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Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2016 and Declaration of a Quarterly Dividend

MONACO--(Marketwired - February 13, 2017) - Scorpio Tankers Inc. (STNG) ("Scorpio Tankers," or the "Company") today reported its results for the three months and year ended December 31, 2016 and declaration of a quarterly dividend.

Results for the three months ended December 31, 2016 and 2015

For the three months ended December 31, 2016, the Company's adjusted net loss (see Non-IFRS Measures section below) was $29.4 million, or $0.18 basic and diluted loss per share, which excludes a $0.2 million, or $0.00 per basic and diluted share, unrealized loss on derivative financial instruments. For the three months ended December 31, 2016, the Company had a net loss of $29.7 million, or $0.18 basic and diluted loss per share.

For the three months ended December 31, 2015, the Company's adjusted net income was $36.3 million (see Non-IFRS Measures section below), or $0.22 basic and $0.21 diluted earnings per share, which excludes (i) a $0.7 million write-off of deferred financing fees, (ii) a $0.7 million write-off of deposits made for options to construct MR product tankers that expired unexercised and (iii) a $0.7 million unrealized loss on derivative financial instruments. The adjustments resulted in an aggregate increase of the Company's net income by $2.1 million, or $0.01 basic and diluted earnings per share. For the three months ended December 31, 2015, the Company had net income of $34.2 million, or $0.21 basic and $0.20 diluted earnings per share.

Results for the years ended December 31, 2016 and 2015

For the year ended December 31, 2016, the Company's adjusted net loss (see Non-IFRS Measures section below) was $10.7 million, or $0.07 basic and diluted loss per share, which excludes (i) a $2.1 million loss on sales of vessels, (ii) an aggregate write-off of $14.5 million of deferred financing fees, (iii) a $1.4 million unrealized gain on derivative financial instruments and (iv) a $1.0 million aggregate gain recorded on the repurchase of $10.0 million aggregate principal amount of the Company's Convertible Notes. The adjustments resulted in an aggregate decrease of the Company's net loss by $14.2 million, or $0.08 per basic and diluted share. For the year ended December 31, 2016, the Company had a net loss of $24.9 million, or $0.15 basic and diluted loss per share.

For the year ended December 31, 2015, the Company's adjusted net income was $221.3 million (see Non-IFRS Measures section below), or $1.37 basic and $1.21 diluted earnings per share, which excludes (i) a gain of $1.2 million resulting from the sale of the Company's investment in Dorian, (ii) a gain of $1.4 million resulting from the early termination of a contract on a time chartered-in vessel, (iii) a reserve of $1.4 million for a pool bunker supplier in bankruptcy, (iv) a $2.7 million write-off of deferred financing fees, (v) a $0.7 million write-off of deposits made for options to construct MR product tankers that expired unexercised, (vi) a net loss of $35,000 related to the gains and losses on the sales of four vessels, (vii) a $1.3 million unrealized loss on derivative financial instruments and (viii) a gain of $46,000 resulting from the repurchase of $1.5 million aggregate principal amount of the Company's Convertible Notes. The adjustments resulted in an aggregate increase of the Company's net income by $3.5 million or $0.02 basic and $0.01 diluted earnings per share. For the year ended December 31, 2015, the Company had net income of $217.7 million, or $1.35 basic and $1.20 diluted earnings per share.

Declaration of Dividend

On February 13, 2017, the Company's Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about March 30, 2017 to all shareholders as of February 23, 2017 (the record date). As of February 10, 2017, there were 174,629,755 shares outstanding.

Diluted Weighted Number of Shares

Diluted earnings per share is determined using the if-converted method. Under this method, the Company assumes that the Convertible Notes (which were issued in June 2014) are converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $5.4 million and $21.7 million during the three months and year ended December 31, 2016, respectively, are not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three months and year ended December 31, 2016, the Company's basic weighted average number of shares were 161,868,161 and 161,118,654, respectively. The weighted average number of shares, both diluted and under the if-converted method, were anti-dilutive for the three months and year ended December 31, 2016 as the Company incurred a net loss. As of the date hereof, the Convertible Notes are not eligible for conversion.

Summary of Recent and Fourth Quarter Significant Events

  • Below is a summary of the average daily TCE revenue and duration for voyages fixed thus far in the first quarter of 2017 as of the date hereof:

    • For the LR2s in the pool: approximately $16,000 per day for 61% of the days

    • For the LR1 in the pool: approximately $14,500 per day for 50% of the days

    • For the MRs in the pool: approximately $14,300 per day for 53% of the days

    • For the ice-class 1A and 1B Handymaxes in the pool: approximately $16,500 per day for 51% of the days

  • Below is a summary of the average daily TCE revenue earned during the fourth quarter of 2016:

    • For the LR2s in the pool: $13,966 per revenue day

    • For the LR1 in the pool: $14,856 per revenue day

    • For the MRs in the pool: $11,677 per revenue day

    • For the Handymaxes in the pool: $10,461 per revenue day

  • Signed a non-binding term sheet to sell and leaseback three MR tankers to an unaffiliated third party. Upon completion, the Company's liquidity is expected to increase by approximately $29.0 million after the repayment of debt.

  • Received a commitment for a credit facility of up to $81.4 million with a final maturity of December 2021 from DVB Bank SE to refinance a previous facility with DVB Bank SE, which financed four product tankers.

  • Received loan commitments from Macquarie Bank Limited (London Branch), DekaBank Deutsche Girozentrale, The Export-Import Bank of Korea ("KEXIM") and Garanti-Instituttet for Eksportkreditt ("GIEK") for a total loan facility of up to $172.0 million. The proceeds of the facility are expected to be used to partially finance eight MR product tankers that are currently under construction at Hyundai Mipo Dockyard Co., Ltd. ("HMD").

  • Took delivery of STI Selatar, an LR2 product tanker that was under construction at Sungdong Shipbuilding and Marine Engineering Co., Ltd. ("SSME"), in February 2017.

  • Upsized the Company's BNP Paribas Credit Facility by $27.6 million, the proceeds of which were used to refinance the existing indebtedness on two MR product tankers.

  • Executed a loan facility with HSH Nordbank AG which was used to refinance the existing indebtedness on two MR product tankers in February 2017.

  • Entered into an agreement to bareboat-in seven Handymax ice-class 1A product tankers for up to two years.

  • Paid a quarterly cash dividend on the Company's common stock of $0.125 per share in December 2016.

DVB 2017 Credit Facility

In January 2017, the Company received a commitment for a credit facility of up to $81.4 million from DVB Bank SE (the "DVB 2017 Credit Facility") to refinance its previous facility with DVB Bank SE. The new credit facility will be used to refinance the existing indebtedness on four product tankers, has a final maturity of December 2021, and bears interest at LIBOR plus a margin of 2.75% per annum. The available borrowings may be used to finance up to 63% of the fair market value of the respective vessels.

The remaining terms and conditions, including financial covenants, are similar to those set forth above in the Company's existing credit facilities. The loan facility is subject to customary conditions precedent and the execution of definitive documentation.

2017 Credit Facility

In January 2017, the Company received commitments from a group of financial institutions led by Macquarie Bank Limited (London Branch) for a total loan facility of up to $172.0 million (the "2017 Credit Facility"). The facility includes two commercial tranches for $15.0 million and $25.0 million, a KEXIM Guaranteed Tranche for $48.0 million, a KEXIM Funded Tranche for $52.0 million, and a GIEK Guaranteed Tranche for $32.0 million.

The loan facility is expected to be used to partially finance the purchase of eight MR product tankers that are currently under construction at HMD. Drawdowns will be available at an amount equal to the lower of 60% of the contract price and 60% of the fair market value of each respective vessel. Other key terms are as follows:

The first commercial tranche of $15.0 million has a final maturity of six years from the drawdown date of each vessel, bears interest at LIBOR plus a margin of 2.25% per annum, and has a 15 year repayment profile.

The second commercial tranche of $25.0 million has a final maturity of nine years from the drawdown date of each vessel (assuming KEXIM or GIEK have not exercised their option to call for prepayment of the KEXIM and GIEK funded and guaranteed tranches by the date falling two months prior to the maturity of the first commercial tranche and in the event that the first commercial tranche has not been extended), bears interest at LIBOR plus a margin of 2.25% per annum, and has a 15 year repayment profile.

The KEXIM Funded Tranche and GIEK Guaranteed Tranche have a final maturity of 12 years from the drawdown date of each vessel (assuming the commercial tranches are refinanced through that date), bear interest at LIBOR plus a margin of 2.15% per annum, and have a 12 year repayment profile.

The KEXIM Guaranteed Tranche has a final maturity of 12 years from the drawdown date of each vessel (assuming the commercial tranches are refinanced through that date), bears interest at LIBOR plus a margin of 1.60% per annum, and has a 12 year repayment profile.

The remaining terms and conditions, including financial covenants, are similar to those set forth above in the Company's existing credit facilities. The loan facility is subject to customary conditions precedent and the execution of definitive documentation.

Upsizing of BNP Paribas Credit Facility

In December 2016, the Company upsized its existing credit facility with BNP Paribas by $27.6 million. The $27.6 million increase of the bilateral financing bears interest at LIBOR plus a margin of 2.30% per annum and was used to refinance the existing indebtedness on two MR product tankers (2013 built). In addition, the maturity date of the facility was extended to December 2021. The terms and conditions, including covenants, of the credit facility are similar to those in the Company's existing credit facilities.

HSH Credit Facility

In January 2017, the Company executed a loan facility with HSH Nordbank AG which was fully drawn in February 2017, and the proceeds of $31.1 million were used to refinance the existing indebtedness on two MR product tankers. The facility has a final maturity of five years from the first drawdown date, and bears interest at LIBOR plus a margin of 2.50% per annum. The remaining terms and conditions, including financial covenants, are similar to those in the Company's existing credit facilities.

2011 Credit Facility

As of December 31, 2016, the 2011 Credit Facility, which is scheduled to mature in May 2017, had seven MR product tankers as collateral. Since January 2017, the Company has refinanced two vessels in the BNP Paribas Credit Facility, two vessels in the HSH Credit Facility, and the Company is in discussions to refinance the remaining three vessels.

Time and Bareboat Charter-in Update

In December 2016, the Company entered into agreements to bareboat-in seven Handymax ice-class 1A product tankers. The agreements include purchase options, which can be exercised through December 31, 2018. If the purchase options are not exercised, the bareboat-in agreements expire on March 31, 2019.

Three of the vessels were previously time chartered-in by the Company for $15,600 per day. These time charter-in contracts were cancelled in January 2017 and replaced by the new bareboat contracts at a rate of $7,500 per day. The remaining four vessels will be chartered-in, on a bareboat basis, for $6,000 per day. Two of these vessels were delivered in February 2017 and the remaining two are expected to be delivered within the first quarter of 2017.

In November 2016, the Company extended the time charter-in agreement for an MR product tanker that is currently time chartered-in for an additional year at $13,050 per day effective January 2017. The Company also has an option to extend the charter for an additional year at $15,000 per day.

In October 2016, the Company time chartered-in a 2006 built MR product tanker for one year at $13,500 per day. The Company also has an option to extend the charter for an additional year at $15,000 per day.

$250 Million Securities Repurchase Program

In May 2015, the Company's Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities, which currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2017 (SBNB), which were issued in October 2014. As of the date hereof, the Company has the authority to purchase up to an additional $153.3 million of its securities under its Securities Repurchase Program. The Company expects to repurchase its securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the Securities Repurchase Program to repurchase any of its securities.

Since January 1, 2016 through the date of this press release, the Company has repurchased its securities as follows:

  • An aggregate of 2,956,760 of its common shares at an average price of $5.58 per share; the repurchased shares are being held as treasury shares. There were 174,629,755 shares outstanding as of February 10, 2017.

  • $10.0 million aggregate principal amount of its Convertible Notes at an average price of $839.28 per $1,000 principal amount.

Conference Call

The Company will have a conference call on February 13, 2017 at 9:00 AM Eastern Standard Time and 3:00 PM Central European Time.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 888-417-8527 (U.S.) or 719-325-2439 (International). The conference participant passcode is 5057068. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.

Slides and Audio Webcast:

There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Webcast URL: https://www.webcaster4.com/Webcast/Page/610/19558

Current Liquidity

As of February 10, 2017, the Company had $91.5 million in cash.

Debt

Set forth below is a summary of the Company's outstanding indebtedness as of the dates presented:

In millions of U.S. dollars

Outstanding as of September 30, 2016

Drawdowns and repayments, net

Outstanding as of December 31, 2016

Drawdowns and repayments, net

Outstanding as of February 10, 2017

Availability as of February 10, 2017 (5)

2011 Credit Facility (1)

$

95.0

$

(2.0

)

$

93.0

(50.0

)

$

43.0

-

K-Sure Credit Facility

317.4

(3.3

)

314.1

(14.9

)

299.2

-

KEXIM Credit Facility

366.6

-

366.6

(4.3

)

362.3

-

ING Credit Facility

126.5

(2.2

)

124.3

(1.1

)

123.2

-

ABN AMRO Credit Facility

132.7

(6.4

)

126.3

(1.7

)

124.6

-

BNP Paribas Credit Facility (2)

32.8

(0.6

)

32.2

27.6

59.8

-

Credit Suisse Credit Facility (3)

-

-

-

29.4

29.4

30.6

Scotiabank Credit Facility

32.7

(0.6

)

32.1

-

32.1

-

NIBC Credit Facility

40.8

(1.0

)

39.8

(1.0

)

38.8

-

2016 Credit Facility

288.0

(6.8

)

281.2

-

281.2

-

DVB Credit Facility

90.0

(1.6

)

88.4

-

88.4

-

HSH Credit Facility (4)

-

-

-

31.1

31.1

-

2020 senior unsecured notes

53.8

-

53.8

-

53.8

-

2017 senior unsecured notes

51.8

-

51.8

-

51.8

-

Convertible Notes

348.5

-

348.5

-

348.5

-

$

1,976.6

$

(24.5

)

$

1,952.1

$

15.1

$

1,967.2

$

30.6

(1)

Activity for the 2011 Credit Facility includes the following repayments in connection with the refinancing of outstanding borrowings thereunder (i) $13.0 million related to STI Sapphire, which was refinanced in January 2017, (ii) $13.3 million related to STI Emerald, which was refinanced in February 2017, (iii) $13.7 million related to STI Duchessa, which was refinanced in February 2017, and (iv) $10.1 million related to STI Onyx, which was refinanced in February 2017.

(2)

In December 2016, the Company upsized its existing credit facility with BNP Paribas by $27.6 million. The upsized loan facility was fully drawn in January and February 2017, and the aggregate proceeds of $27.6 million were used to refinance the existing indebtedness on STI Sapphire and STI Emerald, which were previously financed under the 2011 Credit Facility.

(3)

In February 2017, the Company took delivery of STI Selatar, an LR2 product tanker from SSME. The Company drew down $29.4 million from this credit facility to partially finance the delivery of the vessel.

(4)

In January 2017, the Company executed a loan facility with HSH Nordbank AG. The facility has a maturity of five years from the agreement date and bears interest at LIBOR plus a margin of 2.50% per annum. This facility was fully drawn in February 2017, and the proceeds were used to refinance the existing indebtedness on STI Duchessa and STI Onyx, which were previously financed under the 2011 Credit Facility.

(5)

The 2017 Credit Facility and the DVB 2017 Credit Facility will be included in the schedule upon the execution of the loan documentation.

Newbuilding Program

The Company currently has nine newbuilding vessel orders (eight MRs and one LR2) with HMD and SSME, which the Company refers to as its Newbuilding Program.

During the fourth quarter of 2016, the Company made installment payments of $12.7 million relating to vessels under its Newbuilding Program.

Set forth below are the installment payments that have been made and are expected to be made in the first quarter of 2017 and future installment payments *:

In millions of U.S. dollars

Q1 2017 - installment payments made to date

$

29.2

Q1 2017 - remaining installment payments

56.3

Q2 2017

32.3

Q3 2017

68.2

Q4 2017

50.5

Q1 2018

21.6

$

258.1

*These are estimates only and are subject to change as construction progresses.

Explanation of Variances on the Fourth Quarter of 2016 Financial Results Compared to the Fourth Quarter of 2015

For the three months ended December 31, 2016, the Company recorded a net loss of $29.7 million compared to net income of $34.2 million for the three months ended December 31, 2015. The following were the significant changes between the two periods:

  • Time charter equivalent, or TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management. The following table depicts TCE revenue for the three months ended December 31, 2016 and 2015:

For the three months ended December 31,

In thousands of U.S. dollars

2016

2015

Vessel revenue

$

106,068

$

178,398

Voyage expenses

(420

)

(293

)

TCE revenue

$

105,648

$

178,105

  • TCE revenue decreased $72.5 million to $105.6 million from $178.1 million for the three months ended December 31, 2016 and 2015, respectively. This decrease was driven by a decrease in overall time charter equivalent revenue per day to $12,465 per day from $21,057 for the three months ended December 31, 2016 and 2015, respectively (see the breakdown of daily TCE below). TCE revenue per day decreased across all of our operating segments as persistently high refined product inventories along with a lack of arbitrage opportunities have resulted in reduced global product tanker demand.

  • Vessel operating costs decreased $4.0 million to $46.9 million from $50.9 million for the three months ended December 31, 2016 and 2015, respectively. This decrease was driven by a reduction in the number of owned vessels in our fleet to an average of 77.0 vessels from an average of 80.3 vessels for the three months ended December 31, 2016 and 2015, respectively. Additionally, overall vessel operating costs per day decreased to $6,623 per day from $6,891 per day for the three months ended December 31, 2016 and 2015, respectively. This decrease was driven by improvements in our LR2 and MR operating segments (see the breakdown of daily vessel operating costs below).

  • Charterhire expense increased $5.3 million to $23.5 million from $18.2 million for the three months ended December 31, 2016 and 2015, respectively. This increase was primarily driven by an increase in the Company's time chartered-in fleet to an average of 15.7 vessels from an average of 11.9 vessels for the three months ended December 31, 2016 and 2015, respectively.

  • Depreciation expense decreased slightly by $0.2 million to $30.7 million from $30.9 million for the three months ended December 31, 2016 and 2015, respectively. This decrease was primarily driven by the mix of the Company's vessels as the average number of owned MRs decreased to 42.0 from 47.0 for the three months ended December 31, 2016 and 2015, respectively, as a result of the sales of five MRs during the first and second quarters of 2016. This decrease was partially offset by an increase in the average number of owned LR2s to 21.0 from 19.0 for the three months ended December 31, 2016 and 2015, respectively, as a result of the deliveries of two LR2s under our Newbuilding Program during the first and second quarters of 2016.

  • General and administrative expenses decreased $5.9 million to $12.3 million from $18.2 million for the three months ended December 31, 2016 and 2015, respectively. This decrease was primarily driven by reductions in compensation expense (which includes a reduction in restricted stock amortization).

  • Financial expenses decreased $2.5 million to $21.7 million from $24.1 million for the three months ended December 31, 2016 and 2015, respectively. The decrease was primarily the result of a decrease in interest expense as the average debt outstanding decreased to $1.9 billion from $2.1 billion for the three months ended December 31, 2016 and 2015, respectively. Additionally, we recorded a $0.7 million write-off of deferred financing fees during the three months ended December 31, 2015. We did not record any write-offs of deferred financing fees during the three months ended December 31, 2016.

  • Unrealized gains and losses on derivative financial instruments relate to the change in the fair value of the profit or loss agreement on one of the Company's time chartered-in vessels with a third party who neither owns nor operates the vessel.

Scorpio Tankers Inc. and Subsidiaries

Condensed Consolidated Statement of Income

(unaudited)

For the three months ended December 31,

For the year ended December 31,

In thousands of U.S. dollars except per share and share data

2016

2015

2016

2015

Revenue

Vessel revenue

$

106,068

$

178,398

$

522,747

$

755,711

Operating expenses

Vessel operating costs

(46,933

)

(50,916

)

(187,120

)

(174,556

)

Voyage expenses

(420

)

(293

)

(1,578

)

(4,432

)

Charterhire

(23,521

)

(18,206

)

(78,862

)

(96,865

)

Depreciation

(30,686

)

(30,874

)

(121,461

)

(107,356

)

General and administrative expenses

(12,306

)

(18,245

)

(54,899

)

(65,831

)

Loss on sales of vessels

-

-

(2,078

)

(35

)

Write-off of vessel purchase options

-

(731

)

-

(731

)

Gain on sale of Dorian shares

-

-

-

1,179

Total operating expenses

(113,866

)

(119,265

)

(445,998

)

(448,627

)

Operating (loss) / income

(7,798

)

59,133

76,749

307,084

Other (expense) and income, net

Financial expenses

(21,667

)

(24,149

)

(104,048

)

(89,596

)

Realized gain on derivative financial instruments

-

-

-

55

Unrealized (loss) / gain on derivative financial instruments

(229

)

(678

)

1,371

(1,255

)

Financial income

50

18

1,213

145

Other income (expenses), net

(22

)

(112

)

(188

)

1,316

Total other expense, net

(21,868

)

(24,921

)

(101,652

)

(89,335

)

Net (loss) / income

$

(29,666

)

$

34,212

$

(24,903

)

$

217,749

(Loss) /earnings per share

Basic

$

(0.18

)

$

0.21

$

(0.15

)

$

1.35

Diluted

$

(0.18

)

$

0.20

$

(0.15

)

$

1.20

Basic weighted average shares outstanding

161,868,161

163,792,076

161,118,654

161,436,449

Diluted weighted average shares outstanding (1)

161,868,161

202,210,591

161,118,654

199,739,326

(1) The dilutive effect of (i) unvested shares of restricted stock and (ii) the potentially dilutive securities relating to our Convertible Notes were excluded from the computation of diluted earnings per share for the three months and year ended December 31, 2016 because their effect would have been anti-dilutive. Weighted average shares under the if-converted method (which includes the potential dilutive effect of both the unvested shares of restricted stock and our Convertible Notes) were 199,834,980 and 199,965,014 for the three months and year ended December 31, 2016, respectively.

Scorpio Tankers Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)

As of

In thousands of U.S. dollars

December 31, 2016

December 31, 2015

Assets

Current assets

Cash and cash equivalents

$

99,887

$

200,970

Accounts receivable

42,329

69,017

Prepaid expenses and other current assets

9,067

3,585

Derivative financial instruments

116

-

Inventories

6,122

6,575

Total current assets

157,521

280,147

Non-current assets

Vessels and drydock

2,913,254

3,087,753

Vessels under construction

137,917

132,218

Other assets

21,495

23,337

Total non-current assets

3,072,666

3,243,308

Total assets

$

3,230,187

$

3,523,455

Current liabilities

Current portion of long-term debt

$

353,012

$

124,503

Finance lease liability

-

53,372

Accounts payable

9,282

25,683

Accrued expenses

23,024

32,643

Derivative financial instruments

-

1,175

Total current liabilities

385,318

237,376

Non-current liabilities

Long-term debt

1,529,669

1,872,114

Derivative financial instruments

-

80

Total non-current liabilities

1,529,669

1,872,194

Total liabilities

1,914,987

2,109,570

Shareholders' equity

Issued, authorized and fully paid-in share capital:

Share capital

2,247

2,224

Additional paid-in capital

1,756,769

1,729,314

Treasury shares

(443,816

)

(427,311

)

Retained earnings

-

109,658

Total shareholders' equity

1,315,200

1,413,885

Total liabilities and shareholders' equity

$

3,230,187

$

3,523,455

Scorpio Tankers Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(unaudited)

For the year ended December 31,

In thousands of U.S. dollars

2016

2015

Operating activities

Net (loss) / income

$

(24,903

)

$

217,749

Gain on sale of Dorian shares

-

(1,179

)

Loss on sales of vessels

2,078

35

Write-off of vessel purchase options

-

731

Depreciation

121,461

107,356

Amortization of restricted stock

30,207

33,687

Amortization of deferred financing fees

28,628

17,418

Unrealized (gain)/loss on derivative financial instruments

(1,371

)

1,255

Amortization of acquired time charter contracts

65

513

Accretion of Convertible Notes

11,562

11,096

Gain on repurchase of Convertible Notes

(994

)

(46

)

166,733

388,615

Changes in assets and liabilities:

Decrease / (increase) in inventories

564

(1,909

)

Decrease in accounts receivable

26,688

9,184

Increase in prepaid expenses and other current assets

(5,546

)

(1,615

)

Decrease / (increase) in other assets

2,045

(14,153

)

(Decrease) / increase in accounts payable

(2,487

)

775

(Decrease) / increase in accrued expenses

(9,486

)

11,206

Interest rate swap termination payment

-

(128

)

11,778

3,360

Net cash inflow from operating activities

178,511

391,975

Investing activities

Acquisition of vessels and payments for vessels under construction

(126,842

)

(905,397

)

Proceeds from disposal of vessels

158,175

90,820

Proceeds from sale of Dorian shares

-

142,436

Deposit returned for vessel purchases

-

(31,277

)

Net cash inflow / (outflow) from investing activities

31,333

(703,418

)

Financing activities

Debt repayments

(753,431

)

(226,260

)

Issuance of debt

565,028

643,550

Debt issuance costs

(10,679

)

(8,497

)

Repayment of Convertible Notes

(8,393

)

(1,632

)

Gross proceeds from issuance of common stock

-

159,747

Equity issuance costs

(24

)

(7,554

)

Dividends paid

(86,923

)

(87,056

)

Repurchase of common stock

(16,505

)

(76,028

)

Net cash (outflow) / inflow from financing activities

(310,927

)

396,270

(Decrease) / increase in cash and cash equivalents

(101,083

)

84,827

Cash and cash equivalents at January 1,

200,970

116,143

Cash and cash equivalents at December 31,

$

99,887

$

200,970

Scorpio Tankers Inc. and Subsidiaries

Other operating data for the three months and year ended December 31, 2016 and 2015

(unaudited)

For the three months ended December 31,

For the year ended December 31,

2016

2015

2016

2015

Adjusted EBITDA(1) (in thousands of U.S. dollars)

$

29,997

$

99,520

$

230,307

$

449,084

Average Daily Results

Time charter equivalent per day(2)

$

12,465

$

21,057

$

15,783

$

23,163

Vessel operating costs per day(3)

$

6,623

$

6,891

$

6,576

$

6,564

Aframax/LR2

TCE per revenue day (2)

$

14,523

$

26,464

$

20,280

$

30,544

Vessel operating costs per day(3)

$

6,916

$

7,330

$

6,734

$

6,865

Average number of owned vessels

21.0

19.0

20.3

14.6

Average number of time chartered-in vessels

2.0

2.1

2.0

4.0

Panamax/LR1

TCE per revenue day (2)

$

14,856

$

21,013

$

17,277

$

21,804

Vessel operating costs per day(3)

-

-

-

$

8,440

Average number of owned vessels

-

-

-

0.7

Average number of time chartered-in vessels

1.0

2.2

0.9

3.9

MR

TCE per revenue day (2)

$

11,981

$

19,681

$

14,898

$

21,803

Vessel operating costs per day(3)

$

6,510

$

6,838

$

6,555

$

6,461

Average number of owned vessels

42.0

47.0

43.4

42.6

Average number of time chartered-in vessels

7.7

4.0

5.2

3.6

Handymax

TCE per revenue day (2)

$

11,129

$

18,562

$

12,615

$

19,686

Vessel operating costs per day(3)

$

6,522

$

6,483

$

6,404

$

6,473

Average number of owned vessels

14.0

14.3

14.0

14.8

Average number of time chartered-in vessels

5.0

3.6

4.6

5.4

Fleet data

Average number of owned vessels

77.0

80.3

77.7

72.7

Average number of time chartered-in vessels

15.7

11.9

12.7

16.9

Drydock

Expenditures for drydock (in thousands of U.S. dollars)

-

-

-

-

(1)

See Non-IFRS Measures section below.

(2)

Freight rates are commonly measured in the shipping industry in terms of time charter equivalent per day (or TCE per day), which is calculated by subtracting voyage expenses, including bunkers and port charges, from vessel revenue and dividing the net amount (time charter equivalent revenues) by the number of revenue days in the period. Revenue days are the number of days the vessel is owned less the number of days the vessel is off-hire for drydock and repairs.

(3)

Vessel operating costs per day represent vessel operating costs excluding non-recurring expenses (for example insurance deductible expenses for repairs) divided by the number of days the vessel is owned during the period.

Fleet list as of February 10, 2017

Vessel Name

Year Built

DWT

Ice class

Employment

Vessel type

Owned vessels

1

STI Brixton

2014

38,734

1A

SHTP (1)

Handymax

2

STI Comandante

2014

38,734

1A

SHTP (1)

Handymax

3

STI Pimlico

2014

38,734

1A

Time Charter (5)

Handymax

4

STI Hackney

2014

38,734

1A

SHTP (1)

Handymax

5

STI Acton

2014

38,734

1A

SHTP (1)

Handymax

6

STI Fulham

2014

38,734

1A

SHTP (1)

Handymax

7

STI Camden

2014

38,734

1A

SHTP (1)

Handymax

8

STI Battersea

2014

38,734

1A

SHTP (1)

Handymax

9

STI Wembley

2014

38,734

1A

SHTP (1)

Handymax

10

STI Finchley

2014

38,734

1A

SHTP (1)

Handymax

11

STI Clapham

2014

38,734

1A

SHTP (1)

Handymax

12

STI Poplar

2014

38,734

1A

Time Charter (5)

Handymax

13

STI Hammersmith

2015

38,734

1A

SHTP (1)

Handymax

14

STI Rotherhithe

2015

38,734

1A

SHTP (1)

Handymax

15

STI Amber

2012

49,990

-

SMRP(2)

MR

16

STI Topaz

2012

49,990

-

SMRP(2)

MR

17

STI Ruby

2012

49,990

-

SMRP(2)

MR

18

STI Garnet

2012

49,990

-

SMRP(2)

MR

19

STI Onyx

2012

49,990

-

SMRP(2)

MR

20

STI Sapphire

2013

49,990

-

SMRP(2)

MR

21

STI Emerald

2013

49,990

-

SMRP(2)

MR

22

STI Beryl

2013

49,990

-

SMRP(2)

MR

23

STI Le Rocher

2013

49,990

-

SMRP(2)

MR

24

STI Larvotto

2013

49,990

-

SMRP(2)

MR

25

STI Fontvieille

2013

49,990

-

SMRP(2)

MR

26

STI Ville

2013

49,990

-

SMRP(2)

MR

27

STI Duchessa

2014

49,990

-

SMRP(2)

MR

28

STI Opera

2014

49,990

-

SMRP(2)

MR

29

STI Texas City

2014

49,990

-

SMRP(2)

MR

30

STI Meraux

2014

49,990

-

SMRP(2)

MR

31

STI San Antonio

2014

49,990

-

SMRP(2)

MR

32

STI Venere

2014

49,990

-

SMRP(2)

MR

33

STI Virtus

2014

49,990

-

SMRP(2)

MR

34

STI Aqua

2014

49,990

-

SMRP(2)

MR

35

STI Dama

2014

49,990

-

SMRP(2)

MR

36

STI Benicia

2014

49,990

-

SMRP(2)

MR

37

STI Regina

2014

49,990

-

SMRP(2)

MR

38

STI St. Charles

2014

49,990

-

SMRP(2)

MR

39

STI Mayfair

2014

49,990

-

SMRP(2)

MR

40

STI Yorkville

2014

49,990

-

SMRP(2)

MR

41

STI Milwaukee

2014

49,990

-

SMRP(2)

MR

42

STI Battery

2014

49,990

-

SMRP(2)

MR

43

STI Soho

2014

49,990

-

SMRP(2)

MR

44

STI Memphis

2014

49,995

-

SMRP(2)

MR

45

STI Tribeca

2015

49,990

-

SMRP(2)

MR

46

STI Gramercy

2015

49,990

-

SMRP(2)

MR

47

STI Bronx

2015

49,990

-

SMRP(2)

MR

48

STI Pontiac

2015

49,990

-

SMRP(2)

MR

49

STI Manhattan

2015

49,990

-

SMRP(2)

MR

50

STI Queens

2015

49,990

-

SMRP(2)

MR

51

STI Osceola

2015

49,990

-

SMRP(2)

MR

52

STI Notting Hill

2015

49,687

1B

Time Charter (6)

MR

53

STI Seneca

2015

49,990

-

SMRP(2)

MR

54

STI Westminster

2015

49,687

1B

Time Charter (6)

MR

55

STI Brooklyn

2015

49,990

-

SMRP(2)

MR

56

STI Black Hawk

2015

49,990

-

SMRP(2)

MR

57

STI Elysees

2014

109,999

-

SLR2P (4)

LR2

58

STI Madison

2014

109,999

-

SLR2P (4)

LR2

59

STI Park

2014

109,999

-

SLR2P (4)

LR2

60

STI Orchard

2014

109,999

-

SLR2P (4)

LR2

61

STI Sloane

2014

109,999

-

SLR2P (4)

LR2

62

STI Broadway

2014

109,999

-

SLR2P (4)

LR2

63

STI Condotti

2014

109,999

-

SLR2P (4)

LR2

64

STI Rose

2015

109,999

-

Time Charter (7)

LR2

65

STI Veneto

2015

109,999

-

SLR2P (4)

LR2

66

STI Alexis

2015

109,999

-

SLR2P (4)

LR2

67

STI Winnie

2015

109,999

-

SLR2P (4)

LR2

68

STI Oxford

2015

109,999

-

SLR2P (4)

LR2

69

STI Lauren

2015

109,999

-

SLR2P (4)

LR2

70

STI Connaught

2015

109,999

-

SLR2P (4)

LR2

71

STI Spiga

2015

109,999

-

SLR2P (4)

LR2

72

STI Savile Row

2015

109,999

-

SLR2P (4)

LR2

73

STI Kingsway

2015

109,999

-

SLR2P (4)

LR2

74

STI Carnaby

2015

109,999

-

SLR2P (4)

LR2

75

STI Lombard

2015

109,999

-

SLR2P (4)

LR2

76

STI Grace

2016

109,999

-

SLR2P (4)

LR2

77

STI Jermyn

2016

109,999

-

SLR2P (4)

LR2

78

STI Selatar

2017

109,999

-

SLR2P (4)

LR2

Total owned DWT

5,061,233

Vessel Name

Year Built

DWT

Ice class

Employment

Vessel type

Daily Base Rate

Expiry (8)

Time or bareboat chartered-in vessels

79

Kraslava

2007

37,258

1B

SHTP (1)

Handymax

$

17,000

02-Jun-17

80

Krisjanis Valdemars

2007

37,266

1B

SHTP (1)

Handymax

$

17,000

02-Apr-17

81

Silent

2007

37,847

1A

SHTP (1)

Handymax

$

7,500

21-Mar-19

(9)

82

Single

2007

37,847

1A

SHTP (1)

Handymax

$

7,500

24-Mar-19

(9)

83

Star I

2007

37,847

1A

SHTP (1)

Handymax

$

7,500

27-Mar-19

(9)

84

Sky

2008

37,879

1A

SHTP (1)

Handymax

$

6,000

31-Mar-19

(10)

85

Style

2008

37,923

1A

SHTP (1)

Handymax

$

6,000

31-Mar-19

(10)

86

Miss Mariarosaria

2011

47,499

-

SMRP(2)

MR

$

16,350

26-May-17

87

Vukovar

2015

49,990

-

SMRP(2)

MR

$

17,034

01-May-18

88

Targale

2007

49,999

-

SMRP(2)

MR

$

16,200

17-May-17

89

Zefyros

2013

49,999

-

SMRP(2)

MR

$

15,800

08-Jul-17

(11)

90

Gan-Trust

2013

51,561

-

SMRP(2)

MR

$

13,050

06-Jan-18

(12)

91

CPO New Zealand

2011

51,717

-

SMRP(2)

MR

$

15,250

12-Sep-18

(13)

92

CPO Australia

2011

51,763

-

SMRP(2)

MR

$

15,250

01-Sep-18

(13)

93

Ance

2006

52,622

-

SMRP(2)

MR

$

13,500

12-Oct-17

(14)

94

Hellespont Progress

2006

73,728

-

SPTP (3)

LR1

$

17,250

13-Apr-17

95

Densa Alligator

2013

105,708

-

SLR2P (4)

LR2

$

18,500

17-Feb-17

(15)

Total time chartered-in DWT

848,453

Newbuildings currently under construction

Vessel Name

Yard

DWT

Vessel type

96

Hull 2601 - TBN STI Galata

HMD

(16)

52,000

MR

97

Hull 2602 - TBN STI Bosphorus

HMD

(16)

52,000

MR

98

Hull 2603 - TBN STI Leblon

HMD

(16)

52,000

MR

99

Hull 2604 - TBN STI La Boca

HMD

(16)

52,000

MR

100

Hull 2605 - TBN STI San Telmo

HMD

(16)

52,000

MR

101

Hull 2606 - TBN STI Jurere

HMD

(16)

52,000

MR

102

Hull 2607 - TBN STI Esles II

HMD

(16)

52,000

MR

103

Hull 2608 - TBN STI Jardins

HMD

(16)

52,000

MR

104

Hull S3121 - TBN STI Rambla

SSME

(17)

109,999

LR2

Total newbuilding product tankers DWT

525,999

Total Fleet DWT

6,435,685

(1)

This vessel operates in or is expected to operate in the Scorpio Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial Management (SCM). SHTP and SCM are related parties to the Company.

(2)

This vessel operates in or is expected to operate in the Scorpio MR Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the Company.

(3)

This vessel operates in or is expected to operate in the Scorpio Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related party to the Company.

(4)

This vessel operates in or is expected to operate in the Scorpio LR2 Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the Company.

(5)

This vessel is currently time chartered-out to an unrelated third-party for three years at $18,000 per day. This time charter is scheduled to expire in January 2019.

(6)

This vessel is currently time chartered-out to an unrelated third-party for three years at $20,500 per day. This time charter is scheduled to expire in December 2018.

(7)

This vessel is currently time chartered-out to an unrelated third-party for three years at $28,000 per day. This time charter is scheduled to expire in February 2019.

(8)

Redelivery from the charterer is plus or minus 30 days from the expiry date.

(9)

In December 2016, we entered into an agreement to bareboat-in this vessel, which was previously time chartered-in by the Company for $15,600 per day. The time charter-in contract was cancelled in January 2017 and replaced by the new bareboat contract at a rate of $7,500 per day. The agreement includes a purchase option which can be exercised through December 31, 2018. If the purchase option is not exercised, the bareboat-in agreement will expire on March 31, 2019. This vessel was delivered under the bareboat agreement in January 2017.

(10)

In December 2016, we entered into an agreement to bareboat-in this vessel at a rate of $6,000 per day. The agreement includes a purchase option which can be exercised through December 31, 2018. If the purchase option is not exercised, the bareboat-in agreement will expire on March 31, 2019. This vessel was delivered under the bareboat agreement in February 2017.

(11)

We have an option to extend the charter for an additional year at $17,000 per day.

(12)

In November 2016, we entered into a new charter agreement for one year at $13,050 per day effective January 2017. We have an option to extend the charter for an additional year at $15,000 per day.

(13)

We have an option to extend the charter for an additional year at $16,000 per day.

(14)

We have an option to extend the charter for an additional year at $15,000 per day.

(15)

We have an option to extend the charter for an additional six months at $20,550 per day.

(16)

These newbuilding vessels are being constructed at HMD (Hyundai Mipo Dockyard Co. Ltd. of South Korea). Seven vessels are expected to be delivered throughout 2017 and one vessel is expected to be delivered in the first quarter of 2018.

(17)

This newbuilding vessel is being constructed at SSME (Sungdong Shipbuilding & Marine Engineering Co., Ltd). This vessel is expected to be delivered in the first quarter of 2017.

Dividend Policy

The declaration and payment of dividends is subject at all times to the discretion of the Company's Board of Directors. The timing and amount of dividends, if any, depends on the Company's earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

The Company's dividends paid during 2015 and 2016 were as follows:

Date paid

Dividends per share

March 2015

$0.120

June 2015

$0.125

September 2015

$0.125

December 2015

$0.125

March 2016

$0.125

June 2016

$0.125

September 2016

$0.125

December 2016

$0.125

On February 13, 2017, the Company's Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about March 30, 2017 to all shareholders as of February 23, 2017 (the record date). As of February 10, 2017, there were 174,629,755 shares outstanding.

Securities Repurchase Program

In May 2015, the Company's Board of Directors authorized a new Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities, which currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2017 (SBNB), which were issued in October 2014. As of the date hereof, the Company has the authority to purchase up to an additional $153.3 million of its securities under its Securities Repurchase Program. The Company expects to repurchase any securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the Securities Repurchase Program to repurchase any securities.

Since January 1, 2016 through the date of this press release, the Company has repurchased its securities as follows:

  • An aggregate of 2,956,760 of its common shares at an average price of $5.58 per share; the repurchased shares are being held as treasury shares. There were 174,629,755 shares outstanding as of February 10, 2017.

  • $10.0 million aggregate principal amount of its Convertible Notes at an average price of $839.28 per $1,000 principal amount.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 78 product tankers (22 LR2, 14 Handymax, and 42 MR tankers) with an average age of 2.2 years and time or bareboat charters-in 17 product tankers (one LR2, one LR1, eight MR and seven Handymax tankers). The Company has contracted for nine newbuilding product tankers (eight MR and a LR2 tanker). The LR2 is expected to be delivered in the first quarter of 2017 and the eight MRs are expected to be delivered throughout 2017 and the first quarter of 2018. Additional information about the Company is available at the Company's website www.scorpiotankers.com, which is not a part of this press release.

Non-IFRS Measures

Reconciliation of IFRS Financial Information to Non-IFRS Financial Information

This press release describes adjusted net income and adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. "Non-IFRS" measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.

The Company believes that the presentation of adjusted net income with adjusted earnings per share, basic and diluted, and adjusted EBITDA are useful to investors because they facilitate the comparability and the evaluation of companies in the Company's industry. In addition, the Company believes that adjusted net income with adjusted earnings per share, basic and diluted, and adjusted EBITDA are useful in evaluating its operating performance compared to that of other companies in the Company's industry. The Company's definitions of adjusted net income with the adjusted earnings per share, basic and diluted, and adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries.

Reconciliation of Net Income to Adjusted Net Income

For the three months ended December 31, 2016


In thousands of U.S. dollars except per share data



Amount



Per share
basic



Per share
diluted


Net loss

$

(29,666

)

$

(0.18

)

$

(0.18

)

Adjustments:

Unrealized loss on derivative financial instruments

229

0.00

0.00

Adjusted net loss

$

(29,437

)

$

(0.18

)

$

(0.18

)

For the three months ended December 31, 2015


In thousands of U.S. dollars except per share data


Amount

Per share
basic

Per share
diluted

Net income

$

34,212

$

0.21

$

0.20

Adjustments:

Deferred financing fees write-off

720

0.00

0.00

Write-off of vessel purchase options

731

0.00

0.00

Unrealized loss on derivative financial instruments

678

0.00

0.00

Adjusted net income

$

36,341

$

0.22 (1)

$

0.21 (1)

(1) Summation differences due to rounding

For the year ended December 31, 2016


In thousands of U.S. dollars except per share data


Amount

Per share
basic

Per share
diluted

Net loss

$

(24,903

)

$

(0.15

)

$

(0.15

)

Adjustments:

Deferred financing fees write-off

14,479

0.09

0.09

Unrealized gain on derivative financial instruments

(1,371

)

(0.01

)

(0.01

)

Gain on repurchase of Convertible Notes

(994

)

(0.01

)

(0.01

)

Loss on sales of vessels

2,078

0.01

0.01

Adjusted net loss

$

(10,711

)

$

(0.07

)

$

(0.07

)

For the year ended December 31, 2015


In thousands of U.S. dollars except per share data


Amount

Per share
basic

Per share
diluted

Net income

$

217,749

$

1.35

$

1.20

Adjustments:

Deferred financing fees write-off

2,730

0.02

0.01

Gain on sale of Dorian shares

(1,179

)

(0.01

)

(0.01

)

Write-down of vessel held for sale and loss on sales of vessels

35

0.00

0.00

Gain on early termination of time chartered-in contract

(1,397

)

(0.01

)

(0.01

)

Reserve for pool bunker supplier in bankruptcy

1,396

0.01

0.01

Unrealized loss on derivative financial instruments

1,255

0.01

0.01

Gain on repurchase of Convertible Notes

(46

)

0.00

0.00

Write-off of vessel purchase options

731

0.00

0.00

Adjusted net income

$

221,274

$

1.37

$

1.21

Reconciliation of Net Income to Adjusted EBITDA

For the three months ended December 31,

For the year ended December 31,

In thousands of U.S. dollars

2016

2015

2016

2015

Net (loss) / income

$

(29,666

)

$

34,212

$

(24,903

)

$

217,749

Financial expenses

21,667

24,149

104,048

89,596

Unrealized loss / (gain) on derivative financial instruments

229

678

(1,371

)

1,255

Financial income

(50

)

(18

)

(219

)

(145

)

Depreciation

30,686

30,874

121,461

107,356

Amortization of restricted stock

7,131

8,894

30,207

33,687

Write-off of vessel purchase options

-

731

-

731

Gain on sale of Dorian shares

-

-

-

(1,179

)

Loss on sales of vessels

-

-

2,078

35

Gain on repurchase of Convertible Notes

-

-

(994

)

-

Gain on early termination of time chartered-in contract

-

-

-

(1,397

)

Reserve for pool bunker supplier in bankruptcy

-

-

-

1,396

Adjusted EBITDA

$

29,997

$

99,520

$

230,307

$

449,084

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.