Exhibit 99.1

TSAKOS ENERGY NAVIGATION LIMITED

367 Syngrou Avenue

175 64 P. Faliro

Athens, Greece

May 5, 2023

Dear Shareholder:

You are cordially invited to attend the 2023 Annual General Meeting of Shareholders of Tsakos Energy Navigation Limited, which will be held on Friday, June 16, 2023, at 15:00 (3:00 pm) Greek local time in our Auditorium, 367 Syngrou Avenue, P. Faliro, Athens, Greece.

The following Notice of the 2023 Annual General Meeting of Shareholders and 2023 Proxy Statement describe the items to be considered by the shareholders at the meeting and contain certain information about our company and its officers and directors.

We are pleased to provide our proxy materials to our shareholders over the Internet. On or about May 5, 2023, we will begin mailing a Notice of Internet Availability of Proxy Materials to shareholders informing them that our 2023 Proxy Statement, 2022 audited consolidated financial statements and voting instructions are available online. As more fully described in that Notice, shareholders may choose to access our proxy materials on the Internet or may request to receive paper copies of the proxy materials. This allows us to conserve natural resources and reduces the costs of printing and distributing the proxy materials, while providing our shareholders with access to the proxy materials in a fast and efficient manner. If you request proxy materials by mail, the Notice of the 2023 Annual General Meeting of Shareholders, 2023 Proxy Statement and proxy card or voting instruction card and 2022 audited consolidated financial statements will be sent to you.

Whether or not you are able to attend the 2023 Annual General Meeting in person, it is important that your shares be represented. You can vote your shares by using the Internet, by telephone, or by requesting a printed copy of the proxy materials and completing and returning by mail the proxy card or voting instruction card that you will receive in response to your request. Instructions on each of these voting methods are outlined in the enclosed Proxy Statement. Please vote as soon as possible.

We hope to see you on June 16th.

Sincerely,

Efstratios Georgios Arapoglou

Chairman of the Board of Directors

TSAKOS ENERGY NAVIGATION LIMITED

367 Syngrou Avenue

175 64 P. Faliro

Athens, Greece

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

To Be Held On Friday, June 16, 2023

NOTICE IS HEREBY GIVEN that the 2023 Annual General Meeting (the “2023 Annual General Meeting”) of Shareholders of Tsakos Energy Navigation Limited, a Bermuda company (the “Company”), will be held at 15:00 (3:00 pm) Greek local time, on Friday, June 16, 2023, in the Company’s Auditorium at 367 Syngrou Avenue, P. Faliro, Athens, Greece for the following purposes:

 

(1)

to elect a newly appointed director and re-elect two directors who retire by rotation;

 

(2)

to receive and consider the Company’s 2022 audited financial statements;

 

(3)

to appoint Ernst & Young (Hellas) Certified Auditors Accountants S.A. (“Ernst & Young (Hellas)”), Athens, Greece, as auditors of the Company for the fiscal year ending December 31, 2023 and to authorize the Audit Committee of the Board of Directors to set their remuneration;

 

(4)

to approve the directors’ remuneration;

 

(5)

to transact such other business as may properly come before the 2023 Annual General Meeting.

Copies of our audited consolidated financial statements are available at https://materials.proxyvote.com/G9108L and on the Company’s website at www.tenn.gr

Only holders of record of the Company’s common shares, par value $5.00 per share (the “Common Shares”), at the close of business on April 21, 2023 will be entitled to receive notice of, and to vote at, the 2023 Annual General Meeting and at any adjournment thereof. As described in the attached Proxy Statement, the nominees for election to our Board of Directors are Karen Purnell, Michael G. Jolliffe and Nicholas F. Tommasino.

You are cordially invited to attend the 2023 Annual General Meeting. Whether or not you expect to attend the 2023 Annual General Meeting in person, please vote your shares by using the Internet, by telephone, or by completing and returning by mail the proxy card or voting instruction card. Voting your shares by using the Internet, by telephone, or by returning the proxy card or voting instruction card does not affect your right to vote in person, should you decide to attend the 2023 Annual General Meeting. We look forward to seeing you.

By Order of the Board of Directors

George V. Saroglou

Chief Operating Officer

Athens, Greece

May 5, 2023

IMPORTANT

WE URGE SHAREHOLDERS TO VOTE AS PROMPTLY AS POSSIBLE BY USING THE INTERNET, BY TELEPHONE, OR BY COMPLETING AND RETURNING BY MAIL THE PROXY CARD OR VOTING INSTRUCTION CARD. A PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED. VOTING YOUR SHARES BY USING THE INTERNET, BY TELEPHONE, OR BY RETURNING THE PROXY CARD OR VOTING INSTRUCTION CARD WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON, SHOULD YOU DECIDE TO ATTEND THE 2023 ANNUAL GENERAL MEETING.

TSAKOS ENERGY NAVIGATION LIMITED

367 Syngrou Avenue

175 64 P. Faliro

Athens, Greece

PROXY STATEMENT FOR THE 2023 ANNUAL GENERAL MEETING OF SHAREHOLDERS

To be held on June 16, 2023

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Tsakos Energy Navigation Limited, a Bermuda company (the “Company”), for use at the 2023 Annual General Meeting of Shareholders of the Company (the “2023 Annual General Meeting”) to be held at 15:00 (3:00 pm) Greek local time, on Friday, June 16, 2023, in the Company’s Auditorium at 367 Syngrou Avenue, P. Faliro, Athens, Greece and at any adjournments thereof.

VOTING METHODS

Internet Voting

Shareholders of record may vote by accessing the following website address: http://www.investorvote.com/TNP .

All street name holders may vote on the Internet by accessing the following website address: http://www.proxyvote.com.

Telephone Voting

Shareholders of record may also vote by calling the following toll-free telephone number: 1-800-652-8683 within the United States and Canada from a touch tone telephone. Please follow the instructions provided by the recorded message.

If you are a street name holder, and you requested printed proxy materials, you may vote by telephone if your bank or broker makes that method available to you in the voting instruction card enclosed with the proxy materials that your bank or broker sends to you.

Vote by Mail

If you receive a printed copy of the proxy materials, you can vote by completing the accompanying proxy card or voting instruction form and returning it in the return envelope provided. If you receive a Notice, you can request a printed copy of the proxy materials by following the instructions contained in the Notice. If you vote by Internet or telephone, you do not need to return your proxy card or voting instruction form.

Shareholders of Record and Beneficial Owners

If your shares are registered directly in your name on the books of the Company maintained with the Company’s transfer agent, Computershare, you are considered the “shareholder of record” of those shares and, if you request to receive a paper copy of them, the proxy materials will be mailed directly to you.

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in street name (also called a “street name” holder), and, if you request to receive a paper copy of them, the proxy materials will be forwarded to you by your broker, bank or nominee. As the beneficial owner, you have the right to direct your broker, bank or nominee how to vote and are also invited to attend the 2023 Annual General Meeting. However, since you are not a shareholder of record, you may not vote these shares in person at the 2023 Annual General Meeting unless you bring with you a legal proxy duly executed by the shareholder of record. A legal proxy may be obtained from your broker, bank or other nominee.

 

1

VOTING OF PROXY, REVOCATION

A proxy that is properly executed, whether on the Internet, by telephone or by mail, and not subsequently revoked will be voted in accordance with instructions contained therein. If no instructions are given with respect to the matters to be acted upon, proxies will be voted as follows: (1) for the election of Karen Purnell, Michael G. Jolliffe and Nicholas F. Tommasino as directors, (2) for the approval of the Company’s 2022 audited financial statements, (3) for the appointment of Ernst & Young (Hellas) as the Company’s auditors for the fiscal year ending December 31, 2023 and to authorize the Audit Committee to set their remuneration, (4) for the approval of the directors’ remuneration, and (5) otherwise in accordance with the best judgment of the person or persons voting the proxy on any other matter properly brought before the 2023 Annual General Meeting.

Any shareholder who votes by completing and returning by mail the proxy card or voting instruction card or by using the Internet or by telephone, may revoke its proxy or change its vote at any time before it is voted at the 2023 Annual General Meeting by (A) delivering written notice to the Secretary of the Company of its revocation, (B) executing and delivering to the Secretary of the Company a later dated proxy by using the Internet, by telephone or by mail, or (C) by appearing in person at the 2023 Annual General Meeting and voting his, her or its shares in person.

EXPENSES OF SOLICITATION

Proxies are being solicited by our Board. The expenses of the preparation of proxy materials and the solicitation of proxies for the 2023 Annual General Meeting will be borne by the Company on behalf of the Board. In addition to solicitation by mail, proxies may be solicited in person, by telephone, telecopy, electronically, or other means, or by directors, officers and regular employees of the Company who will not receive additional compensation for such solicitations. If you choose to vote on the Internet, you are responsible for Internet access charges you may incur. D.F. King Co. Inc. has been engaged by the Company to assist in the solicitation of proxies for a fee of $16,500, plus their costs and expenses. Although there is no formal agreement to do so, the Company will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in forwarding the proxy materials to the beneficial owners of the Company’s Common Shares.

VOTING SECURITIES

Holders of record of the Company’s Common Shares as of the close of business on April 21, 2023 will be entitled to notice of, and to vote at, the 2023 Annual General Meeting or any adjournments thereof. On that date there were 29,505,603 Common Shares outstanding, the holders of which are entitled to one vote for each share registered in their names with respect to each matter to be voted on at the 2023 Annual General Meeting. The presence in person or by proxy (regardless of whether the proxy has authority to vote on all matters) of two shareholders of record will constitute a quorum at the 2023 Annual General Meeting.

VOTE REQUIRED

Assuming that a quorum is present at the 2023 Annual General Meeting, directors will be elected by a plurality of the votes cast at the 2023 Annual General Meeting by holders of Common Shares present in person or represented by proxy. Approval of other items at the 2023 Annual General Meeting requires that the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action. Withholding authority to vote for directors and broker non-votes will not affect the election of directors or the outcome of the vote on other proposals.

 

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BOARD OF DIRECTORS VOTING RECOMMENDATION

The Board of Directors recommends that shareholders vote FOR Item No. 1, the election of each nominee to the Board of Directors; FOR Item No. 2, the approval of the Company’s 2022 audited financial statements; FOR Item No. 3, the appointment of Ernst & Young (Hellas), as the Company’s auditors and authorization of the Audit Committee to set their remuneration; and FOR Item No. 4, the approval of the remuneration of the directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our outstanding Common Shares as of April 3, 2023 held by:

 

•

each person or entity that we know beneficially owns 5% or more of our Common Shares; and

 

•

all of our directors, director nominees and officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. In general, a person who has or shares voting power or investment power with respect to securities is treated as a beneficial owner of those securities. Beneficial ownership does not necessarily imply that the named person has the economic or other benefits of ownership. Under SEC rules, shares subject to options, warrants or rights currently exercisable or exercisable within 60 days are considered as beneficially owned by the person holding those options, warrants or rights. The applicable percentage of ownership of each shareholder is based on 29,505,603 Common Shares outstanding on April 3, 2023. Information for certain holders is based on their latest filings with the SEC or information delivered to us.

 

Name of Beneficial Owner		Number of Shares Beneficially Owned				Percentage of Outstanding Common Shares
Tsakos Holdings Foundation(1)			3,223,003				10.9	%
Redmont Trading Corp.(1)			738,001				2.5	%
First Tsakos Investments Inc.(1)			2,485,002				8.4	%
Sea Consolidation S.A. of Panama(2)			1,435,000				4.9	%
Methoni Shipping Company Limited (2)			1,363,702				4.6	%
Intermed Champion S.A. of Panama(2)			813,500				2.8	%
Tsakos Energy Management Ltd. (2)			860,000				2.9	%
All officers and directors as a group (11 persons)(3)			120,476				*

 

*Less

than 1%.

(1)

According to Amendment No. 14 to Schedule 13D jointly filed on May 23, 2022, by Tsakos Holdings Foundation (“Tsakos Holdings”), Redmont Trading Corp. (“Redmont”) and First Tsakos Investments Inc. (“First Tsakos”) and information provided to us. Tsakos Holdings is the sole holder of outstanding capital stock of First Tsakos and Redmont and may be deemed to have shared voting and dispositive power of the common shares reported by Redmont. Tsakos Holdings is a Liechtenstein foundation whose beneficiaries include persons and entities affiliated with the Tsakos family, charitable institutions and other unaffiliated persons and entities. The council which controls Tsakos Holdings consists of five members, two of whom are members of the Tsakos family. Under the rules of the SEC, beneficial ownership includes the power to directly or indirectly vote or dispose of securities or to share such power. It does not necessarily imply economic ownership of the securities. Members of the Tsakos family are among the five council members of Tsakos Holdings and accordingly may be deemed to share voting and/or dispositive power with respect to the shares owned by Tsakos Holdings and may be deemed the beneficial owners of such shares.

 

3

(2)

According to Amendment No. 14 to Schedule 13D jointly filed on May 23, 2022, by Sea Consolidation S.A. of Panama (“Sea Consolidation”), Intermed Champion S.A. of Panama (“Intermed”), Methoni Shipping Company Limited (“Methoni”), Tsakos Energy Management Ltd (“TEM”) and information provided to us, Panayotis Tsakos and Nikolas Tsakos, Sea Consolidation, Intermed, Methoni, TEM, Panayotis Tsakos and Nikolas Tsakos beneficially owned 1,435,000, 813,500, 1,363,702, 860,000, 3,612,202 and 4,513,802 common shares, respectively. Each of Panayotis Tsakos and Nikolas Tsakos, our president and chief executive officer, shares voting and dispositive control over the common shares held by each of Sea Consolidation, Intermed and Methoni and may be deemed to indirectly beneficially own such common shares. Nikolas Tsakos controls TEM. and may be deemed to indirectly own the common shares held by TEM. Panayotis Tsakos is the father of Nikolas Tsakos.

(3)	Does not include shares owned by Tsakos Holdings, First Tsakos, Redmont Trading Corp., Sea Consolidation, Intermed, TEM or Methoni.

Based on information provided to us, entities affiliated with Panayotis Tsakos and Nikolas Tsakos own 310,000, or 8.8%, of our outstanding Series D Preferred Shares, 141,500, or 3.0%, of our outstanding Series E Preferred Shares, and 159,000, or 2.4%, of our outstanding Series F Preferred Shares as of April 3, 2023. Entities affiliated with Nikolas Tsakos own 5,000, or 0.01%, of our outstanding Series D Preferred Shares and 40,000, or 0.08%, of our outstanding Series E Preferred Shares and 100,000, or 1.5%, of our outstanding Series F Preferred Shares as of April 3, 2023.

To our knowledge, none of the entities in the above table own any other shares, and none of our other officers or directors own 1% or more, of our Series D Preferred Shares, Series E Preferred Shares or Series F Preferred Shares, as of April 3, 2023.

As of April 3, 2023, we had 11 holders of record of our common shares. These shareholders of record include CEDEFAST which, as nominee for the Depository Trust Company, is the record holder of 29,486,404 common shares representing approximately 99.9% of our outstanding common shares. CEDEFAST is the nominee of banks and brokers which hold shares on behalf of their customers, the beneficial owners of the shares, who may or may not be resident in the United States. However, apart from the shareholders indicated in the footnotes (1) and (2) above and certain of the directors and officers, we believe that the majority of the remaining shareholders are resident in the United States. The Company is not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.

ITEM NO. 1 – ELECTION OF DIRECTORS

The Company’s Bye-laws provide that the Board will consist of not less than five nor more than 15 members. Under the Company’s Bye-laws, one-third (or the number nearest one-third) of the Board (with the exception of any executive director) retires by rotation each year.

Dr. Purnell’s nomination to the Board of Directors of the Company was unanimously approved by the Corporate Governance, Nominating and Compensation Committee, and her appointment to the Board was unanimously approved by the Board, in each case, at meetings held on October 18, 2023. Her current term ends at the Annual General Meeting when she will stand for election together with Messrs. Michael G. Jolliffe and Nicholas F. Tommasino, who have been chosen by lot to retire and present themselves for re-election.

NOMINEES FOR ELECTION

 

Nominee		Age(1)		Position		Director Since
Karen Purnell (2)		61		Director		2022
Michael G. Jolliffe		73		Director, Vice Chairman		1993
Nicholas F. Tommasino (2)(3)		65		Director		2017

 

4

DIRECTORS CONTINUING IN OFFICE

 

Director		Age(1)		Position		Director Since
Efstratios Georgios (Takis) Arapoglou(2)(3)		72		Chairman of the Board			2010
Nikolas P. Tsakos		59		President and Chief Executive Officer, Director			1993
George V. Saroglou		58		Vice President, Chief Operating Officer, Director			2001
Efthimios E. Mitropoulos (2)		83		Director			2012
Aristides A. N. Patrinos (2)		75		Director			2006
Denis Petropoulos (2)(3)		66		Director			2018

 

(1)	As of May 1, 2023

(2)	Member of the Corporate Governance, Nominating and Compensation Committee

(3)	Member of the Audit Committee

Nominees for Election

The Board of Directors recommends that shareholders vote FOR each of the following nominees to the Board of Directors.

KAREN PURNELL, Dr.

DIRECTOR

Dr. Karen Purnell is a Fellow of the Royal Society of Chemistry and a member of the Institute of Directors. She is an established professional in the shipping and environmental sector spanning more than 27 years, the last 12 years as Managing Director of ITOPF Ltd. In this role, she was responsible for ensuring that shipowners, their P&I insurers, and government agencies receive objective technical advice on accidental ship-source pollution and mitigation of pollution damage. Prior to joining ITOPF, Dr Purnell worked in various R&D and analytical chemistry roles, including the decontamination of radioactively contaminated sites in the UK and USA. Dr Purnell was UK Secretary of State appointed Director on the Board of the Harwich Haven Authority (a Trust Port) from 2015 until the end of her term in December 2020. She was appointed a Trustee of the Harwich Haven Authority Pension Fund in 2021 and she currently serves as Chairman of the Board of Pension Trustees. She also served on the Board of Lloyds Editorial until 2021. Karen mentors university students and school children on Science, Technology, Engineering and Maths (STEM subjects) and is a Liveryman of the Worshipful Company of Shipwrights.

MICHAEL G. JOLLIFFE

CO-FOUNDER AND VICE CHAIRMAN

Mr. Jolliffe has been joint Managing Director and then Vice Chairman of our Board since 1993. He is a director of a number of companies in shipping, agency representation and shipbroking capital services. Mr. Jolliffe is Chief Executive Officer of Tsakos Containers Navigation LLC, a shipping company set up in joint venture between the Tsakos and Jolliffe families and Warwick Capital Partners, a London based fund manager. He is also Chairman of the Wighams Group owning companies involved in shipbroking, agency representation and capital markets businesses. He is also Chairman of StealthGas Inc., a shipping company which is quoted on the Nasdaq Stock Exchange and which owns LPG carriers.

 

5

NICHOLAS F. TOMMASINO

DIRECTOR

Mr. Tommasino is a retired partner of Deloitte LLP, a global professional services firm focusing on Audit, Tax, Advisory and Consulting services. With more than 38 years of experience, including 27 as a Partner until his retirement in 2016, he served global clients in a variety of industries including Transportation, Telecommunications, Pharmaceuticals, Agribusiness and Hospitality. He provided services across a wide range of areas including audit, mergers and acquisitions, U.S. listings, including foreign private issuers, and regulatory and risk areas. He held a number of leadership roles from leading the New York Audit and Advisory practice to the Northeast Practice to the entire East Sector culminating in his assuming the role of Chairman and CEO of Deloitte and Touche LLP (D&T) where he was responsible for all aspects of a multi-billion dollar, fourteen thousand personnel, professional services firm. He directed the Development and Implementation of Strategy, Operations, Talent, Quality, Governance and Cultural Cultivation at D&T. He was a Board member of D&T (including Chairman) and chaired the D&T Executive Committee. He served as a Trustee and Vice President of the Madison Square Boys and Girls Club. He was an associate adjunct professor at Columbia University. He graduated Summa Cum Laude with a BS in accounting from Manhattan College.

Directors Continuing in Office

The following directors will continue in office:

EFSTRATIOS GEORGIOS (TAKIS) ARAPOGLOU

CHAIRMAN OF THE BOARD

Takis Arapoglou is a consultant with an earlier career in International Capital Markets and Corporate & Investment banking and later in managing, restructuring and advising publicly listed Financial Institutions and Corporates. Most recent executive assignments include: Managing Director and Global Head of the Banks and Securities Industry for Citigroup; Chairman and CEO of the National Bank of Greece; Chairman of the Hellenic Banks Association; CEO of Commercial Banking at EFG-Hermes Holding SAE. He is currently holding also the following non-executive board positions: Chairman of Bank of Cyprus; Independent board member of EFG-Hermes Holding; He is a member of the Business Advisory Council for the International MBA program at the Athens University of Economics and Business. He holds degrees in Mathematics, Engineering and Management from Greek and British Universities.

NIKOLAS P. TSAKOS, Dr.

FOUNDER, PRESIDENT AND CHIEF EXECUTIVE OFFICER

Mr. Nikolas P. Tsakos is the Founder and Chief Executive Officer of Tsakos Energy Navigation (TEN), a pioneering shipping company, established 30 years ago and quoted on the New York Stock Exchange. He comes from a traditional Chios seafaring family and has extensive seagoing experience, having also served as an Officer in the Greek Navy. Mr. Tsakos is Vice-Chairman of the GSCC in London, was the Chairman of INTERTANKO from 2014 to 2018 and the former President of the environmental organisation “HELMEPA”. He sits on the boards of a number of maritime and finance organizations and associations. Mr. Tsakos is the co-founder, together with Capt. Tsakos, of the Maria Tsakos Educational Foundation, which supports the higher education of young men and women, both in their native island Chios and abroad. Nikolas graduated from Columbia University in New York with a degree in Economics and Political Science and obtained a Master’s Degree in Shipping, Trade and Finance from London’s City University Business School (CASS). In 2011, he was awarded an honorary doctorate from City University, for his pioneering work in the equity financial markets relating to shipping companies. He is married and has three children.

 

6

GEORGE V. SAROGLOU

VICE PRESIDENT, CHIEF OPERATING OFFICER AND DIRECTOR

Mr. Saroglou has been Chief Operating Officer of the Company since 1996. Mr. Saroglou worked for a private Greek information technology systems integrator from 1987 until 1994. From 1995 to 1996 he was employed in the Trading Department of the Tsakos Group. He graduated from McGill University in Canada in 1987 with a Bachelor’s Degree in Science (Mathematics). Mr. Saroglou is the cousin of Mr. Tsakos.

EFTHIMIOS E. MITROPOULOS, KCMG

DIRECTOR

Mr. Mitropoulos is Secretary-General Emeritus of the International Maritime Organization (IMO), the United Nations specialized agency responsible for the regulation of international shipping from the safety, security and environmental protection points of view. After 23 years of service at IMO (ten of which as Director of the Maritime Safety Division), he was elected Secretary-General in 2003 and re-elected in 2007 for a total of the maximum time permitted of eight years. As a graduate of both Merchant and Naval Academies of Greece, he spent time at sea as a navigation officer and twenty years as a commissioned Hellenic Coast Guard officer, retiring as a rear admiral, having represented Greece at IMO and various other international forums dealing with shipping matters over a twelve year period and having spent two years as Harbour Master of Corfu. Between 2004 and 2012, he was Chancellor of the World Maritime University, Malmö, Sweden and Chairman of the Governing Board of the International Maritime Law Institute in Malta. He is the author of several books on shipping, including texts on tankers, modern types of merchant ships, safety of navigation and shipping economics and policy. He is Chairman of the Board of the “Maria Tsakos” Public Benefit Foundation – International Centre for Maritime Research and Tradition and Patron of two international maritime organizations. He is a member of several shipping societies in Greece and in the United Kingdom and a recipient of many awards and distinctions from Governments, international organizations and universities. He is an honorary citizen of Galaxidi, Greece and Malmö, Sweden.

ARISTIDES A.N. PATRINOS, Ph.D

DIRECTOR

Dr. Patrinos is a member of the Novim Group and the Chair of its Scientific Advisory Board. Novim is a think tank based in Santa Barbara California. He is also Visiting Scholar at the New York University Center for Neural Science. He was also affiliated with Synthetic Genomics Inc, (SGI) serving as President (2006-2011), Senior Vice President for Corporate Affairs (2011-2012), and Programs and Policy Advisor (2012-2020). SGI is a US-based privately held company dedicated to developing and commercializing synthetic biology instruments, clean and renewable fuels and chemicals, sustainable food products; and novel medical applications such as synthetic vaccines and other biologics. Dr. Patrinos also serves on the Advisory Board of EdenRoc Sciences, a privately held biotechnology company formed to cultivate world-class life sciences companies; and on the Science Advisory Board of DataCubed Inc., a NYC-based private company focused on healthcare, big data, and human decision-making. Dr. Patrinos also consults for Oak Ridge National Laboratory, the Energy Futures Initiative, and the translational medicine program of the University of Pittsburgh. He started his career as an Assistant Professor at the University of Rochester, New York. From 1976 to 2006 Dr. Patrinos served in the U.S. Department of Energy (DOE) and several of the DOE National Laboratories and engaged in R&D for several facets of energy production and use and led key research programs in biology and the environment, including global climate change. He played a leading role in the Human Genome Project and has been a central architect of the “genomics” revolution. He is a member of many scientific societies and is the recipient of numerous awards and distinctions including three U.S. Presidential Rank Awards, and two Secretary of Energy Gold Medals. He holds a Diploma in Mechanical and Electrical Engineering from the National Technical University of Athens (Metsovion) and a Ph.D. in Mechanical Engineering and Astronautical Sciences from Northwestern University in Evanston, Illinois. During 2016, Dr. Patrinos was Senior Advisor to DOE Secretary Ernest Moniz. In 2013, an EU stamp was issued in his honor, and he is an honorary citizen of the Greek County of Vari, Voula, and Vouliagmeni.

 

7

DENIS PETROPOULOS

DIRECTOR

Mr. Petropoulos is immediate past chairman, and now acting vice-chairman, of the Baltic Exchange, headquartered in London, UK. He is currently the chairman of Board of Advisors to London International Shipping Week 2023. He has worked in competitive ship broking for over 40 years and has presented on a broad base of shipping related topics at many major international industry conferences. His knowledge of the energy industry and in particular its shipping requirements for crude oils, products, chemicals, LPG and LNG extends to all the supply and refinery centers around the world. Mr. Petropoulos left H.Clarksons in 1985 to open Braemar Tankers, which in 2001 evolved into Braemar Shipping Services PLC listed on the London Stock Exchange, where he sat on the board as Executive Director. In 2011 he opened Braemar’s shipbroking office in Singapore and remained there until 2018 heading up the company’s expanding shipping service operations in the Asia-Australia. He came off the Braemar Shipping Services PLC board in 2015 and remains a shareholder of Braemar PLC, as it is known today. Mr. Petropoulos presently serves on INTERTANKO’s Associate Members’ Committee. He is a trustee of Baltic Exchange Charity Foundation and a patron of the National Maritime Museum London. He was educated at Westminster School, London, and University of Surrey, UK.

CORPORATE OFFICERS OF THE COMPANY

The corporate officers of the Company are appointed annually by the Board and serve at the discretion of the Board. The current corporate officers of the Company, their respective ages and positions are set forth below:

 

Name		Age		Position
Nikolas P. Tsakos		59		President and Chief Executive Officer
George V. Saroglou		58		Vice President and Chief Operating Officer
Paul Durham		72		Chief Financial Officer and Chief Accounting Officer
Vasileios Papageorgiou		76		Chief Marine Officer

Biographies for Messrs. Tsakos and Saroglou are set forth under “Directors Continuing in Office” above.

PAUL DURHAM

CHIEF FINANCIAL OFFICER AND CHIEF ACCOUNTING OFFICER

Mr. Durham joined Tsakos in 1999 and has served as our Chief Financial Officer and Chief Accounting Officer since 2000. Mr. Durham is a Fellow of the Institute of Chartered Accountants in England & Wales. From 1989 through 1998, Mr. Durham was employed in Athens with the Latsis Group, a shipping, refinery and banking enterprise, becoming Financial Director of Shipping in 1995. From 1983 to 1989, Mr. Durham was employed by RJR Nabisco Corporation, serving as internal audit manager for Europe, Asia and Africa until 1986 and then as financial controller of one of their United Kingdom food divisions. Mr. Durham worked with public accounting firms Ernst & Young (London and Paris) from 1972 to 1979 and Deloitte & Touche (Chicago and Athens) from 1979 to 1983. Mr. Durham is a graduate in Economics from the University of Exeter, England.

VASILEIOS PAPAGEORGIOU

CHIEF MARINE OFFICER

Mr. Papageorgiou is our Chief Marine Officer. He monitors our fleet’s technical and operational performance. In addition, he heads the newbuilding section and technically led the recent successful large scale fleet expansion and renewal plan. For the past 20 years Mr. Papageorgiou has overseen the construction of more than 128 vessels of diverse type and range, amongst them DP Shuttle tankers and LNG vessels. He has an extended technical academic background, holding Bachelor of Science degrees in Naval Architecture and Marine Engineering and Master of Science degrees in Internal Combustion Engines and Management and Economics. Mr. Papageorgiou initiated his career 52 years ago, being employed for a period of 5 years in the Greek ship and repair yards of Skaramanga, Perama and Elefsis, being engaged in the supervision of ship repairs and newbuildings.

 

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In 1976 and for a period of 4 years he worked for Chalkis Shipyard and Carras Shipping Co attending repairs and newbuildings in Japan and Yugoslavia. In 1980, Mr. Papageorgiou joined Lloyd’s Register of Shipping initially as a junior Ship and Engine Surveyor in the Far East area (Korea, Japan, China, Hong Kong, Philippines). He was the first surveyor of Greek nationality of Lloyd’s Register supervising the construction of newbuildings in Asia. Soon he was promoted to Principal Surveyor, thereafter to Senior Principal Surveyor, a position held for the first time by an Engineer of Greek nationality. Successively, in 1990, Lloyd’s Register appointed him in the post of area Managing Director for the wider region of Greece, Balkans and Middle East, again a position held for the first time by a Greek citizen. Mr. Papageorgiou is an active participant in a wide range of technical committees.

 

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CORPORATE GOVERNANCE

Board of Directors

Our business is managed under the direction of the Board, in accordance with the Companies Act 1981 of Bermuda, as amended (the “Companies Act”) and our Memorandum of Association and Bye-laws. Members of the Board are kept informed of our business through: discussions with the Chairman of the Board, the President and Chief Executive Officer and other members of our management team; the review of materials provided to directors; and, participation in meetings of the Board and its committees. In accordance with our Bye-laws, the Board has specified that the number of directors will be set at no less than five nor more than fifteen. We currently have nine directors on our Board. At its October 18, 2022 meeting, the Board of Directors approved the appointment of Dr. Purnell as an additional Director and as member in the Corporate Governance, Nominating and Compensation Committee, as well as in the Operational, Safety and Environmental Committee. Dr. Purnell is standing for election at this year’s Annual General Meeting. Under our Bye-laws, one third (or the number nearest to one third) of the Board (with the exception of any executive director) retires by rotation each year. The Bye-laws require that the one third of the directors to retire by rotation be those who have been in office longest since their last appointment or re-appointment. The Bye-laws specify that where the directors to retire have been in office for an equal length of time, those to retire are to be determined by lot (unless they agree otherwise among themselves). From the current directors, in addition to Dr. Purnell, Messrs. Michael G. Jolliffe and Nicholas F. Tommasino have been selected to stand for re-election at this year’s Annual General Meeting.

During the fiscal year ended December 31, 2022, the full Board held four meetings, one of which was by teleconference, the other three being held at Megaron Macedonia, 367 Syngrou Avenue, Athens, Greece and at Lagonissi, Athens, Greece. Each director attended all of the meetings of the Board and all of the meetings of committees of which such director was a member in 2022, except for one director, who attended at least 75% of such meetings.

Independence of Directors

The foundation for the Company’s corporate governance is the Board’s policy that a majority of the members of the Board should be independent. With the exception of the two Executive Directors (Messrs. Tsakos and Saroglou) and one Non-executive Director (Mr. Jolliffe), the Board believes that each of the other incumbent directors (Messrs. Tommasino, Arapoglou, Mitropoulos and Petropoulos, Dr. Patrinos and Dr. Purnell) is independent under the standards established by the New York Stock Exchange (the “NYSE”) because none has a material relationship with the Company directly or indirectly or any relationship that would interfere with the exercise of their independent judgment as directors of the Company.

The Board made its determination of independence in accordance with its Corporate Governance Guidelines, which specify standards and a process for evaluating director independence. The Guidelines provide that:

 

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A director cannot be independent if he or she fails to meet the objective requirements as to “independence” under the NYSE listing standards.

 

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If a director meets the objective NYSE standards, he or she will be deemed independent, absent unusual circumstances, if in the current year and the past three years the director has had no related-party transaction or relationship with the Company or an “interlocking” relationship with another entity triggering disclosure under SEC rules.

 

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If a director who meets the objective NYSE independence requirements either has had a disclosable transaction or relationship or the Corporate Governance, Nominating and Compensation Committee requests that the Board consider any other circumstances in determining the director’s independence, the Board will make a determination of the director’s independence.

 

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To promote open discussion among the independent directors, those directors met three times in regularly scheduled executive sessions in 2022 without participation of the Company’s management and will continue to do so in 2023. Dr. Patrinos serves as the Presiding Director for purposes of these meetings.

Documents Establishing Our Corporate Governance

The Board and the Company’s management have engaged in an ongoing review of our corporate governance practices in order to oversee our compliance with the applicable corporate governance rules of the NYSE and the SEC.

The Company has adopted a number of key documents that are the foundation of its corporate governance, including:

 

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a Code of Business Conduct and Ethics for Directors, Officers and Employees along with its supplemental policies;

 

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a Corporate Governance, Nominating and Compensation Committee Charter;

 

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an Audit Committee Charter;

 

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a Business Development and Capital Markets Committee Charter and;

 

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an Environmental and Operational Committee Charter.

These documents and other important information on our governance, including the Board’s Corporate Governance Guidelines, are posted in the “Corporate Governance” section of the Tsakos Energy Navigation Limited website, and may be viewed at http://www.tenn.gr. We will also provide any of these documents in hard copy upon the written request of a shareholder. Shareholders may direct their requests to the attention of Investor Relations, c/o George Saroglou or Paul Durham, Tsakos Energy Navigation Limited, 367 Syngrou Avenue, 175 64 P. Faliro, Athens, Greece.

The Board has a long-standing commitment to sound and effective corporate governance practices. The Board’s Corporate Governance Guidelines address a number of important governance issues such as:

 

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Selection and monitoring of the performance of the Company’s senior management;

 

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Succession planning for the Company’s senior management;

 

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Qualifications for membership on the Board;

 

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Functioning of the Board, including the requirement for meetings of the independent directors; and

 

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Standards and procedures for determining the independence of directors.

The Board believes that the Corporate Governance Guidelines and other governance documents meet current requirements and reflect a very high standard of corporate governance.

Committees of the Board

The Board has established an Audit Committee, a Corporate Governance, Nominating and Compensation Committee, a Business Development and Capital Markets Committee and an Operational, Safety and Environmental (“OSE”) Committee.

Audit Committee

The current members of the Audit Committee are Messrs. Tommasino, Arapoglou and Petropoulos, each of whom is an independent director. Mr. Tommasino serves as the Chairman of the committee. The Audit Committee is governed by a written charter, which is approved and adopted annually by the Board.

 

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The Board has determined that the continuing members of the Audit Committee meet the applicable independence requirements, and that all continuing members of the Audit Committee meet the requirement of being financially literate. The Audit Committee held three meetings during the fiscal year ended December 31, 2022. The Audit Committee is appointed by the Board and is responsible for, among other matters:

 

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engaging the Company’s external and internal auditors;

 

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approving in advance all audit and non-audit services provided by the auditors;

 

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approving all fees paid to the auditors;

 

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reviewing the qualification and independence of the Company’s external auditors;

 

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discussing compliance with accounting standards and any proposals which the external auditors have made regarding the Company’s accounting standards with the external auditors;

 

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overseeing the Company’s financial reporting and internal control functions;

 

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overseeing the Company’s whistleblower’s process and protection;

 

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overseeing general compliance with related regulatory requirements;

 

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overseeing the executive management’s identification and assessment of risks that the Company faces and the establishment of a risk management structure capable of addressing and mitigating those risks;

 

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overseeing the division of risk-related responsibilities among each of the Board committees as clearly as possible and performing a gap analysis to confirm that the oversight of any risk is not missed;

 

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in conjunction with the full Board, approving the Company-wide risk management program; and

 

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assessing whether the Company’s technical and commercial managers have effective procedures for managing risks.

The Board of Directors has determined that each of Messrs. Tommasino, Arapoglou and Petropoulos, whose biographical details are included herein, qualifies as an “audit committee financial expert” under current SEC regulations and each is independent in accordance with SEC rules and the listing standards of the NYSE.

Corporate Governance, Nominating and Compensation Committee

The current members of the Corporate Governance, Nominating and Compensation Committee are Messrs. Arapoglou, Mitropoulos, Tommasino, Petropoulos, Dr. Patrinos and Dr. Purnell, each of whom is an independent director. Dr. Patrinos serves as the Chairman of the committee. The Corporate Governance, Nominating and Compensation Committee is appointed by the Board and is responsible for:

 

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developing and recommending to the Board corporate governance guidelines applicable to the company and keeping such guidelines under review;

 

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overseeing the evaluation of the Board and management;

 

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arranging for an annual performance evaluation of the committee and producing an annual report to the Board;

 

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reviewing regularly the Board structure, size and composition and making recommendations to the Board with regard to any adjustments that are deemed necessary;

 

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identifying and nominating candidates for the approval of the Board to fill Board vacancies as and when they arise;

 

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implementing plans for succession, making recommendations to the Board for the continuation in service of an executive director and recommending directors who are retiring by rotation to be put forward for re-election;

 

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determining the compensation of the non-executive directors, determining and administering the Company’s long-term incentive plans, including any equity-based plans and grants under them; and

 

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producing an annual report on executive compensation as required by the SEC to be included in the Company’s annual proxy statement or annual report.

During 2022, there were three meetings of the Corporate Governance, Nominating and Compensation Committee.

Business Development and Capital Markets Committee

The current members of the Business Development and Capital Markets Committee are Messrs. Arapoglou, Jolliffe, Saroglou and Tsakos. Mr. Jolliffe is Chairman of the committee. The Business Development and Capital Markets Committee was established in 2014 for the purpose of overseeing the financial policies and activities of the Company and its subsidiaries relating to the Company’s capital structure and capital raising activities. The committee reviews and approves presentations to, and communications with, shareholders, financial analysts, and potential investors and oversees the establishment and maintenance of the Company’s relations with investment banks and financial institutions, as well as the development and expansion of the Company’s business, including the evaluation of strategic growth opportunities.

Operational, Safety and Environmental Committee

The current members of the Operational, Safety and Environmental Committee are Messrs. Jolliffe, Mitropoulos and Papageorgiou and Dr. Patrinos and Dr. Purnell. Mr. Mitropoulos is Chairman of the committee. The primary role of the OSE Committee is to draw the attention of the Board and the Company’s management to issues of concern regarding the safety and security of crew and vessels and the impact of the maritime industry on the environment, to provide an update on related legislation and technological innovations, and more specifically highlight areas in which the Company itself may play a more active role in being in the forefront of adopting operational procedures and technologies that will ensure maximum safety for crew and vessels and contribute to a better environment.

How to Contact the Board and its Committees

We have established a process by which shareholders can contact our Board, including any committee of the Board or the independent members of the Board.

To contact the Board or a committee of the Board or the independent members of the Board, you may write to the following address:

TSAKOS ENERGY NAVIGATION LIMITED

c/o Chairman of the Corporate Governance,

Nominating and Compensation Committee

367 Syngrou Avenue

175 64 P. Faliro

Athens, Greece

 

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All concerns and complaints will be received and processed by the Company’s Chief Operating Officer and/or the Company’s Head of Compliance & Internal Audit.

 

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Priority will be assigned to communications involving an allegation of a threat to a person, property or the environment, and to on-going or time-sensitive issues.

 

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If you have provided your name or have received a control number to permit anonymous or confidential treatment, you will receive a response to your communication by telephone or in writing.

 

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The Chairman of the Board or the Chairman of the Corporate Governance, Nominating and Compensation Committee will decide whether to forward your communication to other Directors, including the Executive Directors, taking into account the substance of the communication and any request that may have been made regarding such dissemination.

To enable directors to attend the Annual General Meeting of Shareholders, the Board has established a practice of scheduling a regular Board meeting to coincide with the Annual General Meeting. In 2022, all of the directors in office prior thereto and continuing in office thereafter attended the Annual General Meeting of Shareholders.

 

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COMPENSATION DISCUSSION AND ANALYSIS

Board Compensation

We pay no cash compensation to our directors who are executive officers. For the year ended December 31, 2022, the aggregate cash compensation of all of the members of the Board was $632,500 per the following annual fee schedule which was approved by the shareholders of the Company on June 17, 2022:

 

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Service on the Board - $60,000

 

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Service on the Audit Committee - $20,000

 

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Service on the Business Development and Capital Markets Committee - $10,000

 

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Service on the Operational, Safety and Environmental Committee - $10,000

 

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Service as Chairman of the Corporate Governance, Nominating and Compensation Committee - $10,000

 

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Service as Chairman of the Operational, Safety and Environmental Committee - $10,000

 

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Service as Chairman of the Audit Committee - $30,000

 

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Service as Chairman of the Business Development and Capital Markets Committee - $30,000

 

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Service as Chairman of the Board - $40,000

No fees are paid for service solely as a member of the Corporate Governance, Nominating and Compensation Committee.

We do not provide benefits for directors upon termination of their service with us.

We do not propose any changes to the fee schedule set forth above for 2023. In Item No. 4, the Board recommends that the shareholders re-approve such fee schedule to be payable to non-management directors for the year ending December 31, 2023.

Management Company

Tsakos Energy Management Limited (“Tsakos Energy Management”), under its management agreement with us, provides overall executive and commercial management of our affairs in exchange for a monthly management fee. We paid Tsakos Energy Management aggregate management fees of $20.2 million in 2022, $20.2 million in 2021 and $20.3 million in 2020.

From the management fee we pay it, Tsakos Energy Management paid, until February 2023, Tsakos Columbia Shipmanagement S.A. (“TCM”), a joint venture between Tsakos Shipping & Trading S.A. (“Tsakos Shipping”) and Columbia Shipmanagement Ltd., and since February 2023, pays Tsakos Shipping, a management fee for its services as technical and operational manager of most of the vessels in our fleet. We prepaid or reimbursed TCM until February 2023, and since February 2023 prepay or reimburse Tsakos Shipping, at cost for all vessel operating expenses payable by them in their capacity as technical manager of the fleet. In 2022, 2021 and 2020, an additional amount of $1.9 million, $2.2 million and $1.3 million, respectively, was paid in fees directly by the Company to TCM for additional services it provided and seafarers’ training.

In 2022, 2021 and 2020, we granted Tsakos Energy Management an incentive award of $1.0 million, $0.5 million and $1.5 million, respectively. In addition, a special award of $1.5 million was paid to Tsakos Energy Management in relation to newbuilding program in 2020. No special award was granted in 2022 and 2021.

Our management agreement with Tsakos Energy Management was amended and restated on March 8, 2007 and has a term of ten years that renews annually. Tsakos Energy Management may terminate the management agreement at any time upon not less than one year’s notice.

 

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In addition, either party may terminate the management agreement under certain circumstances, including the following:

 

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certain events of bankruptcy or liquidation involving either party;

 

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a material breach by either party; or

 

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a failure by Tsakos Energy Management, for a continuous period of two months, materially to perform its duties because of certain events of force majeure.

Moreover, following a change in control of us, which would occur if at least one director were elected to our Board without having been recommended by our existing Board, Tsakos Energy Management may terminate the agreement on 10 business days’ notice. If Tsakos Energy Management terminates the agreement for this reason, then we would immediately be obligated to pay Tsakos Energy Management the present discounted value of all of the payments that would have otherwise been due under the management agreement up until June 30 of the tenth year following the date of termination plus the average of the incentive awards previously paid to Tsakos Energy Management multiplied by ten. Under these terms, therefore, a termination as of December 31, 2022 would have resulted in a payment of approximately $166.5 million. Under the terms of the Management Agreement between the Company and Tsakos Energy Management, the Company may terminate the agreement only under specific circumstances, such as breach of contract by the manager and change of control in the shareholding of the manager without the prior approval of the Company’s Board of Directors.

Management Compensation

Messrs. Tsakos, Saroglou, Durham and Papageorgiou serve as President and Chief Executive Officer, Vice President and Chief Operating Officer, Chief Financial Officer and Chief Accounting Officer, and Chief Marine Officer, respectively. Such individuals are compensated by our manager Tsakos Energy Management, except for Mr. Papageorgiou who is an employee of Tsakos Shipping, and, except for the equity compensation discussed below and the compensation paid to Mr. Papageorgiou for service on the OSE Committee, are not directly compensated by the Company. Although he is not a member of the Board, our Chief Marine Officer, Mr. Papageorgiou serves on the Operational, Safety and Environmental Committee and receives the same $10,000 per annum cash compensation for service on such committee as is paid to non-executive members of the Board serving thereon.

Employees

Tsakos Energy Navigation Limited has no salaried employees. All crew members are employed by the owning-company of the vessel on which they serve, except where the vessel may be on a bareboat charter-out, or where the vessels or the crewing thereof are under third-party management arranged by our technical managers. All vessel-owning companies are subsidiaries of Tsakos Energy Navigation Limited. Approximately 1,364 officers and crew members served on board the vessels we own and were managed by our technical managers as of December 31, 2022.

Share Ownership

The Common Shares beneficially owned by our directors and executive officers and/or companies affiliated with these individuals are disclosed in “Security Ownership of Certain Beneficial Owners and Management” above.

Stock Compensation Plan

At the 2012 Annual Meeting of Shareholders, our shareholders approved a share-based incentive plan (the “2012 Plan”). This plan permits us to grant share options or other share based awards to our directors and officers, to the officers of the vessels in the fleet, and to the directors, officers and employees of our manager, Tsakos Energy Management, and our commercial manager, Tsakos Shipping.

 

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The purpose of the 2012 Plan is to provide a means to attract, retain, motivate and reward the persons whose performance of administrative, commercial, management, technical and maritime services are important for the Company by increasing their ownership in our Company. Awards under the 2012 Plan may include options to purchase our common shares, restricted share awards, other share-based awards (including share appreciation rights granted separately or in tandem with other awards) or a combination thereof.

The 2012 Plan is administered by our Corporate Governance, Nominating and Compensation Committee. Such committee has the authority, among other things, to: (i) select the present or prospective directors, officers, consultants and other personnel entitled to receive awards under the 2012 Plan; (ii) determine the form of awards, or combinations of awards; (iii) determine the number of shares covered by an award; and (iv) determine the terms and conditions of any awards granted under the 2012 Plan, including any restrictions or limitations on transfer, any vesting schedules or the acceleration of vesting schedules and any forfeiture provision or waiver of the same. The 2012 Plan authorizes the issuance of up to 200,000 (giving effect to the 1-for-5 reverse split effected July 1, 2020) Common Shares in the form of restricted stock units (“RSUs”) or options, of which 134,290 Common Shares remain available for issuance. In 2022, 2021and 2020, no RSUs or other awards were issued. As of December 31, 2022, there were no outstanding (non-vested) RSUs, options or other equity awards.

Total stock compensation expense recognized was $nil for the years ended December 31, 2022, December 31, 2021 and December 31, 2020.

 

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REPORT OF THE AUDIT COMMITTEE

The Tsakos Energy Navigation Limited Audit Committee of the Board is composed entirely of non-management directors. The members of the Audit Committee meet the independence and financial literacy requirements set forth by the SEC and the NYSE and Nicholas F. Tommasino, Efstratios Georgios Arapoglou and Denis Petropoulos each qualify as an “audit committee financial expert” as defined by the SEC.

The Audit Committee of the Board operates pursuant to a written charter, which may be accessed through the Corporate Governance section of the Company’s website at http://www.tenn.gr. In accordance with this charter, the Audit Committee assists the Board of Directors in fulfilling its oversight responsibility relating to the integrity of the Company’s financial statements and system of internal controls. The Audit Committee reviews and assesses the adequacy of its charter on an annual basis.

The Company’s Management team has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. The Audit Committee assists the Board in its general oversight of the Company’s financial reporting processes. Specifically, the Audit Committee:

 

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Reviewed and discussed the Company’s annual audited financial statements and quarterly financial statements, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Form 20-F for the year ended December 31, 2022, with Company management and Ernst & Young (Hellas), its Independent Auditors.

 

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The Committee also reviewed related issues and disclosure items, including the Company’s earnings press releases, and performed its regular review of critical accounting policies and the processes by which the Company’s Chief Executive Officer and Chief Financial Officer certify the information contained in its quarterly and annual filings.

 

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Discussed with Ernst & Young (Hellas) the matters required to be discussed by the Public Company Accounting Oversight Board. The Committee also received the written disclosures and letter from Ernst & Young (Hellas) required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young (Hellas)’s communications with the Audit Committee concerning independence and discussed with Ernst & Young (Hellas) their independence and related matters.

 

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As part of its review of audit matters, the Audit Committee supervises the relationship between the Company and its independent public accountants, including: having responsibility to recommend to the Board for Shareholder approval the selection, compensation and retention of the independent public accountants; approving the nature and type of their services; approving their audit and non-audit services; reviewing the plan for and the results of the annual audit and quarterly reviews of the Company’s Consolidated Financial Statements; and confirming their independence. The Audit Committee has evaluated Ernst & Young (Hellas)’s qualifications, performance and independence, including that of the lead audit partner. As part of the engagement process, the Audit Committee considers whether to rotate the independent public accountants. The Audit Committee has recommended to the Board that the Shareholders approve the selection of Ernst & Young (Hellas) as the Company’s independent public accountants for the year 2023.

During the year 2022, the Audit Committee held three meetings. During these meetings, the Audit Committee met with representatives of Ernst & Young (Hellas), both with management present and in private sessions without management present, to discuss the results of the audit and to solicit their evaluation of the Company’s accounting principles, practices and judgments applied by management and the quality and adequacy of the Company’s internal controls. At such meetings, the Audit Committee also met in private sessions with the Head of Compliance & Internal Audit, who reports directly to the Audit Committee, to discuss the audit results for 2022 and audit plans for 2023. The Audit Committee continually reviews specific areas of risk management with the Company.

 

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In performing the above described functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of Company management and the independent public accounting firm, which, in their report, expresses an opinion on the conformity of the Company’s annual financial statements to accounting principles generally accepted in the United States.

In addition, in reliance upon the reviews and discussions as outlined above, the Audit Committee recommended, and the Board of Directors approved, the inclusion of the Company’s audited financial statements in its annual report on Form 20-F for the year ended December 31, 2022 for filing with the SEC and presentation to the Company’s shareholders.

THE AUDIT COMMITTEE

Nicholas F. Tommasino – Chairman

Efstratios Georgios Arapoglou – Member

Denis Petropoulos – Member

Notwithstanding anything to the contrary set forth in any of our previous or future filings with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that might “incorporate by reference” future or previous filings, including this Proxy Statement, in whole or in part, the above “Report of the Audit Committee” shall not be incorporated by reference into any such filings, nor shall it be deemed to be soliciting material or deemed filed with the SEC under the Securities Act of 1933, as amended, or under the Exchange Act.

This Proxy Statement also includes references to our website address. This website is intended to provide inactive, textual references only. The information on this website is not part of this Proxy Statement.

Independent Registered Public Accountants

The accounting firm of Ernst & Young (Hellas), Athens, Greece served as the Company’s independent registered public accounting firm for the years ended December 31, 2022 and December 31, 2021 and has served in such capacity since 2002.

Principal Accounting Fees and Services

An aggregate amount of €666,750 was billed and accrued for fiscal year 2022 relating to fees for audit services performed by Ernst & Young (Hellas), Athens, Greece. An aggregate amount of €719,250 was billed and accrued for fiscal year 2021 relating to fees for audit services. Audit fees consist of the audit of our annual financial statements, services rendered in connection with registration of securities and related comfort letters, consents related to SEC registration statements, as well as work generally only the independent auditor can reasonably be expected to provide, such as statutory audits and financial audits of subsidiaries.

The Audit Committee Charter sets forth the Company’s policy regarding retention of the independent auditors, requiring the Audit Committee to review and approve in advance the retention of the independent auditors for the performance of all audit and lawfully permitted non-audit services. The Chairman of the Audit Committee, or in the absence of the Chairman, any member of the Audit Committee designated by the Chairman, has authority to approve in advance any lawfully permitted non-audit services. The Audit Committee is authorised to establish other policies and procedures for the pre-approval of such services. Where non-audit services are approved under delegated authority, the action must be reported to the full Audit Committee at its next regularly scheduled meeting.

ITEM NO. 2 – APPROVAL OF AUDITED FINANCIAL STATEMENTS

The Board, acting on the recommendation of the Audit Committee, recommends the approval by the Company’s shareholders of the audited financial statements for the fiscal year ended December 31, 2022, together with the report of the Company’s auditors, Ernst & Young (Hellas), Athens, Greece.

 

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Representatives of Ernst & Young (Hellas), Athens, Greece are expected to be present at the 2023 Annual General Meeting. They will have the opportunity to make a statement if they so desire, and are expected to be available to respond to appropriate questions from shareholders.

ITEM NO. 3 – APPOINTMENT OF AUDITORS AND AUTHORIZATION OF THE AUDIT COMMITTEE TO DETERMINE THEIR REMUNERATION

The Audit Committee of the Board has recommended that the Company’s shareholders appoint the firm of Ernst & Young (Hellas), Athens, Greece, independent registered public accounting firm, as auditors of the Company for the year ending December 31, 2023.

The Board, acting on the recommendation of the Audit Committee, recommends this Item No. 3 and that the Company’s shareholders appoint Ernst & Young (Hellas), Athens, Greece as auditors of the Company for the fiscal year ending December 31, 2023 and authorize the Audit Committee to set their remuneration.

ITEM NO. 4 – REMUNERATION OF THE DIRECTORS

We pay no cash compensation to our executive officers or to our directors who are executive officers. For the year ended December 31, 2022, the aggregate cash compensation of all of the members of the Board was $632,500. The annual fee allocation for directors was last approved by the shareholders of the Company on June 17, 2022.

The Board recommends that the shareholders approve the fee schedule for non-management directors in 2023 as set forth in this Proxy Statement under the section “Compensation Discussion and Analysis–Board Compensation”.

ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS

The Company’s Annual Report on Form 20-F and its audited consolidated financial statements for the fiscal year ended December 31, 2022, are available at www.proxyvote.com and on the Company’s website, http://www.tenn.gr and can be accessed through the SEC’s Web site at http://www.sec.gov. If you would like to receive, at no cost, a printed copy of the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2022, please contact the Company by telephone at +30 210 94 07 710, by email at ten@tenn.gr or in writing at Tsakos Energy Navigation Limited, Investor Relations, c/o George Saroglou or Paul Durham, 367 Syngrou Avenue, 175 64 P. Faliro, Athens, Greece.

George V. Saroglou

Chief Operating Officer

May 5, 2023

 

20

Exhibit 99.2

 

Exhibit 99.2 MMMMMMMMMMMM Tsakos Energy Navigation MMMMMMMMMMMMMM C123456789 000000000.000000 ext 000000000.000000 ext 000004 000000000.000000 ext 000000000.000000 ext ENDORSEMENT_LINE______________ SACKPACK_____________ 000000000.000000 ext 000000000.000000 ext Your vote matters – here’s how to vote! MR A SAMPLE You may vote online or by phone instead of mailing this card. DESIGNATION (IF ANY) Votes submitted electronically must be ADD 1 ADD 2 received by 11:59am, (Eastern Time), on ADD 3 June 15, 2023. ADD 4 MMMMMMMMM ADD 5 Online ADD 6 Go to www.investorvote.com/TNP or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Using a black ink pen, mark your votes with an X as shown in this example. Sign up for electronic delivery at Please do not write outside the designated areas. www.investorvote.com/TNP 2023 Annual Meeting Proxy Card 1234 5678 9012 345 qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2 – 4. 1. Election of Directors: 01—Michael G. Jolliffe 02—Karen Purnell 03—Nicholas F. Tommasino + Mark here to vote FOR all nominees Mark here to WITHHOLD vote from all nominees 01 02 03 For All EXCEPT—To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. For Against Abstain For Against Abstain 2. to receive and consider the 2022 audited financial statements 3. to appoint Ernst & Young (Hellas) Certified Auditors-Accountants of the Company; S.A. (“Ernst & Young (Hellas)”), Athens, Greece, as auditors of the Company for the fiscal year ending December 31, 2023 and to authorise the Audit Committee of the Board of Directors to set their remuneration; 4. to approve the directors’ remuneration. Any other business that properly comes before the meeting. B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. C 1234567890                J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MMMMMM 1UPX 577698 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 03T6OB    

2023 Annual Meeting Admission Ticket 2023 Annual Meeting of Tsakos Energy Navigation Limited Shareholders    June 16, 2023, 3:00pm Greek local time 367 Syngrou Avenue, 17564, P. Faliro, Athens, Greece Upon arrival, please present this admission ticket and photo identification at the registration desk. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/TNP qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q TSAKOS ENERGY NAVIGATION LIMITED + Notice of 2023 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting — June 16, 2023 Mr. Efstratios Georgios Arapoglou, and if Mr. Arapoglou is not present, any director of the Company, with full power of substitution, is hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Tsakos Energy Navigation Limited to be held on June 16, 2023 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted by the shareholder. If no such directions are indicated, the Proxy will have authority to vote FOR the election of the Board of Directors and FOR items 2-4. In his discretion, the Proxy is authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) C Non-Voting Items Change of Address — Please print new address below. Comments — Please print your comments below. +

Exhibit 99.3

 

Exhibit 99.3 Your Vote Counts! TSAKOS ENERGY NAVIGATION LTD 2023 Annual Meeting Vote by June 15, 2023 11 :59 PM ET You invested in TSAKOS ENERGY NAVIGATION LTD and it•s time to vote! You have the right to vote on proposals being presented at the Annual Meeting. This is an important notice regarding the availability of proxy material for the shareholder meeting to be held on June 16, 2023. Get informed before you vote View the Notice & Proxy Statement, Financial Statements online OR you can receive a free paper or email copy of the material(s) by requesting prior to June 04, 2023. If you would like to request a copy of the material(s) for this and/or future shareholder meetings, you may (1) visit www.ProxyVote.com, (2) call 1-800-579-1639 or (3) send an email to sendmaterial@proxyvote.com. If sending an email, please include your control number (indicated below) in the subject line. Unless requested, you will not otherwise receive a paper or email copy. Smartphone users Vote in Person at the Meeting* Point your camera here and June 16, 2023 3:00PM LST vote without entering a ~Inumber Tsakos Energy Navigation Limited 367 Syngrou Avenue 17564, P. Faliro Athens, Greece *If you choose to vote these shares in person at the meeting, you must request a “legal proxy.” To do so, please follow the instructions at www.ProxyVote.com or request a paper copy of the materials, which will contain the appropriate instructions. Please check the meeting materials for any special requirements for meeting attendance.    

Vote at www.ProxyVote.com THIS IS NOT A VOTABLE BALLOT TSAKOS ENERGY NAVIGATION LTD 2023 Annual Meeting This is an overview of the proposals being presented at the Vote by June 15, 2023 upcoming shareholder meeting. Please follow the instructions on the reverse side to vote these important matters. 11:59PMET Board Voting Items Recommends 1. Election of Directors Nominees: 0 For 01 Michael G. Jolliffe 02 Karen Purnell 03 Nicholas F. Tommasino 2. To receive and consider the 2022 audited financial statements of the Company; 0 For 3. To appoint Ernst & Young (Hellas) Certified Auditors-Accountants S.A. (II Ernst & Young (Hellas) II), Athens, Greece, as auditors of the Company for the fiscal year ending December 31, 2023 and to authorise the Audit Committee of 0 For the Board of Directors to set their remuneration; 4. To approve the directors’ remuneration. 0 For NOTE: Any other business that properly comes before the meeting.                

Exhibit 99.4

 

 

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

2022

 

 

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

		Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID #1457)			F-2
Consolidated Balance Sheets as of December 31, 2022 and 2021			F-7
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2022, 2021 and 2020			F-8
Consolidated Statements of Other Comprehensive Income (Loss) for the years ended December 31, 2022, 2021 and 2020			F-9
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022, 2021 and 2020			F-10
Consolidated Statements of Cash Flows for the years ended December  31, 2022, 2021 and 2020			F-11
Notes to the Consolidated Financial Statements			F-12

 

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of

Tsakos Energy Navigation Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tsakos Energy Navigation Limited and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of comprehensive income/(loss), other comprehensive income/(loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 6, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 

F-2

Recoverability assessment of vessels, including right-of-use assets under operating leases

 

 

Description of the matter		As of December 31, 2022, the carrying value of the Company’s vessels, including right-of-use assets under operating leases, plus any unamortized dry- docking costs and leasehold improvements was $2,683,203 thousands. As discussed in Notes 1(i) and 4 to the consolidated financial statements, the Company evaluates its vessels and right-of-use assets under operating leases for impairment whenever events or changes in circumstances indicate that the carrying value of a vessel or a right-of-use asset under operating lease plus any unamortized dry-docking costs and leasehold improvements might not be recoverable in accordance with the guidance in ASC 360 – Property, Plant and Equipment (“ASC 360”). If indicators of impairment exist, management compares the future undiscounted net operating cash flows expected to be generated throughout the remaining useful life of each vessel or over the remaining lease term of the right-of-use asset under operating lease to the carrying value plus any unamortized dry-docking costs and leasehold improvements. Where a vessel’s or a right-of-use asset’s under operating lease carrying value plus any unamortized drydocking costs and leasehold improvements exceeds the undiscounted net operating cash flow forecasts, management recognizes an impairment loss equal to the excess of the carrying value plus any unamortized dry-docking costs and leasehold improvements over the fair value of the vessel or right-of-use asset under operating lease.   Auditing management’s recoverability assessment was complex given the judgement and estimation uncertainty involved in determining the assumption of the future charter rates for non-contracted revenue days when forecasting the undiscounted net operating cash flows. These future charter rates are subjective as they involve the development and use of assumptions about the tanker and Liquified Natural Gas (“LNG”) shipping markets through the end of the useful lives of the vessels, or over the remaining lease term for the right-of-use assets under operating leases. These assumptions are forward looking and subject to the inherent unpredictability of future global economic and market conditions.
How we addressed the matter in our audit		We obtained an understanding of the Company’s impairment process, evaluated the design, and tested the operating effectiveness of the controls over the Company’s determination of future charter rates for non-contracted revenue days.   We analyzed management’s impairment assessment by comparing the methodology used to evaluate impairment of each vessel and right-of-use asset under operating lease against the accounting guidance in ASC 360. To test management’s undiscounted net operating cash flow forecasts, our procedures included, among others, comparing the future vessel and right-of-use asset under operating lease charter rates for non-contracted revenue days against internal and external market data sources, such as available market data from various analysts, historical data for the vessels, and recent economic and industry changes. In addition, we performed sensitivity analyses to assess the impact of changes to future charter rates for non-contracted revenue days in the determination of the undiscounted net operating cash flow forecasts. We evaluated the accuracy of the forecasts by

 

F-3

		comparing actual results to management’s historical forecasts. Our procedures also included testing the completeness and accuracy of the future charter rate data used within the forecasts. We assessed the adequacy of the Company’s disclosures in Notes 1(i) and 4 to the consolidated financial statements.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

We have served as the Company’s auditor since 2002.

Athens, Greece

April 6, 2023

 

F-4

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of

Tsakos Energy Navigation Limited

Opinion on Internal Control over Financial Reporting

We have audited Tsakos Energy Navigation Limited and subsidiaries’ internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Tsakos Energy Navigation Limited and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of comprehensive income / (loss), other comprehensive income /(loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated April 6, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

 

F-5

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

Athens, Greece

April 6, 2023

 

F-6

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2022, AND 2021

(Expressed in thousands of U.S. Dollars—except share and per share data)

 

		2022				2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	304,367			$	117,192
Restricted cash			5,072				10,005
Margin deposits (Note 14)			4,270				5,849
Trade accounts receivable, net (Note 1(f))			78,198				30,622
Capitalized voyage expenses			1,904				1,839
Due from related parties (Note 2)			8,889				14,607
Advances and other			15,560				20,176
Vessels held for sale (Note 1(j))			61,626				—
Inventories			26,217				22,918
Prepaid insurance and other			6,818				1,861
Receivable, short-term (Note 3)			—				12,741
Current portion of financial instruments—Fair value (Note 14)			193				1,852
Total current assets			513,114				239,662
FINANCIAL INSTRUMENTS—FAIR VALUE, net of current portion (Note 14)			—				1,526
RIGHT OF USE ASSETS UNDER OPERATING LEASES (Note 3)			58,706				88,573
RIGHT OF USE ASSETS UNDER FINANCE LEASES (Note 3)			41,851				—
LONG-TERM RECEIVABLE (Note 3)			23,307				23,163
FIXED ASSETS (Note 4)
Advances for vessels under construction			46,650				104,635
Vessels			3,552,607				3,279,440
Accumulated depreciation			(972,032	)			(876,482	)
Vessels’ Net Book Value			2,580,575				2,402,958
Total fixed assets			2,627,225				2,507,593
DEFERRED CHARGES AND LEASEHOLD IMPROVEMENTS, net (Note 5)			44,372				34,297
Total assets		$	3,308,575			$	2,894,814
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and other financial liabilities (Note 6)		$	201,046			$	172,936
Payables			48,156				74,912
Due to related parties (Note 2)			7,439				7,747
Accrued liabilities			36,196				27,851
Unearned revenue			26,049				9,020
Current portion of obligations under operating leases (Note 3)			21,737				29,749
Current portion of financial liability under operating leases (Note 3)			1,031				997
Current portion of financial liability under finance leases (Note 3)			28,033				—
Current portion of financial instruments—Fair value (Note 14)			—				8,884
Total current liabilities		$	369,687			$	332,096
LONG-TERM DEBT AND OTHER FINANCIAL LIABILITIES, net of current portion (Note 6)			1,376,831				1,200,251
LONG-TERM OBLIGATIONS UNDER OPERATING LEASES (Note 3)			36,969				58,824
FINANCIAL LIABILITY UNDER OPERATING LEASES, net of current portion (Note 3)			2,164				3,196
FINANCIAL INSTRUMENTS—FAIR VALUE, net of current portion (Note 14)			5				8,656
STOCKHOLDERS’ EQUITY (Note 8)
Preferred Shares, $ 1.00 par value; 25,000,000 shares authorized, 3,517,061 Series D Preferred Shares, 4,745,947 Series E Preferred Shares and 6,747,147 Series F Preferred Shares issued and outstanding at December 31, 2022 and 3,516,896 Series D Preferred Shares, 4,743,708 Series E Preferred Shares, 6,741,259 Series F Preferred Shares and 459,286 Series G Preferred Shares issued and outstanding at December 31, 2021.			15,010				15,461
Common shares, $ 5.00 par value; 60,000,000 shares authorized at December 31, 2022 and 35,000,000 shares authorized in December 31, 2021; 30,183,776 shares issued and 29,505,603 shares outstanding at December 31, 2022 and 25,244,113 shares issued and 24,565,940 shares outstanding at December 31, 2021 respectively.			150,919				126,221
Additional paid-in capital			993,368				973,582
Cost of treasury stock			(6,791	)			(6,791	)
Accumulated other comprehensive income (loss)			7,665				(17,175	)
Retained earnings			311,726				149,505
Total Tsakos Energy Navigation Limited stockholders’ equity			1,471,897				1,240,803
Non-controlling interest			51,022				50,988
Total stockholders’ equity			1,522,919				1,291,791
Total liabilities and stockholders’ equity		$	3,308,575			$	2,894,814

The accompanying notes are an integral part of the consolidated financial statements.

 

F-7

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020

(Expressed in thousands of U.S. Dollars—except share and per share data)

 

		2022				2021				2020
VOYAGE REVENUES:		$	860,400			$	546,120			$	644,135
EXPENSES:
Voyage expenses			209,890				198,078				145,267
Charter hire expense			32,774				30,056				21,602
Vessel operating expenses			190,268				173,277				179,205
Depreciation and amortization			140,821				143,253				137,100
General and administrative expenses			29,854				29,130				29,040
Loss on sale of vessels (Note 4)			440				5,817				6,451
Impairment charges (Note 4)			—				86,368				28,776
Total expenses			604,047				665,979				547,441
Operating income (loss)			256,353				(119,859	)			96,694
OTHER INCOME (EXPENSES):
Interest and finance costs, net (Note 7)			(50,253	)			(31,407	)			(70,579	)
Interest income			2,000				703				1,071
Other, net			366				(18	)			36
Total other expenses, net			(47,887	)			(30,722	)			(69,472	)
Net income (loss)			208,466				(150,581	)			27,222
Less: Net income attributable to the non-controlling interest			(4,232	)			(820	)			(3,220	)
Net income (loss) attributable to Tsakos Energy Navigation Limited		$	204,234			$	(151,401	)		$	24,002
Effect of preferred dividends (Note 10)			(34,724	)			(33,603	)			(36,579	)
Deemed dividend on Series C Preferred Shares (Note 10)			—				—				(2,493	)
Undistributed income to Series G participants (Note 10)			(1,250	)			—				—
Deemed dividend on partially redeemed Series G Convertible Preferred Shares (Note 10)			—				(2,171	)			—
Net income (loss) attributable to common stockholders of Tsakos Energy Navigation Limited		$	168,260			$	(187,175	)		$	(15,070	)
Earnings (Loss) per share, basic attributable to Tsakos Energy Navigation Limited common stockholders		$	6.02			$	(9.53	)		$	(0.80	)
Earnings (Loss) per share, diluted attributable to Tsakos Energy Navigation Limited common stockholders		$	6.01			$	(9.53	)		$	(0.80	)
Weighted average number of shares, basic			27,970,799				19,650,307				18,768,599
Weighted average number of shares, diluted			28,188,064				19,650,307				18,768,599

The accompanying notes are an integral part of these consolidated financial statements.

 

F-8

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

(LOSS) FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020

(Expressed in thousands of U.S. Dollars-except share and per share data)

 

		2022				2021				2020
Net income (loss)		$	208,466			$	(150,581	)		$	27,222
Other comprehensive income (loss)
Unrealized income (losses) from hedging financial instruments
Unrealized income (loss) on interest rate swaps, net			24,840				19,819				(18,641	)
Comprehensive income (loss)			233,306				(130,762	)			8,581
Less: comprehensive income attributable to the non-controlling interest			(4,232	)			(820	)			(3,220	)
Comprehensive income (loss) attributable to Tsakos Energy Navigation Limited		$	229,074			$	(131,582	)		$	5,361

The accompanying notes are an integral part of these consolidated financial statements.

 

F-9

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020

(Expressed in thousands of U.S. Dollars-except for share and per share data)

 

		Preferred				Common				Additional Paid-in				Treasury stock								Retained				Accumulated Other Comprehensive				Tsakos Energy Navigation				Non-controlling				Total Stockholders’
		Shares				Shares				Capital				Shares				Amount				Earnings				(Loss)				Limited				Interest				Equity
BALANCE December 31, 2019		$	18,650			$	95,079			$	992,020				—			$	—			$	364,000			$	(18,353	)		$	1,451,396			$	20,923			$	1,472,319
Net income			—				—												—				24,002								24,002				3,220				27,222
Conversion of Series G Convertible Preferred Shares			(10	)			33				(23	)
Sale of Common Shares							861				2,600																				3,461								3,461
Purchase of Treaury Stock															978,936				(9,834	)											(9,834	)							(9,834	)
Capital contribution from non- controlling interest																																			4,000				4,000
Cash dividends paid ($0.50 per common share)																							(9,379	)							(9,379	)							(9,379	)
Redemption of Series C Preferred Shares paid			(2,000	)							(45,507	)											(2,493	)							(50,000	)							(50,000	)
Dividends paid on Series C preferred shares																							(4,079	)							(4,079	)							(4,079	)
Dividends paid on Series D preferred shares																							(7,492	)							(7,492	)							(7,492	)
Dividends paid on Series E preferred shares																							(10,637	)							(10,637	)							(10,637	)
Dividends paid on Series F preferred shares																							(14,250	)							(14,250	)							(14,250	)
Dividends paid on Series G Convertible preferred shares																							(872	)							(872	)							(872	)
Other comprehensive loss																											(18,641	)			(18,641	)							(18,641	)
BALANCE December 31, 2020		$	16,640			$	95,973			$	949,090				978,936			$	(9,834	)		$	338,800			$	(36,994	)		$	1,353,675			$	28,143			$	1,381,818
Net (loss) income																							(151,401	)							(151,401	)			820				(150,581	)
Purchase of Treasury Stock															19,836				(168	)											(168	)							(168	)
Sale of Common Shares							30,248				20,290				(320,599	)			3,211				(273	)							53,476								53,476
Partial redemption of Series G convertible preferred shares			(2,156	)							(18,562	)											(2,171	)							(22,889	)			22,889				—
Sale of Series D preferred shares			92								2,148																				2,240								2,240
Sale of Series E preferred shares			144								3,357																				3,501								3,501
Sale of Series F preferred shares			741								17,259																				18,000								18,000
Cash dividends paid ($0.10 per																							(1,978	)							(1,978	)							(1,978	)
common share)
Dividends paid on Class B preferred shares of subsidiary																																			(864	)			(864	)
Dividends paid on Series D preferred shares																							(7,594	)							(7,594	)							(7,594	)
Dividends paid on Series E preferred shares																							(10,814	)							(10,814	)							(10,814	)
Dividends paid on Series F preferred shares																							(15,010	)							(15,010	)							(15,010	)
Dividends paid on Series G Convertible preferred shares																							(54	)							(54	)							(54	)
Other comprehensive income																											19,819				19,819								19,819
BALANCE December 31, 2021		$	15,461			$	126,221			$	973,582				678,173			$	(6,791	)		$	149,505			$	(17,175	)		$	1,240,803			$	50,988			$	1,291,791
Net income																							204,234								204,234				4,232				208,466
Partial redemption of Class B preferred shares of subsidiary																																			(2,500	)			(2,500	)
Issuance of Common Shares			—				23,167				20,674								—												43,841								43,841
Partial redemption of Series G convertible preferred shares			(459	)			1,531				(1,072	)																			—								—
Sale of Series D preferred shares			—								1																				1								1
Sale of Series E preferred shares			2								50																				52								52
Sale of Series F preferred shares			6								133																				139								139
Cash dividends paid ($0.10 and $0.15 per common share)																							(7,289	)							(7,289	)							(7,289	)
Dividends paid on Class B preferred shares of subsidiary																																			(1,698	)			(1,698	)
Dividends paid on Series D preferred shares																							(7,694	)							(7,694	)							(7,694	)
Dividends paid on Series E preferred shares																							(10,975	)							(10,975	)							(10,975	)
Dividends paid on Series F preferred shares																							(16,024	)							(16,024	)							(16,024	)
Dividends paid on Series G Convertible preferred shares																							(31	)							(31	)							(31	)
Other comprehensive income																											24,840				24,840								24,840
BALANCE December 31, 2022		$	15,010			$	150,919			$	993,368				678,173			$	6,791	)		$	311,726			$	7,665			$	1,471,897			$	51,022			$	1,522,919

The accompanying notes are an integral part of these consolidated financial statements.

 

F-10

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020

(Expressed in thousands of U.S. Dollars)

 

		2022				2021				2020
Cash Flows from Operating Activities:
Net income (loss)		$	208,466			$	(150,581	)		$	27,222
Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation			120,459				126,821				127,278
Amortization of deferred dry-docking costs and leasehold improvements			19,246				16,432				9,822
Amortization of deferred finance costs			4,052				3,246				3,782
Amortization of Right of use assets for finance lease			1,116				—				—
Amortization of revenue escalation			(2,004	)			—				—
Interest expense on long term receivable, net			(403	)			(32	)			1,932
Change in fair value of derivative instruments			(5,923	)			(12,054	)			8,121
Loss on sale of vessels			440				5,817				6,451
Impairment charges			—				86,368				28,776
Payments for dry-docking			(29,445	)			(27,157	)			(16,291	)
Proceeds from swaps terminations			16,195				—				—
(Increase) Decrease in:
Receivables and other, net			(35,238	)			(1,327	)			19,659
Margin deposits			1,579				304				(6,153	)
Inventories			(3,299	)			(1,105	)			(8,781	)
Prepaid insurance and other			(4,957	)			(445	)			(521	)
Capitalized voyage expenses			(65	)			(238	)			(1,096	)
Increase (Decrease) in:
Payables and other			(27,064	)			23,365				14,981
Accrued liabilities			8,345				(12,700	)			(10,322	)
Unearned revenue			17,029				(3,603	)			556
Net Cash provided by Operating Activities			288,529				53,111				205,416
Cash Flows from Investing Activities:
Advances for vessels under construction			(31,809	)			(55,605	)			(39,671	)
Vessel acquisitions and/or improvements			(301,560	)			(5,623	)			(148,569	)
Proceeds from sale of vessels			31,555				53,224				93,627
Net Cash used in Investing Activities			(301,814	)			(8,004	)			(94,613	)
Cash Flows from Financing Activities:
Proceeds from long-term debt and other financial liabilities			701,105				189,758				348,903
Financing costs			(6,296	)			(1,270	)			(2,964	)
Payments of long-term debt and other financial liabilities			(494,171	)			(318,904	)			(383,660	)
Payments on principal portion of financial liabilities			(2,933	)			—				—
Purchase of treasury stock			—				(168	)			(9,834	)
Redemption of Series C preferred shares			—				—				(50,000	)
Redemption of Series B preferred shares			(2,500	)			—				—
Proceeds from stock issuance program, net			43,841				53,476				3,461
Proceeds from preferred stock issuance, net			192				23,741				—
Cash dividends			(43,711	)			(36,314	)			(46,708	)
Capital contribution from non-controlling interest to subsidiary			—				—				4,000
Net Cash provided by (used in) Financing Activities			195,527				(89,681	)			(136,802	)
Net increase (decrease) in cash and cash equivalents and restricted cash			182,242				(44,574	)			(25,999	)
Cash and cash equivalents and restricted cash at beginning of period			127,197				171,771				197,770
Cash and cash equivalents and restricted cash at end of period		$	309,439			$	127,197			$	171,771
Interest paid
Cash paid for interest, net of amounts capitalized		$	48,946			$	40,840			$	53,813
Reconciliation of cash and cash equivalents and restricted cash at end of period:
Current Assets:
Cash and cash equivalents			304,367				117,192				160,475
Restricted cash			5,072				10,005				11,296
Total Cash and cash equivalents and restricted cash			309,439				127,197				171,771

The accompanying notes are an integral part of these consolidated financial statements.

 

F-11

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

1.	Significant Accounting Policies

 

(a)

Basis of presentation and description of business: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of Tsakos Energy Navigation Limited (the “Holding Company”), and its wholly-owned and majority-owned subsidiaries (collectively, the “Company”). All intercompany balances and transactions have been eliminated upon consolidation.

The Company owns and operates a fleet of crude oil and product carriers including eight vessels chartered-in and three liquified natural gas (“LNG”) carriers providing worldwide marine transportation services under long, medium or short-term charters.

On July 1, 2020, the Company effected a 1-for-5 reverse stock split of its common shares. In connection with the reverse stock split 33.2 fractional shares were cashed out. All share and per share amounts disclosed in the consolidated financial statements and notes give effect to this reverse stock split retroactively, for all periods presented prior to the reverse stock split.

Impact of COVID-19 and conflict in Ukraine on the Company’s Business

The impact of the COVID-19 pandemic and the conflict in Ukraine will continue to negatively affect the global economy (i.e. inflation, interest rates) and demand for oil and charter rates, which may continue to have a negative effect on the Company’s business, financial performance and the results of its operations. As a result, many of the Company’s estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company’s estimates may change in future periods.

 

(b)

Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and expenses, reported in the consolidated financial statements and the accompanying notes. Although actual results could differ from those estimates, management does not believe that such differences would be material.

 

(c)

Other Comprehensive Income (Loss): The consolidated statement of other comprehensive income (loss), presents the change in equity (net assets) during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by shareholders and distributions to shareholders. Reclassification adjustments are presented out of accumulated other comprehensive income (loss) on the face of the statement in which the components of other comprehensive income (loss) are presented or in the notes to the consolidated financial statements. The Company follows the provisions of ASC 220 “Comprehensive Income”, and presents items of net income, items of other comprehensive income (“OCI”) and total comprehensive income in two separate and consecutive statements.

 

(d)

Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar because the Company’s vessels operate in international shipping markets in which the U.S. Dollar is utilized to transact most business. The accounting books of the Company are also maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. Dollars at the year-end exchange rates. Resulting gains or losses are reflected within Vessel operating expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss).

 

F-12

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

(e)

Cash, Cash Equivalents and Restricted Cash: The Company classifies highly liquid investments such as time deposits and certificates of deposit and their equivalents with original maturities of three months or less as cash and cash equivalents. Cash deposits with certain banks that may only be used for special purposes (including loan repayments) are classified as Restricted cash.

 

(f)

Trade Accounts Receivable, Net and Credit Losses Accounting: Trade accounts receivable, net at each balance sheet date includes estimated recoveries from charterers for hire, freight and demurrage and revenue earned but not yet billed, net of any allowance for receivables deemed uncollectible. Trade accounts receivable are recorded when the right to consideration becomes unconditional. The Company’s management at each balance sheet date reviews all outstanding invoices and provides allowance for receivables deemed uncollectible primarily based on the aging of such balances and any amounts in dispute. During 2022, 2021 and 2020, the Company had no write offs of trade accounts receivable, deemed uncollectible.

As of January 1, 2020, the Company adopted ASC 326 which requires entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade accounts receivable. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected credit losses which will result in more timely recognition of such losses. The Company adopted the accounting standard using the prospective transition approach as of January 1, 2020, which resulted in an immaterial adjustment in the opening balance of retained earnings. The Company maintains an allowance for credit losses for expected uncollectable accounts receivable, which is recorded as an offset to trade accounts receivable and changes in such, if any, are classified as allowance for credit losses in the Consolidated Statements of Comprehensive Income (Loss).

The adoption of ASC 326 primarily impacted trade accounts receivable recorded on the Consolidated Balance Sheet. The Company assessed collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considered historical collectability based on past due status. The Company also considered customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to determine adjustments to historical loss data.

The Company assessed that any impairment of accounts receivable arising from operating leases, i.e. time charters, should be accounted in accordance with ASC 842, and not in accordance with Topic 326. Impairment of accounts receivable arising from voyage charters, which are accounted in accordance with ASC 606, are within the scope of Subtopic 326 and must therefore, be assessed for expected credit losses. No allowance was warranted for the years ended December 31, 2021, and December 31, 2022.

In addition, no allowance was recorded for cash equivalents as the majority of cash balances as of the balance sheet date were on time deposits with highly reputable credit institutions, for which periodic evaluations of the relative credit standing of those financial institutions are performed. No allowance was recorded on insurance claims as of December 31, 2021, and December 31, 2022, as their balances were immaterial.

 

(g)

Inventories: Inventories consist of bunkers, lubricants, victualling and stores and are stated at the lower of cost or net realizable value. The cost is determined primarily by the first-in, first-out method. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in earnings in the period in which it occurs.

 

F-13

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

(h)

Fixed Assets: Fixed assets consist of vessels. Vessels are stated at cost, less accumulated depreciation. The cost of vessels includes the contract price and pre-delivery costs incurred during the construction and delivery of newbuildings, including capitalized interest, and expenses incurred upon the acquisition of second-hand vessels. Subsequent expenditures for conversions and major improvements are capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, they are charged to expense as incurred. Expenditures for routine repairs and maintenance are expensed as incurred.

Depreciation is provided on the straight-line method based on the estimated remaining economic useful lives of the vessels, less an estimated residual value based on a scrap price. Effective October 1, 2021 and following management’s reassessment of the residual value of the vessels, the estimated scrap value per light weight ton (“LWT”) was increased to $0.43 from $0.39. Management’s estimate was based on the average demolition prices prevailing in the market during the last four years for which historical data were available. The decrease in the annual depreciation expense is expected to amount approximately $3.0 million per annum based on the useful lives of the Company’s existing fleet which are estimated at 25 years for crude and product oil carriers and 40 years for the LNG carriers from the date of original delivery from the shipyard. The effect of this change in accounting estimate, which did not require retrospective application as per ASC 250 “Accounting Changes and Error Corrections”, was to decrease net income (loss) for the years ended December 31, 2022 and December 31, 2021, by $3.1 million or $0.10 per weighted average number of shares, both basic and diluted and by $746 or $0.04, both basic and diluted, respectively.

 

(i)

Impairment of Fixed Assets and Right-of-use assets: The Company reviews vessels and right-of-use-assets under finance leases for impairment whenever events or changes in circumstances indicate at each reporting date that the carrying amount of a vessel including any unamortized dry-docking costs or right-of-use-assets under finance leases including any unamortized leasehold improvements (Note 1(k)) may not be recoverable. When such indicators are present, a vessel to be held and used and the right-of-use assets under finance leases are tested for recoverability by comparing the estimate of future undiscounted net operating cash flows expected to be generated by the use of the vessel over its remaining useful life and its eventual disposition to its carrying amount. Net operating cash flows are determined by applying various assumptions regarding the use or probability of sale of each vessel, future revenues net of commissions, operating expenses, scheduled dry-dockings, expected off-hire and scrap values, and taking into account historical revenue data and published forecasts on future world economic growth and inflation. Should the carrying value of the vessel, including any unamortized dry-docking costs, or the right-of-use-assets under finance leases, including any unamortized leasehold improvements, exceed its estimated future undiscounted net operating cash flows, impairment is measured based on the excess of the carrying amount plus any unamortized dry-docking costs or the right-of-use-assets under finance leases, including any unamortized leasehold improvements, over the fair market value of the asset. The Company determines the fair value of its vessels and right-of use-assets under finance leases based on management estimates and assumptions and by making use of available market data and taking into consideration third party valuations. The review of the carrying amounts in connection with the estimated recoverable amount for the Company’s vessels and advances for vessels under construction as of December 31, 2022, indicated no impairment charge compared to the impairment charge of $86,368 recorded for the year ended December 31, 2021, and $ nil for the year ended December 31, 2020 (Note 4). The review of the rights-of-use-assets under finance leases in connection with the estimated recoverable amount for the Company’s rights-of use-assets as of December 31, 2022, indicated no impairment charge. The Company had no right-of-use-assets under finance leases as of December 31, 2021.

 

F-14

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

In addition, the Company reviews and tests its right-of-use-assets under operating leases for impairment whenever events or changes in circumstances are indicative of such at each reporting date, by comparing their carrying amount plus any unamortized leasehold improvements (Note 1(k)) with the estimated future undiscounted net operating cash flows expected to be generated by the use of the vessel, considering three-year charter rates estimates and the average of those, over the remaining lease term (Note 4). The review of the carrying amount in connection with the estimated recoverable amount for the Company’s right of use assets as of December 31, 2022, and 2021, indicated no impairment charge.

 

(j)

Reporting Assets held for sale: It is the Company’s policy to dispose of vessels when suitable opportunities occur and not necessarily to keep them until the end of their useful life. Long-lived assets are classified as held for sale when all applicable criteria enumerated under ASC 360 “Property, Plant, and Equipment” are met and are measured at the lower of their carrying amount or fair value less cost to sell. These assets are not depreciated once they meet the criteria to be held for sale. An impairment charge for an asset held for sale is recognized when its fair value less cost to sell is lower than its carrying value at the date it meets the held for sale criteria and upon subsequent measurement. On December 14, 2022, the Company considered that the handymax tankers, Afrodite, Artemis, Ariadne, Aris, Ajax and Apollon met the criteria to be classified as held for sale and reclassified the amount of $61,626 in vessels held for sale, based on the lower of its carrying amount and Level 1 inputs indicative of the vessel’s sales price less cost to sell. All vessels delivered to their new owners in the first quarter of 2023. There was no impairment charge for vessels classified as held for sale as of December 31, 2022. At December 31, 2021, there were no vessels held for sale.

 

(k)

Accounting for Special Survey, Dry-docking Costs and Leasehold improvements: The Company follows the deferral method of accounting for dry-docking and special survey costs whereby actual costs incurred are reported in Deferred Charges and leasehold improvements and are amortized on a straight-line basis over the period through the date the next dry-docking is scheduled to become due (approximately every five years during the first fifteen years of the vessels’ life and every two and a half years within the remaining useful life of the vessels). Costs relating to routine repairs and maintenance are expensed as incurred. The unamortized portion of special survey and dry-docking costs for a vessel that is sold and/ or classified as held for sale, is included as part of the carrying amount of the vessel in determining the gain or loss on sale of the vessel.

The Company follows the deferral method of accounting for leasehold improvement costs whereby actual costs incurred are reported in Deferred Charges and leasehold improvements and are amortized on a straight-line basis over the shorter of the useful life of those leasehold improvements and the remaining lease term, unless the lease transfers ownership of the underlying asset to the lessee or the lessee is reasonably certain to exercise an option to purchase the underlying asset, in which case the lessee shall amortize the leasehold improvements to the end of their useful life.

 

(l)

Loan Costs: Costs incurred for obtaining new loans or refinancing of existing loans, upon application of certain criteria, are capitalized and amortized over the term of the respective loan, using the effective interest rate method. Any unamortized balance of costs relating to loans repaid or refinanced as debt extinguishments is expensed in the period the repayment or extinguishment is made. Deferred financing costs, net of accumulated amortization, are presented as a reduction of long-term debt (Note 6).

 

(m)

Accounting for Leases (Company act as lessee): Leases, where the Company is regarded as the lessee, are classified as either operating leases or finance leases, based on an assessment of the terms of the lease. According to the provisions of ASC 842-20-30-1, at the commencement date, a lessee shall measure both of the following: a) The lease liability at the present value of the lease payments not yet paid, discounted using

 

F-15

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

the discount rate for the lease at lease commencement and b) The right-of-use assets, which shall consist of all of the following: i) The amount of the initial measurement of the lease liability, ii) Any lease payments made to the lessor at or before the commencement date, minus any lease incentives received and iii) Any initial direct costs incurred by the lessee.

After lease commencement, the Company measures the lease liability for an operating lease at the present value of the remaining lease payments using the discount rate determined at lease commencement. The right-of-use assets is subsequently measured at the amount of the remeasured lease liability, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term and any unamortized initial direct costs.

After lease commencement, the Company measures the lease liability for finance leases by increasing the carrying amount to reflect interest on the lease liability and reducing the carrying amount to reflect the lease payments made during the period. The right-of-use asset is amortized from the lease commencement date to the remaining useful life of the underlying asset since the Company has either the obligation or is reasonably certain to exercise its option to purchase the underlying asset. For finance leases, interest expense is determined using the effective interest method and is included under interest and finance cost, net in the consolidated statements of comprehensive income (loss).

Any changes made to leased assets to customize it for a particular use or need of the lessee are capitalized as leasehold improvements. Amounts attributable to leasehold improvements are presented separately from the related right-of-use assets, whereas amortization on the leasehold improvements is recognized on a straight-line basis and is included under depreciation and amortization in the consolidated statements of comprehensive income (loss). (Note 1(k)).

Sale and Leaseback transactions: In accordance with ASC 842, the Company, as seller-lessee, determines whether the transfer of an asset should be accounted as a sale in accordance with ASC 606. The existence of an option for the seller-lessee to repurchase the asset precludes the accounting for the transfer of the asset as a sale unless both of the following criteria are met: (1) the exercise price of the option is the fair value of the asset at the time the option is exercised and (2) there are alternative assets, substantially the same as the transferred asset, readily available in the marketplace; and the classification of the leaseback as a finance lease or a sales-type lease, precludes the buyer-lessor from obtaining control of the asset. The existence of an obligation for the Company, as seller-lessee, to repurchase the asset precludes accounting for the transfer of the asset as sale as the transaction would be classified as a financing arrangement by the Company as it effectively retains control of the underlying asset. If the transfer of the asset meets the criteria of sale, the Company, as seller-lessee recognizes the proceeds from the sale when the buyer-lessor obtains control of the asset, derecognizes the carrying amount of the underlying asset and accounts for the lease in accordance with ASC 842. If the transfer does not meet the criteria of sale, the Company does not derecognize the transferred asset, accounts for any amounts received as a financing arrangement and recognizes the difference between the amount of consideration received and the amount of consideration to be paid as interest.

The Company has five sale and leaseback transactions accounted for as operating leases, two accounted for as finance leases and one accounted for as a financing arrangement as of December 31, 2022 (Note 3 & 6).

 

(n)	Accounting for Revenues and Expenses: Voyage revenues are generated from voyage charter agreements and contracts of affreightment, bareboat charter, time charter agreements (including profit sharing clauses) or pooling arrangements.

 

F-16

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

Voyage charters and contracts of affreightment: Voyage charters are contracts made in the spot market for the use of a vessel for a specific voyage in return of payment of an agreed upon freight rate per ton of cargo. Contracts of affreightment are contracts for multiple voyage charter employments. Revenues from voyage charters in the spot market or under contracts of affreightment are recognized ratably from commencement of cargo loading to completion of discharge of the current cargo, in accordance with ASC 606. Voyage charter payments are due upon discharge of the cargo. Revenues from voyage charters and contracts of affreightment amounted to $405,104, $255,017 and $259,015 for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022 and 2021, receivables from voyage charters and contracts of affreightment amounted to $50,653 and $20,633 respectively, the majority of them collected upon completion of the voyage.

Demurrage revenue, which is included in voyage revenues, represents charterers’ reimbursement for any potential delays exceeding the allowed lay time as per charter party agreement and is recognized as the performance obligation is satisfied.

Time, bareboat charters and pooling arrangements: For time charters and bareboat arrangements, a contract exists, and the vessel is delivered (commencement date) to the charterer, for a fixed period of time, at rates that are determined in the charter agreement and the relevant voyage expenses (i.e. port dues, canal tolls, pilotages and fuel consumption) burden the charterer. The charterer has the right, upon delivery of the vessel, to control the use of the vessel as it has the right to: (i) decide the (re)delivery time of the vessel; (ii) arrange the ports from which the vessel shall pass; (iii) give directions to the master of the vessel regarding the vessel’s operations (i.e. speed, route, bunkers purchases, etc.); (iv) sub-charter the vessel and (v) consume any income deriving from the vessel’s charter.

Thus, time and bareboat charter agreements are accounted as operating leases (Company acts as lessor), ratably on a straight line over the duration of the charter agreement and therefore, fall under the scope of ASC 842.

For vessels operating in pooling arrangements, the Company earns a portion of the generated total revenues, net of expenses incurred by the pool. Revenues and voyage expenses are pooled and allocated to each pool’s participants on a time charter equivalent, or TCE basis, in accordance with an agreed-upon formula, which is determined by points awarded to each vessel in the pool based on the vessel’s age, design and other performance characteristics. Revenue under pooling arrangements is accounted as a variable rate operating leases, falling under the scope of ASC 842 and is recognized for the applicable period, when the collectability is reasonably assured, based on the net revenue distributed by the pool.

The charterer may charter the vessel with or without the owner’s crew and other operating services (time charter/pooling arrangements, and bareboat charter, respectively). Thus, the agreed daily rates (hire rates) in the case of time charter agreements and pooling arrangements also include compensation for part of the agreed crew and other operating services provided by the owner (non-lease components). The Company has elected to account for the lease and non-lease components of time charter agreements and pooling arrangements as a combined component in its consolidated financial statements, having taken into account that the non-lease component would be accounted for ratably on a straight-line basis over the duration of the time charter and pooling arrangements in accordance with ASC 606 and that the lease component is considered as the predominant component. In this respect, the Company qualitatively assessed that more value is ascribed to the vessel rather than to the services provided under the time charter agreements and pooling arrangements.

 

F-17

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

Profit sharing contracts are accounted as variable consideration and included in the transaction price to the extent that variable amounts earned beyond an agreed fixed minimum hire are determinable at the reporting date and when there is no uncertainty associated with the variable consideration. Profit-sharing revenues are calculated at an agreed percentage of the excess of the charter’s average daily income over an agreed amount.

Revenue from time charter hire arrangements with an escalation clause is recognized on a straight-line basis over the charter term unless another systematic and rational basis is more representative of the time pattern in which the vessel is employed.

Revenues from time, bareboat and pooling charter arrangements amounted to $455,296, $291,103 and $385,120 for the years ended December 31, 2022, 2021 and 2020, respectively.

Revenues generated from time charter and bareboat charters are usually collected in advance.

In the event of an incident involving one of the Company’s vessels and where the loss of hire is insurable, the recovery is recorded when such loss of hire is probable and collectability is reasonably assured within the terms of the relevant policy. During 2022, the Company incurred insurance recoveries amounting to $4,424 from loss of hire recorded in its consolidated statements of comprehensive income (loss).

Voyage related and vessel operating expenses: Voyage expenses primarily consist of port charges, canal dues and bunker (fuel) costs relating to spot charters or contract of affreightment. These voyage expenses are borne by the Company unless the vessel is on time-charter, in which case they are borne by the charterer. Commissions (i.e. brokerage and address) are included in voyage expenses under all types of employment. All voyage expenses are expensed as incurred, apart from bunker expenses which consist of part of the contract fulfillment costs and are recognized as a deferred contract cost and amortized over the voyage period when the relevant criteria under ASC 340-40 are met. Unamortized deferred contract costs are included in the consolidated balance sheet under Capitalized voyage expenses. Costs amortized during the year ended December 31, 2022, to fulfill contracts were $8,126. Commissions are expensed as incurred. Vessel operating costs include crew costs, insurances, repairs and maintenance, spares, stores, lubricants, quality and safety costs and other expenses such as tonnage tax, registration fees and communication costs, as well as foreign currency gains or losses. All vessel operating expenses are expensed as incurred. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation. Upon adoption of ASC 842, the Company made an accounting policy election to not recognize contract fulfillment costs for time charters under ASC 340-40. At December 31, 2022 and 2021, receivables from voyage related and operating reimbursable expenses amounted to $2,844 and $2,527, respectively, the majority of them collected upon completion of the voyage.

The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets, net of any deductible amounts, at the time the recovery is probable under the related insurance policies and the claim is not subject to litigation. During 2022, the Company incurred insurance recoveries amounting to $7,378 from damages to fixed assets recorded in its consolidated statements of comprehensive income (loss).

Unearned revenue: Unearned revenue represents cash received prior to the year-end for which related service has not been provided. It primarily relates to charter hire paid in advance at the amount of $13,574 and to revenue resulting from charter agreements with varying rates at the amount of $12,475 as at December 31, 2022.

 

F-18

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

Customers’ concentration: Voyage revenues for 2022, 2021 and 2020 included revenues derived from significant charterers as follows (in percentages of total voyage revenues):

 

Charterer		2022		2021		2020
A		13%		14%		12%
B		8%		11%		9%
C		8%		8%		9%

 

(o)

Segment Reporting: The Company does not evaluate the operating results by type of vessel or by type of charter or by type of cargo. Although operating results may be identified by type of vessel, management, including the chief operating decision maker, reviews operating results primarily by revenue per day and operating results of the fleet. The Company operates three LNG carriers which meet the quantitative thresholds used to determine reportable segments. The chief operating decision maker does not review the operating results of these vessels separately or make any decisions about resources to be allocated to these vessels or assess their performance separately; therefore, the LNG carriers do not constitute a separate reportable segment. The Company’s vessels operate on many trade routes throughout the world and, therefore, the provision of geographic information is considered impracticable by management. For the above reasons, the Company has determined that it operates in one reportable segment, the worldwide maritime transportation of liquid energy related products.

 

(p)

Derivative Financial Instruments: The Company regularly enters into interest rate swap contracts to manage its exposure to fluctuations of interest rates associated with its specific borrowings. Also, the Company enters into bunker swap contracts and put or call options to manage its exposure to fluctuations of bunker prices associated with the consumption of bunkers by its vessels. Interest rate and bunker price differentials paid or received under the swap agreements are recognized as part of Interest and finance costs, net. On the inception of a put or call option on bunkers an asset or liability is recognized. The subsequent changes in its fair value and realized payments or receipts upon exercise of the options are recognized in the consolidated statement of comprehensive income (loss) as part of the interest and finance costs, net. All derivatives are recognized in the consolidated financial statements at their fair value. On the inception date of the derivative contract, the Company evaluates the derivative as an accounting hedge of the variability of cash flow to be paid of a forecasted transaction (“cash flow” hedge). Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in other comprehensive income (loss) until earnings are affected by the forecasted transaction. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in earnings in the period in which those fair value changes occur. Realized gains or losses on early termination of undesignated derivative instruments are also classified in earnings in the period of termination of the respective derivative instrument.

The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges of the variable cash flows of a forecasted transaction to a specific forecasted transaction. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively. In accordance with ASC 815 “Derivatives and Hedging,” the Company may prospectively discontinue the hedge accounting for an existing hedge if the applicable criteria are no longer met, the derivative instrument expires, is sold, terminated or exercised or if the Company removes the designation of the respective cash flow hedge.

 

F-19

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

In those circumstances, the net gain or loss remains in accumulated other comprehensive income (loss) and is reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings, unless the forecasted transaction is no longer probable in which case the net gain or loss is reclassified into earnings immediately.

As of December 31, 2022, the Company has elected one of the optional expedients provided in the ASU 2020-04 Reference Rate Reform and its update, that allows an entity to assert that a hedged forecasted transaction referencing LIBOR or another eligible reference rate remains probable of occurring, regardless of the modification or expected modification to the terms of the hedged item to replace the reference rate. The Company applied the accounting relief as relevant contract and hedge accounting relationship modifications were made during the reference rate reform transition period.

 

(q)

Fair Value Measurements: The Company follows the provisions of ASC 820, “Fair Value Measurements and Disclosures” which defines fair value and provides guidance as to the measure assets, liabilities and equity instruments classified in stockholders’ equity. The guidance creates a fair value hierarchy of measurement and describes fair value as the price that would be received to sell an asset or paid to transfer a liability or the consideration to transfer equity interests issued in an orderly transaction between market participants in the market in which the reporting entity transacts.

In accordance with the requirements of accounting guidance relating to Fair Value Measurements and Disclosures, the Company classifies and discloses its assets, liabilities carried at the fair value in one of the following categories (Note 14): Level 1: Quoted market prices in active markets for identical assets or liabilities or equity instruments; Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data; Level 3: Unobservable inputs that are not corroborated by market data.

 

(r)

Going concern: The Company evaluates whether there is substantial doubt about its ability to continue as a going concern by applying the provisions of ASC 205-40. In more detail, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the consolidated financial statements are issued. As part of such evaluation, the Company did not identify any conditions that raise substantial doubt about the entity’s ability to continue as a going concern. Accordingly, the Company continues to adopt the going concern basis in preparing its consolidated financial statements.

 

(s)

Treasury stock: Treasury stock is stock that is repurchased by the issuing entity, reducing the number of outstanding shares in the open market. When shares are repurchased, they may either be cancelled or held for reissue. If not cancelled, such shares are referred to as treasury stock. Treasury stock is essentially the same as unissued capital and reduces ordinary share capital. The cost of the acquired shares should generally be shown as a deduction from stockholders’ equity. Dividends on such shares held in the entity’s treasury should not be reflected as income and not shown as a reduction in equity. Gains and losses on sales of treasury stock should be accounted for as adjustments to stockholders’ equity and not as part of income. Depending on whether the shares are acquired for reissuance or retirement, treasury stock is accounted for under the cost method or the constructive retirement method. The cost method is also used, when reporting entity management has not made decisions as to whether the reacquired shares will be retired, held indefinitely or reissued. The Company has elected for the repurchase of its common shares to be accounted for under the cost method. Under this method, the treasury stock account is charged for the aggregate cost of shares reacquired.

 

(t)	Accounting for transactions under common control: Common control transaction is any transfer of net assets or exchange of equity interests between entities or businesses that are under common control by an

 

F-20

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

ultimate parent or controlling shareholder before and after the transaction. Common control transactions may have characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations because, from the perspective of the ultimate parent or controlling shareholder, there has not been a change in control over the acquiree. Due to the fact common control transactions do not result in a change in control at the ultimate parent or controlling shareholder level, the Company does not account for such transactions at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred.

 

(u)

Earnings (Loss) Per Share Attributable to Common Stockholders: The Company computes earnings (loss) per share using the two-class method required for participating securities. The two-class method requires income available to common stockholders for the period to be allocated between common shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The Company’s Series G Convertible Preferred Shares (Note 8) are participating securities. Any remaining earnings would be distributed to the holders of common shares and the holders of the Series G Convertible Preferred Shares on a pro-rata basis assuming conversion of all Series G Convertible Preferred Shares into common shares. In September 2022, the holders of Series G Preferred Shares exercised their option to convert Series G Preferred Shares to common shares and proceeded to the conversion of all outstanding 459,286 Series G Preferred Shares into 306,190 common shares. As of December 31, 2022 there were no outstanding Series G Preferred Shares (459,286 shares outstanding as of December 31, 2021). This participating security does not contractually require the holders of such shares to participate in the Company’s losses. As such, net losses for the periods presented were not allocated to the Company’s participating security.

New Accounting Pronouncements—Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. An entity may elect certain optional expedients for hedging relationships that exist as of December 31, 2022 and maintain those optional expedients through the end of the hedging relationship. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848). The amendments in this Update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this Update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this Update apply to all entities that elect to apply the optional guidance in Topic 848. ASU 2020-04 and ASU 2021-01 could be adopted as of March 12, 2020, through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, Deferral of the Sunset Date of Reference Rate Reform (Topic 848). Topic 848 as mentioned above provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU deferred the sunset date of Topic 848 from December 31, 2022, to December 31, 2024. The Company has not yet elected any other optional expedients provided in the standard except for the one described in Note 1(p) and will continue to evaluate the potential impact of adopting these expedients on its consolidated financial statements.

 

F-21

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

2.	Transactions with Related Parties

 

(a)

Tsakos Energy Management Limited (the “Management Company”): The Holding Company has a Management Agreement (“Management Agreement”) with the Management Company, a Liberian corporation, to provide overall executive and commercial management of its affairs for a monthly fee, which may be adjusted per the Management Agreement of March 8, 2007, effective from January 1, 2008, at the beginning of each year, in accordance with the terms of the Management Agreement, if both parties agree.

On January 1, 2020, the monthly fees for operating conventional vessels were $27.5, for the suezmax Eurochampion 2004, the aframaxes Maria Princess and Sapporo Princess, the VLCCs Ulysses, Hercules I, which are managed by a third-party manager, amounted to $27.7, for chartered in vessels or chartered out on a bare-boat basis and for vessels under construction monthly fees were $20.4, $35.0 for the DP2 shuttle tankers, while the monthly fees for LNG carriers, Neo Energy and Maria Energy amounted to $37.3.

On January 1, 2021, monthly fees for operating conventional vessels were $27.5, for the suezmax Eurochampion 2004, the aframaxes Maria Princess and Sapporo Princess, the VLCCs Ulysses, Hercules I, which are managed by a third-party manager, amounted to $28.0, for chartered in vessels or chartered out on a bare-boat basis and for vessels under construction monthly fees were $20.4, $35.0 for the DP2 shuttle tankers, while the monthly fees for LNG carriers, Neo Energy and Maria Energy amounted to $37.8.

On January 1, 2022, monthly fees for operating conventional vessels were $27.5, for the suezmax Eurochampion 2004, the aframaxes Maria Princess and Sapporo Princess, the VLCCs Ulysses, Hercules I, which are managed by a third-party manager, amounted to $28.6, for third-party managed vessels, the handymaxes Afrodite and Ariadne, were $27.5, for chartered in vessels or chartered out on a bare-boat basis and for vessels under construction monthly fees were $20.4, $35.0 for the DP2 shuttle tankers, while the monthly fees for LNG carriers, Neo Energy and Maria Energy were $38.9 and $30.8 for the LNG carrier Tenergy (since delivery January 12, 2022). From May 1, 2022, monthly fees increased to $28.5 for all conventional vessels, for third-party managed vessels, the suezmax Eurochampion 2004, the aframaxes Maria Princess and Sapporo Princess, the VLCCs Ulysses, Hercules I increased to $29.1, for the handymaxes Afrodite and Ariadne remained at $27.5, for the suezmax tanker Decathlon $28.5 (from August 1, 2022). For chartered in vessels or chartered out on a bare-boat basis and for vessels under construction, monthly fees increased to $21.0, $36.0 for the DP2 shuttle tankers, while the monthly fees for LNG carriers, Neo Energy and Maria Energy increased to $42.4 and $34.3 for the LNG carrier Tenergy.

The Management Company, for services rendered, charged $20,228, $20,203 and $20,271 for the years ended December 31, 2022, 2021 and 2020, respectively. Management fees for vessels are included in the General and Administrative Expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss).

In addition to the Management fee, the Management Agreement provides for an incentive award to the Management Company, which is at the absolute discretion of the Holding Company’s Board of Directors. For the years ended December 31, 2022, 2021 and 2020, an award of $1,000, $500 and $1,500, respectively, was granted to the Management Company and is included in the General and Administrative expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss). In addition, a special award of $1,500 was paid to the Management Company in relation to newbuilding program in 2020 which has been included as an additional newbuilding cost in 2020 in the accompanying consolidated financial statements.

The Holding Company and the Management Company have certain officers and directors in common. The President, who is also the Chief Executive Officer and a Director of the Holding Company, is also the sole stockholder of the Management Company. The Management Company may unilaterally terminate its Management Agreement with the Holding Company at any time upon one year’s notice.

 

F-22

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

In addition, if even one director is elected to the Holding Company without the recommendation of the existing Board of Directors, the Holding Company would be obligated to pay the Management Company an amount calculated in accordance with the terms of the Management Agreement. Under the terms of the Management Agreement between the Holding Company and the Management Company, the Holding Company may terminate the Management Agreement only under specific circumstances, without the prior approval of the Holding Company’s Board of Directors.

Estimated future management fees payable over the next ten years under the Management Agreement, exclusive of any incentive awards and based on existing vessels and known vessels scheduled for future delivery as at December 31, 2022, are $22,047 for 2023, $22,362 for 2024, $22,038 for 2025, $21,624 for 2026, $21,282 for 2027 and $88,683 from 2028 to 2032.

Also, under the terms of the Management Agreement, the Management Company provides supervisory services for the construction of new vessels for a monthly fee of $20.4 in 2021, 2020 and until April 30, 2022. From May 1, 2022, monthly fee amounts to $21.0. These fees in total amounted to $1,107, $530 and $740 for the years ended December 31, 2022, 2021 and 2020, respectively and are either accounted for as part of construction costs for delivered vessels or are included in Advances for vessels under construction. At December 31, 2022, the amount due to the Management Company was $165 ($12 due from the Management Company at December 31, 2021).

 

(b)

Tsakos Columbia Shipmanagement S.A. (“TCM”): The Management Company appointed TCM to provide technical management to the Company’s vessels from July 1, 2010. TCM is owned jointly and in equal part by related party interests and by a private German Group. TCM, with the consent of the Holding Company, may subcontract all or part of the technical management of any vessel to an alternative unrelated technical manager.

Effective July 1, 2010, the Management Company, at its own expense, pays technical management fees to TCM, and the Company bears and pays directly to TCM most of its operating expenses, including repairs and maintenance, provisioning and crewing of the Company’s vessels, as well as certain charges which are capitalized or deferred, including reimbursement of the costs of TCM personnel sent overseas to supervise repairs and perform inspections on the Company’s vessels. TCM for services rendered charged $1,947, $2,186 and $1,327 for the years ended December 31, 2022, 2021 and 2020, respectively.

At December 31, 2022, the amount due from TCM was $8,889 ($14,595 at December 31, 2021), relating to vessel operating expenses to be incurred in the following month.

In February 2023, Tsakos Shipping and Trading S.A. (Note 2(c)) assumed all technical management responsibilities for all vessels under the TCM structure. The changeover was seamless with no delays for TEN vessels and the Company’s clients.

TCM has a 25% share in a manning agency, located in the Philippines, named TCM Tsakos Maritime Philippines (TMPI), which provides crew to certain of the Company’s vessels. The Company has no control or ownership directly in TCM Tsakos Maritime Philippines, nor had any direct transactions to date with the agency.

 

(c)

Tsakos Shipping and Trading S.A. (“Tsakos Shipping”): Tsakos Shipping provides chartering services for the Company’s vessels by communicating with third party brokers to solicit research and propose charters. For this service, the Company pays Tsakos Shipping a chartering commission of approximately 1.25% on all freights, hires and demurrages. Such commissions are included in Voyage expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss). Tsakos Shipping also provides sale and

 

F-23

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

purchase of vessels brokerage service. In 2022, 2021 and 2020, Tsakos Shipping charged a brokerage commission of $326 for the sale of the aframax tanker Proteas and the panamax tanker Inca, $96 for the sale of the panamax tanker Maya and $245 for the sale of the suezmax tanker Silia T. and the handysize tanker Didimon, respectively, representing 1.0% of the sale price of each vessel. Tsakos Shipping may also charge a fee of $200 (or such other sum as may be agreed) on delivery of each newbuilding vessel in payment for the cost of design and supervision of the newbuilding by Tsakos Shipping. In 2020, $1.0 million in aggregate was charged for supervision fees on four vessels. In 2021 and 2022, no such fee was charged. All commissions are paid in the ordinary course of the Company’s business and at terms standard to industry practice.

Certain members of the Tsakos family are involved in the decision-making processes of Tsakos Shipping and of the Management Company and are also shareholders of the Holding Company.

Tsakos Shipping for services rendered charged $10,684, $6,821 and $8,060 for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, the amount due to Tsakos Shipping was $3,217 ($1,439 at December 31, 2021). At December 31, 2022, an amount of $506 ($338 at December 31, 2021) is also due to Tsakos Shipping, included in accrued liabilities, which relates to services rendered but not yet invoiced.

 

(d)

Argosy Insurance Company Limited (“Argosy”): The Company places its hull and machinery insurance, increased value insurance, war risk insurance and certain other insurance through Argosy, a captive insurance company affiliated with Tsakos Shipping. Argosy, for services rendered, charged $10,965, $10,002 and $9,480 for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, the amount due to Argosy was $3,569 ($5,805 at December 31, 2021). At December 31, 2022, an amount of $259 ($1 at December 31, 2021) is also due to Argosy, included in accrued liabilities, which relates to services rendered but not yet invoiced.

 

(e)	AirMania Travel S.A. (“AirMania”): Apart from third-party agents, the Company also uses an affiliated company, AirMania, for travel services. AirMania, for services rendered, charged $6,437, $5,098, and $4,380 for the years ended December 31, 2022, 2021 and 2020, respectively.

At December 31, 2022, the amount due to AirMania was $488 ($503 at December 31, 2021).

 

3.	Right-of-use assets and lease liabilities

Operating leases

On January 9, 2020, the Company commenced a new five-year sale and leaseback agreement for each of the two suezmaxes, Archangel and Alaska. The agreed net sale price was $61,070. Under these leaseback agreements, there is a seller’s credit of $11,800 on the sales price that becomes immediately payable to the Company by the owners at the end of the five-year charter or upon sale of the vessels during the charter period. As of December 31, 2022, the Company has classified the seller’s credit, as long-term receivable amounting to $11,190. In accordance with ASC 842 and the package of practical expedients, the Company accounts for the transaction as an operating lease.

On December 21, 2020, the Company commenced a new five-year sale and leaseback agreement for the aframax, Sakura Princess. The agreed net sale price was $24,527. Under this leaseback agreement, there is a seller’s credit of $4,425 on the sales price that becomes immediately payable to the Company by the owners at the end of the five-year charter or upon sale of the vessel during the charter period. As of December 31, 2022, the Company has classified the seller’s credit, as long-term receivable amounting to $4,271. In accordance with ASC 842 and the package of practical expedients, the Company accounts for the transaction as an operating lease.

 

F-24

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

Upon execution of the sale and leaseback of the aframax tanker, Sakura Princess, the Company recognized a financial liability amounting to $5,148, being the difference between the sale price of the asset and its fair value, as per ASC 842-40.

On June 21, 2021, the Company commenced a new five-year sale and leaseback agreement for each of the two suezmaxes, Arctic and Antarctic. The agreed net sale price was $52,304. Under these leaseback agreements, there is a seller’s credit of $8,415 on the sales price that becomes immediately payable to the Company by the owners at the end of the five-year charter or upon sale of the vessel during the charter period. As of December 31, 2022, the Company has classified the seller’s credit, as long-term receivable amounting to $7,846. In accordance with ASC 842 and the package of practical expedients, the Company accounts for the transaction as an operating lease. The sale resulted in a loss of $1,696 in aggregate for both suezmaxes, which is included in Loss on sale of vessels in the accompanying Consolidated Statement of Comprehensive Income (Loss).

At December 31, 2022 and 2021, the Company has assessed the recoverability of the seller’s credits, considering the impairment indicators present, resulting in no impairment charge.

As at December 31, 2022, the Company recognized on its consolidated balance sheet a right-of-use assets under operating leases of $31,701 for the two suezmaxes Arctic and Antarctic, $8,560 for the aframax tanker Sakura Princess and $18,445 for the two suezmaxes Archangel and Alaska, equal to the corresponding obligation under operating leases based on the present value of the future minimum lease payments, for each of the five right-of-use assets, respectively. The Company has not incurred any initial direct costs for the sale and leaseback transactions and has not performed any payments prior to the commencement date of the contracts. The leaseback agreements include option periods, which are not recognized as part of the right-of-use assets and the obligation under operating leases.

The incremental borrowing rate used to determine the obligations under operating leases was 3.59% for the sale and leaseback agreement for each of the two suezmaxes, Archangel and Alaska, 2.54% for the sale and leaseback agreement of the aframax, Sakura Princess and 2.98% for the sale and leaseback agreement for each of the two suezmaxes Arctic and Antarctic and the respective weighted average remaining lease term was 2.02, 2.98 and 3.49 years, respectively, as at December 31, 2022 and 3.02, 3.97 and 4.49 years, respectively, as at December 31, 2021. As at December 31, 2022 and 2021, both the right-of use assets and the corresponding obligation under operating leases were $58,706 (current portion $21,737 and non-current portion $36,969) and $88,573 (current portion $29,749 and non-current portion $58,824), respectively. The financial liability recognized for aframax Sakura Princess was $3,195 (current portion $1,031 and non-current portion $2,164) as of December 31, 2022, and $4,193 (current portion $997 and non-current portion $3,196) as of December 31, 2021.

 

Year		Lease Commitment
2023		$	25,922
2024			25,958
2025			15,332
2026			4,991
Minimum net lease payments		$	72,203
Less: Present value discount			(10,302	)
Total Obligations under operating leases and financial liability (current and non-current portion)		$	61,901

 

F-25

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

The Company has subleased all five vessels and recognized sublease revenue, net of voyage expenses of $54,877, for the year ended 2022, and seven vessels that the Company has recognized sublease revenue, net of voyage expenses of $16,202, and $29,355 for the years ended December 31, 2021 and 2020, respectively.

Finance leases

On December 21, 2017, the Company commenced a five-year sale and leaseback agreement for each of the two suezmaxes, Eurochampion 2004 and Euronike. The agreed net sale price was $65,200. Under these leaseback agreements, there was a seller’s credit of $13,000 on the sales price that would become immediately payable to the Company by the owners at the end of the five-year charter or upon sale of the vessels during the charter period. At inception, the Company accounted the transaction as an operating lease and continued to do so following the adoption of ASC 842 and the package of practical expedients. On October 20, 2022, the Company signed an addendum in the bareboat agreement for each of the two suezmaxes, Eurochampion 2004 and Euronike, whereby had the option to extend the charter period for one year and add two purchase options to repurchase the vessels. In accordance with ASC 842, the Company accounted the transaction as a lease modification and upon reassessment of the classification of the lease, the Company has classified the above transaction as a finance lease, as of the effective date of the modification. In addition, as per ASC 842-10-25-11 the Company reallocated the remaining consideration in the contract and remeasured the lease liability using an updated incremental borrowing rate of 3.9%. The Company has applied the previous seller’s credit as a prepayment in accordance with the agreement as per which the amount of $13,000 shall be applied as partial payment to repurchase the vessels upon exercise of the repurchase options. The lease liability under finance leases as of October 20, 2022, amounted to $29,968. The corresponding right-of-use-assets were adjusted upon remeasurement of the lease liability to $42,968. The Company’s lease liability under finance leases was increased by $229 during the year ended December 31, 2022 presented in the Company’s consolidated statements of comprehensive income (loss) under interest and finance costs, while reduced by $2,164 to reflect the lease payments made during the period, resulting in a total amount of $28,033. The amount of the right-of-use-assets is amortized on a straight-line method based on the estimated remaining economic lives of the vessels and is presented in the Company’s consolidated statements of comprehensive income (loss) under depreciation and amortization. The Company’s right-of-use-assets were amortized by $1,116, resulting in a total amount of $41,851. The weighted average remaining lease term for each of the two suezmaxes, Eurochampion 2004 and Euronike was 0.05 years, as at December 31, 2022. During February 2023, the Company exercised one of the purchase options and repurchased both vessels at a purchase price of $13,750 each, net of the seller’s credit amount of $6,500 for each vessel.

The annual lease payments as at December 31, 2022 are as follows:

 

Year		Lease Commitment
2023		$	28,093
Minimum net lease payments		$	28,093
Less: Discounting effect			(60	)
Total Obligations under finance leases		$	28,033

Discounting effect represents estimated interest payments using incremental borrowing rate of 3.9%.

 

 

F-26

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

The Company has subleased both vessels, the amount of $17,916 and $4,407 was recognized as sublease revenue, net of voyage expenses for the operating lease period (January 1, 2022 until October 20,2022) and the finance lease period, respectively (October 20,2022 until December 31, 2022).

 

4.

Vessels

Acquisitions

On January 12, 2022, July 6, 2022, and October 10, 2022, the Company took delivery of the newbuilding LNG carrier Tenergy (Briety Shipping Inc.), the newbuilding DP2 Shuttle tanker Porto (Ostria Maritime Limited) and the VLCC carrier Dias I (Aquila Maritime Limited), respectively, for an aggregate cost of $384,574.

In 2021, there were no vessel acquisitions.

On January 7, 2020, September 21, 2020, and November 10, 2020, the Company took delivery of the newbuilding aframax tanker, Caribbean Voyager and the suezmax tankers, Apollo Voyager and Artemis Voyager, respectively, for an aggregate cost of $197,845.

Sales

In 2022, the Company sold its the aframax tanker, Proteas, and its panamax tanker, Inca, for net proceeds of $31,555, realizing a loss of $440. In 2021, the Company sold its panamax tanker Maya, for net proceeds of $9,336, realizing a loss of $4,121. In 2020, the Company sold its suezmax tanker, Silia T (previously classified as held for sale), its handysize vessel, Didimon, and its aframax tanker Sakura Princess, for net proceeds of $93,627 in total, realizing a total net loss of $6,451. The net losses from the sale of the vessels are separately reflected in the accompanying Consolidated Statements of Comprehensive Income (Loss).

Impairment

As of December 31, 2022, the Company reviewed the carrying amount including any unamortized dry-docking costs and leasehold improvements in connection with the estimated recoverable amount and the probability of sale for each of its vessels, vessels under construction and its right-of-use-assets under operating and finance leases. This review did not indicate an impairment of the carrying value of the Company’s vessels, vessels under construction, and right-of-use-assets under operating and finance leases. In 2021, there was an impairment charge of $86,368 relating to Aris, Ajax, Afrodite, Apollon, Artemis, Ariadne, and Proteas. In 2020, there was an impairment charge of $28,776 relating to Arctic, Antarctic, Izumo Princess and Sakura Princess. Impairment charges are separately reflected in the accompanying Consolidated Statements of Comprehensive Income (Loss).

 

5.	Deferred Charges and leasehold improvements

Deferred charges, consisting of dry-docking and special survey costs, net of accumulated amortization, amounted to $34,816 and $27,344 at December 31, 2022 and 2021, respectively. Leasehold improvements for the suezmaxes Eurochampion 2004, Euronike amounted to $450, for the suezmaxes Archangel, Alaska, Arctic, Antarctic and the aframax Sakura Princess amounted to $9,106, at December 31, 2022 ($2,857 for the suezmaxes Eurochampion 2004, Euronike and $4,096 for the suezmaxes Archangel, Alaska and Arctic, at December 31, 2021). Amortization of deferred dry-docking costs and of leasehold improvements is included in Depreciation and amortization in the accompanying Consolidated Statements of Comprehensive Income (Loss).

 

F-27

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

6.	Long –term debt and other financial liabilities

Long-term debt

Facility		2022				2021
Loans			1,417,341				1,380,648
Less: Deferred finance costs, net			(7,354	)			(7,461	)
Total long-term debt			1,409,987				1,373,187
Less: Current portion of debt			(194,353	)			(175,062	)
Add: Deferred finance costs, current portion			2,272				2,126
Long-term debt, net of current portion and deferred finance costs			1,217,906				1,200,251

Loan balances outstanding at December 31, 2022, amounted to $1,417,341. These bank loans are payable in U.S. Dollars in semi-annual installments with balloon payments mainly due at maturity between February 2023 and November 2030. Interest rates on the outstanding loans as at December 31, 2022, are based on London interbank offered rate (“LIBOR”) plus a spread, except of seven loan agreements based on SOFR.

On March 2, 2022, and July 1, 2022, the Company drew down the remaining total amount of $55,568 related to the seven-year loan agreement of $74,500, signed on May 31, 2021, for the pre-and post-delivery financing of the DP2 shuttle tanker, Porto. The loan is repayable in fourteen semi-annual installments of $2,087 commencing six months after the delivery of the vessel, plus a balloon of $45,282 payable together with the last installment.

On March 16, 2022, the Company signed a new five-year loan agreement amounting to $62,000 to refinance the existing loan for the suezmax tankers, Dimitris P and Spyros K and the aframax tanker, Uraga Princess. On March 17, 2022, the Company drew down the amount of $62,000 and prepaid the amount of $47,730. The new loan is repayable in ten semi-annual installments of $2,750, commencing six months after the drawdown date, plus a balloon of $34,500 payable together with the last installment.

On March 31, 2022, the Company signed a new six-year loan agreement amounting to $67,500 to refinance the existing loan for the DP2 shuttle tanker, Brasil 2014. On April 4, 2022, the Company drew down the amount of $67,500 and prepaid the amount of $54,117. The new loan is repayable in twelve semi-annual installments of $4,500, commencing six months after the drawdown date, plus a balloon of $13,500 payable together with the last installment.

On April 20, 2022, the Company prepaid the amount of $12,695 to the lender due to sale of its aframax tanker, Proteas.

On May 13, 2022, the Company signed a new five-year loan agreement amounting to $25,200 relating to the refinancing of the suezmax tanker, Euro. On May 13, 2022, the Company drew down the amount of $25,200 and prepaid the amount of $21,683 on May 16, 2022. The new loan is repayable in ten semi-annual installments of $1,505, commencing six months after the drawdown date, plus a balloon of $10,150 payable together with the last installment.

On August 17, 2022, the Company prepaid the amount of $3,301 to the lender due to sale of its panamax tanker, Inca.

 

F-28

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

On September 5, 2022, the Company signed a new six-year loan agreement amounting to $67,500 relating to the refinancing of the DP2 shuttle tanker, Rio 2016. On September 7, 2022, the Company drew down the amount of $67,500 and prepaid the amount of $48,046. The new loan is repayable in twelve semi-annual installments of $4,500, commencing six months after the drawdown date, plus a balloon of $13,500 payable together with the last installment.

On September 15, 2022, the Company signed a new eight-year loan agreement amounting to $118,400 relating to pre- and post- financing of the two aframax tankers under construction Hull 5081 and Hull 5082. On October 27 and on December 14, 2022 the Company drew down the amount of $7,400 and $7,400, respectively. The new loan is repayable in sixteen semi-annual installments of $3,300, commencing six months after the drawdown date, plus a balloon of $65,600 payable together with the last installment.

On September 20, 2022, the Company signed a new eight-year loan agreement amounting to $118,400 relating to pre- and post- financing of the two aframax tankers under construction Hull 5083 and Hull 5084. On January 17 and on February 13, 2023 the Company drew down the amount of $7,400 and $7,400, respectively. The new loan is repayable in sixteen semi-annual installments of $3,289, commencing six months after the drawdown date, plus a balloon of $65,776 payable together with the last installment.

On September 30, 2022, the Company signed a new five-year loan agreement amounting to $42,000 relating to the refinancing of the panamax tanker, Sunrise and the suezmax tanker Pentathlon. On October 6, 2022, the Company drew down the amount of $42,000 and prepaid the amount of $38,315. The new loan is repayable in ten semi-annual installments of $2,721, commencing six months after the drawdown date, plus a balloon of $14,790 payable together with the last installment.

On October 28, 2022, the Company signed a new five-year loan agreement amounting to $189,000 relating to the refinancing of the LNG carrier, Maria Energy and the financing of the VLCC Dias I that was acquired during the fourth quarter of 2022. On November 8 and November 17, 2022, the Company drew down the amount of $89,347 and $99,653, respectively, and prepaid the amount of $87,306. The new loan is repayable in ten semi-annual installments of $5,906, commencing six months after the first drawdown date, plus a balloon of $129,940 payable together with the last installment.

On January 20, 2023, the Company signed a new five-year loan agreement amounting to $85,000 relating to the refinancing of the LNG carrier, Neo Energy, the handysize Andromeda and the suezmax tanker Decathlon. On January 30, 2023, the Company drew down the amount of $72,274 and prepaid the amount of $42,085 and repaid the amount of $24,000 on the same date. The new loan is repayable in ten semi-annual installments of $6,547.2, commencing six months after the first drawdown date, plus a balloon of $6,802 payable together with the last installment.

Upon sale of its six handymax vessels, Afrodite, Ajax, Apollon, Ariadne, Aris and Artemis during the first quarter of 2023, the Company prepaid the amount of $41,750 to the lender.

On February 17, 2023, the Company prepaid the amount of $6,815 to the lender due to sale of its handysize vessels, Arion and Amphitrite.

 

F-29

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

On March 29, 2023, the Company signed a new five-year loan agreement amounting to $72,150 relating to the refinancing of the aframax tankers, Sola TS and Oslo TS. On March 31, 2023, the Company drew down the amount of $72,150 and on March 31, 2023, and on April 3, 2023 prepaid the amounts of $25,973 and $25,650, respectively. The new loan is repayable in ten semi-annual installments of $3,006, commencing six months after the drawdown date, plus a balloon of $42,090 payable together with the last installment.

On March 31, 2023 the Company signed a new five-year loan agreement amounting to $70,000 relating to the refinancing of the aframax tankers, Marathon TS and Stavanger TS. The new loan is repayable in ten semi-annual installments of $2,850, commencing six months after the drawdown date, plus a balloon of $41,500 payable together with the last installment.

According to the debt extinguishment guidance of ASC 470-50 “Debt Modifications and Extinguishments”, the Company expenses any unamortized deferred financing costs on its prepaid loans (Note 7).

At December 31, 2022, interest rates on the bank loans ranged from 4.53% to 7.55%.

The weighted-average interest rates on all executed loans for the applicable periods were:

 

Year ended December 31, 2022			3.91	%
Year ended December 31, 2021			2.02	%
Year ended December 31, 2020			2.88	%

 

F-30

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

STATEMENTS DECEMBER 31, 2022, 2021 AND 2020—(Continued)

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

 

Loan movements throughout 2022:

 

Loan		Origination Date				Original Amount				Balance at January 1, 2022				New Loans				Prepaid				Repaid				Balance at December 31, 2022
8-year term loan			2011				73,600				54,453				—				48,046				6,407				—
6-year term loan			2014				193,239				28,447				—				—				2,474				25,973
8-year term loan			2014				39,954				34,911				—				—				2,589				32,322
7-year term loan			2015				35,190				24,193				—				21,993				2,200				—
7-year term loan			2015				39,900				18,136				—				16,322				1,814				—
7-year term loan			2015				44,800				27,200				—				—				3,200				24,000
12-year term loan			2016				309,824				187,929				—				87,306				21,501				79,122
71/2-year term loan			2017				85,000				62,333				—				—				5,667				56,666
6-year term loan			2018				80,000				54,117				—				54,117				—				—
5-year term loan			2018				44,000				21,683				—				21,683				—				—
8-year term loan			2018				82,752				74,707				—				—				4,597				70,110
5-year term loan			2018				62,500				47,500				—				—				6,000				41,500
6-year term loan			2019				88,150				52,088				—				47,730				4,358				—
5-year term loan			2019				38,250				20,013				—				3,301				5,168				11,544
4-year term loan			2019				26,000				15,600				—				—				2,600				13,000
7-year term loan			2019				56,352				53,534				—				—				2,818				50,716
10-year term loan			2019				54,387				51,180				—				—				3,011				48,169
7-year term loan			2019				72,000				62,400				—				—				4,800				57,600
5-year term loan			2019				71,036				59,531				—				—				5,082				54,449
5-year term loan			2019				36,000				31,200				—				—				2,400				28,800
5-year term loan			2019				35,000				28,636				—				—				3,182				25,454
5-year term loan			2020				16,800				12,285				—				—				2,730				9,555
2-year term loan			2020				27,750				27,750				—				27,750				—				—
5-year term loan			2020				70,000				56,088				—				—				11,217				44,871
5-year term loan			2020				40,000				36,069				—				—				2,487				33,582
6-year term loan			2020				37,500				34,473				—				—				2,652				31,821
5-year term loan			2020				47,000				36,400				—				—				9,100				27,300
5-year term loan			2021				44,500				36,409				—				—				8,091				28,318
5-year term loan			2021				26,000				26,000				—				—				2,000				24,000
4-year term loan			2021				38,000				38,000				—				12,695				2,331				22,974
4-year term loan			2021				48,750				48,750				—				—				7,000				41,750
7-year term loan			2021				74,500				18,633				55,867				—				—				74,500
5-year term loan			2022				62,000				—				62,000				—				2,750				59,250
6-year term loan			2022				67,500				—				67,500				—				4,500				63,000
5-year term loan			2022				25,200				—				25,200				—				1,505				23,695
8-year term loan			2022				14,800				—				14,800				—				—				14,800
5-year term loan			2022				42,000				—				42,000				—				—				42,000
6-year term loan			2022				67,500				—				67,500				—				—				67,500
5-year term loan			2022				189,000				—				189,000				—				—				189,000
Total											1,380,648				523,867				340,943				146,231				1,417,341

The above term bank loans are secured by first priority mortgages on all vessels owned by the Company’s subsidiaries, by assignments of earnings and insurances of the respectively mortgaged vessels, and by corporate guarantees of the relevant ship-owning subsidiaries and in certain cases of the Holding Company as well.

 

F-31