2025 Capital Link Company Presentation Series. As a reminder, in this series, company management highlights the company's current operations, business development, growth prospects, and sector outlook. We are privileged to have with us today the Senior Management Team of International Seaways. We have Ms. Lois Zabrocky, the Chief Executive Officer, Mr. Jeff Pribor, the Chief Financial Officer, and Mr. Thomas Trovato, the Head of Investor Relations. As you all know, International Seaways is one of the largest tanker companies worldwide, providing energy transportation services for crude oil and petroleum products in international flag markets. International Seaways owns and operates a fleet of 83 vessels, and the company's shares are listed on the New York Stock Exchange under the ticker symbol INSW. Now, in terms of logistics, we will begin with a company presentation followed by Q&A. I would kindly remind every one of our participants that you can submit your questions through the Q&A button on your screen during the webinar, and then your questions will be answered during the Q&A session. Now, before we begin our webinar, kindly note the usual disclaimer that this discussion is strictly for informational and educational purposes and should not be relied upon. It is not intended to be investment advice or advice of any kind. It's not an offer to buy or sell securities, and obviously, Capital Link bears no responsibility for the content. And now let's begin our discussion. I'd like to pass the floor on to Lois. Thank you to the management team for being with us again this year. All right. Thank you so much, Nikolas. Happy New Year to everyone. We're very excited to be kicking off 2025 with Nikolas and his team. What we want to do is go to the next page there, Tom. Nikolas already read the disclaimer, so we can skip that. Let's go to looking at International Seaways, INSW at a glance. I'm going to start on the upper left side of the page, and we have 83 tankers. That includes six new buildings. On the water today, we are almost evenly split with 38 tankers trading dirty and 39 tankers trading clean. On the clean side, we have one LR2 and 38 MRs. On the dirty side, we'll go. We're evenly split through VLCCs down to Aframaxes and Panamaxes. What we really want to talk about today is the value proposition of INSW. One of the things we've been talking about at Seaways is that we are a de facto ETF in the tanker space because of the split that we have between crude and product. Our six newbuilding ships that are on order are for Panamax International, and that has traditionally traded dirty. And yet those LR1s have coatings. And so we've also had conversations with oil majors around trading those ships clean. So you can really see how this is very correlated. If you look at the next chart to the right of our fleet count, what you're looking at there is the crude and the product rates. And in particular, as countries, let's talk about Saudi and generally in the Middle East and even in China. Whether the Middle East decides to refine product and export it or export their crude is something that we see them increasingly pivot on, and in China, what we see is, okay, we might import more crude than we need, refine it, export product, and you see how correlated the crude and the product space is. Then we're going to move all the way to the right and talk about, just touch on our healthy balance sheet, so right now, our net loan to value is under 20%. This is Jeff's textbook of what you should be doing at the point in the cycle when the tanker market gives you the opportunity to improve your balance sheet, and we're going to dig more into that as we go along today. Now we come over on the lower left, and you'll see there that gives you the count of our vessels on the spot, right? So we have 20% of our ships that are on time charter, but the vessels that are in the spot market are listed here on that left-hand side. And we've got 10 Vs, 11 Suezmaxes. If you combine Afra and LRs, that's 11. And then we've got 30 MRs on the spot market. And if you look right there to the right of that, you'll see, okay, International Seaways has this many vessels in the spot market, but the pools that we run in take our profile up to a total of almost 200 ships. So if you look on there on the right, Tankers International, we have 10 Vs, but we run with 36. And you look all the way down the column to Norden, where we have 18 MRs being commercially managed by Norden, and they have a total of 77. Well, why is that important? In the tanker business, we are highly fragmented on the owner side. And running in a pool just gives you a lot more consistency and the ability to handle and provide more solutions to customers so that you have closer relationships, which over time brings a higher TCE. And then if we move to the lower right-hand side, as of September 30th, we had almost $700 million in liquidity. Just really incredible strength in our balance sheet because, as we know, we are entering a highly geopolitically charged world, and it's always smart to improve your balance sheet to the point where you can take advantage of all the opportunities that come at every point in the cycle. Go ahead, Tom. This page really gives you the highlights. International Seaways, we just completed eight years listed on the New York Stock Exchange. And we went from being an older aged tanker company at less than $500 million to a $2 billion company with a younger fleet. And this is just your constant effort. And how do we do that? What are we doing every day? Right here are the key components: discipline, capital allocation, focusing on sustainability, operating with our hybrid model, and making that really work for us. And then, critical, constant improvement and having a high-quality capital structure. Of course, the tanker cycle, the final point, the fundamentals are absolutely critical. We're just going to focus largely on International Seaways until we get to the Q&A. Go ahead, Tom. There you go. So there are certain pages in the deck that I just love, and this page is fast becoming one of those. So let's look at the top chart all the way on the right. And what I want to first point out is I think a differentiator with International Seaways is our incredible transparency. What you're looking at is eight quarters and every dollar that the company has spent. And over those eight quarters, we created over $1 billion in free cash flow. And because the guys have improved the balance sheet so much, we're able to have that revolving credit facility and therefore hold less cash. And we've actually put $1.2 billion to work when you look over this eight-quarter period. Returns to shareholders over those eight quarters have been $650 million, which is over a third of our market cap in a snapshot. And if you look right below on the right-hand side, you say, okay, what are shareholder returns? We've had a double-digit return around 12% over this most recent four quarters. And then let's head back over this way and say in that middle chart, this is absolutely critical. Our break-evens are $13,300 per day for looking forward for the next year. And that is across our entire fleet, including the Vs. Well, how are we calculating that? How are we achieving that? We do take our time charters and help use that to say, okay, we have a lower break-even requirement because that's no longer volatile. And the way the team has structured the balance sheet, and we did voluntary prepayments on the debt, why would you do that? When you look at everything, that break-even level is very cutting edge at $13,300 per day. And then you go all the way to the left and say, all right, let's back it up and look at the big picture. We've almost doubled our size. And then when you look at the average age, we've improved that by over a year and a half throughout the last eight years. And this is really just through constant effort from the team because we want to sell those older ships, and we've been very successful doing that and bringing in more efficient economic tonnage. Go ahead, Tom. Tom leaves this in there for me because it's one of my favorite charts. And you look at this and you say, okay, we have a little bit of a saying, you know, don't fight the cycle. You got to work with it. And when you look at this here and you see the biggest acquisition that we did, and there was also a smaller circle inside of the big acquisition. Those, quite frankly, took a lot of courage to get done. Those are our three dual-fuel new buildings, VLCCs that are on to Shell. That's the small circle. Those vessels are on our books at well under $100 million and are worth almost 50% more in value. And when you look at the DSSI merger, that was the height of COVID in the worst market we've ever seen. What it allowed was a transformation of International Seaways. Then you can see we've been really reaping a lot in the last period, and we still continue to do some investment. Again, like these new building LR1s are Panama Canal suitable, the old canal, 105-foot beam. These are niche. They will suit our niche, and they will really come in and complement our fleet. The same thing with modernizing our MR fleet, bringing in more modern tonnage. Go ahead, Tom. When we look at sustainability at INSW, the senior management team has just we really encouraged our board, and we now have a sustainability committee on the board at INSW. We have an internal team composed of senior management that runs sustainability internally at INSW because all of these tenets touch governance, risk, diversity. All these components are really critical to INSW and become more and more a part of our daily management and the running of the future of INSW. Go ahead, Tom. Before I turn it over to Jeff, just to touch on the balance sheet, I'm going to zip through our hybrid operating model. What does it mean, a hybrid operating model? Strategic direction rests within INSW. Execution commercially in the pools, we keep the time charter and a lot of customer relationships. That we outsource, right? The strategy and the direction, the budgets are set within INSW, and then the execution comes from our valued partners, either in our commercial pools and technically on the technical side for purchasing, where if I go right into the technical side, you can see here on the lower right-hand side, each of our critical partners, which is V Group and Anglo. They each manage. They are leaders in technical management, and they each manage between 600-700 fleets, so INSW is getting the benefit from safety practices, crewing, retention, purchasing of being in this larger entity, and yet still having the personalized component where we have dedicated teams that service the INSW fleet, and then if we go to the left-hand side, I'll finish it out with saying we own part of the four pools, four of the six pools that we operate in. And why do we do that? The ownership allows for us to have the lowest cost for our commercial while having the highest input, which we believe combines into an output of providing the highest TCEs over time. Okay, I'm going to turn it over to Jeff Pribor, our CFO, to talk a little bit about our balance sheet. Thanks, Lois. So I'll just spend a couple of minutes on this slide, and then we'll go into Q&A, and we can talk about commentary, anything we said on the company or about the market. So the left-hand side is basically a summary of our balance sheet, but we've pulled out some of the key facts on the right-hand side. So the first, just something Lois touched on before, but in the top right, really a super liquidity position. As of September 30th, we had over $700 million of liquidity available for whatever, split as $150 million of cash and $550 million of undrawn revolving credit capacity. I'd also point out that our earliest maturity on any of our debt is not until the next decade. So this is a strong cash and liquidity position as we look forward into opportunities. Secondly, in the middle of the page, you'll see that what we've invested in our book value of the fleet is a little over $2 billion at cost versus market value at September 30th of about $3.7 billion. That's a factor of rates driving up values, but also when you compare book to market value, it's a factor of that slide that Lois showed before where we concentrate our asset acquisitions at the bottom periods of the cycle, which leads to a low book value relative to market value, and at the bottom right is just a breakdown of our debt, which is our total debt is about $600 million. But the breakdown there, you can see how it's split the top of the revolving credit facilities or RCFs with traditional shipping lending banks that have always been our supporters, but additionally, we have diversified debt. That's one of the points I wanted to make with traditional supporters, shipping banks, and Asian sources of financing. In particular, in terms of cost, our all-in weighted average rate is just over 6%, which these days is just under 100% above the index rate or SOFR, which is a result of our margin, driving down our margins and fixing in a lot of our interest costs, which are 80% fixed between the nature of the debt or hedging. The amortization, as you see in the bottom right, just under $50 million a year, which is healthy, but also is something that we've been able to reduce by transforming some of our term debt to revolver debt, which we did in 2024, which lowers our break-evens and then gives us more flexibility in capital allocation. I think that's the main points I want to make on the balance sheet, and I'll turn it back to you, Lois, to head to Q&A. Okay, we're going to open it up for questions at this time. Hey, good morning, Lois. I have a bunch of questions here from the audience as you and Jeff were speaking, and I'm trying to organize them in some way, shape, or form, but I think let's start off with something on the company strategy within the hybrid operating model and really kind of how the pools work. And I'm actually going to flip back to that slide. Oops, sorry, one more. That's okay. Keeps going. Looking at the lower left-hand side, one of the questions came in, and it's the revenues that you generate for the pools. Do you get those back specifically, or is it a proportionate share within the group of ships? Right. So your chart is excellent here. And what Tom is illustrating is simply if you have a small amount of vessels, and I'm going to use the Vs because everybody likes to talk Vs, and they have the longest voyages. And what Tom is showing here is on a VLCC, if you're doing, let's just say you were doing U.S. Gulf, China on a round, you're going to do very few voyages per year. Even if you're doing AG, Middle East to Asia, you're probably maximum going to be doing something like eight voyages. And if you only have a few vessels, and let's say that you did a U.S. Gulf, China trip, and you caught the market right there in July of 2023 on Tom's chart, you're going to be on that voyage for over a quarter. And so when you're running with the bigger pool, you are more of an overall market representation because you have many more fixing points throughout that fleet. And then as well as that, you're able to get closer to customers so that when they call you up and they say, "Okay, listen, this ship ran late. What other cargoes do you have in your portfolio?" And all of a sudden, you have an opportunity to try to create a solution with a customer where if you're a single vessel owner, you don't have that ability. And so I will continue with the Tankers International example where we own half the pool. And everybody has a voice at the table in the pool. And we come in and we sit down with Charlie Gray, who's running Tankers International, and you say, "Okay, let's look at the results. Let's look at the cargo composition that you've been focusing on. And is this our optimal return?" And we sit there and we collaborate to make sure that our approach, our tactics, all add up into a strategy that's adding the most value to all the owners. And that pool is run as a co-op. It's not a for-profit pool. So everybody is coming in with the attitude and the pure intent of maximizing time charter equivalent over time. Excellent. All right. Good questions coming in. I really appreciate it, guys. I think I just want to start off on the company side in terms of capital allocation. You've had a payout ratio that you showed on the slide of about 60% for most of 2024, and then at the end, there was a 75% payout on adjusted net income for dividends. Is there some sort of how should we really think about that payout ratio going into 2025? Yep. Jeff, do you want to jump in? Sure. I think I'll refer back to what you mentioned, Lois, when you were going over that slide: is that we did what we believe responsible companies should do when you enter an upcycle, which we did in 2022. We used that year in 2023 to begin substantial. We had a lot of cash flow, as you mentioned, over $1 billion over eight quarters. And we used a lot of it to return to shareholders, but a lot of it to de-lever, which then lowers your break-evens and just creates more cash flow. So then what you saw was we had a progression of payout ratios that started at 50%, got into 60%, and now over time, as we put ourselves in that position of low leverage, below 20% gross loan to value, 15% net loan to value, that we could raise that payout ratio to 75%. So I think to answer the question, the track record speaks for itself. What we're doing with a 75% return is what you should expect unless conditions change for some reason why it has to be different. You should expect to continue to get returns like that, payout ratios and returns to shareholders on a similar basis. Along those lines, I think given the way the share price has been over the last three months or so, how do you look at paying out dividends versus share buybacks? Can I go on, Lois? Carry on. Look, we think both of those methods of return are very valid methods of returning cash to shareholders. What we look at is, and in fact, we've used both. I would say we've leaned into dividends. That's been more heavily what we've done. But it was only a few months ago that we had dipped into our $50 million available basket for share purchases, which we've since replenished. And so that actually increased the overall shareholder return in that fourth quarter of 2023 last year to over 80%, like 83%. So we focus first on a dividend where we can give the kind of view that we just did on what to expect in a payout ratio, but we also have share repurchases as another tool in the toolkit that we can use when we think that's a particularly appropriate way to return cash to shareholders. Great. A lot of questions are coming in about the geopolitical environment and its impact on the tankers. I mean, Lois, I think you can probably knock off a few before I even mention them specifically. So maybe you want to start there. And if I think you missed one, I'll jump one in. So we all know that I think our listening audience, I'm sure, is aware that vessels on the OFAC list, Office of Foreign Assets Control, are now really in the spotlight, right? So I think the key component yesterday and the day before, we understand that Shandong Province is saying, "Okay, we're not going to, we don't want any vessels that are prohibited that are in the OFAC list." Now, we're seeing a lot of mixed press on whether or not that's actually going to be enacted or not. Our guys in the Tankers International pool say that there are a few Vs that they understand are diverting to Singapore while everybody assesses. So we use in our business a lot the green light system. And I said, "Well, is it a yellow light?" And I decided it is not a yellow light. It's a flashing yellow light. Basically, the United States can decide what they want for sanctions. And now it seems like China's paying attention. And the other component there, of course, is the Department of Defense put COSCO, CNOOC, and a couple of Chinese builders also on a watch list, right? Because right now, there is no prohibition to do business with COSCO. And make no mistake, COSCO is huge, right? Over 1,000 vessels total. They are running 55 Vs in combination with some Western owners in a pool, and they have Western ships on time charter. So we're really watching closely to see how this develops and evolves. And I would say within International Seaways, I am definitely not. I'm more of a Debbie Downer than many of my colleagues. All along, everyone has said, "Oh, you know all the dark fleet is going to go away." Well, I never agreed with that because I didn't see specifics. Okay, right now, I have two different lists. One has 77 Vs on the OFAC list. One is 85. Slice it either way, 80 Vs. Those Vs are not coming off the OFAC list. Now, the NITC, or the National Iranian Tanker Company, is on there as well, right? The National Oil Company of Iran. So they have like 38 Vs. But all of a sudden, even taking those out, you have a substantial number of Vs. So let's say there's 900 Vs in the fleet that are actively trading. Now you've got 8% that are suddenly and recently increasingly on the OFAC list. And that list continues to go up. And we didn't even get Trump in office yet. I think that this is a flashing yellow, and there will be changes in behavior. We're watching very closely to see how that develops because it's, yes, is it led by the Vs? Yes. There's 42 Suezmaxes on the OFAC list. There's a multitude of Aframaxes on the OFAC list. I find it interesting. Everyone's like, "Oh, you know run to the Vs." This is why I say we're the perfect company. The MRs in Q1 are earning right on what we projected them to. They are still holding strong. It's the crude that has lagged. Because we can't plan the exact timing of when things are going to play out, and recently, there seems to be a new black swan. I say the whole pond is black swans. How wise are you to have a balanced tanker position when we are so affected by geopolitical events? So that's what I would say there on the news recently of the COSCO Department of Defense in the United States saying that they're in the chain of or in service to some component with the Chinese military. There's nothing wrong with that, right? And yet, trust, American oil companies are going to be putting a very close look on, "Well, what does this mean? What does this flashing yellow light mean when I want to export my barrels out of the U.S. Gulf and what vessels I'm going to be targeting to use? And along that line, Lois, do you want to say anything on the Russia-Ukraine conflict and perhaps the forward outcome there? Yeah. Well, at the moment, what we see is a tightening on Russian flows. You see on the gas side, suspension of flows through Ukraine. And on the oil side, what's interesting is Russia exported less in the fourth quarter than they had previously. And it's interesting. I think there's going to be more to come on this of how much of that is some damage to the infrastructure from the Ukrainians targeting it. How much is that really a sustained period now where they haven't been able to reinvest in their oil fields and infrastructure? So we're seeing a few less Russian barrels on the water. It seems to me, politically, while the world likes to keep oil flowing to keep oil prices in a certain range where it doesn't put economic distress on the world, in 2025, we have more oil supply than we do still have over a million barrels a day of demand growth that should come. We've got more than enough. Just with non-OPEC supply, it should be over a million and a half barrels this year, let alone OPEC wants to come back on the market. It seems to me you've got barrels that can be called upon that are not from sanctioned or geopolitically pariah areas. Why not have countries move their barrels that are not sanctioned entities and have companies like INSW showcased that follow every regulation and trust we do and we will? Great. We're trying to pull all these ones. I think I would say moving on to the supply side, there's a good amount of new orders in 2024. Do you think this was generally a sign of things to come, as in there might be more in 2025, or do you think it's going to slow down? What is your view on the supply side? On the supply side, I will say 2025, we have about 2.5% of the existing on the water fleet that will be delivered. And that's a small amount. That is still a small amount. You should have 4%-5% per year to naturally replace. And with the average age of the fleet, tanker fleet on the water being 14 now, you can see that we haven't had fleet attrition, but we also haven't had fleet additions. Like 2024 was like a dearth, a desert of deliveries. So the order book itself, I don't see owners racing to sign up for a few reasons. China is now in the lead, well in the lead as far as the tanker order deliveries, right? So they are ahead of Korea. Korea's building a lot of, you know, they try to go for the highest value units, and we're building our LR1s in Korea purposefully. We do have many vessels that are from China on the water, but we purposely decided to spread out our risk and to build in Korea at a yard where we've built before, but when you look at it, you know, I'm thinking owners might be thinking geopolitically, you know, what's my wisdom? What's my exposure? What's my risk? On top of the fact that now you've seen a pullback in rates, and I'm not so sure owners are disciplined, but I know owners look at their pocketbook, and everyone's going to be very careful and thoughtful before they race to the yards to add to the order book. So let's talk about you mentioned that Seaways has ordered six ships. Is that kind of the Seaways proposition to build on its growth platform? How do you look at secondhand values and purchases? And just kind of talk a little bit more about the growth opportunities. Absolutely. Thanks, Tom. I would say that one of the things that Jeff and I talked about, and he gave me a great compliment one time, he said, "Lois, you're very pragmatic," and I would say that International Seaways is highly pragmatic, and we look at all the opportunities, so in a sector like the LR1s, where there are very few LR1s that are modern, that are Panama Canal suitable, and that's a key space and a niche trade that we wanted to make sure that we build upon, and so therefore, we built those vessels. In a space where we find opportunities, we are very happy to build this company with secondhand ships. We do like to try to keep increasing our efficiency, and that's one thing on the sustainability I didn't harp on. Every year we have, I mean, this year, I think it's around $10 million of green spend. That's not every dollar will be spent wisely, and it will be spent on enhanced systems to make sure that you reduce the weight from the propellers, better hull coatings, and increasing every one of our ships that's on the water, their ability to be more efficient, and when we can, one component to grow this company is looking for ships that will increase our efficiencies. I think we're getting closer on time. Maybe we have a few more here. I think since it's the beginning of the year, I might put you on the spot on this one, but we'll review it at the end of the year too, right? Yes. What do you think the 2025 environment is going to be like? And maybe just use themes rather than list out a whole bunch of rates. Yes, yes, I understand. Well, I mean, I would contend that the VLCCs haven't really had their moment in truly the last three years, 2022, 2023, 2024. They've been underperformers. If we see that China is trying to get their economy going, and I look for that to continue, and I think that will help a pull on crude for VLCCs. And then you have the flip side of the geopolitical events there with our recent elections and incumbent President Trump there being very highly attuned and looking to come in and increase sanctions, most likely to restrict Iranian crude exports that have been very high. So I think we should look for the big ships to do better, and that includes our 13 Suezmaxes because those two vessel classes go hand in hand. I think we should look for some more peace in the world, and that could very well happen, and that would be wonderful for humanity. I still think that a lot of the Russian barrels will continue to be not allowed to go into Europe because I think Europe does understand that they need to have diversity of sources with reliable partners. Those are things that it seems to me in 2025, the United States economy is still blowing and going, and Europe's a little weak. China is trying to shore up. That all affects the tanker market very implicitly. I think, oh, combining kind of your answers to the last two questions, I guess, is there a particular segment that Seaways is looking in 2025 to maybe enhancing their scale? Which one do you prefer? Are you preferring clean? Are you preferring dirty? Preferring a specific class of ship by all means? Yeah, I would say that we've done more on shoring up the clean side with the LR1s and MR fleet additions, modern fleet additions, and the new builds, and so we would be leaning on the crude side. Okay, great. I think I've captured many of the questions that have come through. Nikolas, I think maybe we want to hand it over to you. Thomas, Lois, and Jeff, thank you very much. This has been a great presentation, great attendance. You have an avalanche of questions, obviously. It's great. Thank you very much. In closing, I would like to thank the management team for being with us today. I'd like to thank all of the attendees who made this a very successful presentation. As a reminder, two things. First of all, this will be available for replay upon demand on the Capital Link webinars website and also on our YouTube channel. Institutional investors who would like to have a meeting with the company, please email us at webinars@capitallink.com, and we will put you in touch with the company directly. Thank you all very much for being with us today. A great way to start the year. Thank you all very much, and we're very grateful for the support. Thanks. Thank you. Come see us.