International Seaways(INSW)

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International Seaways(INSW) - 2021 Q2 - Quarterly Report
2021-08-09 12:02
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-37836-1 INTERNATIONAL SEAWAYS, INC. | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- ...
International Seaways(INSW) - 2021 Q1 - Earnings Call Transcript
2021-05-09 17:01
International Seaways, Inc. (NYSE:INSW) Q1 2021 Earnings Conference Call May 6, 2021 10:00 AM ET Company Participants James Small - Chief Administrative Officer and General Counsel Lois Zabrocky - President and CEO Jeff Pribor - Senior Vice President, Chief Financial Officer and Treasurer Bill Nugent - Vice President and Head, Ship Operations Conference Call Participants Liam Burke - B. Riley FBR Omar Nokta - Clarksons Platou Securities Randy Giveans - Jefferies Magnus Fyhr - H.C. Wainwright Greg Lewis - BT ...
International Seaways(INSW) - 2021 Q1 - Quarterly Report
2021-05-06 12:01
[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company reported a significant downturn in Q1 2021, with a net loss of $13.4 million compared to a net income of $33.0 million in Q1 2020, primarily driven by a 63% decrease in shipping revenues [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The financial statements for Q1 2021 reflect a significant decline in performance, with sharp falls in shipping revenues, a net loss, negative operating cash flow, and a slight contraction in the balance sheet Condensed Consolidated Statement of Operations Highlights (Q1 2021 vs Q1 2020) | Metric | Q1 2021 ($ thousands) | Q1 2020 ($ thousands) | | :--- | :--- | :--- | | Shipping Revenues | $46,756 | $125,337 | | (Loss)/income from vessel operations | $(11,845) | $53,349 | | Net (loss)/income | $(13,365) | $33,019 | | Diluted net (loss)/income per share | $(0.48) | $1.12 | Condensed Consolidated Balance Sheet Highlights (as of Mar 31, 2021 vs Dec 31, 2020) | Metric | Mar 31, 2021 ($ thousands) | Dec 31, 2020 ($ thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $156,178 | $199,390 | | Total Assets | $1,552,052 | $1,586,539 | | Total Liabilities | $584,289 | $614,497 | | Total Equity | $967,763 | $972,042 | Condensed Consolidated Statement of Cash Flows Highlights (Q1 2021 vs Q1 2020) | Metric | Q1 2021 ($ thousands) | Q1 2020 ($ thousands) | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | $(21,006) | $38,318 | | Net cash used in investing activities | $(3,417) | $(15,157) | | Net cash used in financing activities | $(18,853) | $(63,077) | | Net decrease in cash, cash equivalents and restricted cash | $(43,276) | $(39,916) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate actions including a proposed merger with Diamond S Shipping, commitments for new dual-fuel VLCCs, debt structure, covenant compliance, and shareholder activities - On March 30, 2021, INSW entered into a merger agreement with Diamond S Shipping Inc. The transaction is expected to close in Q3 2021 and will be treated as an asset acquisition. INSW shareholders will own approximately **55.75%** of the combined company[19](index=19&type=chunk)[20](index=20&type=chunk)[25](index=25&type=chunk) - The company entered into agreements to construct three dual-fuel LNG VLCCs for approximately **$290 million**, with delivery scheduled for Q1 2023. These vessels will be employed on seven-year time charters with Shell[42](index=42&type=chunk) - As of March 31, 2021, the company was in compliance with all debt covenants. However, it warns that a forecasted decline in TCE rates could cause a breach of the Interest Coverage Ratio covenant by the end of **Q3 2021**[59](index=59&type=chunk)[66](index=66&type=chunk) - The Board of Directors declared a regular quarterly cash dividend of **$0.06 per share**, totaling **$1.7 million**, which was paid in March 2021[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the significant Q1 2021 performance decline to a weak tanker market, impacting both Crude and Product carrier segments, while pursuing strategic growth and maintaining liquidity despite potential debt covenant risks - The company's TCE revenues are predominantly from the spot market, which constituted **69%** of total TCE revenues in Q1 2021, a decrease from **93%** in Q1 2020, reflecting a strategy to lock in some vessels on time charters[115](index=115&type=chunk) - Crude tanker rates remained under pressure in Q1 2021, with all tanker types operating at or below industry average cash breakeven levels on benchmark routes[125](index=125&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2021 ($ thousands) | Q1 2020 ($ thousands) | | :--- | :--- | :--- | | Net (loss)/income | $(13,365) | $33,019 | | EBITDA | $10,669 | $63,295 | | Adjusted EBITDA | $10,680 | $74,216 | [Results of Operations by Segment](index=42&type=section&id=Results%20of%20Operations%20by%20Segment) Both operating segments experienced significant declines in TCE revenue and average daily rates in Q1 2021 due to the weak market, with Crude Tankers falling 60% and Product Carriers 70% Segment TCE Revenue Performance ($ thousands) | Segment | Q1 2021 TCE Revenue | Q1 2020 TCE Revenue | % Change | | :--- | :--- | :--- | :--- | | Crude Tankers | $35,950 | $88,854 | -60% | | Product Carriers | $9,219 | $30,877 | -70% | Segment Average Daily TCE Rate | Segment | Q1 2021 ($/day) | Q1 2020 ($/day) | | :--- | :--- | :--- | | Crude Tankers | $18,258 | $43,663 | | Product Carriers | $10,720 | $26,873 | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, the company maintained $212.4 million in liquidity, committed to newbuild VLCCs, paid dividends, and warned of a potential debt covenant breach in Q3 2021 - Total liquidity as of March 31, 2021 was **$212.4 million**, comprised of **$172.4 million** of cash (including **$16.2 million** restricted) and **$40.0 million** of undrawn revolver capacity[164](index=164&type=chunk) - The company has commitments of approximately **$290 million** for three new dual-fuel LNG VLCCs, which will be funded through a combination of long-term financing (commitment for ~85% secured) and available liquidity[170](index=170&type=chunk) - The company warns that the forecasted decline in TCE rates could cause a breach of the Interest Coverage Ratio covenant under its main credit facilities at the end of **Q3 2021**[176](index=176&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of **March 31, 2021**[189](index=189&type=chunk) - No material changes in internal control over financial reporting occurred during the first quarter of 2021[190](index=190&type=chunk) [PART II - OTHER INFORMATION](index=53&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to various legal suits arising in the ordinary course of business, which management deems not material to its financial position and are largely covered by insurance - The company is involved in various lawsuits in the ordinary course of business, which management does not consider to be material to its financial position, results, or cash flows[103](index=103&type=chunk)[192](index=192&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) The company directs investors to review the comprehensive risk factors detailed in its 2020 Annual Report on Form 10-K and the S-4 registration statement related to the proposed Diamond S Shipping merger - For a detailed discussion of risks, the report refers to the company's **2020 Form 10-K** and the **Form S-4** registration statement related to the Diamond S merger[194](index=194&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2021, the company did not repurchase shares under its stock repurchase program, with the only repurchases being shares withheld from management for tax liabilities upon restricted stock unit vesting - No shares were acquired under the company's stock repurchase program during **Q1 2021**[81](index=81&type=chunk)[195](index=195&type=chunk) - The company repurchased **22,830 shares** from management members to cover withholding taxes related to the vesting of restricted stock units[80](index=80&type=chunk)
International Seaways(INSW) - 2020 Q4 - Earnings Call Presentation
2021-03-12 19:44
International Seaways, Inc. Fourth Quarter 2020 Earnings Presentation March 12, 2021 INSTED NYSE Disclaimer Forward-Looking Statements During the course of this presentation, the Company (International Seaways, Inc. (INSW)) may make forward-looking statements or provide forward-looking information. All statements other than statements of historical facts should be considered forward-looking statements. Some of these statements include words such as ''outlook,'' ''believe,'' ''expect,'' ''potential,'' ''cont ...
International Seaways(INSW) - 2020 Q4 - Earnings Call Transcript
2021-03-12 18:39
International Seaways, Inc. (NYSE:INSW) Q4 2020 Results Earnings Conference Call March 12, 2021 9:00 AM ET Company Participants James Small - Chief Administrative Officer and General Counsel Lois Zabrocky - President and CEO Jeff Pribor - Senior Vice President, Chief Financial Officer and Treasurer Bill Nugent - Vice President and Head, Ship Operations Conference Call Participants Liam Burke - B. Riley FBR Omar Nokta - Clarksons Platou Securities Randy Giveans - Jefferies Ben Nolan - Stifel Greg Lewis - BTI ...
International Seaways(INSW) - 2020 Q4 - Annual Report
2021-03-12 13:17
Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from __________ to __________. Commission File Number 1-378 ...
International Seaways(INSW) - 2020 Q3 - Quarterly Report
2020-11-06 13:19
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-37836-1 INTERNATIONAL SEAWAYS, INC. (Exact name of registrant as specified in its charter) | Marshall Islands | 98-0467117 | ...
International Seaways(INSW) - 2020 Q2 - Quarterly Report
2020-08-07 12:23
[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a significant profit turnaround in H1 2020 driven by increased shipping revenues Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$1,758,956** | **$1,753,501** | | Cash and cash equivalents | $128,063 | $89,671 | | Vessels and other property, net | $1,287,478 | $1,292,516 | | **Total Liabilities** | **$686,903** | **$731,208** | | Long-term debt | $523,414 | $590,745 | | **Total Equity** | **$1,072,053** | **$1,022,293** | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Shipping Revenues | $265,062 | $170,884 | | Income from vessel operations | $121,241 | $11,390 | | **Net Income/(Loss)** | **$97,377** | **($5,626)** | | Basic Net Income/(Loss) per Share | $3.37 | ($0.19) | | Diluted Net Income/(Loss) per Share | $3.35 | ($0.19) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$127,690** | **$43,778** | | Net cash (used in)/provided by investing activities | ($27,765) | $9,139 | | Net cash used in financing activities | ($105,707) | ($20,269) | | Net (decrease)/increase in cash | ($5,782) | $32,648 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment performance, debt refinancing, and other key financial events - The company adopted ASC 326 (Financial Instruments – Credit Losses) on January 1, 2020, which did not have a material impact on the consolidated financial statements[26](index=26&type=chunk) - As of June 30, 2020, the company had a **50% interest in two joint ventures** (TI Africa and TI Asia) operating two Floating Storage and Offloading (FSO) vessels[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - The company recorded a pre-tax **impairment charge of $5.5 million** on a 2002-built VLCC vessel during the second quarter of 2020[43](index=43&type=chunk)[61](index=61&type=chunk) - In January 2020, the company completed a major refinancing, entering into **$390 million of new secured debt facilities**[65](index=65&type=chunk)[69](index=69&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(MD&A)) Management discusses strong H1 2020 results from a favorable tanker market and key strategic financial actions [Operations and Oil Tanker Markets](index=44&type=section&id=Operations%20and%20Oil%20Tanker%20Markets) Q2 2020 saw strong tanker rates due to oil oversupply and floating storage demand, which later declined - Global oil consumption in Q2 2020 was estimated at 82.9 million b/d, a **16.5% decrease from Q2 2019**, due to the impact of COVID-19[136](index=136&type=chunk) - Crude tanker rates in Q2 2020 were initially strong due to a breakdown of OPEC/Russia production cuts and a strong contango market driving demand for floating storage[145](index=145&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) TCE revenues surged 117% in Q2 2020, driving a significant increase in income from vessel operations TCE Revenue Performance (in thousands) | Metric | Q2 2020 | Q2 2019 | Change | | :--- | :--- | :--- | :--- | | Total TCE Revenues | $135,289 | $62,487 | +117% | | Crude Tankers TCE | $105,890 | $45,653 | +132% | | Product Carriers TCE | $29,399 | $16,834 | +75% | Crude Tankers Average Daily TCE Rate | Vessel Type | Q2 2020 Spot Rate | Q2 2019 Spot Rate | | :--- | :--- | :--- | | VLCC | $71,747 | $20,038 | | Suezmax | $48,989 | $20,772 | | Aframax | $30,559 | $13,540 | - Equity in income of affiliated companies decreased to $5.2 million in Q2 2020 from $8.0 million in Q2 2019, primarily due to the sale of the company's interest in an LNG joint venture[178](index=178&type=chunk) - Interest expense **decreased by $8.5 million** in Q2 2020 compared to Q2 2019, a result of lower average debt balances and lower average LIBOR rates[181](index=181&type=chunk) [EBITDA and Adjusted EBITDA](index=51&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) Adjusted EBITDA increased substantially to $96.3 million in Q2 2020, reflecting strong operational performance Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net income/(loss) | $64,358 | ($16,523) | | EBITDA | $92,120 | $19,738 | | **Adjusted EBITDA** | **$96,275** | **$21,286** | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity, executed a major debt refinancing, and completed its share repurchase program - As of June 30, 2020, the company had **total liquidity of $184.5 million**, comprising cash and undrawn revolver capacity[190](index=190&type=chunk) - The January 2020 debt refinancing is expected to **reduce annual cash interest expense by approximately $15.0 million**[199](index=199&type=chunk) - The company completed its **$30.0 million stock repurchase program** in H1 2020 and the Board authorized a new $30.0 million program in August 2020[206](index=206&type=chunk) - The company has aggregate purchase commitments of approximately **$13.1 million for vessel betterments**, including scrubbers and ballast water treatment systems[210](index=210&type=chunk)[221](index=221&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company actively manages interest rate risk using derivative instruments and is prepared for the LIBOR transition - In January 2020, the company converted a $350 million notional interest rate collar into an amortizing **$250 million notional interest rate swap**, fixing the rate at 1.97%[224](index=224&type=chunk) - In April 2020, the company entered into a new **$25 million notional interest rate swap**, fixing the rate at 0.50% through January 2025[225](index=225&type=chunk) - The company believes its debt and derivative agreements have adequate provisions to address the **discontinuation of LIBOR after 2021**[227](index=227&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective - Management concluded that **disclosure controls and procedures were effective** as of June 30, 2020[232](index=232&type=chunk) - **No material changes** to internal control over financial reporting were identified during the three months ended June 30, 2020[233](index=233&type=chunk) [Part II - Other Information](index=58&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) Wrongful death lawsuits from a 2017 incident were dismissed, with no other material legal proceedings noted - Wrongful death lawsuits related to a 2017 Galveston accident were **dismissed with prejudice** against the company's subsidiary on May 14, 2020[120](index=120&type=chunk)[235](index=235&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from previous disclosures in the 2019 Form 10-K and Q1 2020 10-Q - There have been **no material changes in risk factors** from those previously disclosed in the 2019 Form 10-K and the Q1 2020 Form 10-Q[238](index=238&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company completed its $30 million stock repurchase program during the second quarter of 2020 - In Q2 2020, the company repurchased 926,700 shares of its common stock for $20.0 million, **completing its $30 million stock repurchase program**[239](index=239&type=chunk)
International Seaways(INSW) - 2020 Q1 - Quarterly Report
2020-05-07 12:16
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1‑37836‑1 INTERNATIONAL SEAWAYS, INC. (Exact name of registrant as specified in its charter) | Marshall Islands | 98‑0467117 | | - ...
International Seaways(INSW) - 2019 Q4 - Annual Report
2020-03-03 13:18
PART I This section details the company's business operations, strategic initiatives, fleet composition, regulatory environment, and key risks in the shipping industry [Business](index=14&type=section&id=Item%201.%20Business) International Seaways, Inc. provides global crude oil and petroleum product transportation, focusing on fleet management, financial optimization, and ESG initiatives [Our Business](index=14&type=section&id=Our%20Business) The company operates a fleet of vessels for crude oil and petroleum product transportation, utilizing both spot and time charters - International Seaways, Inc. owns and operates a fleet of oceangoing vessels for the transportation of crude oil and petroleum products in the International Flag trade, organized into two segments: Crude Tankers and Product Carriers[57](index=57&type=chunk) Fleet Summary as of December 31, 2019 | Vessel Type | Number of Vessels | Total DWT | | :--- | :--- | :--- | | **Crude Tankers** | 27 | 5,317,275 | | **Product Carriers** | 13 | 835,648 | | **JV Vessels (FSO)** | 2 | 864,046 | | **Total Operating Fleet** | **42** | **7,016,969** | - The company charters its vessels through a mix of specific voyages at spot rates (primarily via commercial pools) and for fixed periods through time or bareboat charters, providing a blend of market volatility exposure and predictable revenue streams[58](index=58&type=chunk) [2019 in Review](index=14&type=section&id=2019%20in%20Review) The company significantly improved financial performance in 2019, driven by strategic asset sales and debt refinancing Key Financial Performance (2019 vs. 2018) | Metric | 2019 ($ thousands) | 2018 ($ thousands) | | :--- | :--- | :--- | | Shipping Revenues | 366,184 | 270,361 | | TCE Revenues | 339,919 | 243,100 | | Income/(Loss) from Vessel Operations | 55,168 | (54,531) | | Adjusted EBITDA | 164,669 | 68,295 | - Key strategic achievements in 2019 included selling its 49.9% ownership in an LNG Joint Venture, which facilitated the prepayment of **$110 million** on its 2017 Term Loan Facility[62](index=62&type=chunk) - The company secured commitments for new senior secured credit facilities totaling **$390 million** (the "2020 Debt Facilities") to refinance higher-cost debt, which is expected to reduce annual interest expense by approximately **$15 million**[63](index=63&type=chunk)[65](index=65&type=chunk) [Our Strategy](index=16&type=section&id=Our%20Strategy) The company aims to maximize shareholder value through active fleet management, strategic transactions, and ESG commitment - The company's primary objectives include maximizing stockholder value by blending spot market exposure through commercial pools with selective time charters, actively managing fleet size, and entering value-creating transactions[66](index=66&type=chunk)[67](index=67&type=chunk) - A key strategy is to actively manage the fleet through opportunistic and accretive acquisitions and dispositions to renew the fleet and maximize return on capital over market cycles[70](index=70&type=chunk) - The company is committed to ESG principles, including reducing its carbon footprint. It has implemented a data analytics platform that resulted in a **26,000-ton reduction in CO2 emissions** and included a sustainability-linked pricing mechanism in its 2020 Debt Facilities tied to CO2 emission reductions[74](index=74&type=chunk)[75](index=75&type=chunk) [Fleet Operations](index=20&type=section&id=Fleet%20Operations) The company operates crude and product tanker segments, primarily deploying its fleet in the spot market via commercial pools Fleet Composition (as of Dec 31, 2019) | Vessel Class | Vessels Owned | Vessels Chartered-in | Total | | :--- | :--- | :--- | :--- | | **Crude Tankers** | | | | | VLCC | 13 | 0 | 13 | | Suezmax | 2 | 0 | 2 | | Aframax | 3 | 2 | 5 | | Panamax | 7 | 0 | 7 | | **Product Carriers** | | | | | LR2 | 1 | 0 | 1 | | LR1 | 4 | 1 | 5 | | MR | 4 | 3 | 7 | | **Total** | **34** | **6** | **40** | - The company operates two reportable segments: Crude Tankers (VLCCs, Suezmaxes, Aframaxes, Panamaxes) and Product Carriers (MRs, LR1s, LR2s). The Crude Tankers segment also includes a significant ship-to-ship lightering business in the U.S. Gulf[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - The majority of the fleet is deployed in the spot market through third-party managed commercial pools, such as Tankers International (TI) for VLCCs and Clean Products Tankers Alliance (CPTA) for MRs, to enhance utilization and TCE revenues[87](index=87&type=chunk)[92](index=92&type=chunk)[95](index=95&type=chunk) - The company has a **50% interest** in an FSO Joint Venture, which operates two FSO vessels under 5-year service contracts with North Oil Company in Qatar, expiring in 2022[101](index=101&type=chunk) [Employees](index=28&type=section&id=Employees) As of December 31, 2019, the company employed approximately 1,666 individuals, primarily seafarers - As of December 31, 2019, the company had approximately **1,666 employees**, comprising **1,623 seafarers** and **43 shore-side staff**[106](index=106&type=chunk) [Competition](index=28&type=section&id=Competition) The shipping industry is highly competitive and fragmented, with the company holding a significant share in the U.S. Gulf lightering market - The shipping industry is highly competitive and fragmented. Competition is based on price, vessel quality, reliability, and operator reputation[107](index=107&type=chunk) - In the U.S. Gulf offshore lightering market, the company is one of three active full-service providers and held an approximate **30% market share** in 2019[108](index=108&type=chunk) [Environmental and Security Matters Relating to Bulk Shipping](index=28&type=section&id=Environmental%20and%20Security%20Matters%20Relating%20to%20Bulk%20Shipping) Operations are subject to extensive international and national environmental and security regulations, including IMO 2020 and OPA 90 - The company's operations are subject to extensive government regulation, including international conventions and laws regarding environmental protection and safety[109](index=109&type=chunk) - Key international regulations include the IMO's rules on greenhouse gas (GHG) emissions, the Ballast Water Management (BWM) Convention, and MARPOL Annex VI, which mandated a reduction in fuel sulfur content to **0.50%** from January 1, 2020 (IMO 2020)[114](index=114&type=chunk)[130](index=130&type=chunk)[134](index=134&type=chunk) - In the U.S., operations are primarily regulated by the Oil Pollution Act of 1990 (OPA 90) and CERCLA, which impose strict, and potentially unlimited, liability for oil spills and hazardous substance releases[143](index=143&type=chunk)[144](index=144&type=chunk) - Vessel security is governed by the International Ship and Port Facilities Security (ISPS) Code and the U.S. Maritime Transportation Security Act (MTSA), requiring approved vessel security plans[169](index=169&type=chunk)[170](index=170&type=chunk) [Inspection by Classification Societies](index=46&type=section&id=Inspection%20by%20Classification%20Societies) Vessels must maintain 'in class' certification through regular surveys, including annual, intermediate, and five-year special surveys - Every oceangoing vessel must be certified as "in class" by a Classification Society, signifying it meets specific rules for construction and maintenance[172](index=172&type=chunk) - To maintain class certification, vessels undergo regular surveys: Annual Surveys, Intermediate Surveys, and Class Renewal (Special) Surveys every five years, which often require drydocking[175](index=175&type=chunk)[179](index=179&type=chunk) [Insurance](index=46&type=section&id=Insurance) The company maintains comprehensive insurance coverage for its fleet, including P&I, hull and machinery, war risk, and loss of hire - The company carries protection and indemnity (P&I) insurance coverage for pollution of **$1.0 billion** per occurrence on every vessel in its fleet[178](index=178&type=chunk) - It also maintains marine hull and machinery and war risk insurance for all vessels, covering them up to at least their fair market value[180](index=180&type=chunk) - Loss of hire insurance is maintained to cover loss of charter income resulting from accidents or breakdowns, covering up to **120 days** of lost income per incident after a deductible period[182](index=182&type=chunk) [Taxation of the Company](index=48&type=section&id=Taxation%20of%20the%20Company) The company is exempt from Marshall Islands income tax and potentially U.S. federal income tax under Section 883 - INSW is incorporated in the Republic of the Marshall Islands and is not subject to income tax there[183](index=183&type=chunk) - In 2019, the company was exempt from U.S. federal income tax on its U.S. source shipping income under Section 883 of the Code. However, qualification for this exemption in future years is not guaranteed[186](index=186&type=chunk) - If the Section 883 exemption is not met, the company would be subject to a **4%** U.S. federal income tax on its U.S. source shipping income on a gross basis[186](index=186&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the cyclical shipping industry, operational hazards, substantial debt, and complex environmental and tax regulations - The highly cyclical nature of the tanker industry leads to volatile charter rates and vessel values, which could adversely affect earnings. The company derives a significant portion of its revenue from the spot market (**92% of TCE revenues** in 2019)[190](index=190&type=chunk) - The company has significant indebtedness (**$661 million** as of Dec 31, 2019), which could limit its operational flexibility and ability to finance its business. Credit facilities contain financial covenants, such as minimum liquidity and maximum leverage ratios, which if breached, could lead to debt acceleration[226](index=226&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) - Compliance with complex environmental laws, particularly those related to greenhouse gas emissions (IMO 2020), ballast water treatment, and oil spills (OPA 90), requires significant capital and operating expenditures and may adversely affect business[291](index=291&type=chunk)[292](index=292&type=chunk)[296](index=296&type=chunk) - The company faces risks related to the implementation of IMO 2020 regulations, including the costs and operational challenges of installing scrubbers on **ten VLCCs** and the uncertain price and availability of compliant low-sulfur fuel for the rest of the fleet[265](index=265&type=chunk)[266](index=266&type=chunk)[268](index=268&type=chunk) - There is a risk of being subject to U.S. federal income tax on U.S. source shipping income if the company fails to qualify for the Section 883 exemption, which depends on its stock being considered "publicly traded" and not closely held by **5% shareholders**[309](index=309&type=chunk) [Unresolved Staff Comments](index=87&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[319](index=319&type=chunk) [Properties](index=88&type=section&id=Item%202.%20Properties) The company's primary assets are its fleet of 40 vessels and two joint venture vessels, with its headquarters in leased office space - The company leases office space for its New York headquarters and does not own any production facilities, plants, or similar real properties[321](index=321&type=chunk) - As of December 31, 2019, the company's main assets are its fleet of **40 vessels** (including **six chartered-in**) and interests in **two additional JV vessels**[321](index=321&type=chunk) [Legal Proceedings](index=89&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 20, "Contingencies," in the consolidated financial statements - For information regarding legal proceedings, refer to Note 20, "Contingencies" to the Company's consolidated financial statements[321](index=321&type=chunk) [Mine Safety Disclosures](index=89&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[322](index=322&type=chunk) PART II This section covers the company's common stock market, selected financial data, management's discussion, and financial statements [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=89&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NYSE, with a declared dividend, an authorized stock repurchase program, and an 'at the market' offering program Quarterly Common Stock Price Range (2019) | Quarter | High ($) | Low ($) | | :--- | :--- | :--- | | First | 19.11 | 16.43 | | Second | 20.20 | 17.04 | | Third | 19.46 | 15.34 | | Fourth | 30.04 | 19.70 | - On February 26, 2020, the Board of Directors declared a quarterly dividend of **$0.06 per share**[325](index=325&type=chunk) - The company's **$30 million** stock repurchase program was reauthorized for a 24-month period ending March 5, 2021. No shares were repurchased under the program during 2019[328](index=328&type=chunk) [Selected Financial Data](index=93&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of key financial data, highlighting improved profitability in 2019 with a reduced net loss and increased Adjusted EBITDA Selected Financial Data (2017-2019) | Metric | 2019 ($ thousands) | 2018 ($ thousands) | 2017 ($ thousands) | | :--- | :--- | :--- | :--- | | Shipping revenues | 366,184 | 270,361 | 290,101 | | Income/(loss) from vessel operations | 55,168 | (54,531) | (107,945) | | Net (loss)/income | (830) | (88,940) | (106,088) | | Net cash provided by/(used in) operating activities | 87,486 | (12,480) | 17,395 | | Total assets | 1,753,501 | 1,848,601 | 1,664,484 | | Debt | 661,095 | 810,667 | 552,937 | | Total equity | 1,022,293 | 1,009,855 | 1,085,654 | Selected Non-GAAP Financial Data (2017-2019) | Metric | 2019 ($ thousands) | 2018 ($ thousands) | 2017 ($ thousands) | | :--- | :--- | :--- | :--- | | Time charter equivalent (TCE) revenues | 339,919 | 243,100 | 274,995 | | EBITDA | 141,091 | 43,614 | 14,056 | | Adjusted EBITDA | 164,669 | 68,295 | 117,775 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=97&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) INSW's 2019 financial performance improved significantly due to stronger tanker market conditions, increased TCE revenues, and strategic debt refinancing, enhancing liquidity - Income from vessel operations increased by **$109.7 million** to **$55.2 million** in 2019 from a loss of **$54.5 million** in 2018. This was primarily due to a **40% increase** in TCE revenues, which rose by **$96.8 million**[360](index=360&type=chunk)[361](index=361&type=chunk) - Crude Tanker TCE revenues increased by **48%** to **$259.5 million** in 2019, driven by significantly higher average daily rates, particularly for VLCCs, which saw spot earnings rise from **$18,881/day** in 2018 to **$31,726/day** in 2019[370](index=370&type=chunk) - Product Carrier TCE revenues increased by **19%** to **$80.4 million** in 2019, also due to higher average rates across its LR2, LR1, and MR fleets[379](index=379&type=chunk) - The company executed a major refinancing in January 2020, securing **$390 million** in new debt facilities. This was used to repay higher-cost debt and is anticipated to reduce annual cash interest expense by approximately **$15 million**[390](index=390&type=chunk)[417](index=417&type=chunk)[421](index=421&type=chunk) - As of December 31, 2019, the company had total liquidity of **$200.2 million**, comprising **$150.2 million** in cash (including restricted cash) and **$50 million** in undrawn revolver capacity[403](index=403&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=137&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the "Risk Management" and "Interest Rate Sensitivity" discussions within Item 7 for details on the company's market risk exposures, primarily related to interest rates - The company's disclosures about market risk are detailed in Item 7 under the headings "Risk Management" and "Interest Rate Sensitivity"[497](index=497&type=chunk) [Financial Statements and Supplementary Data](index=138&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2017-2019, including balance sheets, income statements, cash flows, and equity changes, with an unqualified audit opinion Consolidated Balance Sheet Highlights (as of Dec 31, 2019) | Account | Amount (in thousands) | | :--- | :--- | | **Assets** | | | Cash and cash equivalents | 89,671 | | Total Current Assets | 187,344 | | Vessels and other property, net | 1,292,516 | | **Total Assets** | **1,753,501** | | **Liabilities & Equity** | | | Current installments of long-term debt | 70,350 | | Long-term debt | 590,745 | | **Total Liabilities** | **731,208** | | **Total Equity** | **1,022,293** | Consolidated Statement of Operations Highlights (Year ended Dec 31, 2019) | Account | Amount (in thousands) | | :--- | :--- | | Shipping Revenues | 366,184 | | Total operating expenses | 311,016 | | Income from vessel operations | 55,168 | | Interest expense | (66,267) | | **Net loss** | **(830)** | | **Net loss per share (Basic & Diluted)** | **(0.03)** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=235&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[804](index=804&type=chunk) [Controls and Procedures](index=235&type=section&id=Item%209A.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[805](index=805&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019, which was audited by Ernst & Young LLP[807](index=807&type=chunk)[808](index=808&type=chunk) [Other Information](index=235&type=section&id=Item%209B.%20Other%20Information) This item reports no other information - None[809](index=809&type=chunk) PART III This section details the company's directors, executive compensation, security ownership, related party transactions, and accountant fees [Directors, Executive Officers and Corporate Governance](index=237&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details executive officers and corporate governance, including adopted policies, with further information incorporated from the 2020 Proxy Statement - Information regarding directors, executive officers, and corporate governance is provided, with most details incorporated by reference from the forthcoming 2020 Annual Meeting Proxy Statement[813](index=813&type=chunk)[828](index=828&type=chunk) - The company has adopted a Code of Business Conduct and Ethics, an Insider Trading Policy, and an Anti-Bribery and Corruption Policy, which are available on its website[823](index=823&type=chunk) [Executive Compensation](index=239&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item concerning executive compensation is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive Proxy Statement to be filed for the 2020 Annual Meeting of Stockholders[824](index=824&type=chunk)[828](index=828&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=240&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section presents equity compensation plan details and incorporates further security ownership information from the 2020 Proxy Statement Equity Compensation Plan Information (as of Dec 31, 2019) | Plan Category | Securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 538,632 | $19.25 | 319,907 | [Certain Relationships and Related Transactions, and Director Independence](index=240&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item concerning related party transactions and director independence is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive Proxy Statement to be filed for the 2020 Annual Meeting of Stockholders[827](index=827&type=chunk)[828](index=828&type=chunk) [Principal Accountant Fees and Services](index=240&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required for this item concerning principal accountant fees and services is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive Proxy Statement to be filed for the 2020 Annual Meeting of Stockholders[828](index=828&type=chunk) PART IV This section lists all exhibits and financial statement schedules filed as part of the Form 10-K [Exhibits, Financial Statement Schedules](index=241&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including material contracts and audit reports - Lists the consolidated financial statements of the company filed in response to Item 8[830](index=830&type=chunk) - Includes a comprehensive list of exhibits filed with the report, such as the Separation and Distribution Agreement, Articles of Incorporation, debt indentures, credit agreements, and management compensation plans[833](index=833&type=chunk) [Form 10-K Summary](index=249&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - None[841](index=841&type=chunk)