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Section 1: 8-K (8-K)

Document


United States
Securities and Exchange Commission
Washington, D.C. 20549
_______________________________________________
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934

____________March 9, 2018____________                         
Date of Report (Date of earliest event reported)
  
Overseas Shipholding Group, Inc.
(Exact Name of Registrant as Specified in Charter)

____1-6479-1____
Commission File Number
 
Delaware
 
13-2637623
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
  
Two Harbour Place 
302 Knights Run Avenue, Suite 1200
____Tampa, Florida 33602____
 
(Address of Principal Executive Offices) (Zip Code)
 

 
Registrant's telephone number, including area code (813) 209-0600
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 

 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 





OVERSEAS SHIPHOLDING GROUP, INC.
 
FORM 8-K
CURRENT REPORT


Section 2 – Financial Information
 
 
Item 2.02
Results of Operations and Financial Condition.
 
The following information, including the Exhibit to this Form 8-K, is being furnished pursuant to Item 2.02 – Results of Operations and Financial Condition of Form 8-K. This information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act of 1933 registration statements.
 
On March 9, 2018, Overseas Shipholding Group, Inc. issued a press release, a copy of which is attached hereto as Exhibit 99.1, announcing fourth quarter and full year 2017 earnings.
 

Section 9 - Financial Statements and Exhibits.
 
 
Item 9.01
Financial Statements and Exhibits.
 
(d)          Exhibits
 
Pursuant to General Instruction B.2 of Form 8-K, the following exhibit is furnished with this Form 8-K.
 
Exhibit No.
Description
99.1






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
OVERSEAS SHIPHOLDING GROUP, INC.   
 
(Registrant)
 
 
Date: March 9, 2018
By
/s/ Richard Trueblood
 
 
Name:         Richard Trueblood
Title:           Vice President and Chief Financial Officer
EXHIBIT INDEX
 
Exhibit No.
Description
99.1




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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
392525890_osgprlogoa01.jpg

Exhibit 99.1
 
 
 

OVERSEAS SHIPHOLDING GROUP REPORTS
FOURTH QUARTER AND FULL YEAR 2017 RESULTS
 
Tampa, FL – March 9, 2018 – Overseas Shipholding Group, Inc. (NYSE: OSG) (the “Company” or “OSG”) a provider of energy transportation services for crude oil and petroleum products in the U.S. Flag markets, today reported results for the fourth quarter and full year 2017.
 
Highlights

Income from continuing operations for the fourth quarter was $53.6 million, or $0.61 per diluted share, compared with income from continuing operations of $64.7 million, or $0.74 per diluted share for the fourth quarter 2016.

Income from continuing operations for the full year 2017 was $56.0 million, or $0.64 per diluted share, compared with a loss of $1.1 million, or $0.01 per diluted share for the full year 2016.

Shipping revenues for the fourth quarter and full year 2017 were $92.8 million and $390.4 million, down 19% and 16%, respectively, compared with the same periods in 2016. Time charter equivalent (TCE) revenues(A), a non-GAAP measure, for the fourth quarter and full year 2017 were $82.8 million and $361.0 million, down 24% and 19%, respectively, compared with the same periods in 2016.

Fourth quarter and full year 2017 Adjusted EBITDA(B), a non-GAAP measure, was $22.7 million and $111.1 million, down 54% and 37%, respectively, from $49.9 million and $176.2 million in the same periods in 2016.

Total cash(C) was $166.3 million as of December 31, 2017.

Principal payment of $26.4 million plus accrued and unpaid interest of $514 thousand was made on December 27, 2017 on all of the outstanding 8.125% Notes in the fourth quarter, and as a result, the Company's obligations under the indenture was canceled and discharged.
 
Mr. Norton stated, “We witnessed a robust recovery of spot market rates during the fourth quarter.  While still early days, we consider realized reduction in available supply and the emergence of the demand catalysts that we have been looking for - in particular in respect to demand for domestic crude oil transportation - as supportive of increased confidence in a progression towards a more balanced and normalized market environment.”

 Fourth Quarter 2017 Results
 
Shipping revenues were $92.8 million for the quarter, down 19% compared with the fourth quarter of 2016. TCE revenues for the fourth quarter of 2017 were $82.8 million, a decrease of $26.8 million, or 24%, compared with the fourth quarter of 2016, primarily due to lower average daily rates earned, which accounted for a $22.8 million decrease in TCE revenues and a 138-day decrease in revenue days for its fleet, excluding its modern lightering ATBs, driven by additional drydock and repair days resulting in a $4.0 million decrease in TCE revenues.
 





 
 
 
 
 
A, B, C Reconciliations of these non-GAAP financial measures are included in the financial tables attached to this press release starting on Page 8.

1



Operating income for the fourth quarter of 2017 was $3.9 million, compared to operating income of $4.1 million in the fourth quarter of 2016.
 
Net income for the fourth quarter was $53.6 million, compared with net loss of $275.5 million for the fourth quarter 2016. Net income from continuing operations for the fourth quarter was $53.6 million, or $0.61 per diluted share, compared with a net income from continuing operations of $64.7 million, or $0.74 per diluted share for the fourth quarter 2016. The increase reflects the income tax benefit primarily as a result of the remeasurement of the net deferred tax liability to the newly enacted statutory rate of 21%.
 
Adjusted EBITDA was $22.7 million for the quarter, a decrease of $27.1 million compared with the fourth quarter of 2016, driven primarily by the decline in TCE revenues.
 
Full Year 2017 Results
 
Shipping revenues were $390.4 million for the full year 2017, down 16% compared with the full year 2016. TCE revenues for the full year 2017 were $361.0 million, a decrease of $85.1 million, or 19%, compared with the full year 2016, primarily due to lower average daily rates, which accounted for a $75.2 million decrease in TCE revenues and a 278-day decrease in revenue days for its Jones Act fleet, excluding its modern lightering ATBs, driven by an increase in drydock days resulting in a $9.8 million decrease in TCE revenues.
 
Operating income for the full year 2017 was $37.8 million, compared to operating loss of $31.5 million for the full year 2016.
 
Net income for the full year 2017 was $56.0 million, compared with net loss of $293.6 million for the full year 2016. Income from continuing operations for the full year 2017 was $56.0 million, or $0.64 per diluted share, compared with a loss from continuing operations of $1.1 million, or $0.01 per diluted share for the full year 2016. The increase reflects the income tax benefit primarily as a result of the remeasurement of the net deferred tax liability to the newly enacted statutory rate of 21%.
 
Adjusted EBITDA was $111.1 million for the full year 2017, a decrease of $65.1 million compared with the full year 2016, driven primarily by the decline in TCE revenues.
  
Conference Call
 
The Company will host a conference call to discuss its fourth quarter and full year 2017 results at 9:00 a.m. Eastern Time (“ET”) on Friday, March 9, 2018.
 
To access the call, participants should dial (844) 850-0546 for domestic callers and (412) 317-5203 for international callers. Please dial in ten minutes prior to the start of the call.
 
A live webcast of the conference call will be available from the Investor Relations section of the Company’s website at http://www.osg.com/
 
An audio replay of the conference call will be available starting at 11:00 a.m. ET on Friday, March 9, 2018 through 10:59 p.m. ET on Friday, March 16, 2018 by dialing (877) 344-7529 for domestic callers and (412) 317-0088 for international callers, and entering Access Code 10117595.
 
About Overseas Shipholding Group, Inc.
 
Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly traded tanker company providing energy transportation services for crude oil and petroleum products in the U.S. Flag markets. OSG is a major operator of tankers and ATBs in the Jones Act industry. OSG’s 23-vessel U.S. Flag fleet consists of seven ATBs, two lightering ATBs, three shuttle tankers, nine MR tankers, and two non-Jones Act MR tankers that participate in the U.S. MSP. OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in Tampa, FL. More information is available at www.osg.com.
 



2



Forward-Looking Statements
 
This release contains forward-looking statements. In addition, the Company may make or approve certain statements in future filings with the Securities and Exchange Commission (SEC), in press releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical facts should be considered forward-looking statements. These matters or statements may relate to the Company’s prospects, its ability to retain and effectively integrate new members of management and the effect of the Company’s spin-off of International Seaways, Inc. Forward-looking statements are based the Company’s current plans, estimates and projections, and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail in the Annual Report on Form 10-K for OSG and in similar sections of other filings made by the Company with the SEC from time to time. The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements and written and oral forward-looking statements attributable to the Company or its representatives after the date of this release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by the Company with the SEC.

 
Investor Relations & Media Contact:
Susan Allan, Overseas Shipholding Group, Inc.
(813) 209-0620
[email protected]

 


3



Consolidated Statements of Operations
($ in thousands, except per share amounts)

 
Three Months Ended December 31,
 
Fiscal Year Ended December 31,
 
2017
 
2016
 
2017
 
2016
 
(unaudited)
 
(unaudited)
 
 
 
 
Shipping Revenues:
 
 
 
 
 
 
 
Time and bareboat charter revenues
57,400

 
85,539

 
266,193

 
372,149

Voyage charter revenues
35,415

 
29,237

 
124,233

 
90,271

Total shipping revenues
92,815

 
114,776

 
390,426

 
462,420

Operating Expenses:
 

 
 

 
 
 
 

Voyage expenses
10,061

 
5,219

 
29,390

 
16,260

Vessel expenses
34,658

 
33,343

 
135,991

 
140,696

Charter hire expenses
23,101

 
23,138

 
91,587

 
91,947

Depreciation and amortization
12,573

 
20,862

 
58,673

 
89,563

General and administrative
6,413

 
7,013

 
27,493

 
41,608

Severance costs

 
10,758

 
16

 
12,996

Loss on disposal of vessels and other property, including impairments
5,847

 
6,623

 
13,200

 
104,532

Total operating expenses
92,653

 
106,956

 
356,350

 
497,602

Income/(loss) from vessel operations
162

 
7,821

 
34,076

 
(35,182
)
Equity in income of affiliated companies
3,747

 
3,656

 
3,747

 
3,642

Operating income/(loss)
3,909

 
11,476

 
37,823

 
(31,540
)
Other expense
(826
)
 
(295
)
 
(1,881
)
 
(2,391
)
Income/(loss) before interest expense, reorganization items and income taxes and income taxes
3,083

 
11,181

 
35,942

 
(33,931
)
Interest expense
(9,125
)
 
(9,765
)
 
(37,401
)
 
(43,151
)
(Loss)/income before reorganization items and income taxes and income taxes
(6,042
)
 
1,416

 
(1,459
)
 
(77,082
)
Reorganization items, net
8

 
(393
)
 
(190
)
 
10,925

(Loss)/income from continuing operations before income taxes
(6,034
)
 
1,023

 
(1,649
)
 
(66,157
)
Income tax benefit from continuing operations
59,679

 
63,653

 
57,627

 
65,098

Net income/(loss) from continuing operations
53,645

 
64,678

 
55,978

 
(1,059
)
Net income/(loss) from discontinued operations

 
(340,153
)
 

 
(292,555
)
Net income/(loss)
$
53,645

 
$
(275,475
)
 
$
55,978

 
$
(293,614
)
 
 
 
 
 
 
 
 
Weighted Average Number of Common Shares Outstanding:
 

 
 

 
 
 
 

Basic - Class A
87,840,169

 
87,497,273

 
87,834,769

 
90,949,577

Diluted - Class A
88,108,079

 
87,721,704

 
88,082,978

 
90,949,577

Basic and diluted - Class B

 

 

 
533,758

 
 
 
 
 
 
 
 
Per Share Amounts from Continuing Operations:
 

 
 

 
 
 
 

Basic and diluted net income/(loss) – Class A
$
0.61

 
$
0.74

 
$
0.64

 
$
(0.01
)
Basic and diluted net income/(loss) – Class B

 

 

 
$
(0.11
)
Per Share Amounts from Discontinued Operations:
 

 
 

 
 

 
 

Basic and diluted net income/(loss) – Class A

 
$
(3.89
)
 

 
$
(3.24
)
Basic and diluted net income/(loss) – Class B

 

 

 
$
4.54

 
On June 2, 2016 the Board approved the Reverse Split Amendment to the Company’s Amended and Restated Certificate of Incorporation. The Reverse Split Amendment effected the Reverse Split. The Reverse Split Amendment became effective on June 13, 2016. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 260, Earnings Per Share, the Company adjusted the computations of basic and diluted earnings per share retroactively for all periods presented to reflect that change in its capital structure.

4



Consolidated Balance Sheets
($ in thousands)
 
 
December 31, 2017
 
December 31, 2016
ASSETS
 

 
 

Current Assets:
 

 
 

Cash and cash equivalents
$
165,994

 
$
191,089

Restricted cash
58

 
7,272

Voyage receivables, including unbilled of $9,919 and $12,593
24,209

 
23,456

Income tax recoverable
1,122

 
877

Receivable from INSW
372

 
683

Other receivables
2,184

 
2,696

Inventories, prepaid expenses and other current assets
13,356

 
12,243

Total Current Assets
207,295

 
238,316

Restricted cash
217

 
8,572

Vessels and other property, less accumulated depreciation
632,509

 
684,468

Deferred drydock expenditures, net
23,914

 
31,172

Total Vessels, Deferred Drydock and Other Property
656,423

 
715,640

Investments in and advances to affiliated companies
3,785

 
3,694

Intangible assets, less accumulated amortization
41,017

 
45,617

Other assets
23,150

 
18,658

Total Assets
$
931,887

 
$
1,030,497

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Accounts payable, accrued expenses and other current liabilities
$
34,220

 
$
57,222

Income taxes payable
151

 
306

Current installments of long-term debt
28,160

 

Total Current Liabilities
62,531

 
57,528

Reserve for uncertain tax positions
3,205

 
3,129

Long-term debt
420,776

 
525,082

Deferred income taxes
83,671

 
141,457

Other liabilities
48,466

 
48,969

Total Liabilities
618,649

 
776,165

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity:
 
 
 
Common stock - Class A ($0.01 par value; 166,666,666 shares authorized; 78,277,669 and 70,271,172 shares issued and outstanding)
783

 
702

Paid-in additional capital
584,675

 
583,526

Accumulated deficit
(265,758
)
 
(321,736
)
 
319,700

 
262,492

Accumulated other comprehensive loss
(6,462
)
 
(8,160
)
Total Equity
313,238

 
254,332

Total Liabilities and Equity
$
931,887

 
$
1,030,497




5



Consolidated Statements of Cash Flows
($ in thousands) 
 
Years Ended December 31,
 
2017
 
2016
 
2015
Cash Flows from Operating Activities:
 

 
 

 
 

Net income/(loss)
$
55,978

 
$
(293,614
)
 
$
283,960

(Loss)/income from discontinued operations

 
(292,555
)
 
203,395

Net income/(loss) from continuing operations
55,978

 
(1,059
)
 
80,565

Items included in net income/(loss) from continuing operations not affecting cash flows:
 
 
 
 
 
Depreciation and amortization
58,673

 
89,563

 
76,851

Vessel impairment charges
5,878

 
104,405

 

Amortization of debt discount and other deferred financing costs
5,167

 
6,005

 
5,154

Compensation relating to restricted stock, stock unit and stock option grants
2,388

 
7,441

 
3,580

Deferred income tax benefit
(59,047
)
 
(67,394
)
 
(69,564
)
Undistributed earnings of affiliated companies
(91
)
 
132

 
(399
)
Deferred payment obligations on charters-in

 

 
590

Reorganization items, non-cash
(105
)
 
5,198

 
(50
)
Other – net
3,282

 
2,268

 
1,971

Items included in net income/(loss) related to investing and financing activities:
 
 
 
 
 
Loss on repurchases and extinguishment of debt
3,237

 
2,988

 

Loss on disposal of vessels and other property, net
7,322

 
127

 
207

Distributions from INSW

 
202,000

 
200,000

Payments for drydocking
(8,390
)
 
(6,844
)
 
(41,323
)
SEC payment, bankruptcy and IRS claim payments
(5,000
)
 
(7,136
)
 
(8,343
)
Deferred financing costs paid for loan modification

 

 
(4,220
)
Changes in operating assets and liabilities:
 
 
 
 
 
(Increase)/decrease in receivables
(753
)
 
(16,794
)
 
6,502

(Increase)/decrease in income tax recoverable
(246
)
 
323

 
54,637

(Decrease)/increase in deferred revenue
(4,639
)
 
63

 
(3,034
)
Net change in prepaid items and accounts payable, accrued expenses and other current and long-term liabilities
(20,035
)
 
7,574

 
(26,791
)
Net cash provided by operating activities
43,619

 
328,860

 
276,333

Cash Flows from Investing Activities:
 
 
 
 
 
Change in restricted cash
15,569

 
(5,261
)
 
42,502

Expenditures for other property
(11
)
 
(666
)
 
(75
)
Proceeds from disposal of vessels and other property
1,055

 

 

Other – net

 

 
(54
)
Net cash provided by/(used in) investing activities
16,613

 
(5,927
)
 
42,373

Cash Flows from Financing Activities:
 
 
 
 
 
Cash dividends paid

 
(31,910
)
 

Payments on debt, including adequate protection payments

 
(54,345
)
 
(6,030
)
Repurchases and extinguishment of debt
(84,170
)
 
(120,224
)
 
(326,051
)
Repurchases of common stock and common stock warrants

 
(119,343
)
 
(3,633
)
Tax withholding on share-based awards
(1,157
)
 

 

Net cash used in financing activities
(85,327
)
 
(325,822
)
 
(335,714
)
Net decrease in cash and cash equivalents
(25,095
)
 
(2,889
)
 
(17,008
)
Cash and cash equivalents at beginning of year
191,089

 
193,978

 
210,986

Cash and cash equivalents at end of year
$
165,994

 
$
191,089

 
$
193,978

 
 
 
 
 
 
Cash flows from discontinued operations:
 
 
 
 
 
Cash flows provided by operating activities
$

 
$
111,768

 
$
222,739

Cash flows provided by investing activities

 
25,202

 
114,163

Cash flows used in financing activities

 
(355,687
)
 
(206,284
)
Net (decrease)/increase in cash and cash equivalents from discontinued operations
$

 
$
(218,717
)
 
$
130,618




6



Spot and Fixed TCE Rates Achieved and Revenue Days
 
The following tables provides a breakdown of TCE rates achieved for spot and fixed charters and the related revenue days for the three months and fiscal year ended December 31, 2017 and the comparable periods of 2016. Revenue days in the quarter ended December 31, 2017 totaled 2,029 compared with 2,167 in the prior year quarter. Revenue days in the fiscal year ended December 31, 2017 totaled 8,378 compared with 8,658 in the prior year. A summary fleet list by vessel class can be found later in this press release.
 
For the three months ended December 31,
 
2017
 
2016
 
 
Spot
Earnings
 
Fixed
Earnings
 
Spot
Earnings
 
Fixed
Earnings
Jones Act Handysize Product Carriers:
 
 

 
 

 
 

 
 

Average rate
 
$
31,397

 
$
63,163

 
$
29,742

 
$
65,060

Revenue days
 
284

 
790

 
92

 
972

Non-Jones Act Handysize Product Carriers:
 
 

 
 

 
 

 
 

Average rate
 
$
28,334

 
$

 
$
24,311

 
$
9,628

Revenue days
 
184

 

 
147

 
37

ATBs:
 
 

 
 

 
 

 
 

Average rate
 
$
12,644

 
$
25,363

 
$
26,473

 
$
32,029

Revenue days
 
317

 
270

 
83

 
652

Lightering:
 
 

 
 

 
 

 
 

Average rate
 
$
42,802

 
$

 
$
91,052

 
$

Revenue days
 
184

 

 
184

 


 
For the years ended December 31,
 
2017
 
2016
 
 
Spot
Earnings
 
Fixed
Earnings
 
Spot
Earnings
 
Fixed
Earnings
Jones Act Handysize Product Carriers:
 
 

 
 

 
 

 
 

Average rate
 
$
27,179

 
$
63,604

 
$
27,989

 
$
64,919

Revenue days
 
896

 
3,411

 
208

 
4,103

Non-Jones Act Handysize Product Carriers:
 
 

 
 

 
 

 
 

Average rate
 
$
31,174

 
$
14,031

 
$
31,422

 
$
16,141

Revenue days
 
566

 
159

 
544

 
186

ATBs:
 
 

 
 

 
 

 
 

Average rate
 
$
11,111

 
$
26,863

 
$
26,473

 
$
35,269

Revenue days
 
979

 
1,637

 
83

 
2,802

Lightering:
 
 

 
 

 
 

 
 

Average rate
 
$
61,648

 
$

 
$
72,271

 
$

Revenue days
 
730

 

 
732

 



7



Fleet Information
 
As of December 31, 2017, OSG’s operating fleet consisted of 23 vessels, 13 of which were owned, with the remaining vessels chartered-in. Vessels chartered-in are on Bareboat Charters.

 
 
Vessels Owned
 
Vessels Chartered-in
 
Total at December 31, 2017
Vessel Type
 
Number

 
Weighted by
Ownership

 
Number

 
Weighted by
Ownership

 
Total Vessels

 
Vessels
Weighted by
Ownership

 
Total dwt (2)

Handysize Product Carriers (1)
 
4

 
4.0

 
10

 
10.0

 
14

 
14.0

 
664,490

Refined Product ATBs
 
7

 
7.0

 

 

 
7

 
7.0

 
195,131

Lightering ATBs
 
2

 
2.0

 

 

 
2

 
2.0

 
91,112

Total Operating Fleet
 
13

 
13.0

 
10

 
10.0

 
23

 
23.0

 
950,733

 
(1)
Includes two owned shuttle tankers, one chartered-in shuttle tanker and two owned U.S. Flag Product Carriers that trade internationally.
(2)
Total dwt is defined as total deadweight tons for all vessels of that type.

Reconciliation to Non-GAAP Financial Information
 
The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the following non-GAAP measures may provide certain investors with additional information that will better enable them to evaluate the Company’s performance. Accordingly, these non-GAAP measures are intended to provide supplemental information, and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP.
 
(A) Time Charter Equivalent (TCE) Revenues
 
Consistent with general practice in the shipping industry, the Company uses TCE revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Reconciliation of TCE revenues of the segments to shipping revenues as reported in the consolidated statements of operations follow: 

 
Three Months Ended December 31, 
 
Fiscal Year Ended December 31, 
($ in thousands)
2017
 
2016
 
2017
 
2016
TCE revenues
$
82,754

 
$
109,557

 
$
361,036

 
$
446,160

Add: Voyage Expenses
10,061

 
5,219

 
29,390

 
16,260

Shipping revenues
$
92,815

 
$
114,776

 
$
390,426

 
$
462,420

 
Vessel Operating Contribution

Vessel operating contribution, a non-GAAP measure, is TCE revenues minus vessel expenses and charter hire expenses.

Our “niche market activities”, which includes Delaware Bay lightering, MSP vessels and shuttle tankers, continue to provide a stable operating platform underlying our total US Flag operations. These vessels’ operations are insulated from the forces affecting the broader Jones Act market.




8



The following table sets forth the contribution of our vessels:
 
Years Ended December 31,
 
2017
 
2016
 
2015
Niche Market Activities
$
101,405

 
$
106,410

 
$
97,890

Jones Act Handysize Tankers
6,083

 
36,648

 
46,539

ATBs
26,057

 
69,928

 
74,678

Vessel Operating Contribution
$
133,545

 
$
212,986

 
$
219,107


(B) EBITDA and Adjusted EBITDA
 
EBITDA represents net (loss)/income from continuing operations before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be a substitute for, net (loss)/income or cash flows from operations as determined in accordance with GAAP. Some of the limitations are: (i) EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and (iii) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating results and performance, neither of them is necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. The following table reconciles net income/(loss) from continuing operations as reflected in the consolidated statements of operations, to EBITDA and Adjusted EBITDA:
 
Three Months Ended December 31,
 
Fiscal Year Ended December 31,
($ in thousands)
2017
 
2016
 
2017

 
2016

Net Income/(loss) from continuing operations
$
53,645

 
$
64,678

 
$
55,978

 
$
(1,059
)
Income tax benefit from continuing operations
(59,679
)
 
(63,653
)
 
(57,627
)
 
(65,098
)
Interest expense
9,125

 
9,765

 
37,401

 
43,151

Depreciation and amortization
12,573

 
20,862

 
58,673

 
89,563

EBITDA
15,664

 
31,652

 
94,425

 
66,557

Severance costs

 
10,758

 
16

 
12,996

Loss on disposal of vessels and other property, including impairments
5,847

 
6,623

 
13,200

 
104,532

Loss on repurchase of debt
1,238

 
456

 
3,237

 
2,988

Reorganization items, net
(8
)
 
393

 
190

 
(10,925
)
Adjusted EBITDA
$
22,741

 
$
49,882

 
$
111,068

 
$
176,225


 
(C) Total Cash
 
($ in thousands)
 
December 31,
2017
 
December 31,
2016
Cash and cash equivalents
 
$
165,994

 
$
191,089

Restricted cash - current
 
58

 
7,272

Restricted cash – non-current
 
217

 
8,572

Total Cash
 
$
166,269

 
$
206,933



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