International Seaways Inc
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 27, 2025
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-K
Period ended 2023-12-31; filed 2024-02-29.
0001558370-24-002108
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0001558370-25-001691
Item 7. 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 124 previous paragraphs and 112 current paragraphs.
55 unchanged; 39 reworded; 18 added; 27 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 56 previous and 56 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 (18)
Current report
China’s crude oil imports for 2024 decreased 1.9%, or 0.2 million b/d, to 11.0 million b/d, compared with 2023. Excluding years impacted by COVID, this is the first annual decrease in Chinese crude oil imports in approximately 20 years.
Current report
OECD commercial crude inventories in the fourth quarter of 2024 decreased by 3.2%, or 43 million barrels, compared with the third quarter of 2024. OECD commercial product inventories in the fourth quarter of 2024 increased by 1.7%, or 24 million barrels, compared with the third quarter of 2024.
Current report
Tanker rates in general held steady in the fourth quarter compared with the third quarter. VLCCs and Suezmaxes in particular saw some weakness toward the end of the fourth quarter. In January, newly announced sanctions on dark fleet tankers created some strength in these sectors, although it will take time to determine the actual impacts. The weaker Chinese economy remains an impediment to stronger rates, and political uncertainty could have an impact on rates, either positive or negative. Even so, rates remain significantly over cash breakeven levels, reflecting the continuing impact of the disruptions in trade flows on tanker demand.
Current report
The decrease in TCE revenues in 2024 of $122.4 million, or 12%, to $933.1 million from $1,055.5 million in 2023 primarily reflects (i) a net aggregate rates-based decrease of $103.6 million resulting from lower average daily rates in the Crude tanker and LR1 fleets, partially offset by strengthened rates in the LR2 and MR sectors, and (ii) a $31.6 million days-based decline in the LR1 fleet due to a smaller time chartered-in portfolio and 133 more off-hire days during the current year, partially offset by (iii) a $10.7 million days-based increase in the VLCC fleet resulting from the delivery of three dual-fuel VLCC newbuilds between March 2023 and May 2023, and (iv) a $5.7 million increase attributable to the Company’s Lightering business.
Current report
During 2024, TCE revenues for the Product Carriers segment decreased by $47.3 million, or 9%, to $496.0 million from $543.3 million in 2023. The reduction in TCE revenues was primarily as a result of (i) a $31.6 million days-based decrease in the LR1 fleet sector which reflects the impacts of a 419-day net decrease in time chartered-in days and 129 more off-hire days in the current year, (ii) a $24.8 million rates-based decrease in the LR1 sector due to lower average daily rates earned in the current year, (iii) a $1.6 million days-based decrease in the LR2 fleet due to 57 more off-hire days in the current year, and (iv) a $1.0 million days-based decrease in the MR sector, which reflects an increase of 179 off-hire days in the current year, significantly offset by 139 more owned vessel days in the current year. The increase in owned vessel days reflects the Company’s acquisition of six MRs between April 2024
Current report
and May 2024, partially offset by the sales of six MRs between March 2023 and July 2024. Partially offsetting the TCE decreases described above was a $11.9 million aggregate rates-based increase in the MR and LR2 sectors due to higher average blended rates in the current year.
Current report
During 2024, general and administrative expenses increased by $5.1 million to $52.6 million from $47.5 million in 2023. The primary drivers were comprised of (i) increased compensation and benefits costs of $1.8 million, $0.5 million of which relates to non-cash stock compensation, and an additional $0.5 million of which relates to the termination of a legacy retiree medical benefits plan, (ii) higher legal fees of $1.4 million, which were principally incurred in connection with a commercial dispute, (iii) $0.6 million of incremental IT spend, and (iv) increased travel and entertainment expense of $0.4 million. See Note 19, “Contingencies”, to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for additional information relating to the commercial dispute referenced above.
Current report
Other Operating Expenses
Current report
See Note 17, “Other Operating Expenses,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for additional information on these expenses.
Current report
Other Income
Current report
Interest expense decreased in 2024 compared to 2023 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
Current report
Income Tax Benefit/(Provision)
Current report
Such cash inflows were partially offset by:
Current report
During 2024, 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 report
In continuation of our strategic fleet optimization program during 2024, we:
Current report
Further building on our liquidity enhancing, deleveraging and financing diversification initiatives, we executed the following transactions:
Current report
31, 2024. The new agreement consists of a $500 million revolving credit facility (the “$500 Million Revolving Credit Facility”) that matures in January 2030. Under the terms of the $500 Million Revolving Credit Facility, capacity is reduced on a quarterly basis by approximately $12.8 million each quarter, based on a 20-year age-adjusted profile of the collateral vessels. The $500 Million Revolving Credit Facility bears an interest rate based on term SOFR plus the Applicable Margin (each as defined in the credit agreement). The Applicable Margin is 1.85% and is subject to similar sustainability-linked features as included in the $750 Million Credit Facility, that are aimed at reducing the carbon footprint, targeting expenditures toward energy efficiency improvements and maintaining a safety record above the industry average. The Company’s performance against these sustainability measures could impact the margin by five basis points. At the time of closing, after $94.6 million was drawn on the new revolver, our overall undrawn revolver capacity increased by $148 million to $559.4 million. As of December 31, 2024, the undrawn revolver capacity under this facility was $329.8 million.
Current report
By entering into the $500 Million Revolving Credit Facility we have (i) eliminated $19.5 million in mandatory quarterly debt repayments since the balance drawn on closing is not required to be repaid until Maturity, (ii) reduced cash break evens by over $3,000 per day, (iii) extended the maturity profile of the facility from 2027 to 2030, and (iv) reduced future interest expense through a margin reduction of over 85 basis points.
Removed paragraphs (27)
Previous report
China’s crude oil imports in 2023 set a new record of 11.3 million b/d; the previous record year was 2020 with 10.8 million b/d. Crude imports in December averaged 11.4 million b/d, up from November’s imports of 10.3 million b/d.
Previous report
Total commercial inventories ended the fourth quarter of 2023 essentially flat compared with the fourth quarter of 2022; however stocks during the fourth quarter of 2023 declined by approximately 64.0 million barrels from the end of the prior quarter while stocks during the fourth quarter of 2022 increased by approximately 21.0 million barrels.
Previous report
increasing by 6.1 million dwt, 0.9 million dwt, 4.0 million dwt, and 2.2 million dwt, respectively. The LR1/Panamax fleet remained unchanged.
Previous report
Crude tanker rates recovered during the fourth quarter of 2023 from the relatively lower rates in the third 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 remained strong during the quarter. The strength in rates across the board continued into the first quarter of 2024.
Previous report
The increase in TCE revenues in 2023 of $201.8 million, or 24%, to $1,055.5 million from $853.7 million in 2022 primarily reflects (i) a net aggregate $191.9 million rates-based increase resulting from higher average daily rates earned across all of INSW’s fleet sectors, with the exception of the MRs, and (ii) a $10.5 million increase attributable to the Company’s Lightering business.
Previous report
During 2023, TCE revenues for the Product Carriers segment increased by $11.4 million, or 2%, to $543.3 million from $531.9 million in 2022. The increase in TCE revenues was primarily as a result of (i) a $64.2 million aggregate rates-based increase in the LR1 and LR2 sectors due to substantial year-over-year increases in average daily blended rates earned in the current year. Offsetting such increase to a large extent were (ii) a $29.4 million aggregate days-based decrease in the MR and Handysize sectors, principally
Previous report
due to the sales of five MRs between May 2022 and December 2023, and the final four remaining Handysize vessels in the Company’s fleet during the second quarter of 2022, (iii) an $18.4 million rates-based decline in the MR sector due to lower daily rates earned in the current year, and (iv) a $5.2 million days-based decrease in the LR1 fleet sector which reflects a 121-day net decrease in time chartered-in days and 73 more off-hire days in the current year, partially offset by the purchase of a 2011-built LR1 in February 2022.
Previous report
During 2023, general and administrative expenses increased by $1.1 million to $47.5 million from $46.4 million in 2022. The primary driver for the increase was increased compensation and benefits costs of $2.9 million, of which $1.8 million relates to non-cash stock compensation. Partially offsetting such increase was a $2.2 million decrease in costs relating to shareholder activism-related matters in the current year.
Previous report
Equity in Income of Affiliated Companies
Previous report
The Company sold its interest in the FSO joint ventures on June 7, 2022. During 2022, equity in income of affiliated companies was $0.7 million, which reflected the Company’s recognition of a loss on the sale of $9.5 million.
Previous report
Other Income/(Expense)
Previous report
Income Tax Provision
Previous report
Such cash outflows were offset to a large extent by:
Previous report
During 2022, as the tanker cycle recovered from the historical lows of 2021, we increased our overall liquidity with vessel sales, a refinancing that increased the capacity of our revolving credit and cash from operations. With strong market conditions continuing in 2023, we have used incremental liquidity generated from operations to invest in the fleet, reduce debt levels and make returns to shareholders.
Previous report
In December 2022 the Company tendered notice of its intention to exercise its options to purchase two 2009-built Aframaxes that it had been bareboat chartering-in. The aggregate purchase price for the two vessels was $43.0 million, representing an approximately 45% discount to the market price of the vessels. The first of the two vessels was purchased in March 2023, and the second in early April 2023.
Previous report
On March 10, 2023 the Company entered into an amendment to the $750 Million Credit Facility agreement. Pursuant to the amendment, the Company (a) prepaid $97 million of outstanding principal under the $750 Million Facility Term Loan; (b) obtained a release of collateral vessel mortgages over 22 MR product carriers; and (c) received from the lenders additional revolving credit commitments in an aggregate amount of $40 million, which additional commitments constitute an increase to, and are subject to the same terms and conditions as, the previously-existing revolving credit commitments. Following the effectiveness of the amendment, the aggregate principal commitments available under the $750 Million Facility Revolving Loan was $257.4 million (none of which was outstanding) and the scheduled future quarterly principal amortization under the $750 Million Facility Term Loan decreased from $30.2 million to $27.7 million.
Previous report
Following the amendment to the $750 Million Credit Facility agreement, the Company made mandatory principal prepayments totaling $181.3 million between March 2023 and December 2023 on the $750 Million Facility Term Loan in conjunction with the sale of three 2008-built MRs, and the release of five Suezmaxes and one Aframax vessel from the collateral package. These transactions resulted in a further reduction in the scheduled future quarterly principal amortization under the $750 Million Facility Term Loan to $19.0 million beginning in the first quarter of 2024.
Previous report
In May 2023, the Company tendered notice of its intention to exercise its options to purchase one 2013-built Aframax and one 2014-built LR2, which were bareboat chartered-in under the COSCO Lease Financing arrangement as at June 30, 2023. The $46.4 million aggregate purchase price for the two vessels consisted of the $45.2 million remaining debt balance of the COSCO Lease Financing and $1.2 million of purchase option premiums. The transaction closed on July 3, 2023.
Previous report
During the third and fourth quarters of 2023, the Company entered into agreements to construct four dual-fuel ready LNG 73,600 dwt LR1 Product Carriers at K Shipbuilding Co., Ltd’s shipyard, subject to certain conditions customary to similar transactions. The four vessels are scheduled for delivery between the second half of 2025 and the first quarter of 2026. The total construction cost for the vessels will be approximately $231 million, which will be paid for through a combination of long-term financing and available liquidity. On November 24, 2023, the Company entered into an option agreement for the construction of two additional dual-fuel ready LNG 73,600 dwt LR1 Product Carriers at the same shipyard for delivery during the third quarter of 2026 at an additional cost of approximately $116 million. Under the terms of the agreement, as amended, the Company’s option will expire on March 31, 2024.
Previous report
On September 27, 2023, the Company entered into a $160 million revolving credit agreement (the “$160 Million Revolving Credit Facility”) with Nordea Bank Abp, New York Branch (“Nordea”), ING Bank N.V., London Branch (“ING”), Crédit Agricole Corporate & Investment Bank, and DNB Markets Inc. (or their respective affiliates), as mandated lead arrangers and bookrunners; and Danish Ship Finance A/S and Skandinaviska Enskilda Banken AB (PUBL) (or their respective affiliates), as lead arrangers. Nordea is acting as administrative agent, collateral agent, coordinator and security trustee under the Revolving Credit Agreement, and ING is acting as sustainability coordinator.
Previous report
The $160 Million Revolving Credit Facility comprises a 5.5-year revolving credit facility in an aggregate amount of $160 million which matures on March 27, 2029 and reduces on a 20-year age-adjusted profile. The $160 Million Revolving Credit Facility is secured by a first lien on five of the Company’s vessels (the “Collateral Vessels”), along with their earnings, insurances and certain other assets, as well as by liens on certain additional assets of the Borrower. Interest on the $160 Million Revolving Credit Facility is calculated based upon Term SOFR plus the Applicable Margin (each as defined in the credit agreement). The Applicable Margin is 1.90%, and is subject to a sustainability-linked pricing mechanism, pursuant to which the Applicable Margin may be decreased or increased by 0.075%, as described in greater detail in Note 10, “Debt,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data.”
Previous report
On December 20, 2023, the Company adopted an “at the market” offering program in connection with general corporate housekeeping and entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Evercore Group L.L.C. and Jefferies LLC, as sales agents (the “Sales Agents”), to issue and sell through or to the Sales Agents, from time to time, shares of its common stock, in “at the market” offerings having an aggregate gross sales price of up to $100 million. As of the date hereof, the Company has neither sold nor undertaken to sell any shares pursuant to the Distribution Agreement. The Company has no obligation to sell any shares and may at any time suspend offers under the Distribution Agreement or terminate the Distribution Agreement. See Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities,” for further details on the offering program.
Previous report
During the first quarter of 2024, we continued to execute on our fleet optimization program by entering 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 paid for with cash from available liquidity and the balance of 15% with the issuance of INSW common stock. Delivery of the vessels is expected to be completed by the end of the second quarter of 2024.
Previous report
In addition to the above long-term contractual commitments, we have certain obligations for our shore-based employees as of December 31, 2023, related to a defined benefit pension plan in the U.K. as follows:
Previous report
securing of the Scheme’s obligations with an insurance company by 2025. The contributions are subject to change after an actuarial estimate of the Scheme's funding level is produced.
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. See Note 17, “Pension and other postretirement benefit plans,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for additional information.
Reworded paragraphs (39)
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 years ended December 31, 2023 and 2022 we derived 51% and 62%, respectively, of our TCE revenues from our Product Carriers segment. Revenues from our Crude Tankers segment constituted the balance of our TCE revenues during these 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 years ended December 31, 2024 and 2023 we derived 53% and 51%, respectively, of our TCE revenues from our Product Carriers segment. Revenues from our Crude Tankers segment constituted the balance of our TCE revenues during these periods.
Previous wording
As of December 31, 2023, 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, four LR1 newbuilds are scheduled for delivery to the Company between the second half of 2025 and first quarter of 2026, bringing the total operating and newbuild fleet to 77 vessels. Our fleet includes VLCC, Suezmax and Aframax crude tankers and LR2, LR1 and MR product carriers.
Current wording
As of December 31, 2024, the Company’s operating fleet consisted of 78 wholly-owned or lease financed and time chartered-in vessels aggregating 9.1 million deadweight tons (“dwt”). In addition to our operating fleet of 78 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 84 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 91% and 96% of our total TCE revenues in the spot market for the years ended December 31, 2023 and 2022, 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, and six MRs as of December 31, 2023 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 86% and 91% of our total TCE revenues in the spot market for the years ended December 31, 2024 and 2023, respectively. The future minimum revenues, before reduction for brokerage commissions, expected to be received on non-cancelable time charters for three VLCCs, one Suezmax, one Aframax, one LR2 and eight MRs as of December 31, 2024 are as follows:
Previous wording
The ongoing military conflict in Ukraine has had a significant direct and indirect impact on the trade of crude oil and refined petroleum products. This conflict has resulted in the United States, United Kingdom, and the European Union, among other countries, implementing sanctions and executive orders against citizens, entities, and activities connected to Russia. Some of these sanctions and executive orders target the Russian oil sector, including a prohibition on the import of oil from Russia to the United States or the
Current wording
The ongoing military conflict in Ukraine has had a significant direct and indirect impact on the trade of crude oil and refined petroleum products. This conflict has resulted in the United States, United Kingdom, and the European Union, among other countries, implementing sanctions and executive orders against citizens, entities, and activities connected to Russia. Some of these sanctions and executive orders target the Russian oil sector, including a prohibition on the import of oil from Russia to the United States or the United Kingdom, and the European Union's ban on Russian crude oil and petroleum products which took effect in December 2022 and February 2023, respectively.
Previous wording
The International Energy Agency (“IEA”) estimates global oil consumption for the fourth quarter of 2023 at 102.0 million barrels per day (“b/d”), up 1.8% from the same quarter in 2022. The estimate for global oil consumption for 2024 is 103.0 million b/d, an increase of 1.3% over the 2023 estimate of 101.7 million b/d. OECD demand in 2024 is estimated to decrease by 0.2% to 45.6 million b/d, while non-OECD demand is estimated to increase by 2.5% to 57.4 million b/d.
Current wording
The International Energy Agency (“IEA”) estimates global oil consumption for the fourth quarter of 2024 at 104.0 million barrels per day (“b/d”), up 1.5% from the same quarter in 2023. The estimate for global oil consumption for 2025 is 104.0 million b/d, an increase of 1.1% over the 2024 estimate of 102.9 million b/d. OECD demand in 2025 is estimated to remain unchanged at 45.7 million b/d, while non-OECD demand is estimated to increase by 1.9% to 58.3 million b/d.
Previous wording
Global oil production in the fourth quarter of 2023 was 102.2 million b/d, the same level as the fourth quarter of 2022. OPEC crude oil production averaged 26.7 million b/d in the fourth quarter of 2023, a decrease of 0.3 million b/d from the third quarter of 2023, and a decrease of 2.4 million b/d from the fourth quarter of 2022. Non-OPEC production increased by 2.3 million b/d to 70.0 million b/d in the fourth quarter of 2023 compared with the fourth quarter of 2022. Oil production in the U.S. in the fourth quarter of 2023 increased by 2.5% to 13.3 million b/d compared to the third quarter of 2023 and by 7.0% from the fourth quarter of 2022.
Current wording
Global oil production in the fourth quarter of 2024 was 102.9 million b/d, an increase of 0.1 million b/d from the fourth quarter of 2023. OPEC crude oil production averaged 26.7 million b/d in the fourth quarter of 2024, unchanged from the third quarter of 2024, and an increase of 0.2 million b/d from the fourth quarter of 2023. Non-OPEC production increased by 0.1 million b/d to 70.6 million b/d in the fourth quarter of 2024 compared with the fourth quarter of 2023. Oil production in the U.S. of 13.5 million b/d in the fourth quarter of 2024 increased by 2.0% from the third quarter of 2024 and by 2.3% from the fourth quarter of 2023.
Previous wording
U.S. refinery throughput decreased by 1.3 million b/d to 15.8 million b/d in the fourth quarter of 2023 compared with the third quarter of 2023. U.S. crude oil imports in the fourth quarter of 2023 decreased by 0.1 million b/d to 6.1 million b/d compared with the fourth quarter of 2022, with imports from OPEC countries remaining flat and imports from non-OPEC countries decreasing by 0.1 million b/d.
Current wording
U.S. refinery throughput decreased by 0.4 million b/d to 16.5 million b/d in the fourth quarter of 2024 compared with the third quarter of 2024. U.S. crude oil imports in the fourth quarter of 2024 increased by 0.2 million b/d to 6.4 million b/d compared with the fourth quarter of 2023, with imports from OPEC countries increasing by 0.1 million b/d and imports from non-OPEC countries increasing by 0.1 million b/d.
Previous wording
During the fourth quarter of 2023, the tanker fleet of vessels over 10,000 dwt increased, net of vessels recycled, by 1.2 million dwt as the crude fleet increased by 0.8million dwt, with VLCCs and Aframaxes growing by 0.6 million dwt and 0.4 million dwt, respectively, and Suezmaxes decreasing by 0.2 million dwt. The product carrier fleet increased by 0.4 million dwt, with MRs growing 0.4 million dwt. Year-over-year, the size of the tanker fleet increased by 13.1 million dwt with the VLCCs, Suezmaxes, Aframaxes, and MRs
Current wording
During the fourth quarter of 2024, the tanker fleet of vessels over 10,000 dwt increased, net of vessels recycled, by 1.1 million dwt. The crude fleet increased by 0.5 million dwt, with VLCCs decreasing by 0.6 million dwt and Suezmaxes and Aframaxes increasing by 0.6 million dwt and 0.5 million dwt, respectively. 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 decreasing by 0.6 million dwt and Suezmaxes, Aframaxes, and MRs increasing by 1.1 million dwt, 2.5 million dwt, and 2.5 million dwt, respectively. The LR1/Panamax fleet remained unchanged.
Previous wording
The tanker orderbook remains at historic lows across all tanker sectors and the average age of the global fleet is approximately 13 years. During the fourth quarter of 2023, the tanker orderbook increased by 3.4 million dwt overall compared with the third quarter of 2023. The crude tanker orderbook increased by 2.6 million dwt. The VLCC orderbook remained flat, while the Suezmax and Aframax orderbooks increased by 1.4 million dwt and 1.2 million dwt respectively. The product carrier orderbook increased by 0.8 million dwt, with increases in the LR1 and MR sectors of 0.6 million dwt and 0.2 million dwt respectively. Year-over-year, the total tanker orderbook increased by 17.8 million dwt, with VLCC decreasing by 1.1 million dwt and increases in Suezmaxes, Aframaxes, Panamaxes and LR1s of 7.2 million dwt, 5.7 million dwt, 2.2 million dwt and 3.7 million dwt, respectively.
Current wording
During the fourth quarter of 2024, the tanker orderbook increased by 2.9 million dwt overall compared with the third quarter of 2024. The crude tanker orderbook increased by 1.7 million dwt. The VLCC orderbook increased by 1.8 million dwt and the Suezmax orderbook decreased by 0.2 million dwt. The product carrier orderbook increased by 1.2 million dwt, with increases in the LR1 and MR sectors of 0.5 million dwt and 0.7 million dwt respectively. Year-over-year, the total tanker orderbook increased by 45.2 million dwt, with increases in VLCC, Suezmaxes, Aframaxes, Panamaxes and LR1s of 18.8 million dwt, 5.5 million dwt, 8.3 million dwt, 2.6 million dwt and 10.0 million dwt, respectively.
Previous wording
During 2023, income from vessel operations increased by $172.8 million to $615.4 million from $442.7 million in 2022. Such increase resulted principally from a year-over-year increase in TCE revenues and larger gains on the sale of vessels recognized in the current year, partially offset by increased depreciation and amortization, vessel expenses, and charter hire expenses in the current year.
Current wording
During 2024, income from vessel operations decreased by $160.2 million to $455.2 million from $615.4 million in 2023. Such decrease resulted principally from a year-over-year decrease in TCE revenues and increased depreciation and amortization and vessel expenses in the current year.
Previous wording
See Note 5, “Business and Segment Reporting,” to the Company’s consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for additional information on the Company’s segments, including equity in income of affiliated companies and reconciliations of (i) time charter equivalent revenues to shipping revenues and (ii) adjusted income/(loss) from vessel operations for the segments to income/(loss) before income taxes, as reported in the consolidated statements of operations.
Current wording
See Note 4, “Business and Segment Reporting,” to the Company’s consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for additional information on the Company’s segments, including reconciliations of (i) time charter equivalent revenues to shipping revenues and (ii) adjusted income from vessel operations for the segments to income before income taxes, as reported in the consolidated statements of operations.
Previous wording
The following table provides a breakdown of TCE rates achieved for the years ended December 31, 2023 and 2022 between spot and fixed earnings and the related revenue days. The information 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 $973 and $787 per
Current wording
The following table provides a breakdown of TCE rates achieved for the years ended December 31, 2024 and 2023 between spot and fixed earnings and the related revenue days. The information 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 $982 and $973 per day in 2024 and 2023, respectively, as well as activity in the Crude Tankers Lightering business and revenue and revenue days for
Previous wording
day in 2023 and 2022, 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.
Current wording
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 2023, TCE revenues for the Crude Tankers segment increased by $190.4 million, or 59%, to $512.2 million from $321.9 million in 2022. Such increase principally resulted from (i) an aggregate rates-based increase in the Suezmax, VLCC and Aframax fleets of $146.1 million due to significantly higher average daily blended rates in these sectors, (ii) a $21.5 million days-based increase in the VLCC fleet, which primarily reflected the delivery of three dual-fuel LNG VLCC newbuilds between March 2023 and May 2023, (iii) an aggregate $14.6 million days-based increase in the Suezmax and Aframax fleets, which reflected 462 fewer primarily drydock related off-hire days in 2023 and (iv) a $10.5 million increase in the Crude Tankers Lightering business. These increases were partially offset by (v) a $2.2 million days-based decrease in the Panamax fleet due to the Company’s recycling of its two remaining Panamaxes in April 2022.
Current wording
During 2024, TCE revenues for the Crude Tankers segment decreased by $75.1 million, or 15%, to $437.1 million from $512.2 million in 2023. Such decrease principally resulted from (i) an aggregate rates-based decrease in the VLCC, Suezmax and Aframax fleets of $90.5 million due to lower average daily blended rates in these sectors and (ii) a $3.7 million days-based decrease in the Aframax fleet, which reflected 87 more off-hire days in the current year. These decreases were partially offset by (iii) a $10.7 million days-based increase in the VLCC fleet, which reflected the delivery of three dual-fuel LNG VLCC newbuilds between March 2023 and May 2023, partially offset by 80 more off-hire days in the current year, (iv) a $5.7 million increase in the Crude Tankers Lightering business, and (v) a $2.7 million days-based increase in the Suezmax sector resulting from 45 fewer off-hire days in the current year.
Previous wording
Vessel expenses increased by $16.9 million to $115.7 million in 2023 from $98.8 million in 2022. Such increase was principally driven by the VLCC newbuild deliveries described above, along with increased costs of spares, stores and lubricating oils. Charter hire expenses decreased by $3.5 million to $11.9 million in 2023 from $15.4 million in 2022. Approximately $5.8 million ofthe decrease reflects the impact of the exercise of purchase options under bareboat charters for two of the Company’s Aframaxes in 2023, partially offset bya $2.3 million increase in charter hire expensein the Crude Tankers Lightering business. Depreciation and amortization increased by $14.3 million to $76.9 million in 2023 from $62.6 million in 2022 principally as a result of (i) $7.6 million relating to the commencement of depreciation on the Company’s three dual-fuel LNG VLCC newbuilds, (ii) the impact of drydockings and ballast water treatment system and scrubber installations during 2022 and 2023, and (iii) $2.7 million of incremental depreciation relating to the two previously bareboat chartered-in Aframaxes purchased by the Company as noted above.
Current wording
Vessel expenses increased by $14.4 million to $130.1 million in 2024 from $115.7 million in 2023. The VLCC newbuild deliveries described above resulted in $3.2 million of incremental vessel expense in the current year. The remainder of the increase primarily reflects increased costs for repairs and renewals, off-hire fuel, transportation and crew. Charter hire expenses increased by $2.5 million to $14.3 million in 2024 from $11.9 million in 2023. The increase relates to the Crude Tankers Lightering business and reflects incremental spot chartered-in Aframax days for full-service jobs and an increased rate on two of the workboats being chartered-in. Depreciation and amortization increased by $4.1 million to $81.0 million in 2024 from $76.9 million in 2023 principally as a result of $3.0 million relating to 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 $23.3 million for 2023 compared to $16.7 million for 2022. Although lightering activity levels decreased year-over-year, with 438 service support only lighterings and two full-service lighterings being performed during 2023 compared to the 472 service support only lighterings and one full-service lightering that were performed during 2022, operating income increased year-over-year due to the higher average rates earned per lightering operation in 2023 compared with the average rates earned in 2022.
Current wording
Excluding depreciation and amortization and general and administrative expenses, operating income for the Crude Tankers Lightering business was $24.4 million for 2024 compared to $23.3 million for 2023. The increase reflects increased activity levels year-over-year, with 459 service support only lighterings and six full-service lighterings being performed during 2024 compared to the 438 service support only lighterings and two full-service lightering that were performed during 2023.
Previous wording
The following table provides a breakdown of TCE rates achieved for the years ended December 31, 2023 and 2022 between spot and fixed earnings and the related revenue days. The information 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 $797 and $665 per day in 2023 and 2022, respectively, as well as revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies.
Current wording
The following table provides a breakdown of TCE rates achieved for the years ended December 31, 2024 and 2023 between spot and fixed earnings and the related revenue days. The information 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 $850 and $797 per day in 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 during 2023 increased by $2.0 million to $143.8 million from $141.8 million in 2022. The increase reflects an increase in costs for spares and stores, partially offset by the MR and Handysize sales referenced above. Charter hire expenses increased by $10.8 million to $27.5 million in 2023 from $16.8 million in 2022 primarily as a result of (i) increased daily rates for two time chartered-in LR1s upon the Company’s extension of such time charters in October 2022 and May 2023, respectively, and (ii) the Company time chartering-in an additional LR1 in July 2023 at a current market rate to replace LR1s that were redelivered to their owners upon expiry of their time charters. The impact of the increase in rates was partially offset by the year-over-year decrease in time chartered-in days referenced above. Depreciation and amortization increased by $4.5 million to $52.2 million in the current year from $47.7 million in the prior year. Such increase resulted from increased drydock amortization, and the purchase of the LR1 described above, partially offset by the MR and Handysize sales described above.
Current wording
Vessel expenses during 2024 increased by $1.7 million to $145.6 million from $143.8 million in 2023. Such increase principally reflects higher LR1 drydock deviation costs, partially offset by a decrease in spares and repair costs in the MR fleet. Charter hire expenses decreased by $12.0 million to $15.5 million in 2024 from $27.5 million in 2023 primarily as a result of the year-over-year decrease in time chartered-in LR1 days described above. Depreciation and amortization increased by $16.3 million to $68.5 million in the current year from $52.2 million in the prior year. Such increase resulted 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
Other income was $10.7 million for the year ended December 31, 2023 compared with $2.3 million for the year ended December 31, 2022. The current period other income includes $13.9 million of interest income resulting from a significant increase in the average balance of invested cash and the interest rates earned on such investments during 2023 compared to interest income of only $3.7 million earned during 2022. Such interest income in 2023 was partially offset by a $1.3 million loss on extinguishment of debt and a $2.7 million write-off of unamortized deferred financing costs. Similar unamortized deferred financing costs write-offs during 2022 amounted to $1.3 million. See Note 10, “Debt,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for further information. The 2023 and 2022 periods also reflect net actuarial gains and currency gains or losses associated with the Company’s retirement benefit obligation in the United Kingdom.
Current wording
Other income was $10.1 million for the year ended December 31, 2024 compared with $10.7 million for the year ended December 31, 2023. The current year includes $9.9 million of interest income compared to interest income of $13.9 million earned during 2023.The year-over-year decrease reflects the impact of a lower average balance of invested cash during 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 in the second half of 2024. The interest income in 2023 was partially offset by a $1.3 million loss on extinguishment of debt and a $2.7 million write-off of unamortized deferred financing costs. See Note 9, “Debt,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for further information. The 2024 and 2023 periods also reflect net actuarial gains and currency gains or losses associated with the Company’s retirement benefit obligation in the United Kingdom. See Note 18, “Other Income,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for further information.
Previous wording
Interest expense increased in 2023 compared to 2022 as a result of (i) higher average floating interest rates during 2023, (ii) the impact of two lease financings entered into during the second quarter of 2022, and (iii) the post-delivery interest expense related to BoComm Lease Financing. See Note 10, “Debt,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for further information on the Company’s debt facilities.
Current wording
interest expense related to the BoComm Lease Financing. See Note 9, “Debt,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for further information on the Company’s debt facilities.
Previous wording
We qualified for an exemption pursuant to Section 883, or the “Section 883 exemption,” of the U.S. Internal Revenue Code of 1986, as amended, or the “Code,” for the tax year ended December 31, 2023. We will qualify for the Section 883 exemption for 2024 and forward if, among other things, (i) our common shares are treated as primarily and regularly traded on an established securities market in the United States or another qualified country (“publicly traded test”), or (ii) we satisfy one of two other ownership tests. Under applicable U.S. Treasury Regulations, the publicly traded test will not be satisfied in any taxable year in which persons who directly, indirectly or constructively own five percent or more of our common shares (sometimes referred to as “5% shareholders”) own 50% or more of the vote and value of our common shares for more than half the days in such year, unless an exception applies. We can provide no assurance that ownership of our common shares by 5% shareholders will allow us to qualify for the Section 883 exemption in future taxable years. If we do not qualify for the Section 883 exemption, our gross shipping income derived from U.S. sources, i.e., 50% of our gross shipping income attributable to transportation beginning or ending in the United States (but not both beginning and ending in the United States), generally would be subject to a U.S. federal income tax of four percent without allowance for deductions.
Current wording
We qualified for an exemption pursuant to Section 883, or the “Section 883 exemption,” of the U.S. Internal Revenue Code of 1986, as amended, or the “Code,” for the tax year ended December 31, 2024. We will qualify for the Section 883 exemption for 2025 and forward if, among other things, (i) our common shares are treated as primarily and regularly traded on an established securities market in the United States or another qualified country (“publicly traded test”), or (ii) we satisfy one of two other ownership tests. Under applicable U.S. Treasury Regulations, the publicly traded test will not be satisfied in any taxable year in which persons who directly, indirectly or constructively own five percent or more of our common shares (sometimes referred to as “5% shareholders”) own in the aggregate 50% or more of the vote and value of our common shares for more than half the days in such year, unless an exception applies. We can provide no assurance that ownership of our common shares by 5% shareholders will allow us to qualify for the Section 883 exemption in future taxable years. If we do not qualify for the Section 883 exemption, our gross shipping income derived from U.S. sources, i.e., 50% of our gross shipping income attributable to transportation beginning or ending in the United States (but not both beginning and ending in the United States), generally would be subject to a U.S. federal income tax of four percent without allowance for deductions.
Previous wording
The Company reviews its freight tax obligations on a regular basis and may update its assessment of its tax positions based on available information at that time. Such information may include additional legal advice as to the applicability of freight taxes in relevant jurisdictions. Freight tax regulations are subject to change and interpretation; therefore, the amounts recorded by the Company may change accordingly. During 2023 and 2022, the Company increased its reserve for uncertain tax liabilities for various jurisdictions by $3.6 million and $0.2 million, respectively.
Current wording
The Company reviews its freight tax obligations on a regular basis and may update its assessment of its tax positions based on available information at that time. Such information may include additional legal advice as to the applicability of freight taxes in relevant jurisdictions. Freight tax regulations are subject to change and interpretation; therefore, the amounts recorded by the Company may change accordingly. During 2024 the Company decreased its reserve for uncertain tax liabilities for various jurisdictions by $1.1 million compared to a $3.6 million increase in such reserves during 2023.
Previous wording
See Note 12, “Taxes,” to the Company’s consolidated financial statements set forth in Item 8, “Financial Statements and Supplementary Data,” for further details on the income tax provision line.
Current wording
See Note 11, “Taxes,” to the Company’s consolidated financial statements set forth in Item 8, “Financial Statements and Supplementary Data,” for further details on the income tax benefit/(provision) line.
Previous wording
EBITDA represents net income/(loss) before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA are presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA and Adjusted EBITDA do not represent, and should not be considered a substitute for, net income or cash flows from operations determined in accordance with GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results reported under GAAP. Some of the limitations are:
Current wording
EBITDA represents net income before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA are presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA and Adjusted EBITDA do not represent, and should not be considered a substitute for, net income or cash flows from operations determined in accordance with GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results reported under GAAP. Some of the limitations are:
Previous wording
The following table reconciles net income/(loss), as reflected in the consolidated statements of operations set forth in Item 8, “Financial Statements and Supplementary Data,” to EBITDA and Adjusted EBITDA:
Current wording
The following table reconciles net income, as reflected in the consolidated statements of operations set forth in Item 8, “Financial Statements and Supplementary Data,” to EBITDA and Adjusted EBITDA:
Previous wording
As of December 31, 2023, we had total liquidity on a consolidated basis of $601.2 million comprised of $126.8 million of cash, $60.0 million of short-term investments and $414.4 million of undrawn revolver capacity.
Current wording
As of December 31, 2024, we had total liquidity on a consolidated basis of $632.2 million comprised of $157.5 million of cash and $474.7 million of undrawn revolver capacity.
Previous wording
Working capital at December 31, 2023 and 2022 was $269.5 million and $385.2 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 and finance lease liabilities of $127.4 million and $204.7 million at December 31, 2023 and 2022, respectively.
Current wording
Working capital at December 31, 2024 and 2023 was $245.4 million and $269.5 million, respectively. Current assets are highly liquid, consisting principally of cash, interest-bearing deposits, short-term investments, which are time deposits with original maturities of between 91 and 180 days, and receivables. Current liabilities include current installments of long-term debt of $50.1 million and $127.4 million at December 31, 2024 and 2023, respectively.
Previous wording
The Company’s total cash decreased by $116.9 million during the year ended December 31, 2023. This decrease principally reflects:
Current wording
The Company’s total cash increased by $30.7 million during the year ended December 31, 2024. This increase principally reflects:
Previous wording
As of December 31, 2023, we had total debt outstanding (net of original issue discount and deferred financing costs) of $722.7 million and a net debt to total capitalization of 23.8%, which compares with 33.3% at December 31, 2022.
Current wording
As of December 31, 2024, we had total debt outstanding (net of original issue discount and deferred financing costs) of $688.4 million and a net debt to total capitalization of 22.2%, which compares with 23.8% at December 31, 2023.
Previous wording
During 2023, the Company’s Board of Directors declared and paid regular quarterly and supplemental cash dividends totaling $308.2 million or $6.29 per share as follows:
Current wording
During 2024, the Company’s Board of Directors declared and paid regular quarterly and supplemental cash dividends totaling $284.4 million or $5.77 per share as follows:
Previous wording
Also 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 dividend of $1.20 per share of common stock. Both dividends will be paid on March 28, 2024 to stockholders of record as of March 14, 2024.
Current wording
Also on February 26, 2025, 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 $0.58 per share of common stock. Both dividends will be paid on March 28, 2025 to stockholders of record as of March 14, 2025.
Previous wording
During 2023, the Company repurchased and retired 366,483 shares of its common stock in open-market purchases, at an average price of $38.03 per share, for a total cost of $13.9 million. In August 2023, the Company’s Board of Directors authorized an increase in the share repurchase program to $50.0 million from $26.1 million. In November 2023, the Company’s Board of Directors authorized the extension of the expiry date of the stock repurchase program from December 31, 2023 to December 31, 2025.
Current wording
During 2024, the Company repurchased and retired 501,646 shares of its common stock in open-market purchases, at an average price of $49.81 per share, for a total cost of $25.0 million. In November 2024, the Company’s Board of Directors authorized an increase in the share repurchase program to $50.0 million from $25.0 million. The expiry date of the stock repurchase program is on December 31, 2025.
Previous wording
As of December 31, 2023, the Company has vessel construction commitments for four dual-fuel ready LR1s and the purchase and installation of three ballast water treatment systems and two mewis ducts, and the final outstanding installment payments due for sixballast water treatment systems that had been installed as of December 31, 2023. The Company’sdebt service commitments andaggregate purchase commitments for vessel construction and betterments as of December 31, 2023, are presented in the Aggregate Contractual Obligations Table below.
Current wording
As of December 31, 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 five mewis ducts, the final outstanding installment payments due for four ballast water treatment systems that were installed prior to December 31, 2024, and the purchase and installation of various performance efficiency devices for the fleet. The Company’s debt service commitments and aggregate purchase commitments for vessel construction and betterments as of December 31, 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, and diversified financing sources with debt maturities spread out between 2026 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 December 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 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
At December 31, 2023, 42 of the Company’s 72 owned and bareboat chartered-in vessels were pledged as collateral under certain of the Company’s debt and lease financing facilities. The following table presents information with respect to the carrying amount of the Company’s vessels by type. Instances in which the fair market values of the Company’s vessels, which are estimated by a third-party vessel appraiser, are below their carrying values as of December 31, 2023, are indicated in the footnote(s) to the table. The carrying value of each of the Company’s vessels does not necessarily represent its fair market value or the amount that could be obtained if the vessel were sold. The Company’s estimates of market values for its vessels assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class without notations. In addition, because vessel values are highly volatile, these estimates may not be indicative of either the current or future prices that the Company could achieve if it were to sell any of the vessels. The Company would not record a loss for any of the vessels for which the fair market value is below its carrying value unless and until the Company either determines to sell the vessel for a loss or determines that the vessel is impaired as discussed below in “Critical Accounting Policies — Vessel Impairment.” The Company believes that the future undiscounted cash flows expected to be earned over the estimated remaining useful lives for those vessels that have experienced declines in market values below their carrying values would exceed such vessels’ carrying values.
Current wording
At December 31, 2024, 41 of the Company’s 76 owned and bareboat chartered-in vessels were pledged as collateral under certain of the Company’s debt and lease financing facilities. The following table presents information with respect to the carrying amount of the Company’s vessels by type. Instances in which the fair market values of the Company’s vessels, which are estimated by a third-party vessel appraiser, are below their carrying values as of December 31, 2024, are indicated in the footnote(s) to the table. The carrying value of each of the Company’s vessels does not necessarily represent its fair market value or the amount that could be obtained if the vessel were sold. The Company’s estimates of market values for its vessels assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class without notations. In addition, because vessel values are highly volatile, these estimates may not be indicative of either the current or future prices that the Company could achieve if it were to sell any of the vessels. The Company would not record a loss for any of the vessels for which the fair market value is below its carrying value unless and until the Company either determines to sell the vessel for a loss or determines that the vessel is impaired as discussed below in “Critical Accounting Policies — Vessel Impairment.” The Company believes that the future undiscounted cash flows expected to be earned over the estimated remaining useful lives for those vessels that have experienced declines in market values below their carrying values would exceed such vessels’ carrying values.
Previous wording
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 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.
Previous wording
The Company has installed scrubbers on ten VLCCs and two of its Suezmaxes. During 2023, the average price differential between very low sulfur fuel and high sulfur fuel in Singapore and Fujairah, the most common bunkering locations for VLCCs, was approximately $158 per ton. Assuming a VLCC bunker consumption rate of 50 metric tons per day, this translated to approximately $7,900 per day per vessel in lower bunker consumption costs on our VLCCs during 2023. In addition to installing scrubbers on certain of the larger vessels in the Company’s fleet, significant consideration continues to be given to other ways of managing the risk of volatility in the price spread between high-sulfur fuel and low-sulfur fuel as well as the risk of limited supply of compliant fuel or HFO along the routes that the Company’s vessels typically travel.
Current wording
The Company has installed scrubbers on ten VLCCs and two of its Suezmaxes. During 2024, the average price differential between very low sulfur fuel and high sulfur fuel in Singapore and Fujairah, the most common bunkering locations for VLCCs, was approximately $130 per ton. Assuming a VLCC bunker consumption rate of 50 metric tons per day, this translated to approximately $6,500 per day per vessel in lower bunker consumption costs on our VLCCs during 2024. In addition to installing scrubbers on certain of the larger vessels in the Company’s fleet, significant consideration continues to be given to other ways of managing the risk of volatility in the price spread between high-sulfur fuel and low-sulfur fuel as well as the risk of limited supply of compliant fuel or HFO along the routes that the Company’s vessels typically travel.
Previous wording
purposes 100% of the $750 Million Facility Term Loan outstanding principal balance of $113.6 million as of December 31, 2023, and $224.3 million of the notional principal amount outstanding under the Ocean Yield Lease Financing that effectively converts the Company’s interest rate exposure from a three-month SOFR floating rate to a fixed rate of 2.84% through the maturity date of February 22, 2027.
Current wording
As of December 31, 2024, the Company had lease financings and revolving credit facilities under which borrowings bear interest at a rate based on SOFR, plus the applicable margin, as stated in the respective financing arrangements. The Company has entered into interest rate swaps agreements with major financial institutions covering for accounting purposes 100% of the $500 Million Revolving Credit Facility outstanding balance of $144.6 million as of December 31, 2024, and $83.6 million of the notional principal amount outstanding under the Ocean Yield Lease Financing that effectively converts the Company’s interest rate exposure from a three-month SOFR floating rate to a fixed rate of 2.84% through the maturity date of February 22, 2027.
Previous wording
In developing estimates of future cash flows, the Company must make assumptions about future performance, with significant assumptions being related to charter rates, operating expenses, utilization, drydocking and capital expenditure requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. Specifically, in estimating future charter rates, management takes into consideration rates currently in effect for existing time charters and estimated daily time charter equivalent rates for each vessel class for the unfixed days over the estimated remaining lives of each of the vessels. The estimated daily time charter equivalent rates used for unfixed days are based on a combination of (i) rates as forecasted by third-party analysts, and (ii) the trailing 12-year historical average rates, based on monthly average rates published by a third-party maritime research service. Management uses the published 12-year historical average rates in its assumptions because it is management’s belief that the 12-year period captures a distribution of strong and weak charter rate periods, which results in the use of an average mid-cycle rate that is more in line with management’s forecast of a return to mid-cycle charter rate levels in the medium term. Recognizing that the transportation of crude oil and petroleum products is cyclical and subject to significant volatility based on factors beyond the Company’s control, management believes the use of estimates based on the combination of rates forecasted by third-party analysts and 12-year historical average rates calculated as of the reporting date to be reasonable.
Current wording
In developing estimates of future cash flows, the Company must make assumptions about future performance, with significant assumptions being related to charter rates, operating expenses, utilization, drydocking and capital expenditure requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. Specifically, in estimating future charter rates, management takes into consideration rates currently in effect for existing time charters and estimated daily time charter equivalent rates for each vessel class for the unfixed days over the estimated remaining lives of each of the vessels. The estimated daily time charter equivalent rates used for unfixed days are based on a combination of (i) rates as forecasted by third-party analysts, and (ii) trailing historical average rates, based on monthly average rates published by a third-party maritime research service. Management determines the historical periods to utilize in its estimations based on its judgment of current, past, and ongoing shipping cycles. Recognizing that the transportation of crude oil and petroleum products is cyclical and subject to significant volatility based on factors beyond the Company’s control, management believes the use of estimates based on the combination of rates forecasted by third-party analysts and historical average rates calculated as of the reporting date to be reasonable.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
United Kingdom, and the European Union's ban on Russian crude oil and petroleum products which took effect in December 2022 and February 2023, respectively.
Previous report — wording carried elsewhere
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
Previous report — wording carried elsewhere
As of December 31, 2023, the Company had variable rate secured term loans or lease financings, and revolving credit facilities under which borrowings bear interest at a rate based on SOFR, plus the applicable margin, as stated in the respective financing arrangements. The Company has entered into interest rate swaps agreements with major financial institutions covering for accounting