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United States

Securities and Exchange Commission

Washington, D.C. 20549

 

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

 

February 28, 2023

 

Date of Report (Date of earliest event reported)

 

International Seaways, Inc.

(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 York 10016

 

(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 ¨

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. ¨

 

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
Rights to Purchase Common Stock N/A true 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 February 28, 2023, International Seaways, Inc. issued a press release, a copy of which is attached hereto as Exhibit 99.1, announcing fiscal year 2022 earnings.

 

Section 7 – Regulation FD

 

Item 7.01 Regulation FD Disclosure.

 

The following information, including the Exhibit to this Form 8-K, is being furnished pursuant to Item 7.01 — Regulation FD Disclosure 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.

 

Pursuant to the company’s dividend policy, on February 27, 2023 INSW’s Board of Directors declared a regular quarterly dividend of $0.12 per share of common stock for the first quarter of 2023 and a special dividend of $1.88 per share of common stock. Such dividends are payable on March 28, 2023 to shareholders with a record date at the close of business on March 14, 2023.

 

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.

 

Exhibit No. Description
   
99.1 Press Release dated February 28, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


 

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 hereunto duly authorized.

 

  INTERNATIONAL SEAWAYS, INC.
  (Registrant)
   
Date: February 28, 2023 By /s/ James D. Small III
    Name: James D. Small III
    Title: Chief Administrative Officer, Senior Vice President, Secretary and General Counsel

 

 


 

EXHIBIT INDEX

 

Exhibit No.   Description
99.1   Press Release dated February 28, 2023.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

EX-99.1 2 tm238029d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

INTERNATIONAL SEAWAYS REPORTS

FOURTH QUARTER AND FULL YEAR 2022 RESULTS

 

New York, NY – February 28, 2023– 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, today reported results for the fourth quarter and full year of 2022.

 

HIGHLIGHTS & RECENT DEVELOPMENTS

 

· Highest Earnings in Our History: Net income for the fourth quarter was $218.4 million, or $4.40 per diluted share, compared to a net loss of $34.0 million, or $0.68 per diluted share, in the fourth quarter of 2021. For the full year 2022, net income was $387.9 million, or $7.77 per diluted share, representing an increase of $521.4 million compared to the full year of 2021, which was a net loss of $133.5 million, or $3.48 per share.

 

· Adjusted EBITDA(A) for the fourth quarter was $254.3 million and for the full year of 2022 was $549.1 million.

 

· Total liquidity was $541.1 million as of December 31, 2022, which includes cash (and short-term cash investments)(B) of $323.7 million and $217.4 million of remaining undrawn revolver capacity.

 

· Fleet Optimization Program:

 

· Sold a 2008-built MR in the fourth quarter for net proceeds after debt repayment of approximately $14 million and has agreed to sell another 2008-built MR in the first quarter of 2023, which is expected to generate $14 million in net proceeds after debt repayment.

 

· Declared purchase options on two, 2009-built Aframaxes under sale leaseback arrangement for an expected net cash outflow in March 2023 of approximately $41 million in aggregate, representing at a discount of over 45% to current market prices.

 

· Balance Sheet Enhancements:

 

· Received commitments from the Company’s lenders for the $750 Million Credit Facility to amend the senior secured credit facility, subject to completion of formal documentation and closing, which is expected to occur in March 2023, to among other things:

 

· Increase the revolving credit facility (“RCF”) by $40 million to nearly $260 million, which remains fully undrawn.

 

· Reduce the outstanding balance on the term loan by approximately $100 million, as a result of a prepayment to be made on closing.

 

· Reduce the collateral package by 22 vessels, creating unencumbered vessels representing nearly one-third of the total fleet.

 

· Returns to Shareholders:

 

· Declared a combined dividend of $2.00 per share composed of a supplemental dividend of $1.88 per share in addition to regular quarterly cash dividend of $0.12 per share to be paid in March 2023.

 

· During 2022, the Company paid a cumulative $1.42 per share in regular and supplemental dividends and repurchased 687,740 shares for approximately $20 million, representing nearly $90 million in returns to shareholders.

 

· Returned to shareholders over $280 million in aggregate since the start of 2020.

 

“2022 was an outstanding year for Seaways, as we capitalized on our increased scale, further enhanced our financial strength, and continued to return significant capital to shareholders,” said Lois K. Zabrocky, International Seaways’ President and CEO. “We generated record earnings for the third consecutive quarter as a result of our strategy of building a diverse fleet of crude and product tankers with sizable operating leverage. In 2022, we continued to build our track record of returning cash to shareholders with nearly $90 million in cash returns by doubling our quarterly dividend, adding supplemental dividends and executing our share repurchase program. Today, we’re continuing that momentum, announcing a combined dividend of $2.00 per share, representing cumulative returns to shareholders of over $280 million since the start of 2020.”

 

 


 

 

Ms. Zabrocky added, “We are well positioned to carry our significant momentum forward and we anticipate continued market strength based on growing demand and higher tanker utilization from the shifting global energy trade, combined with the lowest orderbook in more than 30 years. We expect near-term catalysts to continue to drive tanker earnings, including sanctions on Russian oil and the reopening of China. Our operating leverage positions us well to capitalize on these trends. Our history of renewing our fleet at cyclical lows continues to serve us well, and we look forward to the delivery of three dual-fuel LNG VLCCs in the first half of 2023, which will not only reduce our carbon footprint today but are well suited to adhere to anticipated environmental regulation into the future.”

 

Jeff Pribor, the Company’s CFO stated, “We continue to strengthen our balance sheet, generating significant free cash flow from our diversified fleet. With ample liquidity of over $540 million at year’s end and a net loan-to-value ratio of under 24%, we remain focused on executing our disciplined capital allocation strategy, investing in the fleet opportunistically, further de-levering, and continuing to return cash to shareholders. Following the closing of the amendment to our credit facility, our cash break-even levels are expected to decrease by more than $600 per day, which further enhances our ability to generate more free cash flow and continue building our track record of returning cash to shareholders.”

 

FOURTH QUARTER 2022 RESULTS

 

Net income for the fourth quarter of 2022 was $218.4 million, or $4.40 per diluted share, compared to a net loss of $34.0 million, or $0.68 per diluted share, for the fourth quarter of 2021. Net income for the quarter reflects the impact of the disposal of older vessels and the write-off of deferred finance costs aggregating $9.7 million. Net income excluding these items was $208.8 million, or $4.21 per diluted share. The increase in the fourth quarter of 2022 was primarily driven by a $242.7 million increase in TCE revenues(C) as a result of higher demand for tankers due to seasonality, restocking of historically low global inventories and the effects of sanctions on Russian oil that disrupted trading patterns leading to longer voyages and higher tanker utilization.

 

Consolidated TCE revenues for the fourth quarter were $335.7 million, compared to $93.0 million for the fourth quarter of 2021. Shipping revenues for the fourth quarter were $338.2 million, compared to $94.7 million for the fourth quarter of 2021.

 

Adjusted EBITDA for the fourth quarter was $254.3 million, compared to $11.9 million for the fourth quarter of 2021.

 

Crude Tankers

 

TCE revenues for the Crude Tankers segment were $150.7 million for the fourth quarter, compared to $42.4 million for the fourth quarter of 2021. This increase was primarily attributable to an increase in spot rates as the average spot earnings of the VLCC, Suezmax and Aframax sectors were approximately $64,600, $59,100 and $62,000 per day, respectively, compared with approximately $14,300, $13,100 and $11,500 per day, respectively, during the fourth quarter of 2021. Shipping revenues for the Crude Tankers segment were $152.9 million for the fourth quarter of 2022, compared to $44.5 million for the fourth quarter of 2021.

 

Product Carriers

 

TCE revenues for the Product Carriers segment were $184.9 million for the fourth quarter, compared to $50.5 million for the fourth quarter of 2021. This significant increase is attributable to substantially higher spot rates with average spot earnings for the LR1 and MR sectors of approximately $64,000 and $39,700 per day, respectively, in the fourth quarter of 2022 compared with approximately $17,400 and $11,300 per day, respectively, in the fourth quarter of 2021. Shipping revenues for the Product Carriers segment were $185.2 million for the fourth quarter, compared to $50.2 million for the fourth quarter of 2021.

 

FULL YEAR 2022 RESULTS

 

Net income for the year ended December 31, 2022, was $387.9 million, or $7.77 per diluted share, compared to a net loss of $133.5 million, or $3.48 per diluted share, for the year ended December 31, 2021. The reported net income for 2022 includes the impact of one-time items, consisting of the gain on disposal of vessels, vessel impairments, net loss on sale of investments in affiliated companies, debt modification expenses and write-off of deferred financing costs, which aggregated $7.8 million. Excluding these items, net income for 2022 was $380 million, or $7.62 per diluted share.

 

Consolidated TCE revenues for the year ended December 31, 2022, were $853.7 million, compared to $255.9 million for the year ended December 31, 2021. Shipping revenues for the year ended December 31, 2022, were $864.7 million, compared to $272.5 million for the year ended December 31, 2021.

 

 


 

 

Adjusted EBITDA for the year ended December 31, 2022 was $549.1 million, compared to $40.4 million for the year ended December 31, 2021.

 

Crude Tankers

 

TCE revenues for the Crude Tankers segment were $321.9 million for the year ended December 31, 2022, compared to $144.3 million for the year ended December 31, 2021. Shipping revenues for the Crude Tankers segment were $331.7 million for the year ended December 31, 2022, compared to $156.3 million for the year ended December 31, 2021.

 

Product Carriers

 

TCE revenues for the Product Carriers segment were $531.9 million for the year ended December 31, 2022, compared to $111.6 million for the year ended December 31, 2021. Shipping revenues for the Product Carriers segment were $533.0 million for the year ended December 31, 2022, compared to $116.3 million for the year ended December 31, 2021.

 

DELEVERAGING INITIATIVES

 

In August 2022, the Company redeemed the $25 million aggregate principal outstanding of the 8.5% senior notes due June 2023.

 

In November 2022, the Company repaid the outstanding balance of $17.8 million on the term loan facility with Macquarie Bank, which unencumbered three vessels.

 

In February 2023, the lending syndicate for the $750 Million Credit Facility unanimously committed to amend the facility whereby the Company will make a prepayment of approximately $100 million on the term loan, the revolving credit facility will increase by $40 million and 22 vessels will be removed from the collateral package. The amendment is subject to formal documentation and signing, which is expected to occur in March 2023.

 

FLEET OPTIMIZATION PROGRAM

 

During 2022, the Company sold or recycled eight vessels with an average age of over 16.5 years. Two of the eight vessels were Panamaxes built between 2002 and 2004 that were sold to be recycled in compliance with the Hong Kong Convention. The Company sold all four of its remaining Handysize vessels with an average age of approximately 16 years and two 2008-built MRs, which saved approximately $4 million per vessel on upcoming drydock and ballast water treatment installation expenditures. In total, net proceeds after debt repayments from vessel sales and recycling were approximately $68 million.

 

In the first quarter of 2023, the Company has also agreed to sell another 2008-built MR, the High Mercury, which is expected to generate approximately $14 million in net proceeds after debt repayment.

 

In March 2022, the Company also completed the sale of a 2010-built MR and the purchase of a 2011-built LR1 with the same counterparty for a net cost of approximately $3 million. The LR1 was delivered into our niche commercial pool, Panamax International.

 

In December 2022, the Company exercised its purchase options on two 2009-built Aframax vessels under sale leaseback arrangement, which were accounted for as operating leases prior to declaration of the options. The vessels are expected to deliver in March 2023 at a net purchase price payable at exercise of approximately $41 million, representing a discount of approximately 45% to the current market value of these vessels.

 

During 2022, the Company completed the installation of a scrubber on a 2012-built Suezmax, increasing the total count of the fleet fitted with scrubbers to 12, of which ten are VLCCs and two are Suezmaxes. Drydockings for 15 vessels were completed during 2022.

 

The newbuilding program, composed of three dual-fuel VLCCs, continues to progress with one vessel scheduled for March 2023 delivery and the remaining two scheduled for delivery in the first half of 2023. The vessels were ordered for an aggregate contract price of $288 million and have approximately $172 million in remaining payments as of December 31, 2022, which are fully financed under a sale leaseback arrangement. Upon delivery, the vessels will commence long term time charters with an oil major for the next seven years.

 

RETURNING CASH TO SHAREHOLDERS

 

During 2022, the Company doubled its regular quarterly dividend from $0.06 per share to $0.12 per share. The Company also paid a supplemental dividend of $1.00 per share in December 2022. In total, the Company paid $69.8 million in dividends during 2022.

 

 


 

 

In August 2022, the Company repurchased 687,740 shares of its common stock in open market purchases, at an average price of $29.08 per share, for a total cost of approximately $20.0 million. The Company’s current share repurchase program has approximately $40.0 million remaining and extends through the end of 2023.

 

The Company’s Board of Directors declared a regular quarterly dividend of $0.12 per share of common stock and a supplemental dividend of $1.88 per share of common stock on February 27, 2023. Both dividends will be paid on March 28, 2023, to shareholders with a record date at the close of business on March 14, 2023.

 

BALANCE SHEET ENHANCEMENTS

 

In May 2022, the Company refinanced three existing credit facilities into a senior secured credit facility with an aggregate capacity of $750 million (the “$750 Million Credit Facility”), composed of a term loan with an aggregate principal amount of $530 million and a revolving credit facility of $220 million. The five-year agreement, which was nearly two times oversubscribed, extended the Company’s debt maturities, reduced the average margin and lowered quarterly amortization payments. The Company also enhanced its sustainability-linked features in the covenant structure of the $750 Million Credit Facility to include a target expenditure on energy efficiency improvements, decarbonization and other environmental related initiatives and a safety target (lost time injury frequency performance) in addition to reduction in carbon emissions outlined in the Poseidon Principles.

 

In June 2022, the Company sold its 50% stake in two floating storage and offshore (“FSO”) vessels to its joint venture partner. The Company received proceeds, net of adjustments for working capital and expenses, of $140 million.

 

In the first half of 2022, the Company refinanced three MRs through sale and leaseback arrangements with Japanese leasing companies, which generated approximately $21.7 million after debt repayment.

 

CONFERENCE CALL

 

The Company will host a conference call to discuss its fourth quarter 2022 results at 10:00 a.m. Eastern Time (“ET”) on Tuesday, February 28, 2023. To access the call, participants should dial (833) 470-1428 for domestic callers and (929) 526-1599 for international callers and entering 426484. 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 https://www.intlseas.com.

 

An audio replay of the conference call will be available until March 7, 2023 by dialing (866) 813-9403 for domestic callers and +44 204 525 0658 for international callers, and entering Access Code 907092.

 

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 77 vessels, including 13 VLCCs (including three newbuildings), 13 Suezmaxes, five Aframaxes/LR2s, eight LR1s and 38 MR tankers. 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 U.S. 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 plans to issue dividends, the Company’s prospects, including statements regarding vessel acquisitions, expected synergies, 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 2022 for the Company, 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:

 

Tom Trovato, International Seaways, Inc.

(212) 578-1602

ttrovato@intlseas.com

Category: Earnings

 

 


 

 

Consolidated Statements of Operations

($ in thousands, except per share amounts)

 

    Three Months Ended     Fiscal Year Ended  
    December 31,     December 31,  
    2022     2021     2022     2021  
    (Unaudited)     (Unaudited)              
Shipping Revenues:                                
Pool revenues   $ 311,193     $ 74,340     $ 774,922     $ 175,997  
Time and bareboat charter revenues     10,239       10,018       33,034       50,094  
Voyage charter revenues     16,725       10,312       56,709       46,455  
Total Shipping Revenues     338,157       94,670       864,665       272,546  
                                 
Operating Expenses:                                
Voyage expenses     2,507       1,665       10,955       16,686  
Vessel expenses     62,229       70,679       240,674       183,057  
Charter hire expenses     9,333       6,651       32,132       23,934  
Depreciation and amortization     28,404       27,035       110,388       86,674  
General and administrative     13,499       10,094       46,351       33,235  
Third-party debt modification fees     -       84       1,158       110  
Merger and integration related costs     -       3,180       -       50,740  
Gain on disposal of vessels and other property, net of impairments     (10,308 )     (4,665 )     (19,647 )     (9,753 )
Total operating expenses     105,664       114,723       422,011       384,683  
Income/(loss) from vessel operations     232,493       (20,053 )     442,654       (112,137 )
Equity in (loss)/income of affiliated companies     280       5,265       714       21,838  
Operating income/(loss)     232,773       (14,788 )     443,368       (90,299 )
Other income/(expense)     2,772       (6,393 )     2,332       (5,947 )
Income/(loss) before interest expense and income taxes     235,545       (21,181 )     445,700       (96,246 )
Interest expense     (17,091 )     (11,871 )     (57,721 )     (36,796 )
Income/(loss) before income taxes     218,454       (33,052 )     387,979       (133,042 )
Income tax provision     (25 )     (1,582 )     (88 )     (1,618 )
Net income/(loss)     218,429       (34,634 )     387,891       (134,660 )
Less: Net loss attributable to noncontrolling interests           (642 )           (1,168 )
Net income/(loss) attributable to the Company   $ 218,429     $ (33,992 )   $ 387,891     $ (133,492 )
                                 
Weighted Average Number of Common Shares Outstanding:                                
Basic     49,049,539       50,310,043       49,381,459       38,407,007  
Diluted     49,619,307       50,310,043       49,844,904       38,407,007  
                                 
Per Share Amounts:                                
Basic net earnings/(loss) per share   $ 4.45     $ (0.68 )   $ 7.85     $ (3.48 )
Diluted net earnings/(loss) per share   $ 4.40     $ (0.68 )   $ 7.77     $ (3.48 )

 

 


 

 

Consolidated Balance Sheets

($ in thousands)

 

    December 31,     December 31,  
    2022     2021  
ASSETS                
Current Assets:                
Cash and cash equivalents   $ 243,744     $ 97,883  
Short-term investments     80,000       -  
Voyage receivables     289,775       107,096  
Other receivables     12,583       5,651  
Inventories     531       2,110  
Prepaid expenses and other current assets     8,995       11,759  
Current portion of derivative asset     6,987       -  
Total Current Assets     642,615       224,499  
                 
Restricted cash     -       1,050  
Vessels and other property, less accumulated depreciation     1,680,010       1,802,850  
Vessels construction in progress     123,940       49,291  
Deferred drydock expenditures, net     65,611       55,753  
Operating lease right-of-use assets     8,471       23,168  
Finance lease right-of-use assets     44,391       -  
Investments in and advances to affiliated companies     36,414       180,331  
Long-term derivative asset     4,662       1,296  
Time charter contracts acquired, net     -       842  
Other assets     9,220       7,700  
Total Assets   $ 2,615,334     $ 2,346,780  
                 
LIABILITIES AND EQUITY                
Current Liabilities:                
Accounts payable, accrued expenses and other current liabilities   $ 51,069     $ 44,964  
Current portion of operating lease liabilities     1,596       8,393  
Current portion of finance lease liabilities     41,870       -  
Current installments of long-term debt     162,854       178,715  
Current portion of derivative liability     -       2,539  
Total Current Liabilities     257,389       234,611  
Long-term operating lease liabilities     7,740       12,522  
Long-term debt, net     860,578       926,270  
Long-term portion of derivative liability     -       757  
Other liabilities     1,875       2,288  
Total Liabilities     1,127,582       1,176,448  
                 
Equity:                
Total Equity     1,487,752       1,170,332  
Total Liabilities and Equity   $ 2,615,334     $ 2,346,780  

 

 


 

 

Consolidated Statements of Cash Flows

($ in thousands)

 

    Fiscal Year Ended December 31,  
    2022     2021  
Cash Flows from Operating Activities:                
Net income/(loss)   $ 387,891     $ (134,660 )
Items included in net income/(loss) not affecting cash flows:                
Depreciation and amortization     110,388       86,674  
Loss on write-down of vessels and other assets     1,697       3,497  
Amortization of debt discount and other deferred financing costs     5,224       2,313  
Amortization of time charter hire contracts acquired     842       2,428  
Deferred financing costs write-off     1,266       2,113  
Stock compensation     6,746       10,529  
Earnings of affiliated companies     (10,297 )     (21,838 )
Merger and integration related costs, noncash           31,053  
Change in fair value of interest rate collar recorded through earnings            
Other – net     (2,242 )     2,969  
Items included in net income/(loss) related to investing and financing activities:                
Gain on disposal of vessels and other assets, net     (21,344 )     (13,250 )
Loss on extinguishment of debt           4,465  
Loss on sale of investments in affiliated companies     9,513        
Cash distributions from affiliated companies     3,111       9,835  
Payments for drydocking     (43,327 )     (42,416 )
Insurance claims proceeds related to vessel operations     5,301       1,846  
Changes in operating assets and liabilities     (166,968 )     (21,750 )
Net cash provided by/(used in) operating activities     287,801       (76,192 )
Cash Flows from Investing Activities:                
Cash acquired, net of equity issuance costs related to merger           54,047  
Expenditures for vessels, vessel improvements and vessels under construction     (115,976 )     (78,035 )
Proceeds from disposal of vessels and other assets     99,157       165,809  
Expenditures for other property     (710 )     (979 )
Investments in and advances to affiliated companies, net     1,362       (7,554 )
Proceeds from sale of investment in affiliated companies     138,966        
Investments in short term time deposits     (105,000 )      
Proceeds from maturities of short term time deposits     25,000        
Net cash provided by investing activities     42,799       133,288  
Cash Flows from Financing Activities:                
Borrowings on long term debt, net of lenders' fees and deferred financing costs     640,141       83,712  
Repayments of debt     (798,740 )     (619,273 )
Proceeds from sale and leaseback financing, net of issuance and deferred financing costs     108,005       447,086  
Payments on sale and leaseback financing and finance lease     (39,240 )     (5,678 )
Cash payments on derivatives containing other-than-insignificant financing elements           (15,697 )
Cash dividends paid     (69,841 )     (40,939 )
Repurchases of common stock     (20,017 )     (16,660 )
Distribution to noncontrolling interest           (5,266 )
Cash paid to tax authority upon vesting or exercise of stock-based compensation     (6,097 )     (1,125 )
Other – net            
Net cash used in financing activities     (185,789 )     (173,840 )
Net increase/(decrease) in cash, cash equivalents and restricted cash     144,811       (116,744 )
Cash, cash equivalents and restricted cash at beginning of year     98,933       215,677  
Cash, cash equivalents and restricted cash at end of year   $ 243,744     $ 98,933  

 

 


 

 

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 and year ended December 31, 2022 and the comparable period of 2021. Revenue days in the quarter ended December 31, 2022 totaled 6,620 compared with 6,642 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 $723 and $575 per day for the three months ended December 31, 2022 and 2021, respectively, and approximately $706 and $610 per day for the years ended December 31, 2022 and 2021, respectively.

 

    Three Months Ended December 31, 2022     Three Months Ended December 31, 2021  
    Spot     Fixed     Total     Spot     Fixed     Total  
Crude Tankers                                                
VLCC                                                
Average TCE Rate   $ 64,596     $ 43,883             $ 14,326     $ 44,200          
Number of Revenue Days     799       92       891       778       74       852  
Suezmax                                                
Average TCE Rate   $ 59,064     $ 32,095             $ 13,069     $ 27,354          
Number of Revenue Days     1,029       92       1,121       1,084       78       1,162  
Aframax                                                
Average TCE Rate   $ 62,030     $ -             $ 11,537     $ 25,733          
Number of Revenue Days     284       -       284       275       69       344  
Panamax                                                
Average TCE Rate   $ -     $ -             $ 15,037     $ 10,237          
Number of Revenue Days     -       -       -       105       66       171  
Total Crude Tankers Revenue Days     2,112       184       2,296       2,242       287       2,529  
Product Carriers                                                
Aframax (LR2)                                                
Average TCE Rate   $ -     $ 18,994             $ -     $ 17,190          
Number of Revenue Days     -       92       92       -       91       91  
Panamax (LR1)                                                
Average TCE Rate   $ 63,950     $ -             $ 17,422     $ -          
Number of Revenue Days     818       -       818       614       -       614  
MR                                                
Average TCE Rate   $ 39,678     $ 20,816             $ 11,311     $ 16,789          
Number of Revenue Days     3,350       64       3,414       3,040       52       3,092  
Handy                                                
Average TCE Rate   $ -     $ -             $ 11,300     $ -          
Number of Revenue Days     -       -       -       316       -       316  
Total Product Carriers Revenue Days     4,168       156       4,324       3,970       143       4,113  
Total Revenue Days     6,280       340       6,620       6,212       430       6,642  

 

 


 

 

    Fiscal Year Ended December 31, 2022     Fiscal Year Ended December 31, 2021  
    Spot     Fixed     Total     Spot     Fixed     Total  
Crude Tankers                                                
VLCC                                                
Average TCE Rate   $ 29,361     $ 44,043             $ 13,604     $ 45,280          
Number of Revenue Days     3,220       310       3,530       2,948       412       3,360  
Suezmax                                                
Average TCE Rate   $ 32,579     $ 28,287             $ 12,624     $ 26,953          
Number of Revenue Days     3,901       365       4,266       2,193       168       2,361  
Aframax                                                
Average TCE Rate   $ 36,488     $ -             $ 10,803     $ 25,740          
Number of Revenue Days     1,283       -       1,283       1,087       144       1,231  
Panamax                                                
Average TCE Rate   $ 19,851     $ -             $ 13,346     $ 11,007          
Number of Revenue Days     70       -       70       437       1,370       1,807  
Total Crude Tankers Revenue Days     8,474       675       9,149       6,665       2,094       8,759  
Product Carriers                                                
LR2                                                
Average TCE Rate   $ -     $ 17,613             $ -     $ 17,637          
Number of Revenue Days     -       362       362       -       364       364  
LR1                                                
Average TCE Rate   $ 38,706     $ -             $ 14,768     $ -          
Number of Revenue Days     3,113       -       3,113       2,052       -       2,052  
MR                                                
Average TCE Rate   $ 30,345     $ 20,927             $ 10,506     $ 16,044          
Number of Revenue Days     13,262       140       13,402       6,492       176       6,668  
Handy                                                
Average TCE Rate   $ 13,861     $ -             $ 8,790     $ -          
Number of Revenue Days     469       -       469       635       -       635  
Total Product Carriers Revenue Days     16,844       502       17,346       9,179       540       9,719  
Total Revenue Days     25,318       1,177       26,495       15,844       2,634       18,478  

 

Revenue days in the above tables exclude days related to full service lighterings and days for which recoveries were recorded under the Company’s loss of hire insurance policies. In addition, during 2022 and 2021, certain of the Suezmaxes and MRs acquired by the Company through the merger were employed on transitional voyages in the spot market prior to delivering to pools. These transitional voyages are excluded from the tables above.

 

During the 2022 and 2021 periods, each of the Company’s LR1s participated in the Panamax International Pool and transported crude oil cargoes exclusively.

 

 


 

 

Fleet Information

 

As of December 31, 2022, INSW’s fleet totaled 77 vessels, including three newbuilds and 74 operating vessels, of which 61 were owned and 16 were chartered in.

 

                Total at December 31, 2022  
Vessel Fleet and Type   Vessels Owned     Vessels Chartered-
in1
    Total
Vessels
    Total Dwt  
Operating Fleet                                
VLCC     4       6       10       3,012,171  
Suezmax     13       0       13       2,061,754  
Aframax     1       3       4       452,375  
Crude Tankers     18       9       27       5,526,300  
                                 
LR2     -       1       1       112,691  
LR1     6       2       8       595,134  
MR     34       4       38       1,905,176  
Product Carriers     40       7       47       2,613,001  
                                 
Total Operating Fleet     58       16       74       8,139,301  
                                 
Newbuild Fleet                                
VLCC     3       0       3       900,000  
                                 
Total Newbuild Fleet     3       -       3       900,000  
                                 
Total Operating and Newbuild Fleet     61       16       77       9,039,301  

 

1 Includes both bareboat charters and time charters, but excludes vessels chartered in where the duration of the charter was one year or less at inception.

 

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) 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
December 31,
    Year Ended December 31,  
($ in thousands)   2022     2021     2022     2021  
Net income/(loss)   $ 218,429     $ (34,634 )   $ 387,891     $ (134,660 )
Income tax provision     25       1,582       88       1,618  
Interest expense     17,091       11,871       57,721       36,796  
Depreciation and amortization     28,404       27,035       110,388       86,674  
Noncontrolling interest     -       138       -       (174 )
EBITDA     263,949       5,992       556,088       (9,746 )
Amortization of time charter contracts acquired     -       685       842       2,428  
Third-party debt modification fees     -       84       1,158       110  
Loss on sale of investments in affiliated companies     -       -       9,513       -  
Merger and integration related costs     -       3,180       -       50,740  
Gain on disposal of vessels and other property, net of impairments     (10,308 )     (4,665 )     (19,647 )     (9,753 )
Gain on sale of interest in DASM     -       -       (135 )     -  
Write-off of deferred financing costs     656       2,113       1,266       2,113  
Loss on extinguishment of debt             4,465       -       4,465  
Adjusted EBITDA   $ 254,297     $ 11,854     $ 549,085     $ 40,357  

 

(B) Cash

 

 

    December 31,     December 31,  
($ in thousands)   2022     2021  
Cash and cash equivalents   $ 243,744     $ 97,883  
Short-term investments     80,000       -  
Restricted cash     -       1,050  
Total Cash   $ 323,744     $ 98,933  

 

(C) 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:

 

    Three Months Ended December 31,     Fiscal Year Ended December 31,  
($ in thousands)   2022     2021     2022     2021  
Time charter equivalent revenues   $ 335,650     $ 93,005     $ 853,710     $ 255,860  
Add: Voyage expenses     2,507       1,665       10,955       16,686  
Shipping revenues   $ 338,157     $ 94,670     $ 864,665     $ 272,546