International Seaways Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
INSW$98.02+3.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001558370-24-011212
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001558370-24-014765
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 95 previous paragraphs and 96 current paragraphs.
47 unchanged; 40 reworded; 7 added; 7 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 88 previous and 89 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
China’s crude oil imports for the first three quarters of 2024 decreased 2.8%, or 0.3 million b/d, to 11.0 million b/d, compared with the same period in 2023.
Current report
While VLCC rates held steady during the third quarter, smaller vessel segments experienced decreases from the higher levels achieved during the first and second quarters of 2024. The weaker Chinese economy remains an impediment to stronger rates. Even so, 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.
Current report
Vessel expenses increased by $5.1 million to $34.2 million in the third quarter of 2024 from $29.1 million in the third quarter of 2023. Such increase primarily reflects increased costs for repairs and renewals, off-hire fuel, transportation and crew. Charter hire expenses increased by $1.7 million quarter-over-quarter due to increased charter hire expense in the Crude Tankers Lightering business, which primarily reflects incremental chartered-in Aframax days for full-service jobs.
Current report
three months ended September 30, 2024 compared to 114 in the prior year’s period. The decrease was partially offset by an increase in full service jobs, from one in the three months ended September 30, 2023, to three in the current quarter.
Current report
The Company’s cash and cash equivalents decreased by $23.5 million during the nine months ended September 30, 2024. The decrease principally reflects:
Current report
Such cash outflows were partially offset by:
Current report
Also, during the quarter ended September 30, 2024, we repurchased and retired 501,646 shares of our common stock in open-market purchases, at an average price of $49.81 per share, for a total cost of $25.0 million.
Removed paragraphs (7)
Previous report
China’s crude oil imports decreased in June 2024 to 11.3 million b/d, a drop of 11% year-over-year, and first half 2024 crude oil imports were at 11.1 million b/d, down 2.3% year-over-year.
Previous report
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 report
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 report
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 report
In April 2024, we opportunistically locked in $86 million of minimum future charter revenues (before reduction for brokerage commissions) on non-cancelable time charters with durations ranging from 32 to 34 months for two 2009-built MRs and one 2014-built LR2. All three vessels are expected to be delivered to their charterers before the end of the third quarter of 2024, after the completion of their scheduled drydocks.
Previous report
Off-Balance Sheet Arrangements
Previous report
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.
Reworded paragraphs (40)
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 June 30, 2024 and for the three and six months ended June 30, 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 September 30, 2024 and for the three and nine months ended September 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 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.
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 nine months ended September 30, 2024 we derived 55% and 54%, respectively, of our TCE revenues from our Product Carriers segment compared with 53% and 52% for the three and nine months ended September 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 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.
Current wording
As of September 30, 2024, the Company’s operating fleet consisted of 76 wholly-owned or lease financed and time chartered-in vessels aggregating 9.0 million deadweight tons (“dwt”). In addition to our operating fleet of 76 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 82 vessels. Our fleet includes VLCC, Suezmax and Aframax crude tankers and LR2, LR1 and MR product carriers.
Previous 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:
Current wording
Our revenues are derived primarily from spot market voyage charters and our vessels are predominantly employed in the spot market via market-leading commercial pools. We derived approximately 84% and 87% of our total TCE revenues in the spot market for the three and nine months ended September 30, 2024, respectively, compared with 89% and 92% for the three and nine months ended September 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 September 30, 2024 are as follows:
Previous 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.
Current wording
The International Energy Agency (“IEA”) estimates global oil consumption for the third quarter of 2024 at 103.6 million barrels per day (“b/d”), up 0.7% from the same quarter in 2023. The estimate for global oil consumption for 2024 is 102.8 million b/d, an increase of 0.8% over the 2023 estimate of 102.0 million b/d. OECD demand in 2024 is estimated to remain unchanged at 45.6 million b/d, while non-OECD demand is estimated to increase by 1.6% to 57.2 million b/d.
Previous 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.
Current wording
Global oil production in the third quarter of 2024 was 102.6 million b/d, a decrease of 0.1 million b/d from the third quarter of 2023. OPEC crude oil production averaged 26.5 million b/d in the third quarter of 2024, down 0.1 million b/d from the second quarter of 2024, and a decrease of 1.0 million b/d from the third quarter of 2023. Non-OPEC production increased by 0.8 million b/d to 70.5 million b/d in the third quarter of 2024 compared with the third quarter of 2023. Oil production in the U.S. of 13.2 million b/d in the third quarter of 2024 remained unchanged from the second quarter of 2024 and increased by 2.1% from the third quarter of 2023.
Previous 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.
Current wording
U.S. refinery throughput increased by 0.5 million b/d to 16.9 million b/d in the third quarter of 2024 compared with the second quarter of 2024. U.S. crude oil imports in the third quarter of 2024 increased by 0.8 million b/d to 7.1 million b/d compared with the third quarter of 2023, with imports from OPEC countries increasing by 0.1 million b/d and imports from non-OPEC countries increasing by 0.7 million b/d.
Previous 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.
Current wording
Total OECD commercial inventories ended the third quarter of 2024 down 1.3% or 18 million barrels of crude and up 1.5% or 23 million barrels of products, compared with the third quarter of 2023.
Previous 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.
Current wording
During the third quarter of 2024, the tanker fleet of vessels over 10,000 dwt increased, net of vessels recycled, by 1.5 million dwt as the crude fleet increased by 0.8 million dwt, split between Suezmaxes and Aframaxes. The product carrier fleet increased by 0.6 million dwt, all in the MR fleet. Year-over-year, the size of the tanker fleet increased by 5.5 million dwt with the VLCCs, Suezmaxes, Aframaxes, and MRs increasing by 0.6 million dwt, 0.3 million dwt, 2.3 million dwt, and 2.3 million dwt, respectively. The LR1/Panamax fleet remained unchanged.
Previous 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.
Current wording
During the third quarter of 2024, the tanker orderbook increased by 3.0 million dwt overall compared with the second quarter of 2024. The crude tanker orderbook increased by 1.9 million dwt. The VLCC orderbook increased by 1.5 million dwt and the Aframax orderbook increased by 0.3 million dwt. The product carrier orderbook increased by 1.1 million dwt, with increases in the LR1 and MR sectors of 0.3 million dwt and 0.8 million dwt respectively. Year-over-year, the total tanker orderbook increased by 44.8 million dwt, with increases in VLCC, Suezmaxes, Aframaxes, Panamaxes and LR1s of 15.2 million dwt, 7.9 million dwt, 9.1 million dwt, 2.7 million dwt and 10.0 million dwt, respectively.
Previous wording
During the second quarter of 2024, income from vessel operations decreased by $13.9 million to $154.8 million from $168.7 million in the second quarter of 2023. Such decrease resulted principally from a quarter-over-quarter decrease in TCE revenues and increased depreciation and amortization in the current quarter, partially offset by $27.9 million in gains on the sale of two vessels recognized in the current quarter.
Current wording
During the third quarter of 2024, income from vessel operations decreased by $13.2 million to $101.0 million from $114.2 million in the third quarter of 2023. Such decrease resulted principally from a quarter-over-quarter decrease in TCE revenues and increased vessel expenses and depreciation and amortization in the current quarter, partially offset by a $13.5 million gain on the sale of a vessel recognized in the current quarter.
Previous 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.
Current wording
TCE revenues in the third quarter of 2024 decreased by $16.3 million, or 7%, to $219.7 million from $236.0 million in the third quarter of 2023. This decrease reflects (i) an aggregate $17.6 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 $9.5 million days-based decline in the LR1 fleet due to a smaller time chartered-in portfolio and 41 more off-hire days during the current quarter, partially offset by (iii) a $6.0 million aggregate rates-based increase in the MR and LR2 sectors, and (iv) a $1.2 million increase attributable to the Company’s Lightering business.
Previous 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.
Current wording
During the first nine months of 2024, income from vessel operations decreased by $58.0 million to $410.2 million from $468.1 million in the first nine months of 2023. Such decrease resulted principally from a $65.1 million decrease in TCE revenues and increased depreciation and amortization and vessel expenses in the current period, partially offset by higher gains on the sale of three vessels recognized in the first nine months of 2024 compared to one vessel sold in the first nine months of 2023.
Previous wording
The decrease in TCE revenues in the first half of 2024 of $48.9 million, or 9%, to $522.8 million from $571.7 million in the first half of 2023 reflects a $32.1 million days-based decline in the LR1 sector, which was driven by factors similar to those discussed above for the quarter-over-quarter period, and a net rates-based decrease of $23.9 million resulting from lower average daily rates in the Crude tanker and LR1 fleets, partially offset by strengthened rates in the MR and LR2 sectors.
Current wording
The decrease in TCE revenues in the first nine months of 2024 of $65.1 million, or 8%, to $742.5 million from $807.6 million in the first nine months of 2023 reflects (i) a $41.2 million days-based decline in the LR1 sector, which was driven by factors similar to those discussed above for the quarter-over-quarter period, and (ii) a net rates-based decrease of $36.3 million resulting from lower average daily rates in the Crude tanker and LR1 fleets, partially offset by strengthened rates in the MR and LR2 sectors. Such decreases were partially offset by (iii) a $11.5 million days-based increase in the VLCC fleet resulting from the delivery ofthree dual-fuel LNG VLCC newbuilds between March 2023 and May 2023
Previous 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.
Current wording
The following tables provide a breakdown of TCE rates achieved for the three and nine months ended September 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 $1,132 and $1,022 per day for the three months ended September 30, 2024 and 2023, respectively, and $1,055 and $992 per day for the nine months ended September 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 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.
Current wording
During the third quarter of 2024, TCE revenues for the Crude Tankers segment decreased by $11.9 million, or 11%, to $98.8 million from $110.8 million in the third quarter of 2023. Such decrease principally resulted from (i) an aggregate rates-based decrease in the VLCC, Suezmax and Aframax fleets of $13.6 million due to lower average daily blended rates in these sectors. This decrease was partially offset by (ii) a $1.2 million increase in the Crude Tankers Lightering business, and (iii) a $0.9 million days-based increase in the Aframax fleet, which reflected 25 fewer off-hire days in the current quarter.
Previous 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.
Current wording
Excluding depreciation and amortization and general and administrative expenses, operating income for the Crude Tankers Lightering business was $5.5 million for the third quarter of 2024 compared with $6.5 million for the third quarter of 2023. The decrease reflects lower service support only activity levels period-over-period, with 106 service support only lighterings being performed during the
Previous wording
During the first six months of 2024, TCE revenues for the Crude Tankers segment decreased by $33.4 million, or 12%, to $244.8 million from $278.2 million in the first six months of 2023. Such decrease principally resulted from (i) an aggregate rates-based decrease in the VLCC, Suezmax and Aframax fleets of $49.2 million due to lower average daily blended rates in these sectors and (ii) a $6.5 million days-based decline in the Aframax fleet, which reflected 132 more off-hire days in the current period. These decreases were offset by (iii) a $12.9 million days-based increase in the VLCC fleet, which reflected the delivery ofthree dual-fuel LNG VLCC newbuilds between March 2023 and May 2023, partially offset by 56 more off-hire days in the current period, (iv) a $5.7 million increase in the Crude Tankers Lightering business, and (v) a $3.7 million days-based increase in the Suezmax sector resulting from 55 fewer off-hire days in the current period.
Current wording
During the first nine months of 2024, TCE revenues for the Crude Tankers segment decreased by $45.3 million, or 12%, to $343.6 million from $389.0 million in the first nine months of 2023. Such decrease principally resulted from (i) an aggregate rates-based decrease in the VLCC, Suezmax and Aframax fleets of $62.3 million due to lower average daily blended rates in these sectors and (ii) a $4.7 million days-based decline in the Aframax fleet, which reflected 107 more off-hire days in the current period. These decreases were offset by (iii) a $11.5 million days-based increase in the VLCC fleet, which reflected the delivery ofthree dual-fuel LNG VLCC newbuilds during the first half of 2023, partially offset by 66 more off-hire days in the current period, (iv) a $6.9 million increase in the Crude Tankers Lightering business, and (v) a $3.3 million days-based increase in the Suezmax sector resulting from 56 fewer off-hire days in the current period.
Previous wording
Vessel expenses increased by $6.4 million to $60.4 million in the first half of 2024 from $54.0 million in the first half of 2023. Such increase principally reflects the impact of the VLCC newbuild deliveries described above and increased repair costs. Charter hire expenses increased by $0.8 million in the current year’s period due to increased charter hire expense in the Crude Tankers Lightering business, which primarily reflects incremental chartered-in Aframax days for full-service jobs and an increased daily rate on one of the workboats being chartered-in. Depreciation and amortization increased by $3.5 million to $40.0 million in the six months ended June 30, 2024 from $36.5 million in the prior year’s comparable period 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 $11.5 million to $94.6 million in the first nine months of 2024 from $83.2 million in the first nine months of 2023. The VLCC newbuild deliveries described above resulted in $3.2 million of incremental vessel expense in the current year’s period. The remainder of the increase was driven by factors consistent with the quarter-of-quarter variance described above, along with the timing of the delivery of stores and spare parts. Charter hire expenses increased by $2.5 million in the current year’s period due to increased charter hire expense in the Crude Tankers Lightering business, which primarily reflects incremental chartered-in Aframax days for full-service jobs and an increased daily rate on two of the workboats being chartered-in. Depreciation and amortization increased by $4.0 million to $60.6 million in the nine months ended September 30, 2024 from $56.6 million in the prior year’s comparable period principally as a result of the commencement of depreciation on the Company’s three 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 $15.0 million for the first half of 2024 compared to $11.1 million for the first half of 2023. The increase reflects increased activity levels period-over-period, with 262 service support only lighterings and three full-service lightering jobs being completed during the first half of 2024 compared with 225 service support only lighterings and one full-service job during the first half of 2023.
Current wording
Excluding depreciation and amortization and general and administrative expenses, operating income for the Crude Tankers Lightering business was $20.4 million for the first nine months of 2024 compared to $17.7 million for the first nine months of 2023. The increase reflects increased activity levels period-over-period, with 368 service support only lighterings and six full-service lightering jobs being completed during the first nine months of 2024 compared with 339 service support only lighterings and two full-service job during the first nine months of 2023.
Previous 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.
Current wording
The following table provides a breakdown of TCE rates achieved for the three and nine months ended September 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 $841 and $786 per day for the three months ended September 30, 2024 and 2023, respectively, and $879 and $792 per day for the nine months ended September 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
During the second quarter of 2024, TCE revenues for the Product Carriers segment decreased by $8.4 million, or 6%, to $131.0 million from $139.4 million in the second quarter of 2023. The reduction in TCE revenues was primarily as a result of (i) a $17.2 million days-based decrease in the LR1 fleet sector which reflects the impacts of a 143-day net decrease in time-chartered in days and an increase of 131 off-hire days in the current period, (ii) a $5.4 million rates-based decrease in the LR1 sector due to lower average daily rates earned in the current quarter, and (iii) a $2.6 million days-based decline in the MR sector, which reflects 153 more off-hire
Current wording
During the third quarter of 2024, TCE revenues for the Product Carriers segment decreased by $4.3 million, or 3%, to $120.9 million from $125.2 million in the third quarter of 2023. The reduction in TCE revenues was primarily as a result of (i) a $9.5 million days-based decrease in the LR1 fleet sector which reflects the impacts of a 139-day net decrease in time-chartered in days and an increase of 41 off-hire days in the current period and (ii) a $4.1 million rates-based decrease in the LR1 sector due to lower average daily rates earned in the current quarter. Partially offsetting these decreases were (iii) a $5.5 million rates-based increase in MR fleet due to higher average blended rates earned in the current quarter, and (iv) a $4.1 million days-based increase in the MR sector, which reflects a 106-day increase in owned vessel days and 58 less off-hire days in the current period. The increase in owned vessel days resulted
Previous wording
days in the current period, partially offset by a 56-day increase in owned vessel days. The increase in owned vessel days resulted from the Company’s acquisition of six MRs between April 2024 and May 2024, partially offset by the sales of four MRs between October 2023 and June 2024. Partially offsetting the TCE revenue decreases described above was (iv) a $17.4 million aggregate rates-based increase in the MR and LR2 sectors due to higher average daily blended rates earned in the current quarter.
Current wording
from the Company’s acquisition of six MRs between April 2024 and May 2024, partially offset by the sales of five MRs between October 2023 and July 2024.
Previous 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.
Current wording
Vessel expenses increased by $1.6 million to $37.1 million in the third quarter of 2024 from $35.5 million in the third quarter of 2023. Such increase principally reflects higher drydock deviation costs in the LR1 sector. Charter hire expenses decreased by $5.8 million to $2.8 million in the current quarter from $8.6 million in the third 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 $5.5 million to $18.8 million in the current quarter from $13.3 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 higher cost bases than the older vessels that were sold.
Previous 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.
Current wording
During the first nine months of 2024, TCE revenues for the Product Carriers segment decreased by $19.8 million, or 5%, to $398.8 million from $418.6 million in the first nine months of 2023. The reduction in TCE revenues was primarily as a result of (i) a $41.2 million days-based decrease in the LR1 fleet sector which reflects the impacts of a 455-day net decrease in time-chartered in days and an increase of 215 off-hire days in the current year’s period, (ii) a $13.1 million rates-based decrease in the LR1 sector due to lower average daily rates earned in the current period, and (iii) a $3.1 million days-based decline in the MR sector, which reflects 55 fewer owned vessel days and 59 more off-hire days in the current period. The decrease in owned vessel days reflects the sale of six MRs between March 2023 and July 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 $39.1 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
Vessel expenses increased by $0.9 million to $70.8 million in the first six months of 2024 from $69.9 million in the first six months of 2023. Such increase principally reflects higher LR1 drydock deviation cost, offset by the impacts of the reduction in owned MR days noted above. Charter hire expenses decreased by $6.5 million to $6.3 million in the current period from $12.8 million in the first half of 2023, primarily as a result of the period-over-period decrease in time chartered-in LR1 days described above. Depreciation and amortization increased by $5.2 million to $30.6 million in the first six months of 2024 from $25.4 million in the prior year’s period. The drivers of the increase were consistent with those which drove the quarter-over-quarter increase described above.
Current wording
Vessel expenses increased by $2.5 million to $107.9 million in the first nine months of 2024 from $105.4 million in the first nine months of 2023. Such increase principally reflects higher LR1 drydock deviation costs, partially offset by the impacts of the reduction in owned MR days noted above. Charter hire expenses decreased by $12.2 million to $9.1 million in the current period from $21.4 million in the first nine months of 2023, primarily as a result of the period-over-period decrease in time chartered-in LR1 days described above. Depreciation and amortization increased by $10.7 million to $49.4 million in the first nine months of 2024 from $38.7 million in the prior year’s period. The drivers of this increase were consistent with the quarter-over-quarter increase described above.
Previous wording
During the second quarter of 2024, general and administrative expenses increased by $0.5 million to $12.0 million from $11.5 million in the second quarter of 2023. The primary driver for such increase was higher compensation and benefits costs of $0.3 million.
Current wording
During the third quarter of 2024, general and administrative expenses increased by $1.1 million to $13.4 million from $12.3 million in the third quarter of 2023. The primary drivers for the increase were higher legal and consultancy fees of $0.3 million and an increase in compensation and benefits costs of $0.3 million.
Previous 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.
Current wording
For the nine months ended September 30, 2024, general and administrative expenses increased by $2.4 million to $37.5 million from $35.1 million for the same period in 2023. The increase principally relates to increased compensation and benefits costs of $0.7 million and higher legal fees of $0.8 million, principally incurred in connection with a commercial dispute. See Note 16, “Contingencies,” to the accompanying condensed consolidated financial statements for additional information.
Previous wording
Other income was $2.4 million and $5.3 million for the three and six months ended June 30, 2024, respectively, compared with $3.4 million and $7.7 million of other income for the three and six months ended June 30, 2023. Other income for the current 2024 periods includes $2.3 million and $5.3 million, respectively, of interest income earned on invested cash, compared to $3.5 million and $7.6
Current wording
Other income was $3.2 million and $8.5 million for the three and nine months ended September 30, 2024, respectively, compared with $0.6 million and $8.3 million of other income for the three and nine months ended September 30, 2023. Other income for the current 2024 periods includes $2.6 million and $7.9 million, respectively, of interest income earned on invested cash, compared to $3.6 million and $11.3 million of interest income earned for the three and nine months ended September 30, 2023, respectively. The
Previous 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.
Current wording
decrease in interest income reflects the impact of a lower average balance of invested cash during the three and nine months ended September 30, 2024, attributable to the significant deleveraging initiatives completed during 2023 as well as a decrease in interest rates in anticipation of the Federal Reserve’s move to cut rates at the end of third quarter of 2024.
Previous 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.
Current wording
As of September 30, 2024, we had total liquidity on a consolidated basis of $693.8 million comprised of $153.3 million of cash and $540.5 million of undrawn revolver capacity.
Previous 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.
Current wording
Working capital at September 30, 2024 and December 31, 2023 was $269.0 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 $49.8 million and $127.4 million at September 30, 2024 and December 31, 2023, respectively.
Previous 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.
Current wording
As of September 30, 2024, we had total debt outstanding (net of original issue discount and deferred financing costs) of $650.5 million and net debt to capital of 21%, compared with 23.8% at December 31, 2023.
Previous wording
With strong market conditions continuing in 2024 to date, we have (i) used incremental liquidity generated from operations and the proceeds from disposal of older tonnage at strong prices to invest in renewing and growing the fleet, (ii) enhanced our balance sheet and liquidity position, and (iii) continued to make substantial returns to shareholders.
Current wording
Building on the strong market conditions during the first half of 2024 to date, we have (i) used incremental liquidity generated from operations and the proceeds from disposal of older tonnage at strong prices to invest in renewing and growing the fleet, (ii) enhanced our balance sheet and liquidity position, and (iii) continued to make substantial returns to shareholders.
Previous 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.
Current wording
On November 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 $1.08 per share of common stock. Both dividends will be paid on December 27, 2024 to stockholders of record as of December 13, 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 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.
Current wording
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
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.
Current wording
During the nine months ended September 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 vessels were delivered to their buyers between the second and third quarters of 2024 and we recognized total gains on the sales of approximately $41.4 million.
Previous 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.
Current wording
As of September 30, 2024, the Company has contractual commitments for the construction of six dual-fuel ready LR1s, and the purchase and installation of one ballast water treatment system and seven mewis ducts, the final outstanding installment payments due for three ballast water treatment systems that were installed prior to September 30, 2024, and purchase and installation of various performance efficiency devices for the fleet. The Company’sdebt service commitments andaggregate purchase commitments for vessel construction and betterments as of September 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, 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
Current wording
Our strong balance sheet, as evidenced by a substantial level of liquidity, 34 unencumbered vessels (excluding the six LR1s under construction) as of September 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 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.
Previous wording
The Company is exposed to market risk from changes in interest rates, which could impact its results of operations and financial condition. The Company manages this exposure to market risk through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. To manage its interest rate risk exposure associated with changes in variable interest rate payments due on its credit facilities in a cost-effective manner, the Company, from time-to-time, enters into interest rate swap, collar or cap agreements, in which it agrees to exchange various combinations of fixed and variable interest rates based on agreed upon notional amounts or to receive payments if floating interest rates rise above a specified cap rate. The Company uses such derivative financial instruments as risk management tools and not for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of major financial institutions in order to manage exposure to nonperformance on such instruments by the counterparties.
Current wording
The Company is exposed to market risk from changes in interest rates, which could impact its results of operations and financial condition. The Company manages this exposure to market risk through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. To manage its interest rate risk exposure associated with changes in variable interest rate payments due on its credit facilities in a cost-effective manner, the Company, from time-to-time, enters into interest rate swap, collar or cap agreements, in which it agrees to exchange various combinations of fixed and variable
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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
Current report — wording carried from elsewhere
interest rates based on agreed upon notional amounts or to receive payments if floating interest rates rise above a specified cap rate. The Company uses such derivative financial instruments as risk management tools and not for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of major financial institutions in order to manage exposure to nonperformance on such instruments by the counterparties.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.