International Seaways, Inc. · NYSE:INSW
International Seaways — Investor Presentation (June 2018)
27 slides from International Seaways's investor presentation, Jun 18, 2018
Slide 1: International Seaways, Inc. June 2018
International Seaways, Inc. 1 International Seaways, Inc. June 2018
Slide 2: Disclaimer
International Seaways, Inc. 2 Disclaimer Forward - Looking Statements During the course of this presentation, the Company (International Seaways, Inc. (INSW)) may make forward - looking statements or provide forward - looking information. All statements other than statements of historical facts shou
Slide 3: Company Overview
Company Overview International Seaways, Inc.
Slide 4: Overview
International Seaways, Inc. Overview 4 1 Represents the number of vessels in each class as a percentage of the fleet, as of June 15, 2018. Does not include JV vessel s. Leading diversified tanker owner with exposure to market recovery in crude and product sectors 55 vessel fleet with balanced mi
Slide 5: Sizable, Diverse Tanker Fleet
International Seaways, Inc. 5 Sizable, Diverse Tanker Fleet VLCC (330 meters) Suezmax (275 meters) Aframax/LR2 (250 meters) Panamax/LR1 (230 meters) MR (180 meters) Capacity Our Fleet 2 million barrels 300,000 DWT 14 1 million barrels 160,000 DWT 2 750,000 barrels 110,000 DWT 7 500,000 barrels 70,00
Slide 6: Investment highlights: low breakeven, renewed fleet, low leverage
International Seaways, Inc. 6 • Optimizes cash flow in difficult market • JVs and time chartered and bareboat vessels provide stable cash flow • Substantially covers fixed costs • $14,200 Fleetwide Cash Breakeven LTM • Reduced to $10,800/day when factoring in JV contributions • Competitive OPEX and
Slide 7: Renewing and Growing Fleet – Acquired 6 Modern VLCCs
International Seaways, Inc. 7 ▪ Acquired Highly - Efficient Sister Ships o Acquired 6 VLCCs from Euronav NV for $434 million in June 2018 o 300,000 DWT VLCCs constructed at Shanghai Waigaoqiao Shipbuilding Co. o 5 built in 2016 and 1 built in 2015 ▪ Strengthened Fleet Profile and Profitability o Mea
Slide 8: Vessel Acquisitions and Vessel Sales
International Seaways, Inc. 8 1 Includes Chartered - in Vessels. Pro forma for sale of Seaways Laura Lynn and Redelivery of Seaways Kimolos Weighted Average Age by DWT (years) 1 Deadweight Tons (millions) 1 Type Built Acquired Price Hatteras Suezmax 2017 Q3 '17 $58.0 Montauk Suezmax 2017 Q3 '17 58.0
Slide 9: Optimizing Cash Flow – Balanced Revenue Mix
International Seaways, Inc. Optimizing Cash Flow – Balanced Revenue Mix 9 • Operating leverage: Every $5,000 TCE = $68 million EBITDA, $2.54 EPS 41 Tankers in Pools (including CMAs) • 17% of conventional fleet deployed on fixed charters 7 Tankers on Time and Bareboat Charter • 2 x FSO and 4 x LNG JV
Slide 10: Positioned to Optimize Cash Flow – Upside from Pool Employment
International Seaways, Inc. Positioned to Optimize Cash Flow – Upside from Pool Employment 10 Pools VLCC Suezmax Aframax Aframax/LR2 Panamax / LR1 MR Total # of INSW Vessels 12 2 6 1 6 11 38 1 # of Total Vessels 60 23 47 11 36 21 198 Other Participants Rationale for Participation Largest VLCC pool a
Slide 11: FSO Joint Venture
International Seaways, Inc. 11 Pro v ides global di v ersific at i on w ith expande d customer base • New five - year contracts commenced in the third quarter of 2017 and are expected to generate in excess of $180 million of EBITDA over the five - year term to International Seaways based on ownershi
Slide 12: LNG Joint Venture
International Seaways, Inc. 12 Pro v ides global di v ersific at i on w ith expande d customer base • The JV anticipates generating $5 million in cash on average for our share annually until 2023 • Thereafter, distributions expected to rise assuming debt is refinanced at or prior to 2023 maturity to
Slide 13: Lean and Scalable Model – Low Cash Breakevens
International Seaways, Inc. $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 VLCC/ULCC Suezmax Aframax Panamax MRPO All Owned INSW Vessel Expenses (Net of One-Off Items) G&A (Excluding non-cash items) Debt Service (Excluding deferred financing costs) DDK & CAPEX $14,400
Slide 14: Protection from Downside, Exposure to Market Upsides
International Seaways, Inc. Source: Clarksons 0 20,000 40,000 60,000 80,000 100,000 120,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $ per Day Time Charter Equivalent Revenue VLCC Annual Average TCE INSW Cash Breakeven TCE LTM 3/31/18 1
Slide 15: Experienced INSW Management Team
International Seaways, Inc. Experienced INSW Management Team Lois K. Zabrocky President & CEO • Most recently served as President for OSG’S International Flag strategic business unit, International Seaways’ predecessor company • Joined OSG in 1992, previously held positions as Head of International
Slide 16: Strong, Transparent Corporate Governance
International Seaways, Inc. Strong, Transparent Corporate Governance Douglas D. Wheat Chairman of the Board • Managing Partner of Wheat Investments Timothy J. Bernlohr Director • Founder and Managing Member of TJB Management Consulting, LLC Ian T. Blackley Director • Former President, CEO and Direct
Slide 17: Market Fundamentals
Market Fundamentals International Seaways, Inc.
Slide 18: Tanker Demand
International Seaways, Inc. Tanker Demand Source: IEA Global Oil Inventories are Declining Global Oil Demand Growth, y - o - y 18 OECD Stocks Vs 5 - Year Average Source: IEA Oil Demand Remains Strong • IEA global demand growth was 1.6 million barrels/day in 2017 • 2018 growth forecast of 1.4 million
Slide 19: Tanker Supply
International Seaways, Inc. Newbuilding Orders by Vessel Type Tanker Supply Orderbook Update • 27 VLCCs have been ordered YTD, other sectors showed less newbuilding ordering • 2018 will still see a fairly large amount of deliveries, although down from 2017 • Orderbook at end of Q1 as % of existing f
Slide 20: IMO 2020 Overview
International Seaways, Inc. IMO 2020 Overview • On Jan 1, 2020, all vessels worldwide must use maximum 0.5% sulfur fuel, down from current 3.5% limit • Can be achieved by using low sulfur fuel or by installing scrubbers and continuing to use high sulfur fuel • Scrubbers are expensive. Less than 10%
Slide 21: Financial Overview
Financial Overview International Seaways, Inc.
Slide 22: Strong Financial Position – Balance Sheet
International Seaways, Inc. Strong Financial Position – Balance Sheet 22 Strong balance sheet protects INSW during low portions of tanker cycle and provides opportunity for growth 1 March 31, 2018 per INSW 10 - Q giving pro forma effect to transactions described on slide 8 that occurred after March
Slide 23: INSW Debt Portfolio – Pro Forma Acquisition of VLCCs
International Seaways, Inc. INSW Debt Portfolio – Pro Forma Acquisition of 6 VLCCs 23 Debt Balance 2 Maturity Callable Rate Amortization Term Loan B $479 million 2022 At 101 after 1/1/19 LIBOR + 600bps 5% per annum Secured Sinosure $311 million 2027 / 2028 Anytime LIBOR + 200 bps 7.6% per annum Fina
Slide 24: Transactions Supporting the Six VLCC Acquisition
International Seaways, Inc. Transactions Supporting the Six VLCC Acquisition 24 Transaction Amount Principal Advisors Acquisition of Six VLCC Subsidiaries $434 million Jefferies, Evercore Term Loan B Amendment and Reduction $60 million Jefferies Funding Required 1 $494 million Sinosure Debt Amendmen
Slide 25: Closing Remarks
Closing Remarks International Seaways, Inc.
Slide 26: Strong Post-Spinoff Accomplishments
International Seaways, Inc. 26 Strong Post - Spinoff Accomplishments Executing on Disciplined Capital Allocation Strategy • Acquired 9 modern, high specification vessels at bottom of the cycle – Grew fleet 23% on DWT basis – Reduced fleet age by close to 3 years • Opportunistically repurchased sha
Slide 27: International
International Seaways, Inc.
International Seaways — Investor Presentation (June 2018) on 6ix