TAMPA, Fla. –
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 2016.
Highlights
-
Successfully completed the spin-off of its international business,
International Seaways, Inc. (NYSE:INSW) on November 30, 2016. As a
result, all results in this release reflect only continuing operations
unless otherwise noted, and reflect the results of International
Seaways as discontinued operations. -
Time charter equivalent (TCE) revenues(A) for the fourth
quarter and full year 2016 were $109.6 million and $446.2 million,
down 4% and 1%, respectively, compared with the same periods in 2015. -
Net income from continuing operations for the fourth quarter was $64.7
million, or $0.74 per diluted share, compared with a net loss of $34.2
million, or $0.35 per diluted share for the fourth quarter 2015. -
Net loss from continuing operations for the full year 2016 was $1.1
million, or $0.01 per diluted share, compared with net income of $80.6
million, or $0.83 per diluted share for the full year 2015. -
Fourth quarter and full year 2016 Adjusted EBITDA(B) was
$49.9 million and $176.2 million, up 6% and 5%, respectively, from
$47.2 million and $168.1 million in the same periods in 2015. - Total cash(C) was $206.9 million as of December 31, 2016.
-
Accelerated the payment of $19.0 million in principal amount of term
loan in the fourth quarter. -
First quarter 2017, received a final decree and order approving a
motion to close its bankruptcy case.
“We are pleased with our performance for the fourth quarter and full
year 2016 despite challenging market conditions throughout most of the
year,” said Sam Norton, OSG’s president and CEO. “We also successfully
executed on our strategic goal of streamlining our operating structure
and enhancing our focus by completing the spin-off of International
Seaways.”
Mr. Norton continued, “Going forward, OSG will be a diversified U.S.
Flag shipping company with a trusted operating franchise and a leading
portfolio in the Jones Act market. Our unique position as the only
operator of shuttle tankers in the U.S. Gulf Coast, the only licensed
operator of lightering vessels in the Delaware Bay, and the only
operator of tankers in the Maritime Security Program (“MSP”) helps
provide stability against market volatility. We are well-positioned to
build on the Company’s strengths, address future growth opportunities
and drive shareholder value.”
Fourth Quarter 2016 Results
TCE revenues for the fourth quarter of 2016 were $109.6 million, a
decrease of $5.0 million, or 4%, compared with the fourth quarter of
2015, primarily due to lower average daily rates earned, which accounted
for a $9.4 million decrease in TCE revenues. This decrease was partially
offset by a $2.9 million increase in Delaware Bay lightering revenues
and a 52-day increase in revenue days for its Jones Act fleet, excluding
its modern lightering ATBs, driven by fewer drydock and repair days
resulting in a $1.5 million increase in TCE revenues. Shipping revenues
were $114.8 million for the quarter, down 3% compared with the fourth
quarter of 2015.
Operating income for the fourth quarter of 2016 was $11.5 million,
compared to operating income of $20.9 million in the fourth quarter of
2015. The decrease reflects the impact of vessel impairment charges on
one of the rebuilt ATBs and the decline in TCE revenues.
Net loss for the fourth quarter was $275.5 million, compared with net
income of $9.3 million for the fourth quarter 2015. Net income from
continuing operations for the fourth quarter was $64.7 million, or $0.74
per diluted share, compared with a net loss from continuing operations
of $34.2 million, or $0.35 per diluted share for the fourth quarter
2015. The increase reflects the reversal of the deferred tax liability
on the unremitted earnings of INSW in the current quarter compared with
a provision in the fourth quarter of 2015, reductions in interest
expense due to the Company’s significant debt reductions in the fourth
quarter of 2015 and in 2016, partially offset by the vessel impairment
recognized in the current quarter. In addition, net loss from continuing
operations in the comparative fourth quarter 2015 period included $27.6
million in bond premium and consent fees and related professional fees
paid on notes repurchased.
Adjusted EBITDA was $49.9 million for the quarter, an increase of $2.7
million compared with the fourth quarter of 2015, driven primarily by
lower general and administrative expenses, partially offset by the
decline in TCE revenues.
Full Year 2016 Results
TCE revenues for the full year 2016 were $446.2 million, a decrease of
$2.9 million, or 1%, compared with the full year 2015, primarily due to
lower average daily rates earned by its Jones Act fleet, which accounted
for a $16.2 million decrease in TCE revenues. This decrease was largely
offset by a 266-day increase in revenue days for its Jones Act fleet,
excluding its modern lightering ATBs, driven by fewer drydock and repair
days resulting in a $11.2 million increase in TCE revenues. Also,
contributing to the offset was a $1.2 million increase in Delaware Bay
lightering revenues and increased average daily rates by its MSP
vessels, which accounted for a $0.9 million increase. Shipping revenues
were $462.4 million for the full year 2016, down 1% compared with the
full year 2015.
Operating loss for the full year 2016 was $31.5 million, compared to
operating income of $84.2 million for the full year 2015.
Net loss for the full year 2016 was $293.6 million, compared with net
income of $284.0 million for the full year 2015. Net loss from
continuing operations for the full year 2016 was $1.1 million, or $0.01
per diluted share, compared with net income of $80.6 million, or $0.83
per diluted share for the full year 2015. The decrease reflects vessel
impairments recognized in the second half of 2016, partially offset by
the benefit from the reversal of the deferred tax liability on the
unremitted earnings of INSW compared with a provision in 2015, and
reductions in interest expense due to the Company’s significant debt
reductions in the second half of 2015 and in 2016. In addition, net
income from continuing operations in the comparative full year 2015
period included a one-time, non-cash income tax benefit of $150.1
million and $29.6 million in bond premium and consent fees and related
professional fees paid on notes repurchased.
Adjusted EBITDA was $176.2 million for the full year 2016, an increase
of $8.1 million compared with the full year 2015, driven primarily by
lower general and administrative expenses, partially offset by the
decline in TCE revenues.
Discontinued Operations
As noted above, OSG completed the separation of its business into two
independent publicly-traded companies through the spin-off of its then
wholly-owned subsidiary INSW on November 30, 2016. The spin-off
separated OSG and INSW into two distinct businesses with separate
management. OSG retained the U.S. Flag business and INSW holds entities
and other assets and liabilities that formed OSG’s former International
Flag business. The spin-off transaction was in the form of a pro rata
distribution of INSW’s common stock to our stockholders and warrant
holders of record as of the close of business on November 18, 2016.
In accordance with Accounting Standards Update (“ASU”) 2014-08, Reporting
Discontinued Operations and Disclosures of Disposals of Components of an
Entity, the assets and liabilities and results of operations of INSW
are reported as discontinued operations for all periods presented.
Net loss from discontinued operations for the fourth quarter was $340.2
million, or $3.89 per diluted share, compared with net income from
discontinued operations of $43.5 million, or $0.45 per diluted share for
the fourth quarter 2015. Net loss from discontinued operations for the
full year 2016 was $292.6 million, or $3.24 per diluted share, compared
with net income of $203.4 million, or $2.10 per diluted share for the
full year 2015. Results from discontinued operations for the fourth
quarter and full year 2016 reflect a charge of $332.6 million to reduce
the carrying value of the INSW disposal group to its estimated fair
value, calculated on a held for sale basis.
Conference Call
The Company will host a conference call to discuss its fourth quarter
and full year 2016 results at 9:00 a.m. Eastern Time (“ET”) on Tuesday,
March 7, 2017.
To access the call, participants should dial (888) 317-6016 for domestic
callers and (412) 317-6016 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 Tuesday, March 7, 2017 through 10:59 p.m. ET on
Tuesday, March 14, 2017 by dialing (877) 344-7529 for domestic callers
and (412) 317-0088 for international callers, and entering Access Code
10101778.
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 24-vessel U.S. Flag
fleet consists of eight 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.
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.
A, B, CReconciliations of these non-GAAP financial
measures are included in the financial tables attached to this press
release.
|
Consolidated Statements of Operations |
||||||||||||||
| Three Months Ended December 31, | Fiscal Year Ended December 31, | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||
|
|
(unaudited) | (unaudited) |
|
|
||||||||||
|
Shipping Revenues: |
||||||||||||||
| Time and bareboat charter revenues | 85,539 | 96,644 | 372,149 | 385,206 | ||||||||||
| Voyage charter revenues | 29,237 | 22,110 | 90,271 | 81,666 | ||||||||||
| Total Shipping Revenues | 114,776 | 118,754 | 462,420 | 466,872 | ||||||||||
| Operating Expenses: | ||||||||||||||
| Voyage expenses | 5,219 | 4,194 | 16,260 | 17,814 | ||||||||||
| Vessel expenses | 33,343 | 34,757 | 140,696 | 138,179 | ||||||||||
| Charter hire expenses | 23,138 | 23,293 | 91,947 | 91,875 | ||||||||||
| Depreciation and amortization | 20,862 | 22,991 | 89,563 | 76,851 | ||||||||||
| General and administrative | 7,013 | 16,335 | 41,608 | 61,540 | ||||||||||
| Severance costs | 10,758 | (5 | ) | 12,996 | – | |||||||||
| Loss on disposal of vessels and other property, including impairments | 6,623 | 61 | 104,532 | 207 | ||||||||||
| Total Operating Expenses | 106,956 | 101,626 | 497,602 | 386,466 | ||||||||||
| Income/(Loss) from vessel operations | 7,821 | 17,128 | (35,182 | ) | 80,406 | |||||||||
| Equity in income of affiliated companies | 3,656 | 3,789 | 3,642 | 3,783 | ||||||||||
| Operating income/(Loss) | 11,476 | 20,917 | (31,540 | ) | 84,189 | |||||||||
| Other Expense | (295 | ) | (24,333 | ) | (2,391 | ) | (26,239 | ) | ||||||
|
Income/(Loss) before interest expense, reorganization items and income taxes |
11,181 | (3,416 | ) | (33,931 | ) | 57,950 | ||||||||
| Interest expense | (9,765 | ) | (15,709 | ) | (43,151 | ) | (70,365 | ) | ||||||
|
Income/(loss) before reorganization items and income taxes |
1,416 | (19,125 | ) | (77,082 | ) | (12,415 | ) | |||||||
| Reorganization items, net | (393 | ) | (1,708 | ) | 10,925 | (8,052 | ) | |||||||
| Income/(loss) from Continuing Operations before income taxes | 1,023 | (20,833 | ) | (66,157 | ) | (20,467 | ) | |||||||
| Income tax benefit/(provision) from Continuing Operations | 63,653 | (13,402 | ) | 65,098 | 101,032 | |||||||||
| Net Income/(Loss) from Continuing Operations | 64,678 | (34,235 | ) | (1,059 | ) | 80,565 | ||||||||
| Net Income/(loss) from Discontinued Operations | (340,153 | ) | 43,502 | (292,555 | ) | 203,395 | ||||||||
| Net Income/(Loss) | $(275,475 | ) | $9,267 | $(293,614 | ) | $283,960 | ||||||||
| Weighted Average Number of Common Shares Outstanding: | ||||||||||||||
| Basic – Class A | 87,497,273 | 95,599,213 | 90,949,577 | 95,584,559 | ||||||||||
| Diluted – Class A | 87,721,704 | 95,599,213 | 90,949,577 | 95,629,090 | ||||||||||
| Basic and Diluted – Class B | – | 1,319,973 | 533,758 | 1,320,337 | ||||||||||
|
Per Share Amounts from Continuing Operations: |
||||||||||||||
| Basic and diluted net income/(loss) – Class A | $0.74 | $(0.35 | ) | $(0.01 | ) | $0.83 | ||||||||
| Basic and diluted net income/(loss) – Class B | – | $(0.35 | ) | $(0.11 | ) | $0.83 | ||||||||
| Per Share Amounts from Discontinued Operations: | ||||||||||||||
| Basic and diluted net income/(loss) – Class A | $(3.89 |
) |
|
|
$0.45 | $(3.24 | ) | $2.10 | ||||||
| Basic and diluted net income/(loss) – Class B | – | $0.45 | $4.54 | $2.10 | ||||||||||
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.
|
Consolidated Balance Sheets |
|||||||
| December 31, | December 31, | ||||||
| 2016 | 2015 | ||||||
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $ | 191,089 | $ | 193,978 | |||
| Restricted cash | 7,272 | 10,583 | |||||
| Voyage receivables | 23,456 | 6,662 | |||||
| Income tax recoverable | 877 | 1,200 | |||||
| Receivable from INSW | 683 | – | |||||
| Other receivables | 2,696 | 3,195 | |||||
| Inventories, prepaid expenses and other current assets | 12,243 | 11,615 | |||||
| Current assets of discontinued operations | – | 396,698 | |||||
| Total Current Assets | 238,316 | 623,931 | |||||
| Restricted cash | 8,572 | – | |||||
| Vessels and other property, less accumulated depreciation | 684,468 | 844,447 | |||||
| Deferred drydock expenditures, net | 31,172 | 58,166 | |||||
| Total Vessels, Deferred Drydock and Other Property | 715,640 | 902,613 | |||||
| Investments in and advances to affiliated companies | 3,694 | 3,827 | |||||
| Intangible assets, less accumulated amortization | 45,617 | 50,217 | |||||
| Other assets | 18,658 | 16,608 | |||||
| Non-current assets of discontinued operations | – | 1,633,214 | |||||
| Total Assets | $ | 1,030,497 | $ | 3,230,410 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities: | |||||||
| Accounts payable, accrued expenses and other current liabilities | $ | 57,222 | $ | 60,450 | |||
| Income taxes payable | 306 | 50 | |||||
| Current installments of long-term debt | – | 56,755 | |||||
| Current liabilities of discontinued operations | – | 37,030 | |||||
| Total Current Liabilities | 57,528 | 154,285 | |||||
| Reserve for uncertain tax positions | 3,129 | 2,520 | |||||
| Long-term debt | 525,082 | 634,286 | |||||
| Deferred income taxes | 141,457 | 208,195 | |||||
| Other liabilities | 48,969 | 52,889 | |||||
| Non-current liabilities of discontinued operations | – | 597,747 | |||||
| Total Liabilities | 776,165 | 1,649,922 | |||||
| Commitments and contingencies | |||||||
| Equity: | |||||||
| Total Equity | 254,332 | 1,580,488 | |||||
| Total Liabilities and Equity | $ | 1,030,497 | $ | 3,230,410 | |||
|
Consolidated Statements of Cash Flows |
||||||
| Fiscal Year Ended December 31, | ||||||
|
|
2016 | 2015 | ||||
| Cash Flows from Operating Activities: | ||||||
| Net income/(loss) | $ (293,614 | ) | $ 283,960 | |||
| Less: Net income/(loss) from discontinued operations | (295,555 | ) | 203,395 | |||
| Net income/(loss) from continuing operations | (1,059 | ) | 80,565 | |||
|
Items included in net income/(loss) from continuing operations not affecting cash flows: |
||||||
| Depreciation and amortization | 89,563 | 76,851 | ||||
| Loss on write-down of vessels | 104,405 | – | ||||
| Amortization of debt discount and other deferred financing costs | 6,005 | 5,154 | ||||
|
Compensation relating to restricted stock/stock unit and stock option grants |
7,441 | 3,580 | ||||
| Deferred income tax benefit | (67,394 | ) | (69,564 | ) | ||
| Undistributed earnings of affiliated companies | 132 | (399 | ) | |||
| Deferred payment obligations on charters-in | – | 590 | ||||
| Reorganization items, non-cash | 5,198 | (50 | ) | |||
| Other – net | 2,268 | 1,971 | ||||
|
Items included in net income/(loss) related to investing and financing activities: |
||||||
| Discount on repurchase of debt | (3,415 | ) | – | |||
| Loss on disposal of vessels and other property – net | 127 | 207 | ||||
| Distributions from INSW | 202,000 | 200,000 | ||||
| Payments for drydocking | (6,844 | ) | (41,323 | ) | ||
| Bankruptcy and IRS claim payments | (7,136 | ) | (8,343 | ) | ||
| Deferred financing costs paid for loan modification | – | (4,220 | ) | |||
| Changes in other operating assets and liabilities | (2,431 | ) | 31,314 | |||
| Net cash provided by operating activities | 328,860 | 276,333 | ||||
| Cash Flows from Investing Activities: | ||||||
| Change in restricted cash | (5,261 | ) | 42,502 | |||
| Expenditures for vessels and vessel improvements | – | (53 | ) | |||
| Expenditures for other property | (666 | ) | (75 | ) | ||
| Other – net | – | (1 | ) | |||
| Net cash provided by/(used in) investing activities | (5,927 | ) | 42,373 | |||
| Cash Flows from Financing Activities: | ||||||
| Cash dividends paid | (31,910 | ) | – | |||
| Payments on debt | (54,345 | ) | (6,030 | ) | ||
| Extinguishment of debt | (120,224 | ) | (326,051 | ) | ||
| Repurchases of common stock and common stock warrants | (119,343 | ) | (3,633 | ) | ||
| Net cash used in financing activities | (325,822 | ) | (335,714 | ) | ||
| Net decrease in cash and cash equivalents | (2,889 | ) | (17,008 | ) | ||
| Cash and cash equivalents at beginning of year | 193,978 | 210,986 | ||||
| Cash and cash equivalents at end of period | $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 |
|||
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, 2016 and the comparable periods of 2015.
Revenue days in the quarter ended December 31, 2016 totaled 2,167
compared with 2,098 in the prior year quarter. Revenue days in the
fiscal year ended December 31, 2016 totaled 8,658 compared with 8,311 in
the prior year. A summary fleet list by vessel class can be found later
in this press release.
| Three Months Ended December 31, 2016 | Three Months Ended December 31, 2015 | |||||||||||
| Spot | Fixed | Total | Spot | Fixed | Total | |||||||
| U.S. Flag | ||||||||||||
| Jones Act Handysize Product Carriers | ||||||||||||
| Average TCE Rate | $29,742 | $65,060 | $ – | $64,193 | ||||||||
| Number of Revenue Days | 92 | 972 | 1,064 | – | 1,082 | 1,082 | ||||||
| Non-Jones Act Handysize Product Carriers | ||||||||||||
| Average TCE Rate | $24,311 | $9,628 | $34,704 | $16,630 | ||||||||
| Number of Revenue Days | 147 | 37 | 184 | 146 | 38 | 184 | ||||||
| ATBs | ||||||||||||
| Average TCE Rate | $ 26,473 | $32,029 | $ – | $38,216 | ||||||||
| Number of Revenue Days | 83 | 652 | 735 | – | 665 | 665 | ||||||
| Lightering | ||||||||||||
| Average TCE Rate | $91,052 | $ – | $83,320 | $ – | ||||||||
| Number of Revenue Days | 184 | – | 184 | 167 | – | 167 | ||||||
| Total U.S. Flag Revenue Days | 506 | 1,661 | 2,167 | 313 | 1,785 | 2,098 | ||||||
| Fiscal Year Ended December 31, 2016 | Fiscal Year Ended December 31, 2015 | |||||||||||
| Spot | Fixed | Total | Spot | Fixed | Total | |||||||
| U.S. Flag | ||||||||||||
| Jones Act Handysize Product Carriers | ||||||||||||
| Average TCE Rate | $ 27,989 | $64,919 | $ – | $64,350 | ||||||||
| Number of Revenue Days | 208 | 4,103 | 4,311 | – | 4,260 | 4,260 | ||||||
| Non-Jones Act Handysize Product Carriers | ||||||||||||
| Average TCE Rate | $31,422 | $16,141 | $29,453 | $15,958 | ||||||||
| Number of Revenue Days | 544 | 186 | 730 | 535 | 164 | 699 | ||||||
| ATBs | ||||||||||||
| Average TCE Rate | $ 26,473 | $35,269 | $ – | $38,605 | ||||||||
| Number of Revenue Days | 83 | 2,802 | 2,885 | – | 2,700 | 2,700 | ||||||
| Lightering | ||||||||||||
| Average TCE Rate | $72,271 | $ – | $79,209 | $ – | ||||||||
| Number of Revenue Days | 732 | – | 732 | 652 | – | 652 | ||||||
| Total U.S. Flag Revenue Days | 1,567 | 7,091 | 8,658 | 1,187 | 7,124 | 8,311 | ||||||
Fleet Information
As of December 31, 2016, OSG’s owned and operated fleet totaled 24 U.S.
Flag vessels (14 vessels owned and 10 chartered-in). Vessels
chartered-in are Bareboat Charters. The Company’s fleet list excludes
vessels chartered-in where the duration of the charter was one year or
less at inception.
| Vessels Owned | Vessels Chartered-in | Total at December 31, 2016 | ||||||||||||
| Vessel Type | Number |
Weighted by Ownership |
Number |
Weighted by Ownership |
Total |
Vessels Weighted by Ownership |
Total Dwt |
|||||||
| Operating Fleet | ||||||||||||||
| Handysize Product Carriers 1 | 4 | 4.0 | 10 | 10.0 | 14 | 14.0 | 664,490 | |||||||
| Clean ATBs | 8 | 8.0 | – | – | 8 | 8.0 | 226,064 | |||||||
| Lightering ATBs | 2 | 2.0 | – | – | 2 | 2.0 | 91,112 | |||||||
| Total U.S. Flag Operating Fleet | 14 | 14.0 | 10 | 10.0 | 24 | 24.0 | 981,666 | |||||||
1 Includes two owned shuttle tankers, one chartered in
shuttle tanker and two owned U.S. Flag Product Carriers that trade
internationally.
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) | 2016 | 2015 | 2016 | 2015 | ||||
| TCE revenues | $109,557 | $114,560 | $446,160 | $449,058 | ||||
| Add: Voyage Expenses | 5,219 | 4,194 | 16,260 | 17,814 | ||||
| Shipping revenues | $114,776 | $ 118,754 | $462,420 | $466,872 | ||||
(B) EBITDA and Adjusted EBITDA
EBITDA represents net (loss)/income from continuing operations before
interest expense, income taxes and depreciation and amortization
expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of
certain items that we do not consider indicative of our ongoing
operating performance. EBITDA and Adjusted EBITDA do not represent, and
should not be a substitute for, net (loss)/income or cash flows from
operations as determined in accordance with GAAP. Some of the
limitations are: (i) EBITDA and Adjusted EBITDA do not reflect our cash
expenditures, or future requirements for capital expenditures or
contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect
changes in, or cash requirements for, our working capital needs; and
(iii) EBITDA and Adjusted EBITDA do not reflect the significant interest
expense, or the cash requirements necessary to service interest or
principal payments, on our debt. While EBITDA and Adjusted EBITDA are
frequently used as a measure of operating results and performance,
neither of them is necessarily comparable to other similarly titled
captions of other companies due to differences in methods of
calculation. The following table reconciles net income/(loss) from
continuing operations as reflected in the consolidated statements of
operations, to EBITDA and Adjusted EBITDA:
| Three Months Ended December 31, | Fiscal Year Ended December 31, | |||||||
| ($ in thousands) | 2016 | 2015 | 2016 | 2015 | ||||
| Net Income/(loss) from continuing operations | $64,678 | $(34,235) | $(1,059) | $ 80,565 | ||||
| Income tax expense/(benefit) from continuing operations | (63,653) | 13,402 | (65,098) | (101,032) | ||||
| Interest expense | 9,765 | 15,709 | 43,151 | 70,365 | ||||
| Depreciation and amortization | 20,862 | 22,991 | 89,563 | 76,851 | ||||
| EBITDA | 31,652 | 17,867 | 66,557 | 126,749 | ||||
| Severance costs | 10,758 | (5) | 12,996 | – | ||||
| Loss on disposal of vessels and other property, including impairments | 6,623 | 61 | 104,532 | 207 | ||||
| Loss on repurchase of debt | 456 | 24,447 | 2,988 | 26,516 | ||||
| Other costs associated with repurchase of debt | – | 3,099 | 77 | 3,099 | ||||
| Write-off of registration statement costs | – | – | – | 3,493 | ||||
| Reorganization items, net | 393 | 1,708 | (10,925) | 8,052 | ||||
| Adjusted EBITDA | $49,882 | $ 47,177 | $176,225 | $168,116 | ||||
(C) Total Cash
| ($ in thousands) |
December 31,
2016 |
December 31,
2015 |
||
| Cash and cash equivalents | $191,089 | $193,978 | ||
| Restricted cash – current | 7,272 | 10,583 | ||
| Restricted cash – non-current | 8,572 | – | ||
| Total Cash | $206,933 | $204,561 | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170307005753/en/
Overseas Shipholding Group, Inc.
Brian Tanner, 212-578-1645
btanner@osg.com
