International Seaways Inc

Previous wording

This Management’s Discussion and Analysis, which should be read in conjunction with our accompanying condensed consolidated financial statements and notes thereto, provides a discussion and analysis of our business, current developments, financial condition, cash flows and results of operations as of March 31, 2024 and for the three months ended March 31, 2024 and 2023. It is organized as follows:

Current wording

This Management’s Discussion and Analysis, which should be read in conjunction with our accompanying condensed consolidated financial statements and notes thereto, provides a discussion and analysis of our business, current developments, financial condition, cash flows and results of operations as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023. It is organized as follows:

Previous wording

We are a provider of ocean transportation services for crude oil and refined petroleum products. We operate our vessels in the International Flag market. Our business includes two reportable segments: Crude Tankers and Product Carriers. For both the three months ended March 31, 2024 and 2023, we derived 54% of our TCE revenues from our Product Carriers segment. Revenues from our Crude Tankers segment constituted the balance of our TCE revenues in the 2024 and 2023 periods.

Current wording

We are a provider of ocean transportation services for crude oil and refined petroleum products. We operate our vessels in the International Flag market. Our business includes two reportable segments: Crude Tankers and Product Carriers. For the three and six months ended June 30, 2024 we derived 52% and 53%, respectively, of our TCE revenues from our Product Carriers segment compared with 48% and 51% for the three and six months ended June 30, 2023, respectively. Revenues from our Crude Tankers segment constituted the balance of our TCE revenues in the 2024 and 2023 periods.

Previous wording

As of March 31, 2024, the Company’s operating fleet consisted of 73 wholly-owned or lease financed and time chartered-in vessels aggregating 8.8 million deadweight tons (“dwt”). In addition to our operating fleet of 73 vessels, six LR1 newbuilds are scheduled for delivery to the Company between the second half of 2025 and third quarter of 2026, bringing the total operating and newbuild fleet to 79 vessels. Our fleet includes VLCC, Suezmax and Aframax crude tankers and LR2, LR1 and MR product carriers.

Current wording

As of June 30, 2024, the Company’s operating fleet consisted of 77 wholly-owned or lease financed and time chartered-in vessels aggregating 9.0 million deadweight tons (“dwt”). In addition to our operating fleet of 77 vessels, six LR1 newbuilds are scheduled for delivery to the Company between the second half of 2025 and third quarter of 2026, bringing the total operating and newbuild fleet to 83 vessels. Our fleet includes VLCC, Suezmax and Aframax crude tankers and LR2, LR1 and MR product carriers.

Previous wording

three months ended March 31, 2024, compared with 96% for the three months ended March 30, 2023. The future minimum revenues, before reduction for brokerage commissions, expected to be received on non-cancelable time charters for three VLCCs, two Suezmaxes, one Aframax, and six MRs, as of March 31, 2024 are as follows:

Current wording

Our revenues are derived predominantly from spot market voyage charters and our vessels are predominantly employed in the spot market via market-leading commercial pools. We derived approximately 88% and 89% of our total TCE revenues in the spot market for the three and six months ended June 30, 2024, respectively, compared with 91% and 93% for the three and six months ended June 30, 2023, respectively. The future minimum revenues, before reduction for brokerage commissions, expected to be received on non-cancelable time charters for three VLCCs, two Suezmaxes, one Aframax, one LR2, and eight MRs, as of June 30, 2024 are as follows:

Previous wording

The International Energy Agency (“IEA”) estimates global oil consumption for the first quarter of 2024 at 102.0 million barrels per day (“b/d”), up 1.6% from the same quarter in 2023. The estimate for global oil consumption for 2024 is 103.2 million b/d, an increase of 1.2% over the 2023 estimate of 102.0 million b/d. OECD demand in 2024 is estimated to decrease 0.2% to 45.7 million b/d, while non-OECD demand is estimated to increase by 2.3% to 57.5 million b/d.

Current wording

The International Energy Agency (“IEA”) estimates global oil consumption for the second quarter of 2024 at 102.9 million barrels per day (“b/d”), up 0.7% from the same quarter in 2023. The estimate for global oil consumption for 2024 is 103.1 million b/d, an increase of 1.0% over the 2023 estimate of 102.1 million b/d. OECD demand in 2024 is estimated to decrease 0.2% to 45.6 million b/d, while non-OECD demand is estimated to increase by 2.0% to 57.5 million b/d.

Previous wording

Global oil production in the first quarter of 2024 was 101.3 million b/d, a decrease of 1.0 million b/d from the first quarter of 2023. OPEC crude oil production averaged 26.5 million b/d in the first quarter of 2024, a decrease of 0.2 million b/d from the fourth quarter of 2023, and a decrease of 2.3 million b/d from the first quarter of 2023. Non-OPEC production increased by 1.2 million b/d to 69.3 million b/d in the first quarter of 2024 compared with the first quarter of 2023. Oil production in the U.S. in the first quarter of 2024 decreased by 5.2% to 12.5 million b/d compared to the fourth quarter of 2023 and by 0.3% from the first quarter of 2023.

Current wording

Global oil production in the second quarter of 2024 was 102.2 million b/d, a decrease of 0.3 million b/d from the second quarter of 2023. OPEC crude oil production averaged 26.6 million b/d in the second quarter of 2024, the same level as the first quarter of 2024, and a decrease of 1.7 million b/d from the second quarter of 2023. Non-OPEC production increased by 1.4 million b/d to 70.1 million b/d in the second quarter of 2024 compared with the second quarter of 2023. Oil production in the U.S. in the second quarter of 2024 increased by 5.5% to 13.3 million b/d compared to the first quarter of 2024 and by 4.7% from the second quarter of 2023.

Previous wording

U.S. refinery throughput increased by 0.1 million b/d to 15.9 million b/d in the first quarter of 2024 compared with the fourth quarter of 2023. U.S. crude oil imports in the first quarter of 2024 increased by 0.4 million b/d to 6.6 million b/d compared with the first quarter of 2023, with imports from OPEC countries decreasing by 0.1 million b/d and imports from non-OPEC countries increasing by 0.5 million b/d.

Current wording

U.S. refinery throughput increased by 0.5 million b/d to 16.4 million b/d in the second quarter of 2024 compared with the first quarter of 2024. U.S. crude oil imports in the second quarter of 2024 increased by 0.4 million b/d to 6.6 million b/d compared with the second quarter of 2023, with imports from OPEC countries remaining flat and imports from non-OPEC countries increasing by 0.4 million b/d.

Previous wording

Total OECD commercial inventories ended the first quarter of 2024 down 41 million barrels of crude and 39 million barrels of products (3.0% and 2.7%, respectively), compared with the first quarter of 2023.

Current wording

Total OECD commercial inventories ended the second quarter of 2024 down 1.9% or 27 million barrels of crude, and up 1.8% or 26 million barrels of products, respectively, compared with the second quarter of 2023.

Previous wording

During the first quarter of 2024, the tanker fleet of vessels over 10,000 dwt increased, net of vessels recycled, by 1.9 million dwt as the crude fleet increased by 1.2 million dwt, all in the Aframax fleet. The product carrier fleet increased by 0.6 million dwt, with MRs growing 0.4 million dwt. Year-over-year, the size of the tanker fleet increased by 9.3 million dwt with the VLCCs, Suezmaxes, Aframaxes, and MRs increasing by 3.3 million dwt, 0.5 million dwt, 3.4 million dwt, and 2.1 million dwt, respectively. The LR1/Panamax fleet remained unchanged.

Current wording

During the second quarter of 2024, the tanker fleet of vessels over 10,000 dwt increased, net of vessels recycled, by 0.9 million dwt as the crude fleet increased by 0.5 million dwt, all in the Aframax fleet. The product carrier fleet increased by 0.4 million dwt, all in the MR fleet. Year-over-year, the size of the tanker fleet increased by 6.8 million dwt with the VLCCs, Suezmaxes, Aframaxes, and MRs increasing by 1.5 million dwt, 0.2 million dwt, 3.1 million dwt, and 2.1 million dwt, respectively. The LR1/Panamax fleet remained unchanged.

Previous wording

During the first quarter of 2024, the tanker orderbook increased by 11.9 million dwt overall compared with the fourth quarter of 2023. The crude tanker orderbook increased by 10.5 million dwt. The VLCC orderbook increased by 7.1 million dwt, while the Suezmax and Aframax orderbooks increased by 3.1 million dwt and 0.2 million dwt respectively. The product carrier orderbook increased by 1.4 million dwt, with increases in the LR1 and MR sectors of 0.2 million dwt and 1.3 million dwt respectively. Year-over-year, the total tanker orderbook increased by 33.2 million dwt, with increases in VLCC, Suezmaxes, Aframaxes, Panamaxes and LR1s of 8.8 million dwt, 10.5 million dwt, 6.3 million dwt, 2.2 million dwt and 5.3 million dwt, respectively.

Current wording

During the second quarter of 2024, the tanker orderbook increased by 8.4 million dwt overall compared with the first quarter of 2024. The crude tanker orderbook increased by 5.3 million dwt. The VLCC orderbook increased by 3.4 million dwt, while the Suezmax and Aframax orderbooks increased by 0.5 million dwt and 1.5 million dwt, respectively. The product carrier orderbook increased by 3.1 million dwt, with increases in the LR1 and MR sectors of 0.9 million dwt and 2.2 million dwt respectively. Year-over-year, the total tanker orderbook increased by 38.4 million dwt, with increases in VLCC, Suezmaxes, Aframaxes, Panamaxes and LR1s of 15.3 million dwt, 8.2 million dwt, 5.9 million dwt, 2.7 million dwt and 6.4 million dwt, respectively.

Previous wording

Crude tanker rates remained strong, albeit at similar levels as in the fourth quarter of 2023, remaining significantly over 10-year average rates and cash breakeven levels, reflecting the continuing impact of the disruptions in trade flows on tanker demand. Clean product tanker rates strengthened during the quarter. Subsequent to the end of the first quarter of 2024, rates have softened somewhat due to reduced Chinese imports of crude oil and reduced exports of clean products from the U.S. Gulf.

Current wording

Crude tanker rates remained strong in the second quarter of 2024, although VLCC rates were weaker than in the first quarter of 2024, a weakness that is persisting into the third quarter of 2024, on the back of reduced Chinese crude oil imports. Even so, current rates remain significantly over 10-year average rates and cash breakeven levels, reflecting the continuing impact of the disruptions in trade flows on tanker demand. Clean product tanker rates remained strong during the second quarter of 2024, and that strength continues into the third quarter of 2024.

Previous wording

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Company to make estimates in the application of its accounting policies based on the best assumptions, judgments and opinions of management. For a description of all of the Company’s material accounting policies, see Note 3, “Summary of Significant Accounting Policies,” to the Company’s consolidated financial statements as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K. See Note 2, “Significant Accounting Policies,” to the accompanying condensed consolidated financial statements for any changes or updates to the Company’s critical accounting policies for the current period.

Current wording

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Company to make estimates in the application of its accounting policies based on the best assumptions, judgments and opinions of management. For a description of all of the Company’s material accounting policies, see Note 3, “Summary of Significant Accounting Policies,” to the Company’s consolidated financial statements as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K. See Note 2, “Significant Accounting Policies,” to

Previous wording

TCE revenues in the first quarter of 2024 decreased by $12.4 million, or 4%, to $270.9 million from $283.3 million in the first quarter of 2023. This decrease reflects (i) an aggregate $20.2 million days-based decline in the LR1 and MR sectors due to a smaller time chartered-in LR1 portfolio during the current quarter and the sales of three MRs between March 2023 and December 2023, (ii) a net $7.4 million rates-based decrease resulting from lower average daily rates earned across all of INSW’s fleet sectors, with the exception of the MR and LR2 fleets, partially offset by (iii) a $11.2 million days-based increase in the VLCC fleet relating tothe delivery ofthree dual-fuel LNG VLCC newbuilds, and (iv) a $3.4 million increase attributable to the Company’s Lightering business.

Current wording

TCE revenues in the second quarter of 2024 decreased by $36.5 million, or 13%, to $251.8 million from $288.3 million in the second quarter of 2023. This decrease reflects (i) an aggregate $33.5 million rates-based decline resulting from lower average daily rates earned in each of INSW’s Crude tanker fleet sectors and the LR1 fleet, (ii) a $17.2 million days-based decline in the LR1 fleet due to a smaller time chartered-in portfolio and 131 more off-hire days during the current quarter, (iii) a $4.4 million days-based decrease due to increased Aframax off-hire days in the current period, partially offset by (iv) a $17.4 million aggregate rates-based increase in the MR and LR2 sectors, and (v) a $2.4 million increase attributable to the Company’s Lightering business.

Previous wording

During the first quarter of 2024, income from vessel operations decreased by $30.9 million to $154.4 million from $185.3 million in the first quarter of 2023. Such decrease resulted principally from a quarter-over-quarter decrease in TCE revenues, a gain on the disposal of a vessel recognized in the prior year’s quarter, and increased vessel expenses and depreciation and amortization in the current quarter primarily related to the delivery of three dual-fuel LNG VLCCs during the first half of 2023.

Current wording

During the first half of 2024, income from vessel operations decreased by $44.8 million to $309.2 million from $354.0 million in the first half of 2023. Such decrease resulted principally from a $48.9 million decrease in TCE revenues and increased depreciation and amortization and vessel expenses in the current period, partially offset by larger gains on the sale of vessels recognized in the first half of 2024.

Previous wording

The following table provides a breakdown of TCE rates achieved for the three months ended March 31, 2024 and 2023, between spot and fixed earnings and the related revenue days. The information in this table is based, in part, on information provided by the commercial pools in which the segment’s vessels participate and excludes commercial pool fees/commissions averaging approximately $1,232 and $1,266 per day for the three months ended March 31, 2024 and 2023, respectively, as well as activity in the Crude Tankers Lightering business and revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies. The fixed earnings rates in the table are net of broker/address commissions.

Current wording

The following tables provide a breakdown of TCE rates achieved for the three and six months ended June 30, 2024 and 2023, between spot and fixed earnings and the related revenue days. The information in this table is based, in part, on information provided by the commercial pools in which the segment’s vessels participate and excludes commercial pool fees/commissions averaging approximately $794 and $690 per day for the three months ended June 30, 2024 and 2023, respectively, and $1,016 and $977 per day for the six months ended June 30, 2024 and 2023, respectively, as well as activity in the Crude Tankers Lightering business and revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies. The fixed earnings rates in the table are net of broker/address commissions.

Previous wording

During the first quarter of 2024, TCE revenues for the Crude Tankers segment decreased by $5.3 million, or 4%, to $124.0 million from $129.3 million in the first quarter of 2023. Such decrease principally resulted from an aggregate rates-based decrease in the Suezmax, VLCC and Aframax fleets of $20.5 million due to lower average daily blended rates in these sectors. This decrease was offset by (i) a $11.2 million days-based increase in the VLCC fleet, which reflected the delivery ofthree dual-fuel LNG VLCC newbuilds between March 2023 and May 2023, and (ii) a $3.4 million increase in the Crude Tankers Lightering business.

Current wording

During the second quarter of 2024, TCE revenues for the Crude Tankers segment decreased by $28.1 million, or 19%, to $120.9 million from $148.9 million in the second quarter of 2023. Such decrease principally resulted from (i) an aggregate rates-based decrease in the VLCC, Suezmax and Aframax fleets of $28.1 million due to lower average daily blended rates in these sectors and (ii) a $4.4 million days-based decline in the Aframax fleet, which reflected 83 more off-hire days in the current quarter. These decreases were offset by (iii) a $2.4 million increase in the Crude Tankers Lightering business, and (iv) a $1.3 million days-based increase in the VLCC fleet, which reflected the delivery oftwo of the three dual-fuel LNG VLCC newbuilds between April 2023 and May 2023, partially offset by 42 more off-hire days in the current quarter.

Previous wording

​Vessel expenses increased by $5.5 million to $30.5 million in the first quarter of 2024 from $25.0 million in the first quarter of 2023. Such increase principally reflects the impact of the VLCC newbuild deliveries described above. Charter hire expenses increased by $1.0 million quarter-over-quarter due to increased charter hire expense in the Crude Tankers Lightering business, which primarily reflects charter hire incurred in conjunction with a full-service lightering job during the current quarter and an increased daily rate on one of the workboats being chartered-in by the Company. Depreciation and amortization increased by $2.8 million to $20.0 million in the current quarter from $17.2 million in the first quarter of 2023 principally as a result of the commencement of depreciation on the Company’s three dual-fuel LNG VLCC newbuilds.

Current wording

​Vessel expenses increased by $0.9 million to $29.9 million in the second quarter of 2024 from $29.0 million in the second quarter of 2023. Such increase principally reflects the impact of the VLCC newbuild deliveries described above. Charter hire expenses decreased by $0.3 million quarter-over-quarter due to decreased charter hire expense in the Crude Tankers Lightering business, which primarily reflects fewer on-hire days for chartered-in workboats and lower average daily rates for chartered-in Aframaxes used for full-service lighterings. Depreciation and amortization increased by $0.7 million to $20.0 million in the current quarter from $19.3 million in the second quarter of 2023 principally as a result of the commencement of depreciation on the Company’s dual-fuel LNG VLCC newbuilds.

Previous wording

Excluding depreciation and amortization and general and administrative expenses, operating income for the Crude Tankers Lightering business was $7.8 million for the first quarter of 2024 compared with $6.0 million for the first quarter of 2023. The increase reflects (i) higher average rates earned per lightering operation in the first quarter of 2024 compared with the first quarter of 2023 and (ii) increased activity levels period-over-period, with 128 service support only lighterings and one full-service lightering job (which was completed in April 2024) being performed during the three months ended March 31, 2024 compared to the 122 service support only lighterings that were performed during the three months ended March 31, 2023.

Current wording

Excluding depreciation and amortization and general and administrative expenses, operating income for the Crude Tankers Lightering business was $7.2 million for the second quarter of 2024 compared with $5.2 million for the second quarter of 2023. The increase reflects increased activity levels period-over-period, with 134 service support only lighterings and three full-service lightering jobs being performed during the three months ended June 30, 2024 compared to 103 service support only lighterings and one full-service job during the three months ended June 30, 2023.

Previous wording

The following table provides a breakdown of TCE rates achieved for the three months ended March 31, 2024 and 2023, between spot and fixed earnings and the related revenue days. The information in this table is based, in part, on information provided by the commercial pools in which the segment’s vessels participate and excludes commercial pool fees/commissions averaging approximately $898 and $787 per day for the three months ended March 31, 2024 and 2023, respectively, as well as revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies. The fixed earnings rates in the table are net of broker/address commissions.

Current wording

The following table provides a breakdown of TCE rates achieved for the three and six months ended June 30, 2024 and 2023, between spot and fixed earnings and the related revenue days. The information in this table is based, in part, on information provided by the commercial pools in which the segment’s vessels participate and excludes commercial pool fees/commissions averaging approximately $900 and $802 per day for the three months ended June 30, 2024 and 2023, respectively, and $899 and $794 per day for the six months ended June 30, 2024 and 2023, respectively, as well as revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies. The fixed earnings rates in the table are net of broker/address commissions.

Previous wording

Vessel expenses decreased by $0.9 million to $32.9 million in the first quarter of 2024 from $33.7 million in the first quarter of 2023. Such decrease reflects the MR sales referenced above. Charter hire expenses decreased by $3.2 million to $3.1 million in the current quarter from $6.3 million in the first quarter of 2023, primarily as a result of the quarter-over-quarter decrease in time chartered-in LR1 days described above. Depreciation and amortization increased by $1.8 million to $14.1 million in the current quarter from $12.3 million in the prior year’s quarter. Such increase resulted primarily from increased drydock amortization, offset by the impact of the sales of the MR vessels referenced above.

Current wording

Vessel expenses increased by $1.8 million to $37.9 million in the second quarter of 2024 from $36.1 million in the second quarter of 2023. Such increase principally reflects higher drydock deviation costs in the LR1 sector. Charter hire expenses decreased by $3.3 million to $3.1 million in the current quarter from $6.4 million in the second quarter of 2023, primarily as a result of the quarter-over-quarter decrease in time chartered-in LR1 days described above. Depreciation and amortization increased by $3.4 million to $16.5 million in the current quarter from $13.1 million in the prior year’s quarter. Such increase resulted primarily from increased drydock amortization and the MR purchases and sales referenced above, as the acquired vessels have larger depreciable cost bases than the vessels that were sold.

Previous wording

During the first quarter of 2024, TCE revenues for the Product Carriers segment decreased by $7.0 million, or 5%, to $147.0 million from $154.0 million in the first quarter of 2023. The reduction in TCE revenues was primarily as a result of (i) a $14.7 million days-based decrease in the LR1 fleet sector which reflects a 173-day net decrease in time-chartered in days, (ii) a $5.5 million days-based decline in the MR sector, which reflects the sales of three MRs between March 2023 and December 2023 and (iii) a $3.4 million rates-based decrease in the LR1 sector due to lower average daily rates earned in the current quarter. Partially offsetting such decreases was (iv) a $16.6 million aggregate rates-based increase in the MR and LR2 sectors due to higher average daily blended rates earned in the first quarter of 2024.

Current wording

During the first half of 2024, TCE revenues for the Product Carriers segment decreased by $15.5 million, or 5%, to $278.0 million from $293.5 million in the first half of 2023. The reduction in TCE revenues was primarily as a result of (i) a $32.1 million days-based decrease in the LR1 fleet sector which reflects the impacts of a 315-day net decrease in time-chartered in days and an increase of 174 off-hire days in the current year’s period, (ii) a $8.6 million rates-based decrease in the LR1 sector due to lower average daily rates earned in the current period, and (iii) a $7.9 million days-based decline in the MR sector, which reflects 161 fewer owned vessel days and 117 more off-hire days in the current period. The decrease in owned vessel days reflects the sale of five MRs between March 2023 and June 2024, partially offset by the six MR acquisitions during the second quarter of 2024 described above. Partially offsetting the TCE revenue decreases described above was (iv) a $33.8 million aggregate rates-based increase in the MR and LR2 sectors due to higher average daily blended rates earned in the current period.

Previous wording

During the first quarter of 2024, general and administrative expenses increased by $1.1 million to $12.4 million from $11.2 million in the first quarter of 2023. The primary driver for such increase was higher legal fees of $0.7 million, principally incurred in connection with a commercial dispute. See Note 14, “Contingencies,” to the accompanying condensed consolidated financial statements for additional information.

Current wording

For the six months ended June 30, 2024, general and administrative expenses increased by $1.3 million to $24.1 million from $22.8 million for the same period in 2023. The increase reflects higher legal fees of $0.5 million, principally incurred in connection with a commercial dispute. See Note 16, “Contingencies,” to the accompanying condensed consolidated financial statements for additional information. The remainder of the increase principally relates to increased compensation and benefits costs of $0.4 million and a non-cash increase in the current period provision for expected credit losses of $0.2 million.

Previous wording

Other income was $3.0 million for the three months ended March 31, 2024 compared with $4.3 million for the three months ended March 31, 2023. Other income in the current period includes $3.0 million of interest income earned on invested cash compared to $4.1 million of interest income earned during the first quarter of 2023. The quarter-over-quarter decrease reflects the impact of a lower average balance of invested cash during the three months ended March 31, 2024, attributable to the significant deleveraging initiatives completed during 2023. Both periods also reflect net actuarial gains and currency losses associated with the retirement benefit obligation in the United Kingdom.

Current wording

million of interest income earned for the three and six months ended June 30, 2023, respectively. The decrease reflects the impact of a lower average balance of invested cash during the three and six months ended June 30, 2024, attributable to the significant deleveraging initiatives completed during 2023.

Previous wording

Interest expense decreased during the first quarter of 2024 compared to the first quarter of 2023 as a result of (i) a reduction in the average outstanding principal balance under the $750 Million Term Loan Facility and (ii) the repayment in full of the COSCO Lease financing in July 2023, partially offset by post-delivery interest expense related to the BoComm Lease Financing. See Note 8, “Debt,” in the accompanying condensed consolidated financial statements for further information on the Company’s debt facilities.

Current wording

Interest expense decreased in the 2024 periods compared to the corresponding 2023 periods as a result of (i) a reduction in the average outstanding principal balance under the $750 Million Term Loan Facility (which was amended and extended in April 2024), (ii) the repayment in full of the COSCO Lease financing in July 2023 and (iii) the repayment in full of the ING Credit Facility in April 2024, partially offset by post-delivery interest expense related to the BoComm Lease Financing. See Note 8, “Debt,” in the accompanying condensed consolidated financial statements for further information on the Company’s debt facilities.

Previous wording

The Company believes it will qualify for an exemption from U.S. federal income taxes under Section 883 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and U.S. Treasury Department regulations for the 2024 calendar year, so long as less than 50 percent of the total value of the Company’s stock is held by one or more shareholders who own 5% or more of the Company’s stock for more than half of the days of 2024. There can be no assurance at this time that INSW will continue to qualify for the Section 883 exemption beyond calendar year 2024. Should the Company not qualify for the exemption in the future, INSW will be subject to U.S. federal income taxation of 4% of its U.S. source shipping income on a gross basis without the benefit of deductions. Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the U.S. will be considered to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the U.S. would be considered to be 100% derived from sources within the United States, but INSW does not and cannot engage in transportation that gives rise to such income.

Current wording

The Company qualifies for an exemption from U.S. federal income taxes under Section 883 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and U.S. Treasury Department regulations for the 2024 calendar year, as less than 50 percent of the total value of the Company’s stock was held by one or more shareholders who own 5% or more of the Company’s stock for more than half of the days of 2024. There can be no assurance at this time that INSW will continue to qualify for the Section 883 exemption beyond calendar year 2024. Should the Company not qualify for the exemption in the future, INSW will be subject to U.S. federal income taxation of 4% of its U.S. source shipping income on a gross basis without the benefit of deductions. Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the U.S. will be considered to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the U.S. would be considered to be 100% derived from sources within the United States, but INSW does not and cannot engage in transportation that gives rise to such income.

Previous wording

As of March 31, 2024, we had total liquidity on a consolidated basis of $625.9 million comprised of $139.5 million of cash, $75.0 million of short-term investments, and $411.4 million of undrawn revolver capacity.

Current wording

As of June 30, 2024, we had total liquidity on a consolidated basis of $682.5 million comprised of $176.1 million of cash and $506.3 million of undrawn revolver capacity.

Previous wording

Working capital at March 31, 2024 and December 31, 2023 was $310.0 million and $269.4 million, respectively. Current assets are highly liquid, consisting principally of cash, interest-bearing deposits, short-term investments consisting of time deposits with original maturities of between 91 and 180 days and receivables. Current liabilities include current installments of long-term debt of $127.5 million and $127.4 million at March 31, 2024 and December 31, 2023, respectively.

Current wording

Working capital at June 30, 2024 and December 31, 2023 was $322.9 million and $269.4 million, respectively. Current assets are highly liquid, consisting principally of cash, interest-bearing deposits, short-term investments consisting of time deposits with original maturities of between 91 and 180 days and receivables. Current liabilities include current installments of long-term debt of $49.6 million and $127.4 million at June 30, 2024 and December 31, 2023, respectively.

Previous wording

The Company’s cash and cash equivalents increased by $12.7 million during the three months ended March 31, 2024. This increase principally reflects $156.4 million of cash provided by operating activities. Such cash inflows were principally offset by:

Current wording

The Company’s cash and cash equivalents increased by $49.4 million during the six months ended June 30, 2024. This increase principally reflects (i) $324.4 million of cash provided by operating activities, (ii) $60.0 million in net proceeds from maturities of short term time deposits, (iii) $48.0 million in net proceeds from the disposal of vessels and other assets, and (iv) a $50.0 million drawdown under the $500 Million Revolving Credit Facility. Such cash inflows were partially offset by:

Previous wording

As of March 31, 2024, we had total debt outstanding (net of original issue discount and deferred financing costs) of $691.7 million and net debt to total capitalization of 21.0%, compared with 23.8% at December 31, 2023.

Current wording

As of June 30, 2024, we had total debt outstanding (net of original issue discount and deferred financing costs) of $708.8 million and net debt to capital of 22.1%, compared with 23.8% at December 31, 2023.

Previous wording

On February 28, 2024, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.12 per share of common stock and a supplemental cash dividend of $1.20 per share of common stock. Both dividends totaling $64.7 million were paid on March 28, 2024 to stockholders of record as of March 14, 2024. On May 7, 2024, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.12 per share of common stock and a supplemental dividend of $1.63 per share of common stock. Both dividends will be paid on June 26, 2024 to stockholders of record as of June 12, 2024.

Current wording

On August 6, 2024, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.12 per share of common stock and a supplemental dividend of $1.38 per share of common stock. Both dividends will be paid on September 25, 2024 to stockholders of record as of September 11, 2024.

Previous wording

In continuation of our strategic fleet optimization program, in February 2024, we entered into agreements for the en bloc purchase of four 2015-built and two 2014-built MR Product Carriers for an aggregate purchase price of $232 million. Eighty-five percent of the purchase price consideration will be funded from available liquidity and the balance of 15% with the issuance of common stock. Three of the six vessels were delivered between April and early May 2024, and delivery of the remaining three MRs is expected to be completed by the end of the second quarter of 2024. A registration statement on Form S-3 was filed with the SEC on April 29, 2024 to register the shares that will be issued in conjunction with these vessel acquisitions and facilitate sellers’ ability to offer and sell or otherwise dispose of the shares of common stock issued to them under this transaction.

Current wording

In continuation of our strategic fleet optimization program, in February 2024, we entered into agreements for the en bloc purchase of four 2015-built and two 2014-built MR Product Carriers for an aggregate purchase price of $232 million. Eighty-five percent of the purchase price consideration was funded from available liquidity and the balance of 15% with the issuance of common stock. All of the six vessels were delivered during the second quarter of 2024. An automatic shelf registration statement on Form S-3 was filed with the SEC on April 29, 2024 that, in connection with prospectus supplements filed during the second quarter of 2024, registered the aggregate 623,778 shares that were issued in conjunction with these vessel acquisitions and facilitated the seller’s ability to offer and sell or otherwise dispose of the shares of common stock issued to them under this transaction.

Previous wording

In March 2024, we entered into an agreement for the sale of one 2009-built MR for net proceeds of approximately $23 million after fees and commissions. The vessel was delivered to the buyer in April 2024 and the Company recognized a gain on the sale.

Current wording

During the six months ended June 30, 2024, we entered into agreements for the sale of one 2009-built MR and two 2008-built MRs for aggregate net proceeds of approximately $72 million after fees and commissions. The 2009-built MR and one of the 2008-built MRs were delivered to the buyers during the second quarter of 2024 and the Company recognized total gains on the sales of approximately $27.9 million. The second 2008-built vessel was delivered to its buyer in July 2024.

Previous wording

In March 2024 we also declared options to build two additional dual-fuel ready LNG 73,600 dwt LR1 Product Carriers at the same shipyard where our other four newbuild LR1s are currently under construction. The six LR1s are scheduled for delivery between the second half of 2025 and the third quarter of 2026 for an aggregate cost of approximately $347 million, which will be paid for through a combination of long-term financing and available liquidity.

Current wording

In March 2024 we also declared options to build two additional dual-fuel ready LNG 73,600 dwt LR1 Product Carriers at the same shipyard where our other four newbuild LR1s are currently under construction. The six LR1s are expected to be delivered beginning in the second half of 2025 through the third quarter of 2026 for an aggregate cost of approximately $359 million, which will be paid for through a combination of long-term financing and available liquidity.

Previous wording

Further building on our liquidity enhancing, deleveraging and financing diversification initiatives, we have executed the following transactions:

Current wording

Further building on our liquidity enhancing, deleveraging and financing diversification initiatives, we executed the following transactions:

Previous wording

As of March 31, 2024, the Company has contractual commitments for the construction of six dual-fuel ready LR1s, the acquisition of six MRs, and the purchase and installation of three ballast water treatment systems and 11 mewis ducts, and the final outstanding installment payments due for five ballast water treatment systems that had been installed as of March 31, 2024. The Company’sdebt

Current wording

As of June 30, 2024, the Company has contractual commitments for the construction of six dual-fuel ready LR1s, and the purchase and installation of three ballast water treatment systems and ten mewis ducts, and the final outstanding installment payments due for three ballast water treatment systems that were installed prior to June 30, 2024. The Company’sdebt service commitments andaggregate purchase commitments for vessel construction and betterments as of June 30, 2024, are presented in the Aggregate Contractual Obligations Table below.

Previous wording

Our strong balance sheet, as evidenced by a substantial level of liquidity, 30 unencumbered vessels as of March 31, 2024, and diversified financing sources with debt maturities spread out between 2030 and 2031, positions us to support our operations over the next twelve months as we continue to advance our vessel employment strategy, which seeks to achieve an optimal mix of spot (voyage charter) and long-term (time charter) charters. Our balance sheet strength and diverse fleet position us to continue pursuing our disciplined capital allocation strategy of fleet renewal, incremental debt reduction and returns to shareholders and pursue potential strategic opportunities that may arise within the diverse sectors in which we operate.

Current wording

Our strong balance sheet, as evidenced by a substantial level of liquidity, 35 unencumbered vessels (excluding the six LR1s under construction) as of June 30, 2024, and diversified financing sources with debt maturities spread out between 2030 and 2031, positions us to support our operations over the next twelve months as we continue to advance our vessel employment strategy, which seeks to achieve an optimal mix of spot (voyage charter) and long-term (time charter) charters. Our balance sheet strength and balanced fleet

Previous wording

Pursuant to an agreement between INSW and the trustees of the OSG Ship Management (UK) Ltd. Retirement Benefits Plan (the“Scheme”), INSW guarantees the obligations of INSW Ship Management UK Ltd., a subsidiary of INSW, to make payments to the Scheme.

Current wording

Pursuant to an agreement between INSW and the trustees of the OSG Ship Management (UK) Ltd. Retirement Benefits Plan (the“Scheme”), INSW guarantees the obligations of INSW Ship Management UK Ltd., a subsidiary of INSW, to make payments to the Scheme. The Company is in the process of settling its obligations under the Scheme and expects to make a $3.6 million payment to the Scheme before the end of the third quarter of 2024 to secure the benefits under the Scheme with an insurance company.