
Forward-Looking Information This report contains forward-looking statements about future operations, financial results, business strategy, and market trends, based on current estimates and assumptions, not guarantees of future performance - This report contains forward-looking statements regarding future operations, financial results, business strategy, and market trends, based on current estimates and assumptions, not guarantees of future performance14 - Key factors influencing actual results include charter rates, vessel values, oil supply and demand, geopolitical events, environmental regulations, financing availability, and interest rate fluctuations1516 - The company explicitly states it has no obligation to update or revise any forward-looking statements17 PART I Item 3. Key Information This section presents the company's financial capitalization as of December 31, 2024, and outlines significant risks across industry, business operations, management, and securities, including the cyclical tanker market, oil dependence, regulatory burdens, and financial leverage Capitalization Consolidated Capitalization as of December 31, 2024 | Metric | Amount (in thousands of U.S. Dollars) | | :--- | :--- | | Cash & Equivalents | | | Cash and cash equivalents | $343,373 | | Restricted cash | $4,939 | | Total cash | $348,312 | | Capitalization | | | Long-term secured debt obligations | $1,747,094 | | Total stockholders' equity | $1,767,197 | | Total capitalization | $3,514,291 | Risk Factors The company faces diverse risks across industry, business, management, securities, and tax, including the cyclical tanker market, dependence on charterers, operational hazards, regulatory compliance, key personnel reliance, share price volatility, and potential tax law changes or PFIC classification - Industry Risks: The tanker industry is cyclical, leading to volatile charter rates, with geopolitical events, protectionist trade measures, and oil supply/demand changes significantly impacting revenues and earnings293337 - Business Risks: Dependence on charterers' commitments, potential loan covenant breaches from declining vessel values, risks from newbuilding contracts, fuel price volatility, operational hazards, cybersecurity threats, and high financial leverage are key concerns287577 - Regulatory & Environmental Risks: Extensive environmental, health, and safety laws (e.g., MARPOL, EU ETS) necessitate significant expenditures, while increasing ESG scrutiny from investors and lenders may impose additional costs and risks626465 - Management & Shareholder Risks: Dependence on Tsakos Energy Management and Tsakos Shipping, significant influence from the Tsakos family's share ownership, and anti-takeover provisions in bylaws could deter beneficial acquisitions30116118 - Tax Risks: Changes in international tax laws (e.g., OECD global minimum tax, Bermuda's Corporate Income Tax Act 2023) could impact financial results, alongside the risk of PFIC classification leading to unfavorable U.S. tax treatment for U.S. investors145148152 Item 4. Information on the Company Tsakos Energy Navigation Limited provides international seaborne crude oil and petroleum product transportation, operating a modern, diversified fleet of 61 vessels as of April 4, 2025, with a strategy focused on long-term charters, operational efficiency through the Tsakos Group, and compliance with extensive regulations Business Overview and Fleet - As of April 4, 2025, the company operated 61 vessels, comprising 55 conventional tankers, 2 LNG carriers, and 4 DP2 suezmax shuttle tankers, with a total capacity of approximately 7.5 million dwt156 Operating Fleet Composition as of April 4, 2025 | Vessel Type | Number of Vessels | | :--- | :--- | | VLCC | 3 | | Suezmax | 12 | | Aframax | 25 | | Aframax LR2 | 2 | | Panamax LR1 | 9 | | Handysize MR1 | 4 | | LNG carrier | 2 | | Shuttle DP2 | 4 | | Total | 61 | - The fleet is relatively modern with an average age of 10.4 years as of April 4, 2025, and a significant newbuilding program of 21 vessels under construction, scheduled for delivery between 2025 and 202815989166 - The company's strategy emphasizes a modern, diversified fleet, revenue stability through long and medium-term charters, serving high-quality clientele, and leveraging its relationship with Tsakos Shipping & Trading S.A. (TST) for operational efficiency160162 Fleet Deployment and Management Fleet Employment Basis (% of Operating Days) | Employment Basis | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Time Charter—fixed rate | 55% | 46% | 37% | | Time Charter—variable rate and pool | 27% | 30% | 36% | | Period employment coa at variable rates | 2% | 1% | 2% | | Spot Voyage | 16% | 23% | 25% | - As of April 4, 2025, 82% of the fleet was employed at fixed rates (including time charters with profit sharing), aiming for stable income while retaining flexibility for favorable market trends167 - Tsakos Energy Management executes operations, subcontracting technical management to Tsakos Shipping and Trading S.A. (TST) for day-to-day vessel operations, maintenance, and crewing, with some vessels managed by third parties171174186 Regulation - The company's operations are significantly impacted by extensive international, national, and local regulations, primarily from the International Maritime Organization (IMO), the U.S., and the EU194 - Key IMO regulations include MARPOL Annex VI, mandating a global 0.5% sulfur cap on marine fuels, and setting GHG emission standards via the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII)204206 - In the U.S., the company is subject to the Oil Pollution Act of 1990 (OPA 90), establishing strict liability for oil spills, and the Clean Water Act (CWA), regulating ballast water and other discharges221230 - The EU has implemented its Monitoring, Reporting, and Verification (MRV) system for CO2 emissions and included maritime transport in the EU Emissions Trading System (ETS) from January 1, 2024, requiring companies to surrender allowances251257 Item 5. Operating and Financial Review and Prospects In 2024, geopolitical events positively impacted the healthy tanker market, despite softer rates, leading to a 9.6% decrease in voyage revenues to $804.1 million and net income falling to $176.2 million, while the company continued fleet expansion and maintained strong liquidity with $307.7 million net cash from operations Results of Operations - 2024 vs 2023 Key Financial Performance (2024 vs. 2023) | Metric | 2024 (million U.S. Dollars) | 2023 (million U.S. Dollars) | | :--- | :--- | :--- | | Voyage Revenues | $804.1 | $889.6 | | Operating Income | $278.6 | $391.5 | | Net Income (attributable to company) | $176.2 | $300.2 | | Earnings Per Share (basic & diluted) | $5.03 | $9.04 | Key Operational Metrics (2024 vs. 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Average number of vessels | 61.8 | 59.5 | | Fleet Utilization | 92.5% | 96.3% | | Average TCE per vessel per day | $32,550 | $36,822 | - The decrease in voyage revenue stemmed from softer market charter rates and lower fleet utilization due to a higher number of vessels undergoing scheduled dry-docking (fifteen in 2024 versus eight in 2023)381 - Operating expenses increased slightly by 1.6% to $198.0 million due to dry-docking, while general and administrative expenses rose 36.3% to $45.4 million, largely from an $8.1 million stock compensation expense absent in 2023322323 - The company recorded a net gain of $48.7 million on vessel sales in 2024 from five vessels, compared to an $81.2 million gain from eight vessels in 2023, with no impairment charge in 2024 versus a $26.4 million impairment in 2023405325 Liquidity and Capital Resources - Net cash provided by operating activities was $307.7 million in 2024, a decrease from $395.3 million in 2023, primarily due to lower market rates428 - Net cash used in investing activities totaled $441.6 million in 2024, primarily for vessel acquisitions and newbuilding payments ($645.3 million), partially offset by $228.4 million from vessel sales431 - Net cash provided by financing activities was $105.5 million in 2024, with $410.6 million drawn in new loans, $226.1 million of debt repaid, and $71.8 million in dividend payments to shareholders434436437 - Total debt outstanding increased to $1.76 billion at year-end 2024 from $1.57 billion at year-end 2023, resulting in a debt-to-capital ratio of 49.9% at December 31, 2024435446 Critical Accounting Estimates - Vessel impairment is a critical accounting estimate, with reviews conducted when indicators are present, comparing future undiscounted net operating cash flows to the vessel's carrying amount349 - Future cash flow projections rely on subjective assumptions for revenues (using 10-year historical averages for unfixed days), operating expenses, dry-docking costs, and scrap values, which may differ from actual results350 - As of December 31, 2024, the fleet's market value was $3.9 billion, exceeding its $3.0 billion carrying value, and despite one LNG carrier having a carrying value ($194.5 million) higher than its market value ($169.0 million), no impairment was recorded due to expected cash flows exceeding carrying value360 Item 6. Directors, Senior Management and Employees This section outlines the company's leadership, board structure, and compensation, noting a nine-member board with a majority of independent directors, key committees, executive compensation managed by Tsakos Energy Management, and the adoption of a new equity incentive plan in 2024 - The company is led by Founder and CEO Nikolas P. Tsakos and Chairman Efstratios Georgios (Takis) Arapoglou, with a nine-member board where a majority are independent under NYSE standards453467468 - The Board operates with four key committees: Audit; Corporate Governance, Nominating and Compensation; Business Development and Capital Markets; and Operational, Safety and Environmental (OSE)476 - In 2024, aggregate cash compensation for all board members was $685,000, with executive officers compensated by the management company, not directly by TEN, except for equity awards485488 - A new equity incentive plan (the "2024 Plan") was adopted, allowing grants of up to 1,000,000 common shares, with 625,000 restricted common shares granted in July 2024, leading to an $8.1 million stock-based compensation expense for the year493496 Item 7. Major Shareholders and Related Party Transactions The company conducts significant related-party transactions with Tsakos family-affiliated entities, including management fees, commissions, insurance premiums, and travel services, while Tsakos Group entities beneficially owned approximately 27.1% of outstanding common shares as of April 4, 2025 Charges by Related Parties (in thousands of U.S. dollars) | Party | Service | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Tsakos Shipping and Trading S.A. | Commissions & Special Charges | $13,047 | $13,077 | | Tsakos Energy Management Limited | Management Fees | $19,880 | $19,503 | | Argosy Insurance Company Limited | Insurance Premiums | $16,727 | $14,420 | | AirMania Travel S.A. | Travel Services | $7,027 | $6,589 | - As of April 4, 2025, Tsakos Group-affiliated entities, including the Tsakos Holdings Foundation, beneficially owned 8,166,208 common shares, representing approximately 27.1% of the outstanding shares116513 - The management agreement with Tsakos Energy Management has a ten-year annually renewing term, including a change of control provision that could result in an estimated $166.7 million termination payment as of December 31, 2024505 Item 8. Financial Information This section confirms financial statements in Item 18, notes no significant post-balance sheet changes, and outlines the company's intent to pay semi-annual common share dividends, subject to board discretion and covenants, with cumulative quarterly dividends on Series E and F Preferred Shares at fixed-to-floating rates - The company intends to pay semi-annual cash dividends on common shares, subject to board discretion and various financial and legal constraints519 - Dividends on Series E Preferred Shares are fixed at 9.25% per annum until May 28, 2027, then switch to a floating rate520 - Dividends on Series F Preferred Shares are fixed at 9.50% per annum until July 30, 2028, then switch to a floating rate521 - Dividend payment ability depends on subsidiary earnings and cash flow, and is restricted by certain bank loan covenants525526 Item 10. Additional Information This section details share capital, Bermuda corporate governance, and tax considerations, including 60 million authorized common shares and 25 million preferred shares, Bermuda law's impact on shareholder rights, anti-takeover provisions, and the company's Section 883 U.S. tax exemption alongside potential PFIC risks for U.S. shareholders Share Capital - Authorized share capital comprises 60,000,000 common shares ($5.00 par value) and 25,000,000 preferred shares ($1.00 par value)532 Shares Outstanding as of April 4, 2025 | Share Class | Shares Outstanding | | :--- | :--- | | Common Shares | 30,127,603 | | Series E Preferred Shares | 4,745,947 | | Series F Preferred Shares | 6,747,147 | Bermuda Law and Corporate Governance - The company is an exempted company under Bermuda's Companies Act 1981, with governance differing from U.S. corporate law537 - The company's bye-laws contain anti-takeover provisions, including a classified board and super-majority voting for certain business combinations with "interested persons" (owners of 15% or more)553554555 - Preferred shareholders possess limited voting rights, primarily triggered by six quarterly dividends in arrears, allowing them to elect one director to the board540 Tax Considerations - The company believes it is exempt from U.S. federal income tax on U.S.-source shipping income under Section 883 of the Internal Revenue Code by satisfying the "Publicly-Traded Test"576579 - If the Section 883 exemption is unavailable, U.S.-source shipping income would be subject to a 4% tax on a gross basis588 - There is a risk of PFIC classification, leading to adverse U.S. federal income tax consequences for U.S. shareholders, though the company does not believe it was a PFIC in 2024601603 - Bermuda's Corporate Income Tax Act 2023, effective January 1, 2025, is expected to apply, but the company anticipates no material tax liabilities due to its holding company status and exclusion of subsidiary dividend income566567 Item 11. Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from interest rate fluctuations, bunker price volatility, and foreign exchange rate changes, with a 0.25 percentage-point interest rate increase potentially raising annual payments by $4.4 million, managed through derivative contracts, and Euro-denominated expenses representing 24.3% of total costs in 2024 - The company faces interest rate risk on variable-rate debt, with a 0.25 percentage-point increase estimated to raise annual interest payments by $4.4 million based on December 31, 2024 debt levels628 - To manage risk, the company utilizes derivative contracts, including a floating-to-fixed interest rate swap with a $54.0 million notional amount at year-end 2024, and bunker and EUAs swap agreements to hedge against price fluctuations628633634 - The company has foreign exchange risk, with approximately 24.3% of 2024 vessel, voyage, and overhead expenditures denominated in Euros, where a 1% change in the Euro/U.S. dollar rate would impact vessel operating expenses by about 0.3%635 PART II Item 15. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2024, a conclusion attested by Ernst & Young (Hellas) - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024641 - Management's assessment determined that the company's internal control over financial reporting was effective as of December 31, 2024, based on the COSO 2013 framework645646 - Ernst & Young (Hellas), the independent registered public accounting firm, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting647687 Item 16. Various Governance and Disclosure Items This section details corporate governance and disclosure, including three "audit committee financial experts," a code of ethics, €724,500 in 2024 audit fees to Ernst & Young (Hellas), and a cybersecurity risk management strategy with no material impact from cyber threats to date - The Board of Directors has identified three members as "audit committee financial experts": Nicholas Tommasino, Efstratios Arapoglou, and Dennis Petropoulos649 - The company has adopted a code of ethics, an insider trading policy, and a cybersecurity risk management program650665666 Principal Accountant Fees (Ernst & Young (Hellas)) | Fee Type | 2024 | 2023 | | :--- | :--- | :--- | | Audit Fees | €724,500 | €693,000 | | Audit-Related Fees | €0 | €0 | | Tax Fees | €0 | €0 | | All Other Fees | €0 | €0 | - The company's cybersecurity governance involves the IT department, Management, and Audit Committee oversight, with no material impact from cyber threats to date669670 Item 18. Financial Statements Consolidated Financial Statements The consolidated financial statements present the company's financial position, operations, and cash flows for the three years ended December 31, 2024, showing total assets growing to $3.71 billion and total stockholders' equity increasing to $1.77 billion in 2024 Consolidated Balance Sheet Data (in thousands of U.S. Dollars) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $451,803 | $509,336 | | Vessels' Net Book Value | $2,919,783 | $2,600,021 | | Total Assets | $3,706,522 | $3,364,090 | | Total Current Liabilities | $408,519 | $323,202 | | Long-Term Debt & Other Financial Liabilities | $1,495,342 | $1,370,683 | | Total Liabilities | $1,939,325 | $1,711,443 | | Total Stockholders' Equity | $1,767,197 | $1,652,647 | Consolidated Statement of Comprehensive Income Data (in thousands of U.S. Dollars) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Voyage Revenues | $804,061 | $889,566 | $860,400 | | Total Expenses | $525,503 | $498,067 | $604,047 | | Operating Income | $278,558 | $391,499 | $256,353 | | Net Income | $181,630 | $305,084 | $208,466 | | Net Income attributable to TEN | $176,231 | $300,182 | $204,234 | Consolidated Statement of Cash Flows Data (in thousands of U.S. Dollars) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $307,684 | $395,279 | $288,529 | | Net Cash used in Investing Activities | ($441,606) | ($137,441) | ($301,814) | | Net Cash from (used in) Financing Activities | $105,540 | ($190,583) | $195,527 | | Net Change in Cash | ($28,382) | $67,255 | $182,242 | Notes to Consolidated Financial Statements The notes detail significant accounting policies, including revenue recognition, vessel impairment, and derivatives, alongside related-party transactions, debt covenants, lease obligations, and new vessel commitments, noting the 2024 adoption of an equity incentive plan with an $8.1 million stock-based compensation expense and no impairment charge in 2024 - The company's revenue recognition policy differentiates between voyage charters (recognized loading-to-discharge under ASC 606) and time/bareboat charters (accounted for as operating leases under ASC 842)741744 - As of December 31, 2024, the company had commitments for twelve vessels under construction with remaining payments totaling $725.7 million, scheduled between 2025 and 2028869 - The company's loan agreements include financial covenants such as maintaining minimum liquidity ($80.9 million at December 31, 2024), a maximum consolidated leverage ratio, and minimum hull value to loan ratios, with the company in compliance as of year-end832833 - In 2024, the company adopted the 2024 Equity Incentive Plan, granting 625,000 restricted shares and recognizing an $8.1 million stock-based compensation expense846847 - The company recognized a new liability of $12.9 million for European Union Allowances (EUAs) to be surrendered by September 2025 under the EU Emissions Trading System (ETS)756