International Seaways, Inc. (INSW) Business
This page reproduces the company's own Item 1 Business text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.
Informational only - not investment advice. See Disclaimer.
ITEM 1. BUSINESS
OUR BUSINESS
International Seaways, Inc., a Marshall Islands corporation incorporated in 1999, and its wholly owned subsidiaries own and operate a fleet of oceangoing vessels engaged primarily in the transportation of crude oil and petroleum products in the International Flag trade. Our vessel operations are organized into two segments: Crude Tankers and Product Carriers. At December 31, 2025, we owned or operated an International Flag fleet of 70 vessels (totaling an aggregate of 8.4 million dwt), consisting of VLCC, Suezmax and Aframax crude tankers, as well as LR2, LR1 and MR product carriers. In addition to our operating fleet of 70 vessels, four dual-fuel ready LR1 newbuilds are contracted for delivery to the Company between the first and third quarters of 2026, bringing the total operating and newbuild fleet to 74 vessels. The Marshall Islands is the principal flag of registry of our vessels. Additional information about our fleet, including its ownership profile, is set forth under “— Fleet Operations — Fleet Summary,” as well as on the Company’s website, www.intlseas.com. Neither our website nor the information contained on that site, or connected to that site, is incorporated by reference in this Annual Report on Form 10-K.
Our ultimate customers, including those of the commercial pools in which we participate, include major independent and state-owned oil companies, oil traders, refinery operators and international government entities. We generally charter our vessels to customers either for specific voyages at spot rates through the services of pools in which the Company participates, or for specific periods of time at fixed daily rates through time charters or bareboat charters. Spot market rates are highly volatile, while time charter and bareboat charter rates provide more predictable streams of TCE revenues because they are fixed for specific periods of time. For a more detailed discussion on factors influencing spot and time charter markets, see “— Fleet Operations — Commercial Management” below.
2025 IN REVIEW
In 2025, we recorded another annual period of strong financial results. Shipping revenues and TCE Revenues for 2025 were $843.3 million and $819.6 million, respectively. Approximately 52% of our TCE Revenues were generated from our Crude Tankers segment and 48% from our Product Carriers segment. Income from vessel operations decreased by $109.8 million to $345.4 million in 2025, from $455.2 million in 2024, primarily driven by lower average daily rates across INSW’s Product Carrier sectors. We achieved an Adjusted EBITDA (see Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations for definition) of $474.7 million in 2025 compared to $583.3 million in 2024.
In addition, we continued to further enhance our strong balance sheet by increasing total liquidity to $723.6 million from $632.2 million at the end of 2024, and ended the year with 44% (i.e., 31 vessels) of our fleet unencumbered, a net loan to value ratio of 12.9%, and a net debt-to-capital ratio of 16.5%. We made approximately $426.1 million in capital investments for vessel and other property purchases, vessel improvements, vessel construction and drydocking. We also returned capital to our shareholders through cash dividends totaling $144.6 million.
During 2025, we continued to focus on (i) maximizing our fleet’s earning potential through safe and reliable operations, opportunistic charter-ins/charter-outs, and sales and purchases of vessels, (ii) building on our track record as a disciplined capital allocator, and (iii) executing transactions that would ultimately unlock the value of our shares to investors.
We executed these goals during 2025 by:
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| ● | Maintaining our fleet optimization program: |
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| o | We sold 12 vessels – one 2010-built VLCC, one 2011-built VLCC, three 2008-built MRs, five 2007-built MRs and two 2006-built LR1s, resulting in net proceeds of approximately $246.3 million after fees and commissions. We recognized total net gains of approximately $42.5 million on these sales. |
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| o | We took delivery of the first two of the six dual-fuel ready LNG 73,600 dwt LR1 Product Carriers under construction in Korea at K Shipbuilding Co., Ltd.’s shipyard. |
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| o | We took delivery of one 2020-built, scrubber-fitted VLCC in November 2025 for a purchase price of $119.0 million. |
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| o | We opportunistically locked in $34.9 million of minimum revenues (before reduction for brokerage commissions) on non-cancelable time charters for two Suezmaxes and two MRs with charter expiry dates ranging from October 2025 to November 2026. At December 31, 2025, the remaining future minimum revenues under these charters (approximately $14.6 million), when aggregated with the remaining future minimum revenues (excluding any applicable profit share) under time charters entered into in previous years, totaled approximately $208.7 million. |
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| o | Between December 2025 and February 2026, we entered into agreements to sell one 2007-built MR, four 2008-built MRs, one 2010-built VLCC and one 2012-built VLCC for aggregate proceeds of approximately $216.4 million, net of commissions and fees. The Company expects to close all of these transactions in the first quarter of 2026 and recognize gains from the vessel sales. |
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| ● | Building on our track record as a disciplined capital allocator |
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| o | In a cyclical business such as ours, we believe that capital allocation is not a formula embedded in a financial metric but levers that we pull at the right times in the cycle. We have a proven track record of buying vessel assets at appropriate points, while opportunistically renewing our fleet, voluntarily decreasing our leverage and returning a substantial amount of cash to shareholders, throughout the cycle. |
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| o | We paid out $144.6 million in dividends to our shareholders during 2025 and with the dividend declared by our Board of Directors in February 2026, we will have returned over $1.0 billion to our shareholders since 2020 through dividends and share repurchases. |
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| ● | Executing a number of liquidity enhancing, deleveraging and financing diversification initiatives, including: |
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| o | We issued $250 million aggregate principal amount of non-amortizing, 7.125% senior unsecured bonds maturing on September 23, 2030 at an issue price of 100%. |
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| o | We exercised our purchase options on six VLCCs that secured the Ocean Yield Lease Financing arrangement. The $257.8 million aggregate purchase price, was paid on November 10, 2025 using the proceeds from our senior unsecured bond issuance. The impact of this transaction is reduced interest expense and the elimination of approximately $22 million in annual mandatory principal payments. |
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| o | We entered into an ECA Credit Facility, consisting of (i) a 12-year term loan facility of up to $239.7 million and (ii) a commercial credit facility of up to $91.9 million, collectively for use in respect of our LR1 newbuilding program at K Shipbuilding Co., Ltd. The 12-year facility combines for a 20-year amortization profile and a blended interest rate of SOFR plus 125 basis points across two tranches. |
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Liquidity and Sources of Capital,” for further details on these financing transactions.
Finally, during the fourth quarter of 2025, in an effort to maximize future operational and strategic flexibility while maintaining compliance with evolving global tax regulations that are focused on the alignment of the jurisdictions in which an entity’s commercial or strategic management are performed with where its profits are realized, we completed the redomiciliation of our vessel-owning subsidiaries and various intermediate holding companies from the Marshall Islands and Liberia to Bermuda. The Company itself remains organized under the laws of the Republic of the Marshall Islands. See “— Income Taxation of the Company — Bermuda Taxation” below for further discussion on the impact of this exercise.
OUR STRATEGY
Our primary objectives are to (i) maintain safe and reliable vessel operations that meet or exceed environmental standards; (ii) actively manage the size, age and composition of our fleet over the course of market cycles to increase investment returns and available capital; (iii) maximize cash flows through management of vessel employment in the spot market through our participation in a number of commercial pools and selective time charters; (iv) defend and grow the market share and profits of our asset light Crude Tankers Lightering business; (v) execute a disciplined yet flexible capital allocation strategy that is aligned with the shipping industry cycles by maintaining a healthy balance sheet in order to use cash flow generation for opportunistic fleet investment, further de-levering that
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reduces cash break evens and/or interest costs and increases return to shareholders; and (vi) enter into value-creating transactions. The key elements of our strategy are:
Actively manage our fleet to maximize return on capital over market cycles.
We will continue to actively manage the size and composition of our fleet through opportunistic accretive acquisitions and dispositions as part of our effort to achieve above-market returns on capital for our vessel assets and renew our fleet. Using our commercial, financial and operational expertise, we will continue to execute our plan to opportunistically grow our fleet through the timely and selective acquisition of high-quality secondhand vessels, resales or newbuild contracts when we believe those acquisitions will result in attractive returns on invested capital and increased cash flow. We also intend to continue to engage in opportunistic dispositions where we can achieve attractive values for our vessels relative to their anticipated future earnings from operations as we assess the market cycle. Taken together, we believe these activities have and will continue to help us maintain a balanced, high-quality and modern fleet of crude oil and refined product vessels with an enhanced return on invested capital. We believe our balanced and versatile fleet, our experience and our long-standing relationships with participants in the crude and refined product shipping industry position us to identify and take advantage of attractive acquisition opportunities in any vessel class in the international market.
Generate strong cash flows through a blend of spot market and period market exposure
We believe we are well-positioned to generate strong cash flows by identifying and taking advantage of attractive chartering opportunities in the International Flag tanker market. We will continue to pursue an overall chartering strategy, with a substantial spot rate exposure that provides us with higher returns when the more volatile spot market is stronger.
We currently deploy the majority of our fleet on a spot rate basis to benefit from market volatility and what we believe are the traditionally higher returns the spot market offers compared with time charters. We believe this strategy continues to offer significant upside exposure to the spot market and an opportunity to capture enhanced profit margins at times when vessel demand exceeds supply. As of December 31, 2025, we participated in six commercial pools as our principal means of participation in the spot market— Tankers International (“TI”), Maersk Tankers Suezmax Pool (“MAERSK”), Panamax International (“PI”), Clean Products Tankers Alliance (“CPTA”), Norden Tanker Pool (“NTP”) and Aframax International Pool (“AI”) — each selected for specific expertise in its respective market. Our continued participation in pools allows us to benefit from economies of scale and higher vessel utilization rates.
We plan to continue to complement our spot chartering strategy by selectively employing a portion of our vessels on time charters that provide consistent cash flows. As of December 31, 2025, we had three VLCCs, two Suezmaxes, one Aframax, one LR2 and six MRs on time charters expiring between 2026 and 2030. We may seek to place other tonnage on time charters, for storage or transport, when we can do so at attractive rates.
Maintain an appropriate and flexible financial profile.
We seek to maintain a strong balance sheet and prudent financial leverage with sufficient liquidity that positions us to take advantage of attractive strategic opportunities throughout the dynamic tanker cycles of the shipping sector. During 2025, we maintained what we believe to be reasonable financial leverage for the current point in the tanker cycle. As of December 31, 2025, we had total liquidity on a consolidated basis of $723.6 million, comprised of $166.9 million of cash and short-term investments and $556.7 million of remaining undrawn revolver capacity, as well as a Consolidated Net Debt to Assets Value and Consolidated Net Debt to Book Capital ratios of 12.9% and 16.5%, respectively.
Sustainability and governance initiatives
We are committed to fulfilling our mission of transporting energy safely and efficiently to customers around the world using well-maintained assets operated by dedicated crews in a diligent and environmentally sustainable manner. We are aware of our role as a crude and petroleum products transporter in a world gradually transitioning to cleaner energy sources. While we believe that oil will continue to play a significant role in the global energy landscape during this transition, we are committed to supporting and adapting to the shift toward cleaner energy. We welcome and support efforts to increase transparency and to promote investors’ understanding of how we and our industry peers are addressing the climate change-related risks and opportunities particular to our industry. The Company’s governance, strategy, risk management and performance monitoring efforts in this area are evolving and will continue to do so over time. We have disclosed certain information relating to sustainability and governance on our website, including our
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Sustainability Disclosure Report. The report includes information on how we monitor, manage and perform on material sustainability and governance issues in the face of increasing expectations and regulations. Our Sustainability Disclosure Report may be found on our website at www.intlseas.com and is not incorporated by reference into this Annual Report.
Governance – Our Board of Directors (the “Board”), which had nine members as of December 31, 2025, including seven independent members, has experts in shipping and compliance and engages in regular discussions relating to environmental matters and the Company’s response to related risks and opportunities. During 2024, the Board established a committee of the Board to assist the Board in fulfilling its sustainability oversight responsibilities with respect to Environmental and Social policies, strategies and programs. The Company’s management team, led by the Chief Executive Officer, has the day-to-day responsibility to execute the action plans as approved by the Board.
Strategy – We are committed to sustainability and governance practices as a part of our core culture. To achieve sustainable growth, including reducing fuel cost and enhancing workforce safety, as well as our long-term financial goals, we have taken actions which include:
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| - | The establishment of a Performance and Sustainability team that is tasked with both educating the organization as well as putting in place programs and initiatives to expand our decarbonization efforts; |
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| - | The continuing implementation of a third-party data collection and analysis platform which allows data to be gathered from our vessels for use in advanced analytics with the aim of reducing our fuel consumption and CO2 and GHG emissions; |
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| - | The inclusion of a sustainability-linked pricing mechanism in both the $500 Million Revolving Credit Facility and the $160 Million Revolving Credit Facility. The mechanism has been certified by an independent, leading firm in sustainability and corporate governance research as meeting sustainability-linked loan principles. The adjustment in pricing will be linked to the carbon efficiency of the INSW fleet as it relates to reductions in CO2 emissions year-over-year, such that it aligns with the IMO’s industry reduction targets in GHG emissions by 2050 (as per the 2023 IMO Strategy on Reduction of GHG Emissions from Ships). This key performance indicator is calculated in a manner consistent with the de-carbonization trajectory outlined in the Poseidon Principles, the global framework by which financial institutions can assess the climate alignment of their ship finance portfolios. The relevant emissions data for our fleet will be reported to the applicable Classification Societies, the IMO and the lenders under our sustainability-linked loan facility. We also intend to make such emissions data publicly available. In addition to this GHG reduction measure, the pricing mechanism in the $500 Million Revolving Credit Facility also includes key performance indicators relating to crew safety and investment by the Company aimed at improving energy efficiency and the reduction of emissions; |
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| - | Participation in ITOPF, the leading not-for-profit marine ship pollution response advisors; |
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| - | Participation in the Marine Anti-Corruption Network, a global business network of over 220 members whose vision is a maritime industry free of corruption that enables fair trade to the benefit of society at large; |
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| - | Membership in the Society for Gas as a Marine Fuel, an organization providing expertise on the use of low and zero carbon marine fuels; |
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| - | Membership on the steering committee of Together in Safety, an industry consortium connecting the maritime sector to improve safety performance; |
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| - | Participation in the North American Marine Environmental Protection Association; |
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| - | Participation as a signatory to the Neptune Declaration on Seafarer Wellbeing and Crew Change, in a worldwide call to action to improve working conditions for seafarers by increasing transparency around mental health, connectivity, shore leave, and work/rest hours; |
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| - | Participation as a signatory to the Gulf of Guinea Declaration on the Suppression of Piracy, which has been signed by more than 500 organizations across the maritime industry and sets out a series of steps to help decrease and end the threat of piracy in the Gulf of Guinea; |
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| - | The installation of Ballast Water Treatment Systems on vessels to comply with all applicable regulations; |
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| - | Specific consideration of overall fuel consumption when selecting vessel purchase candidates and ships in our fleet to consider for disposition, in order to reduce our fleet’s contribution to GHG emissions; and |
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| - | Our continued commitment to practice environmentally and socially responsible ship recycling. Stoppage of work until identified unsafe working conditions are rectified and improvements in procedures for materials handling were some of the positive takeaways noted from our most recent recycling projects. |
Additionally, we are developing a plan to meet the IMO’s 2050 and interim GHG emissions targets. The pathway to achieve these targets includes short-term, mid-term and long-term components, such as:
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| - | We have embarked on a significant Fleet Decarbonization Project to enhance and align our sustainability strategy with stakeholder expectations. We are undertaking a comprehensive assessment of the future readiness and decarbonization capabilities of our vessels. This project will set the foundation for a robust formalized transition plan, ensuring that our fleet is well-prepared to meet the demands of any future low-carbon requirements. |
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| - | We completed the construction of our three dual-fuel LNG VLCCs at Daewoo Shipbuilding and Marine Engineering’s shipyard during 2023. We expect these highly efficient tankers to be well suited to adhere to future environmental regulation throughout their life. |
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| - | We have a six vessel dual-fuel ready LR1 newbuild program, with two of the vessels delivered to us in 2025, as discussed in the “2025 in Review” section above. |
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| - | We have installed, and placed a number of additional orders for, energy savings devices such as wake improvement ducts, propellor boss cap fins (PBCFs), and advanced hull coatings which significantly reduce our carbon footprint and adhere to future environmental regulations. |