Company Quick10K Filing
Quick10K
International Seaways
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$17.22 29 $503
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
8-K 2019-10-08 Regulation FD, Exhibits
8-K 2019-10-07 Regulation FD, Exhibits
8-K 2019-10-07 Enter Agreement, M&A, Exhibits
8-K 2019-08-08 Earnings, Exhibits
8-K 2019-06-24 Enter Agreement, Exhibits
8-K 2019-06-05 Shareholder Vote
8-K 2019-05-09 Earnings, Exhibits
8-K 2019-04-26 Regulation FD, Exhibits
8-K 2019-04-05 Exhibits
8-K 2019-03-12 Earnings, Exhibits
8-K 2019-03-07 Enter Agreement, Exhibits
8-K 2019-01-09 Enter Agreement, Exhibits
8-K 2018-12-28 Enter Agreement, Exhibits
8-K 2018-12-12 Regulation FD, Exhibits
8-K 2018-11-07 Earnings, Exhibits
8-K 2018-09-25 Other Events, Exhibits
8-K 2018-08-08 Earnings, Exhibits
8-K 2018-06-18 Regulation FD, Exhibits
8-K 2018-06-14 Regulation FD, Exhibits
8-K 2018-06-12 M&A, Off-BS Arrangement
8-K 2018-05-31 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-05-24 Shareholder Vote
8-K 2018-05-14 Other Events, Exhibits
8-K 2018-05-04 Earnings, Exhibits
8-K 2018-05-02 Earnings, Regulation FD, Exhibits
8-K 2018-04-26 Enter Agreement, Off-BS Arrangement
8-K 2018-04-18 Enter Agreement
8-K 2018-04-04 Officers
8-K 2018-03-08 Earnings, Exhibits
8-K 2017-12-20 Enter Agreement
GD General Dynamics 54,733
SBLK Star Bulk Carriers 926
TDW Tidewater 626
KNOP Knot Offshore Partners 605
TOO Teekay Offshore Partners 496
DRYS Dryships 451
OMEX Odyssey Marine Exploration 40
DCIX Diana Containerships 13
TRMD TORM 0
CUK Carnival 0
INSW 2019-06-30
Note 1 — Basis of Presentation:
Note 2 — Significant Accounting Policies:
Note 3 — Earnings per Common Share:
Note 4 — Business and Segment Reporting:
Note 5 — Vessels:
Note 6 — Equity Method Investments:
Note 7 — Variable Interest Entities (“Vies”):
Note 8 — Fair Value of Financial Instruments, Derivatives and Fair Value Disclosures:
Note 9 — Debt:
Note 10 — Taxes:
Note 11 — Related Parties:
Note 12 — Capital Stock and Stock Compensation:
Note 13 — Accumulated Other Comprehensive Loss:
Note 14 — Revenue:
Note 15 — Leases:
Note 16 — Contingencies:
Part II – Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 insw-20190630ex3116b44bb.htm
EX-31.2 insw-20190630ex3127bd9b3.htm
EX-32 insw-20190630xex32.htm

International Seaways Earnings 2019-06-30

INSW 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 insw-20190630x10q.htm 10-Q insw_Current_Folio_10Q

aqszAQkj7ju

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to         

Commission File Number        1‑37836‑1       

 

 

INTERNATIONAL SEAWAYS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Marshall Islands

    

98‑0467117

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

 

 

 

600 Third Avenue, 39th Floor, New York, New York

 

10016

(Address of principal executive offices)

 

(Zip Code)

 

 

Registrant’s telephone number, including area code: 212-578-1600

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  ☒ NO  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES  ☒ NO  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b‑2 of the Exchange Act.

 

 

 

 

 

 

Large accelerated filer ☐

Accelerated filer ☒

Emerging growth company ☒

 

 

 

Non-accelerated filer ☐

Smaller reporting company ☐

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). YES  ☐ NO  ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES  ☒ NO  ☐

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of each class

Symbol

Name of each exchange on which registered

Common Stock (no par value)

INSW

New York Stock Exchange

8.5% Senior Notes due 2023

INSW - PA

New York Stock Exchange

Former name, former address and former fiscal year, if changed since last report

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date. The number of shares outstanding of the issuer’s common stock as of August 7, 2019: common stock, no par value 29,274,452 shares.

 

 

 

INTERNATIONAL SEAWAYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
DOLLARS IN THOUSANDS
(UNAUDITED)

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2019

 

2018

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

91,662

 

$

58,313

Voyage receivables, including unbilled of $65,831 and $87,725

 

 

74,460

 

 

94,623

Other receivables

 

 

5,576

 

 

5,246

Inventories

 

 

4,110

 

 

3,066

Prepaid expenses and other current assets

 

 

6,916

 

 

5,912

Current portion of derivative asset

 

 

30

 

 

460

Total Current Assets

 

 

182,754

 

 

167,620

Restricted cash

 

 

58,630

 

 

59,331

Vessels and other property, less accumulated depreciation of $335,960 and $307,051

 

 

1,291,862

 

 

1,330,795

Vessel held for sale

 

 

6,754

 

 

 -

Deferred drydock expenditures, net

 

 

23,382

 

 

16,773

Operating lease right-of-use assets

 

 

33,216

 

 

 -

Investments in and advances to affiliated companies

 

 

265,959

 

 

268,322

Long-term derivative asset

 

 

26

 

 

704

Other assets

 

 

2,626

 

 

5,056

Total Assets

 

$

1,865,209

 

$

1,848,601

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable, accrued expenses and other current liabilities

 

$

34,427

 

$

23,008

Current portion of operating lease liabilities

 

 

11,481

 

 

 -

Current installments of long-term debt

 

 

57,680

 

 

51,555

Current portion of derivative liability

 

 

1,912

 

 

707

Total Current Liabilities

 

 

105,500

 

 

75,270

Long-term operating lease liabilities

 

 

19,030

 

 

 -

Long-term debt

 

 

736,826

 

 

759,112

Long-term derivative liability

 

 

6,386

 

 

1,922

Other liabilities

 

 

2,129

 

 

2,442

Total Liabilities

 

 

869,871

 

 

838,746

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Capital - 100,000,000 no par value shares authorized; 29,273,175 and 29,184,501

 

 

 

 

 

 

shares issued and outstanding

 

 

1,310,731

 

 

1,309,269

Accumulated deficit

 

 

(275,111)

 

 

(269,485)

 

 

 

1,035,620

 

 

1,039,784

Accumulated other comprehensive loss

 

 

(40,282)

 

 

(29,929)

Total Equity

 

 

995,338

 

 

1,009,855

Total Liabilities and Equity

 

$

1,865,209

 

$

1,848,601

 

See notes to condensed consolidated financial statements

2

INTERNATIONAL SEAWAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

Shipping Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Pool revenues, including $26,731,  $16,355,  $67,891 and $29,125

 

 

 

 

 

 

 

 

 

 

 

 

received from companies accounted for by the equity method

 

$

44,713

 

$

33,601

 

$

112,350

 

$

69,115

Time and bareboat charter revenues

 

 

6,541

 

 

6,608

 

 

12,061

 

 

14,521

Voyage charter revenues

 

 

17,756

 

 

16,700

 

 

46,473

 

 

25,251

 

 

 

69,010

 

 

56,909

 

 

170,884

 

 

108,887

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Voyage expenses

 

 

6,523

 

 

6,897

 

 

14,368

 

 

10,074

Vessel expenses

 

 

30,746

 

 

31,528

 

 

61,284

 

 

68,186

Charter hire expenses

 

 

13,033

 

 

10,723

 

 

30,218

 

 

19,346

Depreciation and amortization

 

 

18,818

 

 

16,804

 

 

37,747

 

 

34,428

General and administrative

 

 

6,297

 

 

6,064

 

 

13,070

 

 

12,093

Provision for credit losses, net

 

 

(21)

 

 

 -

 

 

1,277

 

 

 -

Third-party debt modification fees

 

 

 -

 

 

1,302

 

 

30

 

 

1,302

Loss/(gain) on disposal of vessels and other property, net of impairments

 

 

1,548

 

 

(6,740)

 

 

1,500

 

 

(167)

Total operating expenses

 

 

76,944

 

 

66,578

 

 

159,494

 

 

145,262

(Loss)/income from vessel operations

 

 

(7,934)

 

 

(9,669)

 

 

11,390

 

 

(36,375)

Equity in income of affiliated companies

 

 

8,015

 

 

8,822

 

 

16,085

 

 

17,162

Operating income/(loss)

 

 

81

 

 

(847)

 

 

27,475

 

 

(19,213)

Other income/(expense)

 

 

839

 

 

(4,863)

 

 

1,875

 

 

(4,184)

Income/(loss) before interest expense and income taxes

 

 

920

 

 

(5,710)

 

 

29,350

 

 

(23,397)

Interest expense

 

 

(17,443)

 

 

(13,086)

 

 

(34,976)

 

 

(24,707)

Loss before income taxes

 

 

(16,523)

 

 

(18,796)

 

 

(5,626)

 

 

(48,104)

Income tax provision

 

 

 -

 

 

 -

 

 

 -

 

 

(8)

Net loss

 

$

(16,523)

 

$

(18,796)

 

$

(5,626)

 

$

(48,112)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

29,220,345

 

 

29,130,230

 

 

29,200,897

 

 

29,118,271

Diluted

 

 

29,220,345

 

 

29,130,230

 

 

29,200,897

 

 

29,118,271

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Amounts:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

$

(0.57)

 

$

(0.65)

 

$

(0.19)

 

$

(1.65)

 

See notes to condensed consolidated financial statements

3

INTERNATIONAL SEAWAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
DOLLARS IN THOUSANDS
(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(16,523)

 

$

(18,796)

 

$

(5,626)

 

$

(48,112)

Other comprehensive (loss)/income, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized losses on cash flow hedges

 

 

(7,203)

 

 

3,099

 

 

(10,381)

 

 

10,569

Defined benefit pension and other postretirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrecognized prior service costs

 

 

30

 

 

77

 

 

 4

 

 

36

Net change in unrecognized actuarial losses

 

 

197

 

 

1,743

 

 

24

 

 

1,355

Other comprehensive (loss)/income, net of tax

 

 

(6,976)

 

 

4,919

 

 

(10,353)

 

 

11,960

Comprehensive loss

 

$

(23,499)

 

$

(13,877)

 

$

(15,979)

 

$

(36,152)

 

See notes to condensed consolidated financial statements

4

INTERNATIONAL SEAWAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
DOLLARS IN THOUSANDS
(UNAUDITED)

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 30,

 

 

 

2019

 

 

2018

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net loss

 

$

(5,626)

 

$

(48,112)

Items included in net loss not affecting cash flows:

 

 

 

 

 

 

Depreciation and amortization

 

 

37,747

 

 

34,428

Loss on write-down of vessels and other assets

 

 

 -

 

 

948

Amortization of debt discount and other deferred financing costs

 

 

3,560

 

 

2,651

Deferred financing costs write-off

 

 

 -

 

 

2,273

Stock compensation, non-cash

 

 

1,821

 

 

1,525

Earnings of affiliated companies

 

 

(16,367)

 

 

(17,548)

Other – net

 

 

227

 

 

233

Items included in net loss related to investing and financing activities:

 

 

 

 

 

 

Loss/(gain) on disposal of vessels and other property, net

 

 

1,500

 

 

(1,115)

Loss on repurchase of debt

 

 

 -

 

 

1,295

Cash distributions from affiliated companies

 

 

6,528

 

 

35,863

Payments for drydocking

 

 

(10,878)

 

 

(2,701)

Insurance claims proceeds related to vessel operations

 

 

640

 

 

3,528

Changes in operating assets and liabilities:

 

 

 

 

 

 

Decrease/(increase) in receivables

 

 

20,163

 

 

(4,221)

Decrease in deferred revenue

 

 

(15)

 

 

(903)

Net change in inventories, prepaid expenses and other current assets, accounts

 

 

 

 

 

 

payable, accrued expenses and other current and long-term liabilities

 

 

4,478

 

 

1,979

Net cash provided by operating activities

 

 

43,778

 

 

10,123

Cash Flows from Investing Activities:

 

 

 

 

 

 

Expenditures for vessels and vessel improvements

 

 

(5,356)

 

 

(128,925)

Proceeds from disposal of vessels and other property, net

 

 

9,090

 

 

126,504

Expenditures for other property

 

 

(301)

 

 

(320)

Investments in and advances to affiliated companies, net

 

 

434

 

 

1,966

Repayments of advances from affiliated companies

 

 

5,272

 

 

93,142

Net cash provided by investing activities

 

 

9,139

 

 

92,367

Cash Flows from Financing Activities:

 

 

 

 

 

 

Issuance of debt, net of issuance and deferred financing costs

 

 

 -

 

 

72,924

Extinguishment of debt

 

 

 -

 

 

(60,000)

Payments on debt

 

 

(19,652)

 

 

(42,770)

Cash paid to tax authority upon vesting of stock-based compensation

 

 

(359)

 

 

(397)

Other – net

 

 

(258)

 

 

 -

Net cash used in financing activities

 

 

(20,269)

 

 

(30,243)

Net increase in cash, cash equivalents and restricted cash

 

 

32,648

 

 

72,247

Cash, cash equivalents and restricted cash at beginning of year

 

 

117,644

 

 

70,606

Cash, cash equivalents and restricted cash at end of period

 

$

150,292

 

$

142,853

 

See notes to condensed consolidated financial statements

5

INTERNATIONAL SEAWAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
DOLLARS IN THOUSANDS
(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Accumulated

 

Comprehensive

 

 

 

 

Capital

 

Deficit

 

Loss

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2019

 

$

1,309,269

 

$

(269,485)

 

$

(29,929)

 

$

1,009,855

Net loss

 

 

 -

 

 

(5,626)

 

 

 -

 

 

(5,626)

Other comprehensive loss

 

 

 -

 

 

 -

 

 

(10,353)

 

 

(10,353)

Forfeitures of vested restricted stock awards

 

 

(359)

 

 

 -

 

 

 -

 

 

(359)

Compensation relating to restricted stock awards

 

 

434

 

 

 -

 

 

 -

 

 

434

Compensation relating to restricted stock units awards

 

 

883

 

 

 -

 

 

 -

 

 

883

Compensation relating to stock option awards

 

 

504

 

 

 -

 

 

 -

 

 

504

Balance at June 30, 2019

 

$

1,310,731

 

$

(275,111)

 

$

(40,282)

 

$

995,338

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2018

 

$

1,306,606

 

$

(180,545)

 

$

(40,407)

 

$

1,085,654

Net loss

 

 

 -

 

 

(48,112)

 

 

 -

 

 

(48,112)

Other comprehensive income

 

 

 -

 

 

 -

 

 

11,960

 

 

11,960

Forfeitures of vested restricted stock awards

 

 

(486)

 

 

 -

 

 

 -

 

 

(486)

Compensation relating to restricted stock awards

 

 

416

 

 

 -

 

 

 -

 

 

416

Compensation relating to restricted stock units awards

 

 

695

 

 

 -

 

 

 -

 

 

695

Compensation relating to stock option awards

 

 

414

 

 

 -

 

 

 -

 

 

414

Balance at June 30, 2018

 

$

1,307,645

 

$

(228,657)

 

$

(28,447)

 

$

1,050,541

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 1, 2019

 

$

1,309,881

 

$

(258,588)

 

$

(33,306)

 

$

1,017,987

Net loss

 

 

 -

 

 

(16,523)

 

 

 -

 

 

(16,523)

Other comprehensive loss

 

 

 -

 

 

 -

 

 

(6,976)

 

 

(6,976)

Forfeitures of vested restricted stock awards

 

 

(210)

 

 

 -

 

 

 -

 

 

(210)

Compensation relating to restricted stock awards

 

 

202

 

 

 -

 

 

 -

 

 

202

Compensation relating to restricted stock units awards

 

 

587

 

 

 -

 

 

 -

 

 

587

Compensation relating to stock option awards

 

 

271

 

 

 -

 

 

 -

 

 

271

Balance at June 30, 2019

 

$

1,310,731

 

$

(275,111)

 

$

(40,282)

 

$

995,338

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 1, 2018

 

$

1,306,869

 

$

(209,861)

 

$

(33,366)

 

$

1,063,642

Net loss

 

 

 -

 

 

(18,796)

 

 

 -

 

 

(18,796)

Other comprehensive income

 

 

 -

 

 

 -

 

 

4,919

 

 

4,919

Forfeitures of vested restricted stock awards

 

 

(120)

 

 

 -

 

 

 -

 

 

(120)

Compensation relating to restricted stock awards

 

 

224

 

 

 -

 

 

 -

 

 

224

Compensation relating to restricted stock units awards

 

 

441

 

 

 -

 

 

 -

 

 

441

Compensation relating to stock option awards

 

 

231

 

 

 -

 

 

 -

 

 

231

Balance at June 30, 2018

 

$

1,307,645

 

$

(228,657)

 

$

(28,447)

 

$

1,050,541

 

See notes to condensed consolidated financial statements

 

 

6

INTERNATIONAL SEAWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1 — Basis of Presentation:

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements include the accounts of International Seaways, Inc. (“INSW”), a Marshall Islands corporation, and its wholly owned subsidiaries. The Company owns and operates a fleet of 47 oceangoing vessels, including six vessels that have been chartered-in under operating leases for durations exceeding one year at inception and six vessels in which the Company has interests through its joint ventures, engaged primarily in the transportation of crude oil and refined petroleum products in the International Flag trade through its wholly owned subsidiaries. Subsequent to June 30, 2019, we (i) sold and delivered a 2004-built MR to its buyer (see Note 5, “Vessels”),  (ii) tendered notice of redelivery on a 2006-built chartered-in MR to its owners, and (iii) chartered-in a 2006-built Panamax for a two-year period with no options to extend (see Note 15, “Leases”).  Unless the context indicates otherwise, references to “INSW”, the “Company”, “we”, “us” or “our”, refer to International Seaways, Inc. and its subsidiaries.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by generally accepted accounting principles in the United States. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the results have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.

 

The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles in the United States for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018.

 

All intercompany balances and transactions within INSW have been eliminated. Investments in 50% or less owned affiliated companies, in which INSW exercises significant influence, are accounted for by the equity method.

 

Dollar amounts, except per share amounts, are in thousands.

 

 

 

Note 2 — Significant Accounting Policies:

 

Cash, cash equivalents and Restricted cash  Interest-bearing deposits that are highly liquid investments and have a maturity of three months or less when purchased are included in cash and cash equivalents. Restricted cash of $58,630 and $59,331 as of June 30, 2019 and December 31, 2018, respectively, represents legally restricted cash relating to the Company’s 2017 Term Loan Facility, Sinosure Credit Facility, ABN Term Loan Facility, and 10.75% Unsecured Subordinated Notes (See Note 9, “Debt”). Such restricted cash reserves are included in the non-current assets section of the condensed consolidated balance sheets. 

 

Concentration of Credit Risk  Financial instruments that potentially subject the Company to concentrations of credit risk are voyage receivables due from charterers and pools in which the Company participates. With respect to voyage receivables, the Company limits its credit risk by performing ongoing credit evaluations. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the voyage receivables balance. We determine the allowance based on troubled accounts, historical experience, and other currently available evidence. Provisions for doubtful accounts associated with operating lease receivables and non-operating lease receivables are included in provision for credit losses on the condensed consolidated statements of operations. Voyage receivables reflected in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018 are net of an allowance for doubtful accounts of $1,277 and $0, respectively. The provisions for doubtful accounts for the three and six months ended June 30, 2019 were $(21) and $1,277, respectively. The provisions for doubtful accounts for the three and six months ended June 30, 2018

7

INTERNATIONAL SEAWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

were $0 and $41, respectively. During the three and six months ended June 30, 2019 and 2018, the Company did not have any individual customers who accounted for 10% or more of its revenues apart from the pools in which it participates. The pools in which the Company participates accounted in aggregate for 85% and 88% of consolidated voyage receivables at June 30, 2019 and December 31, 2018, respectively.

 

Deferred finance charges  Finance charges, excluding original issue discount, incurred in the arrangement and/or amendments resulting in the modification of debt are deferred and amortized to interest expense on either an effective interest method or straight-line basis over the life of the related debt. Unamortized deferred finance charges of $344 and $413 relating to the 2017 Revolver Facility are included in other assets in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018, respectively. Unamortized deferred financing charges of $23,156 and $26,647 relating to the 2017 Term Loan Facility, Sinosure Credit Facility, ABN Term Loan Facility, 8.5% Senior Notes and 10.75% Subordinated Notes are included in long-term debt in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018, respectively. Interest expense relating to the amortization of deferred financing charges amounted to $1,250 and $2,480 for the three and six months ended June 30, 2019, respectively, and $800 and $1,456 for the three and six months ended June 30, 2018, respectively.

 

Revenue and expense recognition — The Company recognizes revenue in accordance with the provisions of ASC 606, Revenue from Contracts with Customers (ASC 606). The standard provides a unified model to determine how revenue is recognized. In doing so, the Company makes judgments including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each performance obligation. Revenues are recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

As the Company’s performance obligations are services which are received and consumed by its customers as it performs such services, revenues are recognized over time proportionate to the days elapsed since the service commencement compared to the total days anticipated to complete the service. The minimum duration of services is less than one year for each of the Company’s current contracts.

 

The Company’s contract revenues consist of revenues from time charters, bareboat charters, voyage charters and pool revenues.

 

Revenues from time charters are accounted for as fixed rate operating leases with an embedded technical management service component and are recognized ratably over the rental periods of such charters. Bareboat charters are also accounted for as fixed rate operating leases and the associated revenue is recognized ratably over the rental periods of such charters.

 

Voyage charters contain a lease component if the contract (i) specifies a specific vessel asset; and (ii) has terms that allow the charterer to exercise substantive decision-making rights, which have an economic value to the charterer and therefore allow the charterer to direct how and for what purpose the vessel is used. Voyage charter revenues and expenses are recognized ratably over the estimated length of each voyage. For a voyage charter which contains a lease component, revenue and expenses are recognized based on a lease commencement-to-discharge basis and the lease commencement date is the latter of discharge of the previous cargo or voyage charter contract signing. For voyage charters that do not have a lease component, revenue and expenses are recognized based on a load-to-discharge basis. Accordingly, voyage expenses incurred during a vessel’s positioning voyage to a load port in order to serve a customer under a voyage charter not containing a lease are considered costs to fulfill a contract and are deferred and recognized ratably over the load-to-discharge portion of the contract.

 

Under voyage charters, expenses such as fuel, port charges, canal tolls, cargo handling operations and brokerage commissions are paid by the Company whereas, under time and bareboat charters, such voyage costs are paid by the Company’s customers.

8

INTERNATIONAL SEAWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

For the Company’s vessels operating in pools, revenues and voyage expenses are pooled and allocated to each pool’s participants on a time charter equivalent (“TCE”) basis in accordance with an agreed-upon formula. Accordingly, the Company accounts for its agreements with commercial pools as variable rate operating leases. For the pools in which the Company participates, management monitors, among other things, the relative proportion of the Company’s vessels operating in each of the pools to the total number of vessels in each of the respective pools and assesses whether or not the Company’s participation interest in each of the pools is sufficiently significant so as to determine that the Company has effective control of the pool.

 

Demurrage earned during a voyage charter represents variable consideration. The Company estimates demurrage at contract inception using either the expected value or most likely amount approaches. Such estimate is reviewed and updated over the term of the voyage charter contract.

 

On January 1, 2019, the Company adopted the provisions of ASU 2016-02, Leases (ASC 842). This standard provides lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under ASC 606 and both of the following conditions are met: (1) the timing and pattern of transfer of the non-lease components and associated lease component are the same; and (2) the lease component, if accounted for separately, would be classified as an operating lease. If lease and non-lease components are aggregated under this practical expedient, a lessor would account for the combined component as follows: if the non-lease components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with ASC 606 as described above; otherwise, the entity must account for the combined component as an operating lease in accordance with ASC 842.

 

The Company has elected the lessor practical expedient to aggregate non-lease components with the associated lease components and to account for the combined components as required by the practical expedient since its primary revenue streams described above meet the conditions required to adopt the practical expedient. Furthermore, the Company has performed a qualitative analysis of each of its primary revenue contract types to determine whether the lease component or the non-lease component is the predominant component of the contract. The Company concluded that the lease component is the predominant component for all of its primary revenue contract types as the lessee would ascribe more value to the control and use of the underlying vessel rather than to the technical services to operate the vessel which is an add-on service to the lessee. Accordingly, effective January 1, 2019, the Company’s primary revenue streams are accounted for as lease revenue under ASC 842, except for revenue from voyage charters that don’t meet the definition of a lease. Such contracts will continue to be accounted for as service revenue in accordance with the provisions of ASC 606.

 

Under ASC 842, lease revenue for fixed lease payments are recognized over the lease term on a straight-line basis and lease revenue for variable lease payments (e.g., demurrage) are recognized in the period in which the changes in facts and circumstances on which the variable lease payments are based occur. Initial direct costs are expensed over the lease term on the same basis as lease revenue.

 

See Note 14, “Revenue,” for additional disclosures on revenue recognition and the impact of adopting ASC 842 on January 1, 2019.

 

Leases —  The Company currently has two major categories of lease contracts under which the Company is a lessee – chartered-in vessels and leased office and other space. Chartered-in vessels include bareboat charters which have a lease component only and time charters which have both lease and non-lease components. The lease component relates to the cost to a lessee to control the use of the vessel and the non-lease components relate to the cost to the lessee for the lessor to operate the vessel (technical management service components). For time charters-in, the Company has separated non-lease components from lease component and scoped out non-lease components from the application of ASC 842. For leased office and other space, the Company has elected the ASC 842 practical expedient to account for the lease and non-lease components as a single lease component as it is not practical to separate the insignificant non-lease components from the associated lease components for these types of leases. Further, ASC 842 also allows lessees to elect as an accounting policy not to apply the provisions of ASC 842 to short term leases (i.e., leases with an original term of 12-months or less). Instead, a lessee may recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. The accounting policy election for short-term leases is required to be made by class of underlying asset to which the right of use relates. The Company has elected not to apply

9

INTERNATIONAL SEAWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

ASC 842 to its portfolio of short-term leases existing on January 1, 2019 (see Note 15, “Leases,” for additional information with respect to the Company’s short-term leases).

 

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities, and long-term operating lease liabilities in the Company’s condensed consolidated balance sheets. The Company does not have finance leases.  

 

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any prepaid lease payments made and excludes accrued lease payments and lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

 

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company makes significant judgements and assumptions to estimate its incremental borrowing rate that a lessee would have to pay to borrow on a 100% collateralized basis over a term similar to the lease term and in an amount equal to the lease payments in a similar economic environment. The Company performs the following steps in estimating its incremental borrowing rate: (i) gather observable debt yields of the Company’s recently issued debt facilities; and (ii) make adjustments to the yields of the actual debt facilities to reflect changes in collateral level, terms, the risk-free interest rate, and credit ratings. In addition, the Company performs sensitivity analyses to evaluate the impact of selected discount rates on the estimated lease liability.

 

The Company makes significant judgements and assumptions to separate the lease component from the non-lease component of its time chartered-in vessels. For purposes of determining the standalone selling price of the vessel lease and technical management service components of the Company’s time charters, the Company concluded that the residual approach would be the most appropriate method to use given that vessel lease rates are highly variable depending on shipping market conditions, the duration of such charters, and the age of the vessel. The Company believes that the standalone transaction price attributable to the technical management service component is more readily determinable than the price of the lease component and, accordingly, the price of the service component is estimated using observable data (such as fees charged by third-party technical managers) and the residual transaction price is attributed to the vessel lease component.

 

See discussion above under revenue and expense recognition for the Company’s accounting policy on revenues from leases. See Note 15, “Leases,” for additional disclosures on leases and the impact of adopting ASC 842 on January 1, 2019.

 

Fair value measurements —  We account for certain assets and liabilities at fair value under ASC 820. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. In addition, the fair value of assets and liabilities should include consideration of non-performance risk, which for the liabilities described below includes the Company's own credit risk. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market:

 

Level 1 - Quoted prices in active markets for identical assets or liabilities. Our level 1 non-derivative assets and liabilities primarily include cash and cash equivalents and the 8.50% Senior Notes.

Level 2 - Quoted prices for similar assets and liabilities in active markets or model-based valuation techniques for which all significant inputs are observable in the market (where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, etc.). Our level 2 non-derivative liabilities primarily include the 2017 Term Loan Facility, Sinosure Credit Facility, ABN Term Loan Facility and 10.75% Subordinated Notes. Our Level 2 derivative assets and liabilities primarily include our interest rate caps and swaps.

10

INTERNATIONAL SEAWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Level 3 - Inputs that are unobservable (for example cash flow modeling inputs based on assumptions).

 

Recently Adopted Accounting Standards —In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842), a standard that requires lessees to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. The requirements of this standard include a significant increase in required disclosures to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The FASB has issued several amendments and practical expedients to the standard, including clarifying guidance, transition relief on comparative reporting at adoption, the lessee practical expedient, which allows lessees, as an accounting policy election made by class of underlying asset, to choose not to separate non-lease components from lease components and instead combine the separate lease and non-lease components and account for them as a single lease components, the lessor practical expedient, which allows entities to choose to aggregate non-lease components with the associated lease components and to account for the combined components as required by the practical expedient, a practical expedient, which allows lessees to elect as an accounting policy not to apply the provisions of ASC 842 to short term leases, and codification improvements to clarify that lessees and lessors are exempt from a certain interim disclosure requirement associated with adopting the new leases standard. The new standard is effective for us beginning January 1, 2019 and we adopted the standard using the modified retrospective transition approach, which allows the Company to recognize a cumulative effect adjustment to the opening balance of accumulated deficit in the period of adoption rather than restate our comparative prior year periods. Based on our analysis, the cumulative effect adjustment to the opening balance of accumulated deficit is zero because (i) we do not have any unamortized initial direct costs as of January 1, 2019 that need to be written off; (ii) we do not have any deferred gain or loss from our previous sale and operating leaseback transactions that need to be recognized; and (iii) the timing and pattern of revenue recognition under our revenue contracts that have lease and non-lease components is the same and even if accounted for separately, the lease component of such contracts would be considered operating leases. We elected certain available practical expedients and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. See Note 14, “Revenue” and Note 15, “Lease,” for further information and the impact of adopting ASC 842 on January 1, 2019.

 

In August 2018, the SEC issued a final rule that amends certain of its disclosure requirements. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly changing the information provided to investors. The amendments require registrants to include a reconciliation of changes in stockholders’ equity in their interim financial statements. As a result, registrants will have to provide the reconciliation for both the year-to-date and quarterly periods as well as comparable periods in Form 10-Q, but only for the year-to-date periods in registration statements. While the amendments adopted in August 2018 are effective on November 5, 2018, the SEC staff issued a Compliance and Disclosure Interpretation (C&DI) that provides an extended transition period for companies to comply with the requirement to provide a reconciliation of changes in stockholders’ equity in their interim financial statements, allowing a registrant to not comply with that requirement until the Form 10-Q for the quarter that begins after November 5, 2018. Accordingly, the Company began providing the new interim reconciliations of shareholders’ equity required by the rule in the Form 10-Q for the three months ended March 31, 2019.

 

Recently Issued Accounting Standards —  In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit losses (ASC 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model known as the current expected credit loss (“CECL”) model that is based on expected losses rather than incurred losses. Under the new guidance, an entity is required to recognize as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. Unlike the incurred loss models under existing standards, the CECL model does not specify a threshold for the recognition of an impairment allowance. Rather, an entity will recognize its estimate of expected credit losses for financial assets as of the end of the reporting period. Credit impairment will be recognized as an allowance or contra-asset rather than as a direct write-down of the amortized cost basis of a financial asset. However, the carrying amount of a financial asset that is deemed uncollectible will be written off in a manner consistent with existing standards. In November 2018, the FASB issued ASU 2018-19, Financial Instruments – Credit losses (ASC 326), which clarifies that operating lease receivables are not within the scope of ASC 326 and should instead be accounted for under the new leasing standard, ASC 842. The standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2019 and early adoption is permitted. We are in the process of evaluating financial assets on our balance sheet for potential credit losses under CECL model, including assessing changes

11

INTERNATIONAL SEAWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

that might be necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting. Most of our voyage receivables are operating lease receivables which are out of the scope of ASC 326.

 

In August 2018, the FASB issued ASU 2018-14, Defined Benefit Plans (ASC 715), which amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. ASU 2018-14 adds requirements for an entity to disclose the following: (1) the weighted average interest crediting rates used in the entity’s cash balance pension plans and other similar plans; (2) a narrative description of the reasons for significant gains and losses affecting the benefit obligation for the period; and (3) an explanation of any other significant changes in the benefit obligation or plan assets that are not otherwise apparent in the other disclosures required by ASC 715. Further, the ASU removes guidance that requires the following disclosures: (1) the amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit cost over the next year; (2) information about plan assets to be returned to the entity, including amounts and expected timing; (3) information about benefits covered by related-party insurance and annuity contracts and significant transactions between the plan and related parties; and (4) effects of a one-percentage-point change in the assumed health care costs and the effect of this change in rates on service cost, interest cost, and the benefit obligation for postretirement health care benefits. The standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2020 and early adoption is permitted. Management does not expect the adoption of this accounting standard to have a material impact on the Company’s consolidated financial statements.

 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820), which changes the fair value measurement disclosure requirements. The new disclosure requirements are: (1) changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and (2) the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The eliminated disclosure requirements are: (1) transfers between Level 1 and Level 2 of the fair value hierarchy; and (2) policies related to valuation processes and the timing of transfers between levels of the fair value hierarchy. Under ASU 2018-13, entities are no longer required to estimate and disclose the timing of liquidity events for investments measured at fair value. Instead, the requirement to disclose such events applies only when they have been communicated to the reporting entities by the investees or announced publicly. The standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2019 and early adoption is permitted. Management does not expect the adoption of this accounting standard to have a material impact on the Company’s consolidated financial statements.

 

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"), which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software, in order to determine the applicable costs to capitalize and the applicable costs to expense as incurred. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. The standard can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company intends to adopt ASU 2018-15 using the prospective approach and the adoption is not expected to have a material impact on the Company’s consolidated financial statements.

 

 

 

Note 3 — Earnings per Common Share:

 

Basic earnings per common share is computed by dividing earnings, after the deduction of dividends and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period.

 

The computation of diluted earnings per share assumes the issuance of common stock for all potentially dilutive stock options and restricted stock units not classified as participating securities. Participating securities are defined by ASC 260, Earnings Per Share, as unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents and are included in the computation of earnings per share pursuant to the two-class method.

 

12

INTERNATIONAL SEAWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Weighted average shares of unvested restricted common stock considered to be participating securities totaled 42,267 and 44,870 for the three and six months ended June 30, 2019, respectively, and 39,709 and 39,326 for the three and six months ended June 30, 2018, respectively. Such participating securities are allocated a portion of income, but not losses under the two-class method. As of June 30, 2019, there were 208,732 shares of restricted stock units and 538,632 stock options outstanding and considered to be potentially dilutive securities.

 

The components of the calculation of basic earnings per share and diluted earnings per share are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

Net loss

 

$

(16,523)

 

$

(18,796)

 

$

(5,626)

 

$

(48,112)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

29,220,345

 

 

29,130,230

 

 

29,200,897

 

 

29,118,271

Diluted

 

 

29,220,345

 

 

29,130,230

 

 

29,200,897

 

 

29,118,271

 

Reconciliations of the numerator of the basic and diluted earnings per share computations are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

Net loss allocated to:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stockholders

 

$

(16,523)

 

$

(18,796)

 

$

(5,626)

 

$

(48,112)

Participating securities

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

$

(16,523)

 

$

(18,796)

 

$

(5,626)

 

$

(48,112)

 

For the three and six months ended June 30, 2019 and 2018 earnings per share calculations, there were no dilutive equity awards outstanding. Awards of 738,007 and 645,728 for the three and six months ended June 30, 2019, respectively, and 611,246 and 495,838 for the three and six months ended June 30, 2018, respectively, were not included in the computation of diluted earnings per share because inclusion of these awards would be anti-dilutive.

 

 

 

Note 4 — Business and Segment Reporting:

 

The Company has two reportable segments: Crude Tankers and Product Carriers. The joint ventures with two floating storage and offloading service vessels are included in the Crude Tankers Segment. The joint venture with four LNG Carriers is included in Other. Adjusted (loss)/income from vessel operations for segment purposes is defined as loss/(gain) from vessel operations before general and administrative expenses, provision for credit losses, third-party debt modification fees, and (loss)/gain on disposal of vessels and other property, net of impairments. The accounting policies followed by the reportable segments are the same as those followed in the preparation of the Company’s condensed consolidated financial statements.

 

 

13

INTERNATIONAL SEAWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Information about the Company’s reportable segments as of and for the three and six months ended June 30, 2019 and 2018 follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude

 

Product

 

 

 

 

 

 

 

 

Tankers

 

Carriers

 

Other

 

Totals

Three months ended June 30, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

Shipping revenues

 

$

52,130

 

$

16,880

 

$

 -

 

$

69,010

Time charter equivalent revenues

 

 

45,653

 

 

16,834

 

 

 -

 

 

62,487

Depreciation and amortization

 

 

14,795

 

 

3,994

 

 

29

 

 

18,818

(Gain)/loss on disposal of vessels and other property

 

 

(1)

 

 

1,549

 

 

 -

 

 

1,548

Adjusted (loss)/income from vessel operations

 

 

(851)

 

 

781

 

 

(40)

 

 

(110)

Equity in income of affiliated companies

 

 

4,603

 

 

 -

 

 

3,412

 

 

8,015

Investments in and advances to affiliated companies at June 30, 2019

 

 

139,202

 

 

10,554

 

 

116,203

 

 

265,959

Adjusted total assets at June 30, 2019

 

 

1,278,859

 

 

315,086

 

 

116,203

 

 

1,710,148

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

Shipping revenues

 

$

41,154

 

$

15,755

 

$

 -

 

$

56,909

Time charter equivalent revenues

 

 

34,385

 

 

15,627

 

 

 -

 

 

50,012

Depreciation and amortization

 

 

12,240

 

 

4,530

 

 

34

 

 

16,804

Gain on disposal of vessels and other property, net of impairments

 

 

(4,055)

 

 

(2,685)

 

 

 -

 

 

(6,740)

Adjusted (loss)/income from vessel operations

 

 

(5,198)

 

 

(4,149)

 

 

304

 

 

(9,043)

Equity in income of affiliated companies

 

 

4,709

 

 

 -

 

 

4,113

 

 

8,822

Investments in and advances to affiliated companies at June 30, 2018

 

 

152,604

 

 

13,583

 

 

108,847

 

 

275,034

Adjusted total assets at June 30, 2018

 

 

1,338,120

 

 

351,615

 

 

108,847

 

 

1,798,582