 6, 2020, International Seaways, Inc.
issued a press release, a copy of which is attached hereto as Exhibit 99.1, announcing third quarter 2020 earnings.
Section 8 – Other
Events
Item 8.01
Other Events.
On November 6, 2020, International Seaways, Inc.
announced that its Board of Directors had declared a quarterly cash dividend of $0.06 per share of common stock, payable December
23, 2020 to shareholders of record at the close of business on December 8, 2020.
Section 9 – Financial
Statements and Exhibits
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
Pursuant to General Instruction B.2 of Form 8-K,
the following exhibit is furnished with this Form 8-K.
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 hereunto duly authorized.
INTERNATIONAL SEAWAYS, INC.
(Registrant)
Date: November 6, 2020
By
/s/ James D. Small III
Name:
James D. Small III
Title:
Chief Administrative Officer, Senior Vice President, Secretary and General Counsel
New York, NY – November 6, 2020 – International
Seaways, Inc. (NYSE: INSW) (the “Company” or “INSW”), one of the largest tanker companies worldwide providing
energy transportation services for crude oil and petroleum products in International Flag markets, today reported results for the
third quarter of 2020.
Highlights
·
Net income for the third quarter was $14.0 million, or $0.50 per diluted
share, compared to a net loss of $11.1 million, or $0.38 per diluted share, in the third quarter of 2019. Net income for the quarter
reflects the impact of a $12.8 million impairment charge and loss on sale of vessels and a $0.7 million write-off of deferred finance
costs and fees associated with the extinguishment of debt. Net income excluding these items was $27.6 million, or $0.98 per diluted
share.
·
Time charter equivalent (TCE) revenues(A) for the
third quarter were $94.0 million, compared to $65.8 million for the third quarter of 2019.
·
Adjusted EBITDA(B) for the third quarter was $54.6
million, compared to $23.8 million for the same period of 2019.
·
Cash(C) was $153.7 million as of September 30, 2020;
total liquidity was $193.7 million, including $40.0 million of undrawn revolver.
·
Renewed share buyback program and increased authorization to a further
$50 million.
·
Paid a regular quarterly cash dividend of $0.06 per share in September
2020 and announced a quarterly cash dividend of $0.06 per share payable in December 2020.
·
Prepaid the full $40.0 million outstanding under the Transition Term
Loan Facility
·
Subsequent to the end of the quarter, agreed to sell a 2002-built
VLCC, Seaways Mulan, a 2003-built VLCC, Seaways Rosalyn, and a 2001-built Aframax, Seaways Fran.
·
Signed 10-year extensions to our contracts for our two FSO joint ventures,
which are expected to generate in excess of $322 million of contract revenues for the Company over the additional 10-year extension
periods.
“During the third quarter, we generated solid results
and increased our cash position despite current pressure on rates,” said Lois K. Zabrocky, International Seaways’ President
and CEO. “Our sizeable fleet of crude and product tankers performed well during the quarter, and the four favorable time
charters we executed earlier this year at very strong rates were instrumental in enabling us to optimize revenue during the current
period of oil inventory destocking. Importantly, taking into consideration these time charters, two of which extend well into 2021,
the contributions from our FSO JV, and our ongoing strategy of paying down debt, we have reduced our cash breakeven rate to approximately
$17,500 per day.”
Ms. Zabrocky continued, “Moving forward, we remain positive
on the long-term outlook of the tanker market. Our strategic focus continues to be on executing our disciplined and balanced approach
to capital allocation, while continuing to advance initiatives that unlock significant value for shareholders. With this important
goal in mind, we have finalized 10-year extensions for our FSO joint venture contracts, which are expected to generate in excess
of $322 million of contract revenues for the Company, bolstering our contracted cash flows for another decade. In addition, and
as we continue to operate in a COVID-19 environment, our priorities remain the safety of our onshore and at-sea professionals and
providing best-in-class service to our leading energy customers.”
Jeff Pribor, the Company’s CFO, added, “We have
succeeded in generating strong cash flows year-to-date for shareholders and deploying capital to further pay down debt and significantly
enhance our financial strength. Notably, our total liquidity at quarter’s end was $194 million, and our net loan to value
was 39%, one of the lowest among our tanker peers. We also paid our regular quarterly cash dividend of $0.06, complementing the
approximate 5% of stock we have purchased in 2020 thus far. With our ample liquidity, we remain in a strong position to continue
to return capital to shareholders and take advantage of strategic opportunities as they arise.”
1
Third Quarter 2020 Results
Net
income for the third quarter was $14.0 million, or $0.50 per diluted share, compared to a net loss of $11.1 million, or $0.38 per
diluted share, in the third quarter of 2019. The increase in the third quarter of 2020 primarily reflects higher TCE revenues and
substantially lower charter hire expenses and interest expense. An increase of $14.3
million in losses on disposals of vessels, and other property, including impairments served to partially offset such increases.
Net income for the nine months ended September 30, 2020 was $111.4 million,
or $3.88 per diluted share, compared to a net loss of $16.7 million, or $0.57 per share, for the nine months ended September 30,
2019.
Consolidated TCE revenues for the third quarter of 2020 were
$94.0 million, compared to $65.8 million for the third quarter of 2019. Shipping revenues for the third quarter of 2020 were $99.9
million, compared to $71.3 million for the third quarter of 2019. Consolidated TCE revenues for the nine months ended September
30,2020 were $349.1 million, compared to $222.3 million in the prior year period. Shipping revenues for the nine months ended September
30, 2020 were $364.9 million compared to $242.2 million for the prior year period.
The third quarter began with some strength in the crude tanker
market, carried over from the strong environment of the second quarter. The large inventory build-up seen in the second quarter
as a result of overproduction and oil contango put pressure on tanker rates during the third quarter.
In the third quarter of 2020, the Company recorded an impairment
charge of $11.7 million for a 2002-built and 2003-built VLCC, both of which have been contracted for sale, to write-down their
carrying values to their estimated fair values at September 30, 2020. Interest expense decreased by $9.0 million for the third
quarter of 2020 compared to the third quarter of 2019 as a result of lower average outstanding debt balances in the current year
periods compared to the 2019 periods. This was principally attributable to $110 million in principal prepayments on the 2017 Term
Loan Facility during the second half of 2019, the $40 million repayment of the Transition Loan Facility in August 2020 and the
use of cash in the January 2020 refinancing. In addition, lower average margins and interest rates on the refinanced portion of
debt entered into by the Company during the first quarter of 2020, and lower average LIBOR rates during the third quarter of 2020
contributed to the decline in interest expense.
Adjusted EBITDA was $54.6 million for the quarter, compared
to $23.8 million for the third quarter of 2019. Adjusted EBITDA was $225.1 million for the nine months ended September 30, 2020,
compared to $92.5 million for the nine months ended September 30, 2019.
Crude Tankers
TCE revenues for the Crude Tankers segment were $79.8
million for the quarter compared to $49.4 million for the third quarter of 2019. This increase primarily resulted from the impact
of higher average rates in the VLCC, Suezmax, and Panamax sectors, with average spot earnings climbing to approximately $35,800,
$28,200, and $15,500 per day, respectively, aggregating approximately $33.9 million. Also contributing was a 214-day increase in
VLCC revenue days, which includes 110 days covered under the Company’s loss of hire insurance policy related to an off-hire
period for the Seaways Mulan, as it was held by Indonesian authorities from February 8, 2020 through June 8, 2020 and was not redelivered
back to the Tankers International Pool until June 28, 2020. The Company received $4.1 million from its insurance provider as a
result of this recovery. Shipping revenues for the Crude Tankers segment were $83.6 million for the third quarter of 2020 compared
to $54.9 million for the third quarter of 2019. TCE revenues for the Crude Tankers segment were $274.5 million for the nine months
ended September 30, 2020, compared to $167.0 million for the same period last year. Shipping revenues for the Crude Tankers segment
were $287.7 million for the nine months ended September 30, 2020, compared to $186.7 million for the same period last year.
2
Product Carriers
TCE revenues for the Product Carriers segment were $14.2 million
for the quarter, compared to $16.4 million for the third quarter of 2019. Higher period-over-period average daily blended rates
earned by the LR2 and MR fleets, with average spot rates rising to approximately $21,500 and $14,400 per day, respectively, accounted
for an increase in TCE revenues of approximately $0.8 million. This was offset by a $2.6 million days-based decline arising primarily
from a 283-day decrease in MR revenue days in the third quarter, which resulted principally from the redelivery of four time chartered-in
MRs to their owners between the third quarter of 2019 and July 2020. Shipping revenues for the Product Carriers segment were $16.2
million for the third quarter of 2020, compared to $16.4 million for the third quarter of 2019. TCE revenues for the Product Carriers
segment were $74.5 million for the nine months ended September 30,2020, compared to $55.3 million in the 2019 nine-month period.
Shipping revenues for the Product Carriers segment were $77.2 million for the nine months ended September 30, 2020, compared to
$55.4 million for the same period last year.
Share Repurchases
During the quarter, the Company’s Board of Directors
authorized a renewal of the share repurchase program in the amount of $30 million. On October 28, 2020, the Board of Directors
increased the share repurchase program authorization to $50 million. No shares were acquired under the repurchase program in the
third quarter.
Debt Prepayment
During the third quarter of 2020, the Company prepaid the $40.0
million outstanding principal balance under the Transition Term Loan Facility using available cash on hand, increasing the number
of unencumbered ships in our fleet to 14.
Payment of Regular Cash Dividend
The Company’s Board of Directors declared a regular quarterly
cash dividend of $0.06 per share of common stock on October 28, 2020. The dividend will be paid on December 23, 2020 to shareholders
of record at the close of business on December 8, 2020.
Vessel Sales
Subsequent to quarter end, the Company agreed to sell a 2002-built
VLCC, Seaways Mulan, a 2003-built VLCC, Seaways Rosalyn, and a 2001-built Aframax, Seaways Fran, for delivery to buyers between
November 2020 and January 2021.
10-Year Contract Extensions for FSO Joint Venture
In October 2020, the FSO Joint Venture signed a 10-year extension
on each of the existing service contracts with North Oil Company (“NOC”), relating to the two FSO service vessels.
The extensions will commence in direct continuation of the existing contracts, which were originally scheduled to expire during
the third quarter of 2022.
3
Conference Call
The Company will host a conference call to discuss its third
quarter 2020 results at 9:00 a.m. Eastern Time (“ET”) on Friday, November 6, 2020. To access the call, participants
should dial (855) 940-9471 for domestic callers and (412) 317-5211 for international callers. Please dial in ten minutes prior
to the start of the call. A live webcast of the conference call will be available from the Investor Relations section of the Company’s
website at www.intlseas.com.
An audio replay of the conference call will be available starting
at 12:00 p.m. ET on Friday, November 6, 2020 through 11:59 p.m. ET on Friday, November 13, 2020 by dialing (877) 344-7529 for domestic
callers and (412) 317-0088 for international callers, and entering Access Code 10149198.
About International Seaways, Inc.
International Seaways, Inc. (NYSE:
INSW) is one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products
in International Flag markets. International Seaways owns and operates a fleet of 39 vessels, including 13 VLCCs, two Suezmaxes,
five Aframaxes/LR2s, 13 Panamaxes/LR1s and 4 MR tankers. Through joint ventures, it has ownership interests in two floating storage
and offloading service vessels. International Seaways has an experienced team committed to the very best operating practices and
the highest levels of customer service and operational efficiency. International Seaways is headquartered in New York City, NY.
Additional information is available at https://www.intlseas.com.
Forward-Looking Statements
This release contains forward-looking statements. In addition,
the Company may make or approve certain statements in future filings with the Securities and Exchange Commission (SEC), in press
releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical
facts should be considered forward-looking statements. These matters or statements may relate to the Company’s plans to issue
dividends, its prospects, including statements regarding vessel acquisitions, trends in the tanker markets, and possibilities of
strategic alliances and investments. Forward-looking statements are based on the Company’s current plans, estimates and projections,
and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail
in the Annual Report on Form 10-K for 2019 for the Company, the Quarterly Report on Form 10-Q for the quarters ended March 31,
2020, June 30, 2020 and September 30, 2020, and in similar sections of other filings made by the Company with the SEC from time
to time. The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements and written
and oral forward-looking statements attributable to the Company or its representatives after the date of this release are qualified
in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by
the Company with the SEC.
Investor Relations & Media Contact:
David Siever, International Seaways, Inc.
(212) 578-1635
dsiever@intlseas.com
Category: Earnings
4
Consolidated Statements of Operations
($ in thousands, except per share amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Shipping Revenues:
Pool revenues
$
49,217
$
46,278
$
250,485
$
158,628
Time and bareboat charter revenues
31,294
7,638
66,553
19,699
Voyage charter revenues
19,372
17,362
47,907
63,835
Total Shipping Revenues
99,883
71,278
364,945
242,162
Operating Expenses:
Voyage expenses
5,851
5,470
15,893
19,838
Vessel expenses
31,501
30,350
94,739
91,634
Charter hire expenses
6,442
14,381
24,213
44,599
Depreciation and amortization
19,014
18,961
56,161
56,708
General and administrative
7,422
6,449
21,550
19,519
Provision for credit losses, net
(13
)
(18
)
(80
)
1,259
Third-party debt modification fees
-
-
232
30
Loss/(gain) on disposal of vessels and other property,
including impairments
12,834
(1,472
)
14,164
28
Total operating expenses
83,051
74,121
226,872
233,615
Income/(loss) from vessel operations
16,832
(2,843
)
138,073
8,547
Equity in income of affiliated companies
5,356
8,474
15,672
24,559
Operating income
22,188
5,631
153,745
33,106
Other (expense)/income
(208
)
284
(13,497
)
2,159
Income before interest expense and income taxes
21,980
5,915
140,248
35,265
Interest expense
(7,999
)
(17,010
)
(28,889
)
(51,986
)
Income/(loss) before income taxes
13,981
(11,095
)
111,359
(16,721
)
Income tax provision
-
-
(1
)
-
Net Income/(loss)
$
13,981
$
(11,095
)
$
111,358
$
(16,721
)
Weighted Average Number of Common Shares Outstanding:
Basic
27,932,928
29,249,233
28,517,037
29,217,188
Diluted
28,026,005
29,249,233
28,665,961
29,217,188
Per Share Amounts:
Basic net income/(loss) per share
$
0.50
$
(0.38
)
$
3.90
$
(0.57
)
Diluted net income/(loss) per share
$
0.50
$
(0.38
)
$
3.88
$
(0.57
)
5
Consolidated Balance Sheets
($ in thousands)
September 30,
December 31,
2020
2019
(Unaudited)
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
137,340
$
89,671
Voyage receivables
71,431
83,845
Other receivables
4,702
3,938
Inventories
1,400
3,896
Prepaid expenses and other current assets
5,372
5,994
Total Current Assets
220,245
187,344
Restricted Cash
16,314
60,572
Vessels and other property, less accumulated depreciation
1,262,469
1,292,516
Deferred drydock expenditures, net
28,785
23,125
Total Vessels, Deferred Drydock and Other Property
1,291,254
1,315,641
Operating lease right-of-use assets
24,013
33,718
Investments in and advances to affiliated companies
156,589
153,292
Long-term derivative asset
973
-
Other assets
2,925
2,934
Total Assets
$
1,712,313
$
1,753,501
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities
$
27,355
$
27,554
Current portion of operating lease liabilities
9,949
12,958
Current installments of long-term debt
61,483
70,350
Current portion of derivative liability
4,035
3,614
Total Current Liabilities
102,822
114,476
Long-term operating lease liabilities
11,593
17,953
Long-term debt
489,194
590,745
Long-term derivative liability
6,200
6,545
Other liabilities
15,986
1,489
Total Liabilities
625,795
731,208
Equity:
Total Equity
1,086,518
1,022,293
Total Liabilities and Equity
$
1,712,313
$
1,753,501
6
Consolidated Statements of Cash Flows
($ in thousands)
Nine Months Ended September 30,
2020
2019
(Unaudited)
(Unaudited)
Cash Flows from Operating Activities:
Net income/(loss)
$
111,358
$
(16,721
)
Items included in net income/(loss) not affecting cash flows:
Depreciation and amortization
56,161
56,708
Loss on write-down of vessels and other assets
17,136
-
Amortization of debt discount and other deferred financing costs
2,338
5,373
Deferred financing costs write-off
13,073
343
Stock compensation, non-cash
3,993
2,912
Earnings of affiliated companies
(15,566
)
(24,945
)
Change in fair value of interest rate collar recorded through earnings
1,271
-
Other – net
904
538
Items included in net income/(loss) related to investing and financing activities:
(Gain)/loss on disposal of vessels and other property, net
(2,972
)
28
Loss on extinguishment of debt
1,195
100
Cash distributions from affiliated companies
8,500
10,214
Payments for drydocking
(15,825
)
(13,539
)
Insurance claims proceeds related to vessel operations
4,706
967
Changes in operating assets and liabilities
12,519
21,378
Net cash provided by operating activities
198,791
43,356
Cash Flows from Investing Activities:
Expenditures for vessels and vessel improvements
(46,449
)
(9,797
)
Proceeds from disposal of vessels and other property
13,564
15,762
Expenditures for other property
(493
)
(406
)
Investments in and advances to affiliated companies, net
2,347
2,104
Repayments of advances from affiliated companies
-
4,836
Net cash (used in)/provided by investing activities
(31,031
)
12,499
Cash Flows from Financing Activities:
Issuance of debt, net of issuance and deferred financing costs
362,989
-
Extinguishment of debt
(422,699
)
(10,000
)
Premium and fees on extinguishment of debt
(163
)
(100
)
Payments on debt
(66,636
)
(38,531
)
Payments on derivatives containing other-than-insignificant financing element
(1,331
)
-
Cash dividends paid
(5,091
)
-
Repurchases of common stock
(29,997
)
-
Cash paid to tax authority upon vesting of stock-based compensation
(1,272
)
(369
)
Other – net
(149
)
(277
)
Net cash used in financing activities
(164,349
)
(49,277
)
Net increase in cash, cash equivalents and restricted cash
3,411
6,578
Cash, cash equivalents and restricted cash at beginning of year
150,243
117,644
Cash, cash equivalents and restricted cash at end of period
$
153,654
$
124,222
7
Spot and Fixed TCE Rates Achieved and Revenue Days
The following tables provides a breakdown of TCE rates achieved
for spot and fixed charters and the related revenue days for the three months ended September 30, 2020 and the comparable periods
of 2019. Revenue days in the quarter ended September 30, 2020 totaled 3,123 compared with 3,529 in the prior year quarter. A summary
fleet list by vessel class can be found later in this press release. The information in these tables excludes commercial pool fees/commissions
averaging approximately $654 and $689 per day for the three months ended September 30, 2020 and 2019, respectively.
Three Months Ended September 30, 2020
Three Months Ended September 30, 2019
Spot
Fixed
Total
Spot
Fixed
Total
Crude Tankers
VLCC
Average TCE Rate
$
35,740
$
73,399
$
22,434
$
-
Number of Revenue Days
810
362
1,172
1,068
-
1,068
Suezmax
Average TCE Rate
$
28,246
$
-
$
18,470
$
-
Number of Revenue Days
180
-
180
184
-
184
Aframax
Average TCE Rate
$
10,860
$
-
$
15,342
$
-
Number of Revenue Days
368
-
368
368
-
368
Panamax
Average TCE Rate
$
15,508
$
15,790
$
7,846
$
13,772
Number of Revenue Days
118
269
387
92
551
643
Total Crude Tankers Revenue Days
1,476
631
2,107
1,712
551
2,263
Product Carriers
LR2
Average TCE Rate
$
21,505
$
-
$
17,253
$
-
Number of Revenue Days
92
-
92
87
-
87
LR1
Average TCE Rate
$
14,900
$
-
$
15,475
$
-
Number of Revenue Days
534
-
534
506
-
506
MR
Average TCE Rate
$
14,368
$
-
$
11,430
$
-
Number of Revenue Days
390
-
390
673
-
673
Total Product Carriers Revenue Days
1,016
-
1,016
1,266
-
1,266
Total Revenue Days
2,492
631
3,123
2,978
551
3,529
Revenue days in the above table exclude days related to full
service lighterings and days for which recoveries were recorded under the Company’s loss of hire insurance policies.
8
Fleet Information
As of September 30, 2020, INSW’s owned and operated 39
vessels, 34 of which were owned, 3 of which were chartered in, and 2 FSOs were held through joint venture partnerships.
Vessels Owned
Vessels Chartered-in
Total at September 30, 2020
Vessel Type
Number
Weighted by Ownership
Number
Weighted by Ownership
Total Vessels
Vessels Weighted by Ownership
Total Dwt
Operating Fleet
FSO
2
1.0
-
-
2
1.0
864,046
VLCC
13
13.0
-
-
13
13.0
3,947,222
Suezmax
2
2.0
-
-
2
2.0
316,864
Aframax
2
2.0
2
2.0
4
4.0
450,804
Panamax
7
7.0
-
-
7
7.0
487,365
Crude Tankers
26
25.0
2
2.0
28
27.0
6,066,301
LR2
1
1.00
-
-
1
1.0
112,691
LR1
5
5.00
1
1.0
6
6.0
443,077
MR
4
4.00
0
0.0
4
4.0
201,225
Product Carriers
10
10.00
1
1.0
11
11.0
756,993
Total Operating Fleet
36
35.0
3
3.0
39
38.0
6,823,294
Reconciliation to Non-GAAP Financial Information
The Company believes that, in addition to conventional measures
prepared in accordance with GAAP, the following non-GAAP measures may provide certain investors with additional information that
will better enable them to evaluate the Company’s performance. Accordingly, these non-GAAP measures are intended to provide
supplemental information, and should not be considered in isolation or as a substitute for measures of performance prepared with
GAAP.
(A) Time Charter Equivalent (TCE) Revenues
Consistent with general practice in the shipping industry, the
Company uses TCE revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from
a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional
meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company
management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Reconciliation
of TCE revenues of the segments to shipping revenues as reported in the consolidated statements of operations follow:
9
Three Months Ended
September 30,
Nine Months Ended
September 30,
($ in thousands)
2020
2019
2020
2019
Time charter equivalent revenues
$
94,032
$
65,808
$
349,052
$
222,324
Add: Voyage expenses
5,851
5,470
15,893
19,838
Shipping revenues
$
99,883
$
71,278
$
364,945
$
242,162
(B) EBITDA and Adjusted EBITDA
EBITDA represents net income/(loss) before interest expense,
income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items
that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA do not represent, and should
not be a substitute for, net income or cash flows from operations as determined in accordance with GAAP. Some of the limitations
are: (i) EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual
commitments; (ii) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and
(iii) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service
interest or principal payments, on our debt. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating results
and performance, neither of them is necessarily comparable to other similarly titled captions of other companies due to differences
in methods of calculation. The following table reconciles net income/(loss) as reflected in the condensed consolidated statements
of operations, to EBITDA and Adjusted EBITDA:
Three Months Ended
September 30,
Nine Months Ended
September 30,
($ in thousands)
2020
2019
2020
2019
Net income/(loss)
$
13,981
$
(11,095
)
$
111,358
$
(16,721
)
Income tax provision
-
-
1
-
Interest expense
7,999
17,010
28,889
51,986
Depreciation and amortization
19,014
18,961
56,161
56,708
EBITDA
40,994
24,876
196,409
91,973
Third-party debt modification fees
-
-
232
30
Loss/(gain) on disposal of vessels and other property,
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
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