Attached files
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| 8-K - 8-K - OVERSEAS SHIPHOLDING GROUP INC | v452606_8k.htm |
Exhibit 99.1
OVERSEAS SHIPHOLDING GROUP REPORTS THIRD QUARTER 2016 RESULTS
New York, NY – November 9, 2016 – Overseas Shipholding Group, Inc. (OSG) (NYSE: OSG), a provider of oceangoing energy transportation services, today reported results for the quarter ended September 30, 2016.
Highlights
| · | Time charter equivalent (TCE) revenues(A) for the third quarter of 2016 were $186.8 million, down 20% compared with the same period in 2015. |
| · | Net loss for the third quarter was $98.7 million, or $1.10 per diluted share, compared with net income of $173.4 million, or $1.79 per diluted share, in the third quarter of 2015. The decrease reflects the impact of pre-tax vessel impairment charges of $147.4 million recorded in the third quarter 2016. |
| · | Adjusted EBITDA(B) was $75.6 million, down 39% from $123.9 million in the same period in 2015. |
| · | Total cash(C) was $318.8 million as of September 30, 2016. |
| · | Prepayment of $75 million in principal amount of international subsidiary term loan. |
| · | Repurchased and retired $37 million in principal amount of unsecured notes. |
| · | Repurchased and retired $43 million of Class A warrants at an average share equivalent price of $10.22. |
| · | Board of Directors approves spin-off of International Seaways. |
“I am very pleased with our third quarter results, where we generated $76 million of adjusted EBITDA despite challenging market conditions,” said Captain Ian T. Blackley, OSG’s president and CEO. “Looking to the future, we expect to complete the spin of International Seaways on November 30th with regular way trading commencing December 1st. We believe that two distinct public companies, operating in the Domestic and International markets will provide greater value for our shareholders, as each businesses will be able to fully focus on opportunities and attractive investments in each sector,” concluded Capt. Blackley.
Third Quarter 2016 Results
TCE revenues for the third quarter of 2016 were $186.8 million, a decrease of $46.8 million compared with the third quarter of 2015, primarily driven by lower daily rates earned by the International Flag fleet and the Jones Act ATBs, partially offset by an increase in revenue days resulting from fewer drydock and repair days in the current period. TCE revenues for the first nine months of 2016 were $639.4 million, a decrease of $51.0 million compared with the first nine months of 2015. Shipping revenues for the third quarter of 2016 were $195.0 million, a decrease of $46.8 million compared with the third quarter of 2015. Shipping revenues for the first nine months of 2016 were $660.2 million, a decrease of $60.6 million compared with the first nine months of 2015.
Operating loss for the third quarter of 2016 was $117.6 million, compared to operating income of $85.2 million in the third quarter of 2015. The decrease reflects the impact of vessel impairment charges of $147.4 million recorded in the current quarter, the decline in TCE revenues and an increase in depreciation and amortization expenses. Operating income for the first nine months of 2016 was $35.7 million, a decrease of $219.3 million compared with the first nine months of 2015.
A, B, CReconciliations of these non-GAAP financial measures are included in the financial tables attached to this press release starting on Page 8.
Net loss for the third quarter of 2016 was $98.7 million, or $1.10 per diluted share, compared with net income of $173.4 million, or $1.79 per diluted share, in the third quarter of 2015. The decrease reflects the impact of pre-tax vessel impairment charges, lower TCE revenues, and increases in depreciation and amortization expenses, partially offset by lower interest expense. Net loss for the first nine months of 2016 was $18.1 million, or $0.22 per diluted share, compared with net income of $274.7 million, or $2.83 per diluted share, in the first nine months of 2015. Net income in the comparative 2015 periods included a one-time, non-cash income tax benefit of $150.1 million.
Adjusted EBITDA was $75.6 million for the quarter, a decrease of $48.3 million compared with the third quarter of 2015, driven by lower daily rates earned by the International Flag fleet and the Jones Act ATBs. Adjusted EBITDA was $315.3 million for the first nine months of 2016, a decrease of $53.0 million compared with the first nine months of 2015.
International Crude Tankers
TCE revenues for the International Crude Tankers segment were $50.2 million for the quarter, down 34% compared with the third quarter of 2015. This decrease was primarily due to a decline in VLCC and Aframax rates, with spot rates declining to $25,800 and $15,400 per day, respectively, resulting in a $32.4 million decline in TCE revenues. This decrease was partially offset by a 145-day increase in VLCC and Aframax revenue days resulting from fewer drydock and repair days. TCE revenues for the International Crude Tankers segment were $204.1 million for the first nine months of 2016, a decrease of $16.0 million compared with the first nine months of 2015. Shipping revenues for the International Crude Tankers segment were $53.5 million for the quarter, down 34% compared with the third quarter of 2015. Shipping revenues for the International Crude Tankers segment were $212.9 million for the first nine months of 2016, a decrease of $22.9 million compared with the first nine months of 2015.
International Product Carriers
TCE revenues for the International Product Carriers segment were $27.0 million for the quarter, down 46% compared with the third quarter of 2015. This decrease was primarily due to a decline in MR blended rates, with spot rates declining to $10,700 per day, resulting in a $18.5 million decline in TCE revenues. Also contributing was a 73-day decrease in MR revenue days, resulting primarily from the sale of an older vessel in July 2015, and a decline in LR2 spot rates to $18,000 per day, resulting in a combined $4.4 million decline in TCE revenues. TCE revenues for the International Product Carriers segment were $98.8 million for the first nine months of 2016, a decrease of $37.1 million compared with the first nine months of 2015. Shipping revenues for the International Product Carriers segment were $27.2 million for the quarter, down 46% compared with the third quarter of 2015. Shipping revenues for the International Product Carriers segment were $99.6 million for the first nine months of 2016, a decrease of $37.2 million compared with the first nine months of 2015.
U.S. Flag
TCE revenues for the U.S. Flag segment were $109.6 million for the quarter, up 2% compared with the third quarter of 2015, primarily due to a 113-day increase in revenue days resulting from fewer drydock and repair days and resulting in a $5.3 million increase in TCE revenues. Also contributing were higher daily rates earned by its non-Jones Act Product Carriers, which contributed $3.3 million of the total increase in revenue. These increases were largely offset by a $6.4 million decrease in TCE revenues as a result of lower average daily rates earned by its Jones Act ATBs and Product Carriers. TCE revenues for the U.S. Flag segment were $336.6 million for the first nine months of 2016, an increase of $2.1 million compared with the first nine months of 2015. Shipping revenues for the U.S. Flag segment were $114.2 million for the quarter, up 3% compared with the third quarter of 2015. Shipping revenues for the U.S. Flag segment were $347.6 million for the first nine months of 2016, comparable to the first nine months of 2015.
| 2 |
Conference Call
The Company will host a conference call to discuss its third quarter 2016 results at 9:00 a.m. ET on Wednesday, November 9, 2016.
To access the call, participants should dial (888) 317-6016 for domestic callers and (412) 317-6016 for international callers. Please dial in ten minutes prior to the start of the call.
A live webcast of the conference call will be available from the Investor Relations section of the Company’s website at http://www.osg.com/
An audio replay of the conference call will be available starting at 12:00 p.m. ET on Wednesday, November 9, 2016 through 11:59 p.m. ET on Wednesday, November 16, 2016 by dialing (877) 344-7529 for domestic callers and (412) 317-0088 for international callers, and entering Access Code 10095886.
About OSG
Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly traded tanker company providing energy transportation services for crude oil and petroleum products in the U.S. and International Flag markets. OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in New York City, NY. More information is available at www.osg.com.
Forward-Looking Statements
This release contains forward-looking statements. In addition, the Company may make or approve certain statements in future filings with the Securities and Exchange Commission (SEC), in press releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical facts should be considered forward-looking statements. These matters or statements may relate to the Company’s plans to issue dividends and make payments to securityholders, its prospects, including statements regarding trends in the tanker and articulated tug/barge markets, and possibilities of spin-offs or certain strategic alliances and investments. Forward-looking statements are based on the Company’s current plans, estimates and projections, and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail in the Company’s Annual Report for 2015 on Form 10-K under the caption “Risk Factors” and in similar sections of other filings made by the Company with the SEC from time to time. The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements and written and oral forward looking statements attributable to the Company or its representatives after the date of this release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by the Company with the SEC.
Investor Relations & Media Contact:
Brian Tanner, Overseas Shipholding Group, Inc.
(212) 578-1645
btanner@osg.com
| 3 |
Consolidated Statements of Operations
| ($ in thousands, except per share amounts) | Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Shipping Revenues: | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| Pool revenues | $ | 42,854 | $ | 97,797 | $ | 200,088 | $ | 267,157 | ||||||||
| Time and bareboat charter revenues | 114,518 | 111,120 | 360,964 | 328,816 | ||||||||||||
| Voyage charter revenues | 37,579 | 32,835 | 99,101 | 124,808 | ||||||||||||
| 194,951 | 241,752 | 660,153 | 720,781 | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| Voyage expenses | 8,136 | 8,164 | 20,721 | 30,348 | ||||||||||||
| Vessel expenses | 72,241 | 70,448 | 212,293 | 207,966 | ||||||||||||
| Charter hire expenses | 32,695 | 31,993 | 95,231 | 95,018 | ||||||||||||
| Depreciation and amortization | 43,208 | 38,743 | 128,883 | 113,731 | ||||||||||||
| General and administrative | 19,076 | 21,376 | 53,792 | 58,129 | ||||||||||||
| Technical management transition costs | - | - | - | 40 | ||||||||||||
| Severance costs | 2,238 | - | 2,238 | 5 | ||||||||||||
| (Gain)/loss on disposal of vessels and other property, including impairments | 147,422 | (3,185 | ) | 147,377 | (4,258 | ) | ||||||||||
| Total Operating Expenses | 325,016 | 167,539 | 660,535 | 500,979 | ||||||||||||
| Income/(loss) from vessel operations | (130,065 | ) | 74,213 | (382 | ) | 219,802 | ||||||||||
| Equity in income of affiliated companies | 12,488 | 10,978 | 36,078 | 35,220 | ||||||||||||
| Operating income/(loss) | (117,577 | ) | 85,191 | 35,696 | 255,022 | |||||||||||
| Other expense | (5,079 | ) | (1,963 | ) | (3,104 | ) | (1,842 | ) | ||||||||
| Income/(loss) before interest expense, reorganization items and income taxes | (122,656 | ) | 83,228 | 32,592 | 253,180 | |||||||||||
| Interest expense | (20,126 | ) | (29,191 | ) | (63,337 | ) | (86,691 | ) | ||||||||
| Income/(loss) before reorganization items and income taxes | (142,782 | ) | 54,037 | (30,745 | ) | 166,489 | ||||||||||
| Reorganization items, net | (5,732 | ) | (1,420 | ) | 11,318 | (6,344 | ) | |||||||||
| Income/(loss) before income taxes | (148,514 | ) | 52,617 | (19,427 | ) | 160,145 | ||||||||||
| Income tax benefit | 49,775 | 120,737 | 1,288 | 114,548 | ||||||||||||
| Net (loss)/income | $ | (98,739 | ) | $ | 173,354 | $ | (18,139 | ) | $ | 274,693 | ||||||
| Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||
| Basic - Class A | 89,363,106 | 95,589,751 | 92,108,745 | 95,579,545 | ||||||||||||
| Diluted - Class A | 89,363,106 | 95,599,243 | 92,108,745 | 95,598,816 | ||||||||||||
| Basic - Class B | - | 1,320,094 | 712,976 | 1,320,459 | ||||||||||||
| Diluted - Class B | - | 1,320,094 | 712,976 | 1,320,459 | ||||||||||||
| Per Share Amounts: | ||||||||||||||||
| Basic and Diluted net income - Class A | $ | (1.10 | ) | $ | 1.79 | $ | (0.22 | ) | $ | 2.83 | ||||||
| Basic and Diluted net income - Class B | $ | - | $ | 1.79 | $ | 3.32 | $ | 2.83 | ||||||||
| Cash dividends declared - Class A | $ | - | $ | - | $ | 0.48 | $ | - | ||||||||
| Cash dividends declared - Class B | $ | - | $ | - | $ | 1.56 | $ | - | ||||||||
On December 17, 2015, all shareholders of record of the Company’s Class A and B common stock as of December 3, 2015, received a dividend of one-tenth of one share of Class A common stock for each share of Class A common stock and Class B common stock held by them as of the record date.
On June 13, 2016, the Company effected a one (1) for six (6) reverse stock split and corresponding reduction of the number of authorized shares of common stock, par value $0.01 per share.
In accordance with the relevant accounting guidance, the Company is required to adjust the computations of basic and diluted earnings per share retroactively for all periods presented to reflect the above two changes in capital structure.
| 4 |
Consolidated Balance Sheets
($ in thousands)
| September 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 313,232 | $ | 502,836 | ||||
| Restricted cash | 5,572 | 10,583 | ||||||
| Voyage receivables | 62,763 | 81,612 | ||||||
| Income tax recoverable | 1,031 | 1,664 | ||||||
| Other receivables | 3,657 | 7,195 | ||||||
| Inventories, prepaid expenses and other current assets | 18,037 | 20,041 | ||||||
| Total Current Assets | 404,292 | 623,931 | ||||||
| Restricted cash - non current | - | 8,989 | ||||||
| Vessels and other property, less accumulated depreciation | 1,846,615 | 2,084,859 | ||||||
| Deferred drydock expenditures, net | 68,506 | 95,241 | ||||||
| Total Vessels, Deferred Drydock and Other Property | 1,915,121 | 2,180,100 | ||||||
| Investments in and advances to affiliated companies | 363,282 | 348,718 | ||||||
| Intangible assets, less accumulated amortization | 46,767 | 50,217 | ||||||
| Other assets | 20,492 | 18,455 | ||||||
| Total Assets | $ | 2,749,954 | $ | 3,230,410 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable, accrued expenses and other current liabilities | $ | 87,243 | $ | 91,233 | ||||
| Income taxes payable | 1,955 | 13 | ||||||
| Current installments of long-term debt | 25,483 | 63,039 | ||||||
| Total Current Liabilities | 114,681 | 154,285 | ||||||
| Reserve for uncertain tax positions | 2,556 | 2,520 | ||||||
| Long-term debt | 956,260 | 1,223,224 | ||||||
| Deferred income taxes | 202,589 | 208,195 | ||||||
| Other liabilities | 58,999 | 61,698 | ||||||
| Total Liabilities | 1,335,085 | 1,649,922 | ||||||
Equity: | ||||||||
| Total Equity | 1,414,869 | 1,580,488 | ||||||
| Total Liabilities and Equity | $ | 2,749,954 | $ | 3,230,410 | ||||
| 5 |
Consolidated Statements of Cash Flows
| ($ in thousands) | ||||||||
| Nine Months Ended September 30, | ||||||||
| 2016 | 2015 | |||||||
| Cash Flows from Operating Activities: | (Unaudited) | (Unaudited) | ||||||
| Net (Loss)/Income | $ | (18,139 | ) | $ | 274,693 | |||
| Items included in net (loss)/income not affecting cash flows: | ||||||||
| Depreciation and amortization | 128,883 | 113,731 | ||||||
| Loss on write-down of vessels | 147,422 | - | ||||||
| Amortization of debt discount and other deferred financing costs | 9,289 | 8,009 | ||||||
| Compensation relating to restricted stock/stock unit and stock option grants | 4,458 | 2,511 | ||||||
| Deferred income tax benefit | (5,624 | ) | (83,151 | ) | ||||
| Undistributed earnings of affiliated companies | (32,954 | ) | (29,497 | ) | ||||
| Reorganization items, non-cash | 5,392 | 225 | ||||||
| Other – net | 1,851 | 1,422 | ||||||
| Items included in net (loss)/income related to investing and financing activities: | ||||||||
| Gain on disposal of vessels and other property, net | (45 | ) | (4,258 | ) | ||||
| Loss on repurchase of debt | 3,873 | - | ||||||
| Payments for drydocking | (10,239 | ) | (38,269 | ) | ||||
| Bankruptcy claim payments | (7,136 | ) | (7,916 | ) | ||||
| Deferred financing costs paid for loan modification | (8,273 | ) | (6,187 | ) | ||||
| Changes in operating assets and liabilities | 21,879 | (19,778 | ) | |||||
| Net cash provided by operating activities | 240,637 | 211,535 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Change in restricted cash | 14,000 | 96,610 | ||||||
| Expenditures for vessels and vessel improvements | (591 | ) | (769 | ) | ||||
| Proceeds from disposal of vessels and other property | - | 16,954 | ||||||
| Expenditures for other property | (655 | ) | (53 | ) | ||||
| Investments in and advances to affiliated companies | (987 | ) | (153 | ) | ||||
| Repayments of advances from affiliated companies | 18,500 | 25,000 | ||||||
| Other – net | - | (8 | ) | |||||
| Net cash provided by investing activities | 30,267 | 137,581 | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Cash dividend paid | (31,910 | ) | - | |||||
| Payments on debt | (141,186 | ) | (9,235 | ) | ||||
| Extinguishment of debt | (168,069 | ) | (101,092 | ) | ||||
| Repurchases of common stock and common stock warrants | (119,343 | ) | - | |||||
| Net cash used in financing activities | (460,508 | ) | (110,327 | ) | ||||
| Net (decrease)/increase in cash and cash equivalents | (189,604 | ) | 238,789 | |||||
| Cash and cash equivalents at beginning of year | 502,836 | 389,226 | ||||||
| Cash and cash equivalents at end of period | $ | 313,232 | $ | 628,015 | ||||
| 6 |
Spot and Fixed TCE Rates Achieved and Revenue Days
The following tables provides a breakdown of TCE rates achieved for spot and fixed charters and the related revenue days for the three months ended September 30, 2016 and the comparable period of 2015. Revenue days in the quarter ended September 30, 2016 totaled 6,560 compared with 6,337 in the prior year quarter. A summary fleet list by vessel class can be found later in this press release.
| Three Months Ended September 30, 2016 | Three Months Ended September 30, 2015 | |||||||||||||||||||||||
| Spot | Fixed | Total | Spot | Fixed | Total | |||||||||||||||||||
| International Crude Tankers | ||||||||||||||||||||||||
| ULCC | ||||||||||||||||||||||||
| Average TCE Rate | $ | — | $ | 44,850 | $ | — | $ | 39,000 | ||||||||||||||||
| Number of Revenue Days | — | 92 | 92 | — | 92 | 92 | ||||||||||||||||||
| VLCC | ||||||||||||||||||||||||
| Average TCE Rate | $ | 25,797 | $ | 40,034 | $ | 57,642 | $ | — | ||||||||||||||||
| Number of Revenue Days | 569 | 145 | 714 | 648 | — | 648 | ||||||||||||||||||
| Aframax | ||||||||||||||||||||||||
| Average TCE Rate | $ | 15,370 | $ | — | $ | 35,521 | $ | — | ||||||||||||||||
| Number of Revenue Days | 643 | — | 643 | 564 | — | 564 | ||||||||||||||||||
| Panamax | ||||||||||||||||||||||||
| Average TCE Rate | $ | 13,837 | $ | 21,140 | $ | 22,652 | $ | 15,522 | ||||||||||||||||
| Number of Revenue Days | 415 | 271 | 686 | 347 | 362 | 709 | ||||||||||||||||||
| Other Intl. Crude Tankers Revenue Days1 | 29 | — | 29 | 13 | — | 13 | ||||||||||||||||||
| Total Intl. Crude Tankers Revenue Days | 1,656 | 508 | 2,164 | 1,572 | 454 | 2,026 | ||||||||||||||||||
| International Product Carriers | ||||||||||||||||||||||||
| LR2 | ||||||||||||||||||||||||
| Average TCE Rate | $ | 17,992 | $ | — | $ | 48,062 | $ | — | ||||||||||||||||
| Number of Revenue Days | 92 | — | 92 | 92 | — | 92 | ||||||||||||||||||
| LR1 | ||||||||||||||||||||||||
| Average TCE Rate | $ | 15,312 | $ | 21,613 | $ | 23,959 | $ | 21,030 | ||||||||||||||||
| Number of Revenue Days | 92 | 270 | 362 | 92 | 243 | 335 | ||||||||||||||||||
| MR | ||||||||||||||||||||||||
| Average TCE Rate | $ | 10,690 | $ | 11,543 | $ | 22,258 | $ | 5,294 | ||||||||||||||||
| Number of Revenue Days | 1,577 | 184 | 1,761 | 1,742 | 92 | 1,834 | ||||||||||||||||||
| Total Intl. Product Carriers Revenue Days | 1,761 | 454 | 2,215 | 1,926 | 335 | 2,261 | ||||||||||||||||||
| U.S. Flag | ||||||||||||||||||||||||
| Jones Act Handysize Product Carriers | ||||||||||||||||||||||||
| Average TCE Rate | $ | 28,416 | $ | 65,175 | $ | — | $ | 63,754 | ||||||||||||||||
| Number of Revenue Days | 92 | 995 | 1,087 | — | 1,054 | 1,054 | ||||||||||||||||||
| Non-Jones Act Handysize Product Carriers | ||||||||||||||||||||||||
| Average TCE Rate | $ | 37,214 | - | $ | 26,220 | $ | 15,761 | |||||||||||||||||
| Number of Revenue Days | 181 | - | 181 | 60 | 124 | 184 | ||||||||||||||||||
| ATBs | ||||||||||||||||||||||||
| Average TCE Rate | $ | — | $ | 33,876 | $ | — | $ | 39,844 | ||||||||||||||||
| Number of Revenue Days | — | 729 | 729 | — | 649 | 649 | ||||||||||||||||||
| Lightering | ||||||||||||||||||||||||
| Average TCE Rate | $ | 58,387 | $ | — | $ | 65,020 | $ | — | ||||||||||||||||
| Number of Revenue Days | 184 | — | 184 | 163 | — | 163 | ||||||||||||||||||
| Total U.S. Flag Revenue Days | 457 | 1,724 | 2,181 | 223 | 1,827 | 2,050 | ||||||||||||||||||
| Total Revenue Days | 3,874 | 2,686 | 6,560 | 3,721 | 2,616 | 6,337 | ||||||||||||||||||
1 Other International Crude Tankers revenue days consists of the company’s International Flag Lightering full service revenue days for the quarters ended September 30, 2016 and September 30, 2015.
| 7 |
Fleet Information
As of September 30, 2016 and December 31, 2015, OSG’s owned and operated fleet totaled 79 International Flag and U.S. Flag vessels (62 vessels owned and 17 chartered-in). Those figures include vessels in which the Company has a partial ownership interest through its participation in joint ventures.
| Vessels Owned | Vessels Chartered-in | Total at September 30, 2016 | ||||||||||||||||||||||||||
| Vessel Type | Number | Weighted
by Ownership | Number | Weighted
by Ownership | Total Vessels | Vessels Weighted by Ownership | Total Dwt2 | |||||||||||||||||||||
| Operating Fleet | ||||||||||||||||||||||||||||
| FSO | 2 | 1.0 | — | — | 2 | 1.0 | 873,916 | |||||||||||||||||||||
| VLCC and ULCC | 9 | 9.0 | — | — | 9 | 9.0 | 2,875,775 | |||||||||||||||||||||
| Aframax | 7 | 7.0 | — | — | 7 | 7.0 | 787,859 | |||||||||||||||||||||
| Panamax | 8 | 8.0 | — | — | 8 | 8.0 | 555,504 | |||||||||||||||||||||
| International Flag Crude Tankers | 26 | 25.0 | — | — | 26 | 25.0 | 5,093,054 | |||||||||||||||||||||
| LR2 | 1 | 1.0 | — | — | 1 | 1.0 | 109,999 | |||||||||||||||||||||
| LR1 | 4 | 4.0 | — | — | 4 | 4.0 | 297,710 | |||||||||||||||||||||
| MR | 13 | 13.0 | 7 | 7.0 | 20 | 20.0 | 955,968 | |||||||||||||||||||||
| International Flag Product Carriers | 18 | 18.0 | 7 | 7.0 | 25 | 25.0 | 1,363,677 | |||||||||||||||||||||
| Total Int’l Flag Operating Fleet | 44 | 43.0 | 7 | 7.0 | 51 | 50.0 | 6,456,731 | |||||||||||||||||||||
| Handysize Product Carriers 1 | 4 | 4.0 | 10 | 10.0 | 14 | 14.0 | 664,490 | |||||||||||||||||||||
| Clean ATBs | 8 | 8.0 | — | — | 8 | 8.0 | 226,064 | |||||||||||||||||||||
| Lightering ATBs | 2 | 2.0 | — | — | 2 | 2.0 | 91,112 | |||||||||||||||||||||
| Total U.S. Flag Operating Fleet | 14 | 14.0 | 10 | 10.0 | 24 | 24.0 | 981,666 | |||||||||||||||||||||
| LNG Fleet | 4 | 2.0 | — | — | 4 | 2.0 | 864,800 cbm | |||||||||||||||||||||
| Total Operating Fleet | 62 | 59.0 | 17 | 17.0 | 79 | 76.0 | 7,438,397 and 864,800 cbm | |||||||||||||||||||||
1 Includes two owned shuttle tankers, one chartered in shuttle tanker and two owned U.S. Flag Product Carriers that trade internationally.
2 Total Dwt is defined as the total deadweight of all 79 vessels.
Reconciliation to Non-GAAP Financial Information
The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the following non-GAAP measures may provide certain investors with additional information that will better enable them to evaluate the Company’s performance. Accordingly, these non-GAAP measures are intended to provide supplemental information, and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.
| 8 |
(A) Time Charter Equivalent (TCE) Revenues
Consistent with general practice in the shipping industry, the Company uses TCE revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Reconciliation of TCE revenues of the segments to shipping revenues as reported in the consolidated statements of operations follow:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| ($ in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
| TCE revenues | $ | 186,815 | $ | 233,588 | $ | 639,432 | $ | 690,433 | ||||||||
| Add: Voyage Expenses | 8,136 | 8,164 | 20,721 | 30,348 | ||||||||||||
| Shipping revenues | $ | 194,951 | $ | 241,752 | $ | 660,153 | $ | 720,781 | ||||||||
(B) EBITDA and Adjusted EBITDA
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 do not represent, and should not be a substitute for, net income or cash flows from operations as determined in accordance with GAAP. Some of the limitations are: (i) EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating results and performance, neither of them is necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. The following table reconciles net income as reflected in the consolidated statements of operations, to EBITDA and Adjusted EBITDA:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net (loss)/income | $ | (98,739 | ) | $ | 173,354 | $ | (18,139 | ) | $ | 274,693 | ||||||
| Income tax benefit | (49,775 | ) | (120,737 | ) | (1,288 | ) | (114,548 | ) | ||||||||
| Interest expense | 20,126 | 29,191 | 63,337 | 86,691 | ||||||||||||
| Depreciation and amortization | 43,208 | 38,743 | 128,883 | 113,731 | ||||||||||||
| EBITDA | (85,180 | ) | 120,551 | 172,793 | 360,567 | |||||||||||
| Technical management transition costs | - | - | - | 40 | ||||||||||||
| Severance costs | 2,238 | - | 2,238 | 5 | ||||||||||||
| (Loss)/gain on disposal of vessels, including impairments | 147,422 | (3,185 | ) | 147,377 | (4,258 | ) | ||||||||||
| Loss on repurchase of debt | 5,334 | 2,051 | 3,873 | 2,039 | ||||||||||||
| Other costs associated with repurchase of debt | 85 | - | 302 | - | ||||||||||||
| Write-off of registration statement costs | - | 3,082 | - | 3,493 | ||||||||||||
| Reorganization items, net | 5,732 | 1,420 | (11,318 | ) | 6,344 | |||||||||||
| Adjusted EBITDA | $ | 75,631 | $ | 123,919 | $ | 315,265 | $ | 368,230 | ||||||||
(C) Total Cash
| ($ in thousands) | September 30, 2016 | December 31, 2015 | ||||||
| Cash and cash equivalents | $ | 313,232 | $ | 502,836 | ||||
| Restricted cash | 5,572 | 19,572 | ||||||
| Total Cash | $ | 318,804 | $ | 522,408 | ||||
| 9 |