UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-37836
INTERNATIONAL SEAWAYS, INC.
(Exact name of registrant as specified in its charter)
Marshall Islands
98-0467117
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
600 Third Avenue, 39th Floor, New York, New York
10016
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: 212-578-1600
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock (no par value)
INSW
New York Stock Exchange
Rights to Purchase Common Stock
N/A
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Emerging growth company ☐
Non-accelerated filer ☐
Smaller reporting company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date. The number of shares outstanding of the issuer’s common stock as of May 5, 2026: common stock, no par value, 49,504,696 shares.
INTERNATIONAL SEAWAYS, INC.CONDENSED CONSOLIDATED BALANCE SHEETSDOLLARS IN THOUSANDS(UNAUDITED)
March 31, 2026
December 31, 2025
ASSETS
Current Assets:
Cash and cash equivalents
$
141,847
116,922
Short-term investments
235,000
50,000
Voyage receivables, net of allowance for credit losses of $51 and $52
including unbilled receivables of $212,349 and $169,610
242,467
177,887
Other receivables
25,719
13,836
Inventories
5,407
611
Prepaid expenses and other current assets
15,729
7,384
Current portion of derivative asset
317
406
Total Current Assets
666,486
367,046
Vessels and other property, less accumulated depreciation of $459,285 and $506,585
1,987,355
2,077,986
Vessels construction in progress
64,223
57,725
Deferred drydock expenditures, net
98,043
109,257
Operating lease right-of-use assets
6,222
7,220
Pool working capital deposits
27,571
33,051
Goodwill
7,372
—
Long-term derivative asset
5
Other assets
14,071
16,352
Total Assets
2,871,343
2,668,642
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities
60,388
69,921
Current portion of operating lease liabilities
2,240
3,182
Current installments of long-term debt
28,161
25,788
Total Current Liabilities
90,789
98,891
Long-term operating lease liabilities
5,793
5,954
Long-term debt
573,927
541,291
Other liabilities
6,559
2,229
Total Liabilities
677,068
648,365
Commitments and contingencies
Equity:
Capital - 100,000,000 no par value shares authorized; 49,504,696 and 49,404,078
shares issued and outstanding
1,501,990
1,507,325
Retained earnings
703,500
523,792
2,205,490
2,031,117
Accumulated other comprehensive loss
(11,215)
(10,840)
Total Equity
2,194,275
2,020,277
Total Liabilities and Equity
See notes to condensed consolidated financial statements
1
INTERNATIONAL SEAWAYS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSDOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS(UNAUDITED)
Three Months Ended March 31,
2026
2025
Shipping Revenues:
Pool revenues, including $105,164 and $46,910 from affiliated companies
248,498
137,596
Time charter revenues
61,015
35,857
Voyage charter revenues
15,963
9,941
325,476
183,394
Other operating income
1,900
Operating Expenses:
Voyage expenses
8,231
5,052
Vessel expenses
61,039
67,028
Charter hire expenses
7,696
9,145
Depreciation and amortization
40,567
39,705
General and administrative
9,311
13,217
Other operating expenses
138
95
Gain on disposal of vessels and other assets, net
(88,171)
(10,021)
Total operating expenses
38,811
124,221
Income from vessel operations
288,565
59,173
Holding gain on previously held equity interest
3,919
Operating income
292,484
Other income
2,618
1,844
Income before interest expense
295,102
61,017
Interest expense
(8,959)
(11,452)
Net income
286,143
49,565
Weighted Average Number of Common Shares Outstanding:
Basic
49,460,962
49,307,449
Diluted
49,714,857
49,528,814
Per Share Amounts:
Basic net income per share
5.78
1.00
Diluted net income per share
5.75
2
INTERNATIONAL SEAWAYS, INC.CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEDOLLARS IN THOUSANDS(UNAUDITED)
Other comprehensive loss, net of tax:
Net change in foreign currency translation
(252)
Net change in unrealized losses on cash flow hedges
(343)
(777)
Defined benefit pension and other postretirement benefit plans:
Net change in unrecognized prior service costs
29
(23)
Net change in unrecognized actuarial losses
191
(153)
Other comprehensive loss, net of tax
(375)
(953)
Comprehensive income
285,768
48,612
3
INTERNATIONAL SEAWAYS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSDOLLARS IN THOUSANDS(UNAUDITED)
Cash Flows from Operating Activities:
Items included in net income not affecting cash flows:
Amortization of debt discount and other deferred financing costs
1,261
983
Stock compensation
1,461
1,946
Other – net
(529)
456
Items included in net income related to investing and financing activities:
(3,919)
Payments for drydocking
(13,850)
(16,900)
Insurance claims proceeds related to vessel operations
312
Changes in operating assets and liabilities:
(Increase)/decrease in receivables
(64,580)
25,169
Decrease in deferred revenue
(4,539)
(7,618)
Net change in inventories, prepaid expenses and other current assets, accounts
payable, accrued expenses and other current and long-term liabilities
(12,878)
(13,650)
Net cash provided by operating activities
141,061
69,947
Cash Flows from Investing Activities:
Expenditures for vessels, vessel improvements and vessels under construction
(70,655)
(82,973)
Security deposits returned for vessel exchange transactions
5,000
Proceeds from disposal of vessels and other property, net
222,833
115,264
Expenditures for other property
(319)
(376)
Cash consideration paid for the purchase of equity method investment, net of cash acquired
(4,493)
Investments in short-term time deposits
(225,000)
Proceeds from maturities of short-term time deposits
40,000
Net cash (used in)/provided by investing activities
(37,634)
36,915
Cash Flows from Financing Activities:
Borrowings on nonrevolving credit facility debt
42,604
Repayments of nonrevolving credit facility debt
(1,019)
Borrowings on revolving credit facilities
20,000
Repayments on revolving credit facilities
(101,600)
Payments on sale and leaseback financing
(5,293)
(12,242)
Payments of deferred financing costs
(1,563)
Cash dividends paid
(106,435)
(34,495)
Cash paid to tax authority upon vesting or exercise of stock-based compensation
(6,796)
(3,262)
Net cash used in financing activities
(78,502)
(131,599)
Net increase/(decrease) in cash and cash equivalents
24,925
(24,737)
Cash and cash equivalents at beginning of year
157,506
Cash and cash equivalents at end of period
132,769
4
INTERNATIONAL SEAWAYS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYDOLLARS IN THOUSANDS(UNAUDITED)
Accumulated
Other
Retained
Comprehensive
Capital
Earnings
Loss
Total
For the three months ended
Balance at January 1, 2026
Other comprehensive loss
Dividends declared
Common stock withheld related to net share settlement of equity awards
Compensation relating to restricted stock awards
256
Compensation relating to restricted stock units awards
1,205
Balance at March 31, 2026
Balance at January 1, 2025
1,504,767
359,142
(7,861)
1,856,048
254
1,692
Balance at March 31, 2025
1,503,451
374,212
(8,814)
1,868,849
INTERNATIONAL SEAWAYS, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
Note 1 — Basis of Presentation:
The accompanying unaudited condensed consolidated financial statements include the accounts of International Seaways, Inc. (“INSW”), a Marshall Islands corporation, and its wholly-owned subsidiaries. Unless the context indicates otherwise, references to “INSW”, the “Company”, “we”, “us” or “our”, refer to International Seaways, Inc. and its subsidiaries. As of March 31, 2026, the Company’s operating fleet consisted of 64 wholly-owned or lease financed and time chartered-in oceangoing vessels, engaged primarily in the transportation of crude oil and refined petroleum products in the International Flag trade through its wholly-owned subsidiaries. In addition to our operating fleet, three LR1 newbuilds are scheduled for delivery to the Company between the second and third quarter of 2026, bringing the total operating and newbuild fleet to 67 vessels.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by generally accepted accounting principles in the United States. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
The condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles in the United States for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
All intercompany balances and transactions within INSW have been eliminated.
Risks and Uncertainties
The unaudited condensed consolidated financial statements presented herein reflect estimates and assumptions made by management at March 31, 2026. These estimates and assumptions affect, among other things, the Company’s long-lived asset valuations; freight and other income tax contingencies; and the allowance for expected credit losses. Events and changes in circumstances arising after May 7, 2026, including those resulting from the impacts of macroeconomic volatility with respect to trade and tariffs, as well as the ongoing international conflicts, will be reflected in management’s estimates and assumptions for future periods.
Note 2 — Business Combinations
On January 27, 2026, the Company acquired all of the remaining outstanding capital stock of Tankers (UK) Agencies Limited (“TUKA”), a privately-held joint venture between the Company and CMB.Tech, which serves as the commercial manager for the VLCC pool company – Tankers International Limited (“TIL”). The total purchase consideration was $10.0 million, which includes the fair value of our previously held equity interest in TUKA. TUKA owns 100% of the equity interest in TIL, which is a variable interest entity (“VIE”). The Company has accounted for this transaction as a business combination. As a result of this business combination, TUKA will be consolidated under the voting interest entity model, and TIL will retain its classification as an unconsolidated VIE (see Note 8, Variable Interest Entities (“VIEs”)).
The book value of the Company’s 50% ownership interest immediately prior to the acquisition date was $1.1 million. The acquisition of the additional 50% interest in TUKA was considered an acquisition achieved in stages and resulted in the remeasurement of the previously held equity interest to fair value of $5.0 million. The fair value attributed to the previously held equity interest was derived from the consideration transferred in the transaction and resulted in the recognition of a non-cash holding gain of $3.9 million for the difference between the fair value and the book value of the Company’s previously held equity interest. Such gain was recorded in holding gain on previously held equity interest in the Company’s condensed consolidated statement of operations for the quarter ended March 31, 2026.
6
The acquisition date fair value of the purchase consideration paid and the allocation of the purchase consideration paid to identifiable tangible and intangible assets acquired and liabilities assumed based on their respective estimated fair values as of the date of acquisition was as follows:
(Dollars in thousands)
Amounts
Cash paid
Fair value of previously held equity interest
Total Purchase Consideration
10,000
Fair value of identifiable assets acquired and liabilities assumed:
507
Other tangible assets
5,786
Other tangible liabilities
(3,917)
Total fair value of identifiable net assets acquired
2,376
Goodwill initially recognized(1)(2)
7,624
______________
Note 3 — Significant Accounting Policies:
For a description of all of the Company’s material accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to the Company’s consolidated financial statements as of and for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K. The following is a summary of any changes or updates to the Company’s critical accounting policies for the current period:
Business Combinations — The Company accounts for business combinations using the acquisition method and accordingly, the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree are generally recorded at their acquisition date fair values. The excess of the purchase price over the fair value of net assets acquired, including identifiable intangible assets, is recorded as goodwill. For a business combination achieved in stages, we remeasure our previously held equity interest immediately before the acquisition to the acquisition date fair value and recognize any gain in our consolidated statements of operations. Acquisition-related costs are expensed in the periods in which the costs are incurred.
Goodwill — Goodwill represents the excess purchase price over the fair value of identifiable tangible and intangible assets and liabilities acquired in connection with the Company’s acquisitions. Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification, or ASC, Topic 350 “Intangibles – Goodwill and Other,” we are required to test goodwill for impairment annually or more frequently, whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit with goodwill below its carrying amount. The Company has selected November 30 as its annual goodwill impairment testing date. We have the option to first assess qualitative factors such as current performance and overall economic conditions to determine whether or not it is necessary to perform a quantitative goodwill impairment test. If we choose that option, then we would not be required to perform a quantitative goodwill impairment test unless we determine that, based on a qualitative assessment, it is more likely than not that the fair value of a reporting unit is less than its carrying value. If we determine that it is more likely than not that its fair value is less than its carrying value, or if we choose not to perform a qualitative assessment, we then proceed with the quantitative assessment. Under the quantitative test, if the fair value of a reporting unit exceeds its carrying amount, then goodwill of the reporting unit is considered to not be impaired. If the carrying amount of the reporting unit exceeds its fair value, then an impairment loss is recognized in an amount equal to such excess, up to the value of the goodwill. The reporting unit for goodwill impairment testing purposes is required to be the same as, or one level below an operating segment. Accordingly, the
7
goodwill recognized in the acquisition of TUKA, has been assigned to our VLCC operating segment, which is part of the Crude Tankers reportable segment.
Foreign currency remeasurement and translation — The reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s foreign subsidiaries is primarily the U.S. dollar. Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured to the functional currency at period-end exchange rates. Foreign currency transaction gains and losses resulting from remeasurement are recognized in general and administrative expense in the condensed consolidated statements of operations and are not material for any of the periods presented.
For those subsidiaries with non-U.S. dollar functional currencies, assets and liabilities are translated into U.S. dollars at period-end exchange rates. Revenue and expenses are translated at the average exchange rates during the period. Equity transactions are translated using historical exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive loss in the condensed consolidated balance sheets.
Concentration of Credit Risk — The pools in which the Company participate accounted in aggregate for 88% and 95% of consolidated voyage receivables at March 31, 2026 and December 31, 2025, respectively.
Deferred finance charges — Finance charges incurred in the arrangement of new debt and/or amendments resulting in the modification of existing debt are deferred and amortized to interest expense on either an effective interest method or straight-line basis over the term of the related debt. Unamortized deferred finance charges of $11.6 million and $12.6 million relating to the $500 Million Revolving Credit Facility, the $160 Million Revolving Credit Facility, and the undrawn ECA Credit Facility tranches as of March 31, 2026 and December 31, 2025, respectively, are included in other assets in the condensed consolidated balance sheets. Unamortized deferred financing charges of $12.4 million and $11.1 million as of March 31, 2026 and December 31, 2025, respectively, relating to the Company’s outstanding debt facilities, are included in debt in the condensed consolidated balance sheets.
Interest expense relating to the amortization of deferred financing charges amounted to $1.3 million and $0.8 million for the three months ended March 31, 2026 and 2025, respectively.
Vessels construction in progress — Interest costs are capitalized to vessels during the period that vessels are under construction. Interest capitalized totaled $1.3 million and $0.7 million during the three months ended March 31, 2026 and 2025, respectively.
Recently Adopted Accounting Pronouncements — There have been no recently adopted accounting pronouncements since the filing of our Annual Report on Form 10-K for the year ended December 31, 2025 that may have a material impact on our condensed consolidated financial statements.
New Accounting Pronouncements Not Yet Effective — The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the sole source of authoritative GAAP other than United States Securities and Exchange Commission (“SEC”) issued rules and regulations that apply only to SEC registrants. The FASB issues Accounting Standards Updates (“ASU”) to communicate changes to the codification.
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. This guidance will require additional disclosures and disaggregation of certain costs and expenses presented on the face of the income statement. The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 with early adoption permitted. We are currently evaluating the impact of this new guidance on the disclosures to our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal - Use Software (ASC 350-40): Targeted Improvements to the Accounting for Internal - Use Software. This new guidance is intended to eliminate the use of project stages and introduces a principles-based framework for recognizing and capitalizing internal-use software costs. The ASU is effective for annual periods beginning after December 15, 2027, including interim periods within those annual periods. Early adoption is permitted. We are evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.
8
In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (ASC 815): Hedge Accounting Improvements, which amends certain aspects of the hedge accounting guidance to more closely align hedge accounting with the economics of an entity’s risk management activities. This new guidance is intended to enable entities to achieve and maintain hedge accounting for a broader population of highly effective economic hedges while reducing cost and complexity. This ASU is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual periods. Early adoption is permitted. The amendments require adoption on a prospective basis. We are evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.
Note 4 — Earnings per Common Share:
Basic earnings per common share is computed by dividing earnings, after the deduction of dividends and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period.
The computation of diluted earnings per share assumes the issuance of common stock for all potentially dilutive stock options and restricted stock units not classified as participating securities. Participating securities are included in the computation of earnings per share pursuant to the two-class method.
Weighted average shares of unvested restricted common stock considered to be participating securities totaled 28,072 and 17,708 for the three months ended March 31, 2026 and 2025, respectively. Such participating securities are allocated a portion of income, but not losses under the two-class method. As of March 31, 2026, there were 294,547 shares of restricted stock units and 26,713 stock options outstanding and considered to be potentially dilutive securities.
Reconciliations of the numerator and denominator of the basic and diluted earnings per share computations are as follows:
Numerator:
Net income allocated to:
Common stockholders
285,981
49,547
Participating securities
162
18
Denominator:
Weighted-average common shares outstanding, basic
Dilutive effect of stock options
49,694
79,481
Dilutive effect of performance-based restricted stock units
101,197
32,603
Dilutive effect of restricted stock units
103,004
109,281
Weighted-average common shares outstanding, diluted
There were no antidilutive equity awards outstanding during the three months ended March 31, 2026 and 2025, respectively.
Note 5 — Business and Segment Reporting:
The Company has two reportable segments: Crude Tankers and Product Carriers. Adjusted income from vessel operations for segment purposes is defined as income from vessel operations before other operating income, general and administrative expenses, other operating expenses, and gain on disposal of vessels and assets, net. The accounting policies followed by the reportable segments are the same as those followed in the preparation of the Company’s condensed consolidated financial statements.
9
Information about the Company’s reportable segments as of and for the three months ended March 31, 2026 and 2025 follows:
Crude
Product
Tankers
Carriers
Totals
Three months ended March 31, 2026:
Shipping revenues
191,454
134,022
Time charter equivalent revenues
184,276
132,969
317,245
30,396
30,643
4,495
3,201
19,975
20,592
(52,614)
(35,557)
Adjusted income from vessel operations
129,410
78,533
207,943
Adjusted total assets at March 31, 2026
1,352,651
1,118,184
2,470,835
Expenditures for vessels and vessel improvements
177
70,478
70,655
6,828
7,022
13,850
Three months ended March 31, 2025:
88,004
95,390
84,629
93,713
178,342
28,418
38,610
2,836
6,309
18,702
21,003
34,673
27,791
62,464
Adjusted total assets at March 31, 2025
1,320,918
1,062,611
2,383,529
190
82,783
82,973
1,574
15,326
16,900
Reconciliations of time charter equivalent (“TCE”) revenues of the segments to shipping revenues as reported in the condensed statements of operations follow:
Add: Voyage expenses
Consistent with general practice in the shipping industry, the Company uses time charter equivalent revenues, which represent 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, provide 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.
10
Reconciliations of total adjusted income from vessel operations of the segments to net income, as reported in the condensed consolidated statements of operations follow:
Total adjusted income from vessel operations of all segments
General and administrative expenses
(9,311)
(13,217)
(138)
(95)
88,171
10,021
Consolidated income from vessel operations
Reconciliations of total assets of the segments to amounts included in the condensed consolidated balance sheets follow:
March 31, 2025
Adjusted total assets of all segments
Corporate unrestricted cash and cash equivalents
Other unallocated amounts
23,661
26,099
Consolidated total assets
2,542,397
Note 6 — Vessels:
Vessel Acquisitions and Construction Commitments
Between August 2023 and March 2024, the Company entered into agreements to construct six dual-fuel ready LNG 73,600 dwt LR1 Product Carriers at K Shipbuilding Co., Ltd.’s shipyard for an aggregate cost of approximately $359 million. The first two LR1 newbuildings were delivered during the second half of 2025 and the third and fourth LR1 newbuildings were delivered to the Company in March and April 2026, respectively. The last two LR1 newbuildings are expected to be delivered by the third quarter of 2026. The remaining commitments on the contracts for the construction of the three LR1 newbuilds as of March 31, 2026 were $121.7 million, of which approximately $115.6 million is expected to be drawn from the ECA Credit Facility in accordance with the delivery schedule.
Disposal/Sales of Vessels
During the three months ended March 31, 2026, the Company delivered one 2007-built MR, four 2008-built MRs, one 2010-built VLCC, and one 2012-built VLCC for net proceeds of $222.8 million and recognized a gain of $88.2 million.
Note 7 — Goodwill:
As described above in Note 2, “Business Combinations,” on January 27, 2026, the Company acquired CMB.Tech’s 50% equity interest in TUKA and recognized $7.6 million of goodwill at the time of acquisition.
11
The changes in goodwill during the quarter ended March 31, 2026 were as follows:
Balance at December 31, 2025
Acquisition of TUKA
Foreign currency translation adjustment
Note 8 — Variable Interest Entities (“VIEs”):
Consolidated VIEs
The Company consolidates VIEs in which it holds a variable interest and is the primary beneficiary. On January 27, 2026, in conjunction with the acquisition of TUKA (see Note 2, “Business Combinations”), the Company established Tankers International Suezmax Ltd. (“TISL”), a tanker pool for the commercial management of the Company’s and other third-party owners’ Suezmaxes. TISL was determined to be a VIE. The formation agreements for TISL state that a board of pool participants has decision making power over the significant economic decisions that impact the pool. Although there was one other pool participant during the quarter ended March 31, 2026, the Company controlled the majority of the decision making power and accordingly was considered to be the primary beneficiary of TISL. As such, the balance sheets and results of operations of TISL are included in the Company’s condensed consolidated financial statements as of and for the quarter ended March 31, 2026. This assessment will change if additional third-party owners join the pool and the Company is deemed to no longer hold the majority of the decision making power over the significant economic decisions that impact the pool.
Unconsolidated VIEs
As of March 31, 2026, six commercial pools in which the Company participates were determined to be VIEs for which the Company is not considered a primary beneficiary.
The following table presents the carrying amounts of assets and liabilities in the condensed consolidated balance sheet related to the unconsolidated VIEs as of March 31, 2026:
Condensed Consolidated Balance Sheet
In accordance with accounting guidance, the Company evaluated its maximum exposure to loss related to these unconsolidated VIEs by assuming a complete loss of the Company’s investment in these VIEs. The table below compares the Company’s liability in the condensed consolidated balance sheet to the maximum exposure to loss at March 31, 2026:
Maximum Exposure toLoss
Other Liabilities
–
In addition, as of March 31, 2026, the Company had $210.7 million of trade receivables due from the pools in which it participates that were determined to be VIEs. These trade receivables, which are included in voyage receivables in the accompanying condensed consolidated balance sheet, have been excluded from the above tables and the calculation of INSW’s maximum exposure to loss. The Company does not record the maximum exposure to loss as a liability because it does not believe that such a loss is probable of occurring as of March 31, 2026.
12
Note 9 — Fair Value of Financial Instruments, Derivatives and Fair Value Disclosures:
The estimated fair values of the Company’s financial instruments, other than derivatives that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows:
Fair Value Level
Level 1
2030 Bonds
(253,130)
(249,748)
ECA Credit Facility(1)
(123,079)
(81,494)
Level 2
BoComm Lease Financing (2)
(171,114)
(174,713)
Toshin Lease Financing (2)
(9,752)
(10,151)
Hyuga Lease Financing (2)
(9,642)
(10,164)
Kaiyo Lease Financing (2)
(8,508)
(9,485)
Kaisha Lease Financing (2)
(8,499)
(8,921)
Derivatives
At March 31, 2026, the Company was party to amortizing interest rate swap agreements with major financial institutions participating in the $500 Million Revolving Credit Facility that effectively convert the Company’s interest rate exposure from a three-month SOFR floating rate to a fixed rate of 2.84% through the maturity date of February 22, 2027. The interest rate swap agreements, which contain no leverage features, are designated and qualify as cash flow hedges and have a remaining aggregate notional value of $91.1 million as of March 31, 2026, covering for accounting purposes, $91.1 million of debt outstanding under the ECA Credit Facility. Also, as of March 31, 2026, approximately $0.9 million in gain from previously terminated interest rate swaps is expected to be amortized out of accumulated other comprehensive loss to earnings over the next 12 months.
Derivatives are recorded on a net basis by counterparty when a legal right of offset exists. The Company had the following amounts recorded on a net basis by transaction in the accompanying unaudited condensed consolidated balance sheets related to the Company’s use of derivatives as of March 31, 2026 and December 31, 2025:
Long-term derivative assets
March 31, 2026:
Derivatives designated as hedging instruments:
Interest rate swaps
82
December 31, 2025:
139
The following tables present information with respect to gains and losses on derivative positions reflected in the condensed consolidated statements of operations or in the condensed consolidated statements of comprehensive income.
13
The effect of cash flow hedging relationships recognized in other comprehensive income/(loss) excluding amounts reclassified from accumulated other comprehensive income for the three months ended March 31, 2026 and 2025 follows:
132
(181)
Total other comprehensive income/(loss)
The effect of the Company’s cash flow hedging relationships on the condensed consolidated statement of operations for the three months ended March 31, 2026 and 2025 follows:
(226)
(815)
Discontinued hedging instruments:
Interest rate swap
(249)
219
Total interest expense
(475)
(596)
See Note 12, “Accumulated Other Comprehensive Loss,” for disclosures relating to the impact of derivative instruments on accumulated other comprehensive income/(loss).
The following table presents the fair values, which are pre-tax, for assets and liabilities measured on a recurring basis:
Derivative Assets (interest rate swaps)
399
550
Level 2(1)
The following table summarizes the fair values of net assets acquired in business combinations during the first quarter of 2026:
Fair Value
Previously held equity interest(1)
Identifiable net assets acquired in business combination(2)
1,869
(1) The fair value attributed to the previously held equity interest was derived from the consideration transferred in the transaction
(2) Identifiable net assets acquired primarily consisted of working capital, including $0.5 million of cash and cash equivalents.
14
Note 10 — Debt:
Debt consists of the following:
ECA Credit Facility, due 2038, net of unamortized deferred finance costs of $4,730 and $3,030
118,349
78,464
2030 Bonds, due 2030, net of unamortized deferred finance costs of $4,576 and $4,774
245,424
245,226
BoComm Lease Financing, due 2030, net of unamortized deferred finance costs of $2,559 and $2,731
198,994
202,505
Toshin Lease Financing, due 2031, net of unamortized deferred finance costs of $176 and $189
10,723
11,092
Hyuga Lease Financing, due 2031, net of unamortized deferred finance costs of $145 and $157
10,427
10,808
Kaiyo Lease Financing, due 2030, net of unamortized deferred finance costs of $115 and $126
9,094
9,500
Kaisha Lease Financing, due 2030, net of unamortized deferred finance costs of $118 and $129
9,077
9,484
602,088
567,079
Less current portion
(28,161)
(25,788)
Long-term portion
Capitalized terms used hereafter have the meaning given in these condensed consolidated financial statements or in the respective transaction documents referred to below, including subsequent amendments thereto.
ECA Credit Facility
On March 13, 2026, the Company borrowed $42.6 million upon the delivery of the third LR1 newbuilding, leaving an outstanding principal balance of $123.1 million as of March 31, 2026. An additional $42.6 million was borrowed on April 20, 2026, upon delivery of the fourth LR1 newbuilding.
Debt Covenants
The Company was in compliance with the financial and non-financial covenants under all of its financing arrangements as of March 31, 2026.
Interest Expense
Total interest expense before the impact of capitalized interest, including amortization of deferred financing costs, commitment, administrative and other fees for all of the Company’s debt facilities for the three months ended March 31, 2026 and 2025 was $10.1 million and $12.0 million, respectively. Interest paid, net of interest rate swap cash settlements, for the Company’s debt facilities for the three months ended March 31, 2026 and 2025 was $13.4 million and $10.1 million, respectively.
Note 11 — Capital Stock and Stock Compensation:
Share Repurchase Program
No shares were acquired under the Company’s $50 million stock repurchase program during the three months ended March 31, 2026 and 2025.
15
Shares of Common Stock
The following table shows the changes in shares of common stock outstanding:
Common stock outstanding at beginning
49,404,078
49,194,458
Common stock issued - vesting or exercise of share-based compensation
234,295
189,386
Common stock withheld for employee taxes(1)
(133,677)
(96,387)
Common stock outstanding at ending
49,504,696
49,287,457
Management Compensation
Stock Options
There were no stock options granted during the three months ended March 31, 2026 and 2025. A total of 101,267 and 58,893 stock options were exercised during the three months ended March 31, 2026 and 2025, respectively, by certain senior officers and employees of the Company at an average exercise price of $20.33 and $21.74 per share, respectively.
Restricted Stock Units
During the three months ended March 31, 2026, the Company granted 10,863 time-based restricted stock units (“RSUs”) to certain of its employees. The weighted average grant date fair value of these awards was $73.37 per RSU. Each RSU represents a contingent right to receive one share of INSW common stock upon vesting. All of the RSUs awarded will vest in equal installments on each of the first three anniversaries of the grant date.
During the three months ended March 31, 2026, the Company also granted 10,856 performance-based RSUs to certain of its employees. Each performance stock unit represents a contingent right to receive RSUs based upon the covered employees being continuously employed through the end of the period over which the performance goals are measured and shall vest as follows: (i) one-half of the target RSUs shall vest on December 31, 2028, subject to INSW’s return on invested capital (“ROIC”) performance in the three-year ROIC performance period relative to a target rate (the “ROIC Target”) set forth in the award agreements; and (ii) one-half of the target RSUs shall vest on December 31, 2028, subject to INSW’s three-year total shareholder return (“TSR”) performance relative to that of a performance peer group over a three-year performance period (“TSR Target”). Vesting is subject in each case to the Human Resources and Compensation Committee of the Company’s Board of Directors’ certification of achievement of the performance measures and targets no later than March 15, 2029. The weighted average grant date fair value of the awards with performance conditions was determined to be $73.37 per RSU. The weighted average grant date fair value of the TSR based performance awards which have a market condition was estimated using a Monte Carlo probability model and determined to be $65.15 per RSU.
Rights Agreement
On April 6, 2026, the Board approved and authorized management to enter into, on April 9, 2026, the Second Amended and Restated Rights Agreement (the “Second A&R Rights Agreement”) between the Company and Computershare Trust Company, N.A., as rights agent, which amended and restated the Amended and Restated Rights Agreement with Computershare Trust Company, N.A., as rights
16
agent (the “A&R Rights Agreement”) in its entirety. Each Right entitles the registered holder to purchase from the Company one share of Common Stock at a purchase price of $95 per share, subject to adjustment as described in the Second A&R Rights Agreement (the “Purchase Price”). The Company expects to seek stockholder ratification of the adoption of the Second A&R Rights Agreement at its 2026 annual meeting of stockholders.
In general terms, the Second A&R Rights Agreement implements the same features and protective measures of the A&R Rights Agreement (except as noted below) and includes the following revised provisions:
The Second A&R Rights Agreement otherwise preserves the terms of the prior A&R Rights Agreement. In particular, the Second A&R Rights Agreement does not change:
The Company’s Board of Directors adopted the Second A&R Rights Agreement and prior versions of the Rights Agreement to enable all stockholders of the Company to realize the full potential value of their investment in the Company. The Second A&R Rights Agreement is designed to prevent any individual stockholder or group of stockholders from gaining control of the Company through open market accumulation without paying a control premium to all stockholders or by otherwise disadvantaging other stockholders. The Second A&R Rights Agreement is not intended to prevent a takeover or deter fair offers for securities of the Company that deliver value to all stockholders on an equal basis. It is designed, instead, to encourage anyone seeking to acquire the Company to negotiate with the Board prior to attempting a takeover.
The Company’s Board of Directors may consider an earlier termination of the Second A&R Rights Agreement if market and other conditions warrant.
Dividends
On February 25, 2026, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.12 per share of common stock and a supplemental cash dividend of $2.03 per share of common stock. Both dividends totaling $106.4 million in the aggregate were paid on March 30, 2026 to stockholders of record as of March 20, 2026.
On May 6, 2026, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.12 per share of common stock and a supplemental dividend of $4.43 per share of common stock. Both dividends will be paid on June 26, 2026 to stockholders of record as of June 12, 2026.
Note 12 — Accumulated Other Comprehensive Loss:
The components of accumulated other comprehensive loss, net of related taxes, in the condensed consolidated balance sheets follow:
Unrealized gains on derivative instruments
1,750
2,093
Items not yet recognized as a component of net periodic benefit cost (pension plans)
(12,713)
(12,933)
17
The changes in the balances of each component of accumulated other comprehensive loss, net of related taxes, during the three months ended March 31, 2026 and 2025 follow:
Unrealized gains on cash flow hedges
Items not yet recognized as a component of net periodic benefit cost
Balance as of December 31, 2025
Current period change, excluding amounts reclassified
from accumulated other comprehensive income/(loss)
(45)
(165)
Amounts reclassified from accumulated other comprehensive (loss)/income
265
(210)
Balance as of March 31, 2026
Balance as of December 31, 2024
5,176
(13,037)
from accumulated other comprehensive loss
(424)
(605)
Amounts reclassified from accumulated other comprehensive loss
248
(348)
Balance as of March 31, 2025
4,399
(13,213)
Amounts reclassified out of each component of accumulated other comprehensive loss follow:
Statement of Operations Line Item
Reclassifications of gains on cash flow hedges:
Interest rate swaps entered into by the Company's subsidiaries
Reclassifications of losses on discontinued hedging instruments:
Interest rate swap entered into by the Company's subsidiaries
(pension plans):
Net periodic benefit costs associated with pension and
postretirement benefit plans
Total before and net of tax
At March 31, 2026, the Company expects that it will reclassify $0.3 million (gross and net of tax) of net gain on derivative instruments from accumulated other comprehensive loss to earnings during the next twelve months attributable to interest rate swaps held by the Company.
See Note 9, “Fair Value of Financial Instruments, Derivatives and Fair Value Disclosures,” for additional disclosures relating to derivative instruments.
Note 13 — Shipping Revenue and Other Operating Income:
Revenue Recognition
The majority of the Company’s contracts for pool revenues, time charter revenues, and voyage charter revenues are accounted for as lease revenue under ASC 842. The Company’s contracts with pools are short term which are cancellable with up to 90 days’ notice. As of March 31, 2026, the Company is a party to time charter out contracts with customers on three VLCCs, three Suezmaxes, one Aframax, one LR2, and six MRs with expiry dates ranging from May 2026 to April 2030. The Company’s contracts with customers for voyage charters are short term and vary in length based upon the duration of each voyage. Lease revenue for non-variable lease payments is recognized over the lease term on a straight-line basis and lease revenue for variable lease payments (e.g., demurrage) is recognized in the period in which the changes in facts and circumstances on which the variable lease payments are based occur.
Lightering services provided by the Company’s Crude Tanker Lightering Business, voyage charter contracts that do not meet the definition of a lease, and commercial management services rendered to vessel owners participating in the VLCC and Suezmax tanker pools, (TIL and TISL), respectively, are accounted for as service revenues under ASC 606. In accordance with ASC 606, revenue is recognized when a customer obtains control of or consumes promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services.
The following tables present the Company’s revenues from leases accounted for under ASC 842 and revenues from services accounted for under ASC 606 for the three months ended March 31, 2026 and 2025:
Revenues from leases
Pool revenues
132,762
115,736
45,252
15,763
Voyage charter revenues from non-variable lease payments(1)
6,420
2,523
8,943
Revenues from services
Voyage charter revenues from lightering services
7,020
Total shipping revenues
62,198
75,398
16,395
19,462
Voyage charter revenues from non-variable lease payments
307
530
837
9,104
_____________________________
19
Contract Balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers, and significant changes in contract assets and liabilities balances, associated with revenue from services accounted for under ASC 606. Balances related to revenues from leases accounted for under ASC 842 are excluded from the table below.
Voyage receivables - Billed receivables
Contract assets (Unbilled voyage receivables)
Contract assets (Unbilled Commercial Management Fees)
Contract liabilities (Deferred revenues and off hires)
Opening balance as of January 1, 2026
2,622
Closing balance as of March 31, 2026
2,542
43
3,414
We receive payments from customers based on the schedule established in our contracts. Contract assets relate to our conditional right to consideration for our completed performance obligations under contracts and decrease when the right to consideration becomes unconditional or payments are received. Contract liabilities include payments received in advance of performance under contracts and are recognized when performance under the respective contract has been completed. Deferred revenues allocated to unsatisfied performance obligations will be recognized over time as the services are performed.
Performance Obligations
All of the Company’s performance obligations are generally transferred to customers over time. The expected duration of services is less than one year. There were no material adjustments in revenues from performance obligations satisfied in previous periods recognized during the three months ended March 31, 2026 and 2025, respectively.
Costs to Obtain or Fulfill a Contract
As of March 31, 2026, there were no unamortized deferred costs of obtaining or fulfilling a contract.
European Union’s Emissions Trading System
The European Union’s Emissions Trading System (“EU ETS”) emissions allowances (“EUA”) are valued based upon a market approach utilizing prices published on an EUA market index. The value of the EUAs to be provided to the Company pursuant to the terms of its agreements with the charterers of its vessels and the commercial pools in which it participates is included in shipping revenues in the condensed consolidated statements of operations. The value of the EUA obligations incurred by the Company under the EU ETS while its vessels are on-hire is included in voyage expenses, or in vessel expenses while its vessels are off-hire, in the condensed consolidated statements of operations.
Any EUAs held by the Company are intended to be used to settle its EUA obligations and are accounted for as intangible assets. As of March 31, 2026, the value of EUAs held by the Company that are required to be surrendered to the EU authorities in September 2026 is approximately $2.1 million and is included in other current assets in the condensed consolidated balance sheet.
20
The following table presents the components of the non-cash revenues and expenses recognized for EUAs earned and incurred during the three months ended March 31, 2026 and 2025:
Three months ended March 31,
3,756
1,610
626
420
4,382
2,030
The value of EUAs due to the Company from its charterers or commercial pools in which it participates is $12.1 million as of March 31, 2026 and is included in other receivables in the condensed consolidated balance sheet. The value of the EUAs the Company is obligated to surrender to the EU authorities was $14.1 million and $9.7 million as of March 31, 2026 and December 31, 2025, respectively. The current portion of the March 31, 2026 balance totaling $9.7 million is included in other current liabilities and the noncurrent portion of $4.4 million is included in other liabilities in the condensed consolidated balance sheet.
Note 14 — Leases:
As permitted under ASC 842, the Company has elected not to apply the provisions of ASC 842 to short term leases, which include: (i) tanker vessels chartered-in where the duration of the charter was one year or less at inception; (ii) workboats employed in the Crude Tankers Lightering business which have a lease term of 12-months or less; and (iii) short term leases of office and other space.
Contracts under which the Company is a Lessee
The Company currently has two major categories of leases – chartered-in vessel and office space and vessel equipment. The expenses recognized during the three months ended March 31, 2026 and 2025 for the lease component of these leases are as follows:
Operating lease cost
Vessel assets
2,370
4,725
Office space and vessel equipment
227
46
Short-term lease cost
Vessel assets (1)
1,353
1,201
Total lease cost
4,016
6,168
21
Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for operating leases
2,710
5,013
Supplemental balance sheet information related to leases was as follows:
(2,240)
(3,182)
(5,793)
(5,954)
Total operating and finance lease liabilities
(8,033)
(9,136)
Weighted average remaining lease term - operating leases
6.01 years
5.62 years
Weighted average discount rate - operating leases
4.55%
4.77%
1. Charters-in of vessel assets:
As of March 31, 2026, the Company has a commitment to time charter-in one LR1 through April 2026. The remaining minimum lease liabilities and related number of operating days under this operating lease as of March 31, 2026 are as follows:
Amount
Operating Days
925
26
Total operating lease liabilities
2. Office space and vessel equipment:
The Company has operating leases for offices, a lightering workboat dock space, and hull cleaning robots. These leases have expiry dates ranging from November 2026 to May 2033.
22
Payments of lease liabilities for office space and vessel equipment as of March 31, 2026 are as follows:
977
2027
1,328
2028
1,155
2029
1,077
2030
Thereafter
2,602
Total lease payments
8,216
less imputed interest
(1,108)
7,108
Contracts under which the Company is a Lessor
See Note 13, “Shipping Revenue and Other Operating Income,” for discussion on the Company’s revenues from operating leases accounted for under ASC 842.
The future minimum contracted revenues, before the deduction of brokerage commissions, expected to be received on non-cancelable time charters for three VLCCs, three Suezmaxes, one Aframax, one LR2, and six MRs, and the related revenue days as of March 31, 2026 are as follows:
Revenue Days
77,563
2,464
54,124
1,624
48,770
1,464
35,032
1,122
7,068
228
Future minimum revenues
222,556
6,902
Future minimum contracted revenues do not include the Company’s share of time charters entered into by the pools in which it participates or profit-sharing above the base rate on the newbuild dual-fuel LNG VLCCs. Revenues from a time charter are not generally received when a vessel is off-hire, including time required for normal periodic maintenance of the vessel. In arriving at the minimum future charter revenues, an estimated time off-hire to perform periodic maintenance on each vessel has been deducted, although there is no assurance that such estimate will be reflective of the actual off-hire in the future.
Note 15 — Other Operating Expenses:
Other operating expenses consist of the following expenses:
Consulting fees associated with settlement of pension plan obligations(1)
Total other operating expenses
23
Note 16 — Contingencies:
INSW’s policy for recording legal costs related to contingencies is to expense such legal costs as incurred.
Legal Proceedings Arising in the Ordinary Course of Business
The Company is a party, as plaintiff or defendant, to various suits in the ordinary course of business for monetary relief arising principally from personal injuries, wrongful death, collision or other casualty and to claims arising under charter parties and other contract disputes. A substantial majority of such personal injury, wrongful death, collision or other casualty claims against the Company is covered by insurance (subject to deductibles not material in amount). Each of the claims involves an amount which, in the opinion of management, should not be material to the Company’s financial position, results of operations and cash flows.
In late July 2023, one of the Company’s vessels was arrested in connection with a commercial dispute arising earlier in 2023. Although the vessel was subsequently released, the arresting party sought $25 million in security. The underlying commercial dispute was subject to an arbitration hearing in England. In March 2025, the arbitration tribunal ruled in the Company’s favor by (i) dismissing the arresting party’s claims against the Company, and (ii) awarding the Company the monetary damages of $25 million. The arresting party appealed the arbitration tribunal’s ruling in April 2025, and such appeal was dismissed in September 2025. During the first quarter of 2026, the Company recovered $4.8 million of damages awarded by the arbitration tribunal, representing legal fees that it had incurred in relation to this matter. Such recovery was recognized as a reduction in general and administrative expenses during the three months ended March 31, 2026. The Company’s ultimate ability to collect the balance of the damages in whole or in part from the arresting party remains uncertain.
24
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. Such forward-looking statements represent the Company’s reasonable expectation with respect to future events or circumstances based on various factors and are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors, many of which are beyond the control of the Company, that could cause the Company’s actual results to differ materially from those indicated in these statements. Undue reliance should not be placed on any forward-looking statements and consideration should be given to the following factors when reviewing any such statement. Such factors include, but are not limited to:
25
The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q and written and oral forward-looking statements attributable to the Company or its representatives after the date of this Quarterly Report on Form 10-Q are qualified in their entirety by the cautionary statement contained in this paragraph and in other reports hereafter filed by the Company with the Securities and Exchange Commission.
INTRODUCTION
This Management’s Discussion and Analysis, which should be read in conjunction with our accompanying condensed consolidated financial statements and notes thereto, provides a discussion and analysis of our business, current developments, financial condition, cash flows and results of operations as of March 31, 2026 and for the three months ended March 31, 2026 and 2025. It is organized as follows:
This Quarterly Report on Form 10-Q includes industry data and forecasts that we have prepared based, in part, on information obtained from industry publications and surveys. Third-party industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. In addition, certain statements regarding our market position in this report are based on information derived from internal market studies and research reports. Unless we state otherwise, statements about the Company’s relative competitive position in this report are based on our management’s beliefs, internal studies and management’s knowledge of industry trends.
General:
We are a provider of ocean transportation services for crude oil and refined petroleum products. We operate our vessels in the International Flag market. Our business includes two reportable segments: Crude Tankers and Product Carriers. For the three months ended March 31, 2026 and 2025, we derived 58% and 47%, respectively, of our time charter equivalent (“TCE”) revenues from our Crude Tankers segment. Revenues from our Product Carriers segment constituted the balance of our TCE revenues in the 2026 and 2025 periods.
As of March 31, 2026, the Company’s operating fleet consisted of 64 wholly-owned or lease financed and time chartered-in vessels aggregating 7.6 million deadweight tons (“dwt”). In addition to our operating fleet of 64 vessels, three LR1 newbuilds are scheduled for delivery to the Company between the second and third quarters of 2026, bringing the total operating and newbuild fleet to 67 vessels. Our fleet includes VLCC, Suezmax and Aframax crude tankers and LR2, LR1 and MR product carriers. In addition to the Company’s operating fleet, Tankers International Suezmax Limited (“TISL”), a variable interest entity that is consolidated by the Company, has one Suezmax tanker time chartered-in from a third-party under its pool participation agreement as of March 31, 2026. See Note 8, “Variable Interest Entities (“VIEs”)” to the accompanying condensed consolidated financial statements for additional information on consolidated and unconsolidated VIEs.
The Company’s revenues are highly sensitive to (i) patterns of supply and demand for vessels of the size and design configurations owned and operated by the Company and the trades in which those vessels operate and (ii) the Company’s vessel employment strategy.
Rates for the transportation of crude oil and refined petroleum products from which the Company earns a substantial majority of its revenues are determined by market forces such as the supply and demand for oil, the distance that cargoes must be transported, and the number of vessels expected to be available at the time such cargoes need to be transported. The demand for oil shipments is significantly affected by the state of the global economy, levels of U.S. domestic and international production and OPEC exports. The number of vessels available to transport cargo is affected by newbuilding deliveries and by the removal of existing vessels from service, principally through storage, recycling or conversions.
27
The outbreak of war in the Middle East between Iran and the U.S. and Israel in late February 2026, and the seizures and attacks on vessels travelling through the Red Sea, the Gulf of Aden and the Arabian Gulf, and the effective closure of the Strait of Hormuz, have caused supply disruptions in the oil and gas markets and significant volatility in energy prices and spot charter hire rates. The sharp increase in oil prices and concerns that the supply of crude oil and petroleum products may be significantly constrained for some period of time has led a number of countries to impose export restrictions on certain oil and petroleum products. Also, while charter rates for crude tankers and product carriers initially increased and remain high following the disruption to shipping in the Middle East areas noted above, it is unlikely that the charter rates will remain at these historically high levels. We also expect the voyage expenses of the commercial pools in which we participate to be high in the near-term due to high bunker costs and being subject to additional war risks insurance premiums when the pool’s vessels transit through or call to any ports or areas or the waters of any country bordering the Arabian Gulf or the Red Sea. To date, these geopolitical developments have not had a material adverse effect on INSW’s operations, financial condition, results of operations or cash flow. The extent of any future impact will depend on how the situation develops, including any continued disruption in the Strait of Hormuz and its effect on global energy markets, including the restoration, and timing thereof, of damage to the existing energy infrastructure.
The Company’s revenues are also affected by its vessel employment strategy, which seeks to achieve the optimal mix of spot (voyage charter) and long-term (time or bareboat charter) charters. Because shipping revenues and voyage expenses are significantly affected by the mix between voyage charters and time charters, the Company measures the performance of its fleet of vessels based on TCE revenues. Management makes economic decisions based on anticipated TCE rates and evaluates financial performance based on TCE rates achieved.
Our revenues are derived primarily from spot market voyage charters and our vessels are predominantly employed in the spot market via market-leading commercial pools. We derived approximately 82% of our total TCE revenues in the spot market for the three months ended March 31, 2026, compared with 81% for the three months ended March 31, 2025. The future minimum revenues, before reduction for brokerage commissions, expected to be received on non-cancelable time charters for three VLCCs, three Suezmaxes, one Aframax, one LR2, and six MRs, as of March 31, 2026 are as follows:
(Dollars in millions)
Amount(1)
77.6
54.1
48.8
35.0
7.1
222.6
28
Operations and Oil Tanker Markets:
The International Energy Agency (“IEA”) estimates global oil consumption for the first quarter of 2026 at 103.4 million barrels per day (“b/d”), up 0.5% from the same quarter in 2025. The estimate for global oil consumption for 2026 is 104.3 million b/d, unchanged from 2025 levels. OECD demand in 2026 is estimated to decrease by 0.4% to 45.7 million b/d, while non-OECD demand is estimated to increase by 0.2% to 58.6 million b/d.
Global oil production in the first quarter of 2026 was 102.8 million b/d, an increase of 0.1 million b/d from the first quarter of 2025, but sharply down from 107.5 million b/d in the fourth quarter of 2025 due to effects related to the closure of the Strait of Hormuz. OPEC crude oil production averaged 25.9 million b/d in the first quarter of 2025, a decrease of 2.6 million b/d from the fourth quarter of 2025, and a decrease of 0.9 million b/d from the first quarter of 2025. Non-OPEC production increased by 1.2 million b/d to 71.6 million b/d in the first quarter of 2026 compared with the first quarter of 2025. Oil production in the U.S. of 13.2 million b/d in the first quarter of 2026 decreased by 4.5% from the fourth quarter of 2025 but increased by 0.8% from the first quarter of 2025.
U.S. refinery throughput increased by 0.6 million b/d to 16.6 million b/d in the first quarter of 2026 compared with the fourth quarter of 2025.
U.S. crude oil imports in the first quarter of 2026 decreased by 2.7% to 6.5 million b/d compared with the first quarter of 2025, with imports from OPEC countries decreasing by 0.1 million b/d and imports from non-OPEC countries decreasing by 0.1 million b/d. China’s crude oil imports in March were 11.8 million b/d, down 2.8% year-over-year. The full impact of the closure of the Strait of Hormuz won’t be seen until the April figures are released, since much of the March imports were already in transit and out of the Arabian Gulf at the time of the closure.
OECD commercial crude inventories in the first quarter of 2026 increased by 4.0%, or 53 million barrels, compared with the fourth quarter of 2025. OECD commercial product inventories in the first quarter of 2026 increased by 2.6%, or 37 million barrels, compared with the fourth quarter of 2025. Inventory levels are expected to decrease during the second quarter of 2026 as the full impact of the closure of the Strait of Hormuz on exports from the Middle East Gulf sets in.
During the first quarter of 2026, the tanker fleet of vessels over 10,000 dwt increased, net of vessels recycled, by 9.2 million dwt. The crude fleet increased by 6.7 million dwt, with VLCCs, Suezmaxes and Aframaxes increasing by 3.1 million dwt, 1.3 million dwt and 2.3 million dwt, respectively. The product carrier fleet increased by 2.5 million dwt, with LR1s increasing by 0.5 million dwt and MRs increasing by 2.0 million dwt. Year-over-year, the size of the tanker fleet increased by 20.7 million dwt with the increases of 3.7
million dwt, 4.1 million dwt, 6.3 million dwt, 0.5 million dwt and 6.1 million dwt in the VLCCs, Suezmax, Aframax, LR1 and MR fleets, respectively.
During the first quarter of 2026, the tanker orderbook increased by 22.5 million dwt from the fourth quarter of 2025. The crude tanker orderbook increased by 23.9 million dwt. The VLCC and Suezmax orderbooks increased by 19.9 million dwt and 5.2 million dwt, respectively, and the Aframax orderbook decreased by 1.1 million dwt. The product carrier orderbook decreased by 1.4 million dwt, with the LR1 orderbook decreasing by 0.6 million dwt and the MR orderbook decreasing by 0.8 million dwt. Year-over-year, the total tanker orderbook increased by 47.0 million dwt, with increases in VLCC and Suezmaxes of 38.5 million dwt and 11.8 million dwt, respectively. The LR1, Aframax and MR orderbooks decreased by 0.6 million dwt, 0.7 million dwt and 1.9 million dwt, respectively.
Tanker rates were very strong in the first quarter of 2026 compared with the fourth quarter of 2025. January and February saw stronger rates across the board compared with the fourth quarter. March, however, saw a significant increase in rates due primarily to the war among the U.S., Israel and Iran. As conditions normalize, while it is unlikely rates seen in March 2026 are sustainable, we would expect tanker markets to benefit from the rebalancing of trade flows and the replenishment of inventories.
Update on Critical Accounting Estimates and Policies:
The Company’s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Company to make estimates in the application of its accounting policies based on the best assumptions, judgments and opinions of management. For a description of all of the Company’s material accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to the Company’s consolidated financial statements as of and for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K. See Note 3, “Significant Accounting Policies,” to the accompanying condensed consolidated financial statements for any changes or updates to the Company’s critical accounting policies for the current period.
Results from Vessel Operations:
During the first quarter of 2026, income from vessel operations increased by $229.4 million to $288.6 million from $59.2 million in the first quarter of 2025. Such increase resulted principally from significantly higher TCE revenues, a $78.2 million increase in gains from vessel sales, and decreased general and administrative and vessel expenses in the current quarter.
TCE revenues in the first quarter of 2026 increased by $138.9 million, or 78%, to $317.2 million from $178.3 million in the first quarter of 2025. This increase reflects (i) an aggregate $157.0 million rates-based increase resulting from higher average daily rates earned across the Company’s fleet sectors, partially offset by (ii) a $14.8 million days-based reduction in the MR sector, which reflects the Company selling several of the older vessels in its fleet, as detailed below in the “Product Carriers” discussion.
See Note 5, “Business and Segment Reporting,” to the accompanying condensed consolidated financial statements for additional information on the Company’s segments, including reconciliations of (i) time charter equivalent revenues to shipping revenues and (ii) adjusted income from vessel operations for the segments to net income, as reported in the condensed consolidated statements of operations.
30
Crude Tankers
(Dollars in thousands, except daily rate amounts)
TCE revenues
(30,396)
(28,418)
(4,495)
(2,836)
(19,975)
(18,702)
Adjusted income from vessel operations (a)
Average daily TCE rate
72,811
34,528
Average number of owned vessels (b)
25.5
19.5
Average number of vessels chartered-in
3.1
8.9
Number of revenue days (c)
2,531
2,451
Number of ship-operating days: (d)
Owned vessels
2,297
1,770
Vessels bareboat chartered-in under leases (e)
270
810
Vessels time chartered-in under operating leases (f)
Vessels spot chartered-in under leases (g)
31
The following table provides a breakdown of TCE rates achieved for the three months ended March 31, 2026 and 2025, between spot and fixed earnings and the related revenue days. The information in this table is based, in part, on information provided by the commercial pools in which the segment’s vessels participate and excludes commercial pool fees/commissions averaging approximately $1,699 and $1,112 per day for the three months ended March 31, 2026 and 2025, respectively, as well as activity in the Crude Tankers Lightering business and revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies. The fixed earnings rates in the table are net of broker/address commissions.
Spot Earnings
Fixed Earnings
VLCC(1):
Average rate
86,693
128,264
33,531
37,974
Revenue days
693
657
Suezmax:
68,027
36,964
30,911
29,170
979
184
1,088
78
Aframax:
51,379
38,511
25,422
38,502
266
90
89
During the first quarter of 2026, TCE revenues for the Crude Tankers segment increased by $99.6 million, or 118%, to $184.3 million from $84.6 million in the first quarter of 2025. Such increase principally resulted from (i) an aggregate rates-based increase in the VLCC, Suezmax and Aframax sectors of $99.4 million which resulted from the very strong rate environment during the current quarter as described in the “Operations and Oil Tanker Markets” section above, and (ii) a $2.8 million days-based increase in the VLCC sector, which reflects 96 fewer off-hire days in the current period and the net impact of the Company’s acquisition of a 2020-built VLCC in November 2025, partially offset by the sales of one 2010-built VLCC and one 2011-built VLCC during the first quarter of 2025 and one 2010-built VLCC and one 2012-built VLCC during the first quarter of 2026. Partially offsetting the TCE revenue increases described above was a $2.2 million decrease in the Crude Tankers Lightering business.
Vessel expenses increased by $2.0 million to $30.4 million in the first quarter of 2026 from $28.4 million in the first quarter of 2025. Such increase was driven principally by increased costs for repairs, lubricating oils and crew. Charter hire expenses increased by $1.7 million quarter-over-quarter primarily due to increased charter hire expense in the Crude Tankers Lightering business, which reflects incremental chartered-in Aframax days for a full-service job completed during the first quarter of 2026 and increased daily rates on a portion of its chartered-in workboat fleet. In addition, charter hire expense for the first quarter of 2026 included hire due to a third party participant of TISL, the Suezmax tankers pool formed in March 2026 (as described in Note 8, “Variable Interest Entities,” to the accompanying condensed consolidated financial statements). Depreciation and amortization increased by $1.3 million to $20.0 million in the current quarter from $18.7 million in the first quarter of 2025, primarily as a result of increased drydock amortization, the timing of the sales of the VLCCs and the acquired VLCC noted above.
Excluding depreciation and amortization and general and administrative expenses, the operating loss for the Crude Tankers Lightering business was $0.3 million for the first quarter of 2026 compared with operating income of $2.8 million for the first quarter of 2025. The decrease reflects a decline in quarter-over-quarter activity levels, with 61 service support-only lightering jobs and one full-service lightering job being performed during the first quarter of 2026 compared with 85 service support-only lighterings during the first quarter of 2025.
32
Product Carriers
(30,643)
(38,610)
(3,201)
(6,309)
(20,592)
(21,003)
39,131
22,061
Average number of owned vessels
34.1
43.1
5.0
5.9
Number of revenue days
3,398
4,248
Number of ship-operating days:
3,071
3,923
Vessels bareboat chartered-in under leases (a)
360
Vessels time chartered-in under leases
180
The following table provides a breakdown of TCE rates achieved for the three months ended March 31, 2026 and 2025, between spot and fixed earnings and the related revenue days. The information in this table is based, in part, on information provided by the commercial pools in which the segment’s vessels participate and excludes commercial pool fees/commissions averaging approximately $814 and $767 per day for the three months ended March 31, 2026 and 2025, respectively, as well as revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies. The fixed earnings rates in the table are net of broker/address commissions.
LR2:
39,509
39,417
LR1(1):
70,664
27,367
719
MR(2):
37,224
22,037
21,408
21,782
2,192
533
2,664
710
33
During the first quarter of 2026, TCE revenues for the Product Carriers segment increased by $39.3 million, or 42%, to $133.0 million from $93.7 million in the first quarter of 2025. The increase in TCE revenues was primarily as a result of (i) an aggregate $57.6 million rates-based increase in the LR1 and MR sectors due to higher average daily blended rates earned in the current quarter. Such increase was partially offset by (ii) a $14.8 million days-based decrease in the MR sector, which reflects the net impact of the Company’s sale of 13 MRs between June 2025 and March 2026, the acquisition of two MRs in January 2025 and 156 fewer off-hire days in the current quarter, and (iii) a $3.6 million days-based decrease in the LR1 sector, which resulted primarily from a 90-day quarter-over-quarter decrease in time chartered-in LR1 days, and 64 more off-hire days during the current quarter.
Vessel expenses decreased by $8.0 million to $30.6 million in the first quarter of 2026 from $38.6 million in the first quarter of 2025. Such decrease principally reflects the net sales of the MRs referenced above. Charter hire expenses decreased by $3.1 million to $3.2 million in the current quarter from $6.3 million in the first quarter of 2025, primarily as a result of the decrease in time chartered-in LR1s noted above. Depreciation and amortization decreased by $0.4 million to $20.6 million in the current quarter from $21.0 million in the prior year’s quarter. Such decrease resulted primarily from the changes in the MR fleet described above, offset to a large extent by increased depreciation in the LR1 fleet. The increases in the LR1 fleet reflected the Company taking delivery of three dual-fuel ready LNG newbuild LR1s between September 2025 and March 2026, offset by the sale of two 2006-built LR1s in the third quarter of 2025.
Other Operating Income
Other operating income totaling $1.9 million during the first quarter of 2026 represents fees earned by the Company’s wholly owned subsidiaries – Tankers (UK) Agencies Limited (“TUKA”) and Tankers (UK) Suezmax Agencies Limited (“TUKSA”) for commercial management services rendered to vessel owners participating in the VLCC and Suezmax tanker pools operated by Tankers International Limited (“TIL”) and TISL, respectively. See Note 8, “Variable Interest Entities (“VIEs”),” to the accompanying condensed consolidated financial statements for additional information on consolidated and unconsolidated VIEs.
General and Administrative Expenses
During the first quarter of 2026, general and administrative expenses decreased by $3.9 million to $9.3 million from $13.2 million in the first quarter of 2025. The primary driver for the quarter-over-quarter decrease was a $5.8 million decrease in legal fees, which in part reflected the recovery of $4.8 million in damages awarded to the Company by an arbitration tribunal in England in connection with a commercial dispute that arose in 2023. See Note 16, “Contingencies,” to the accompanying condensed consolidated financial statements for additional information. Partially offsetting the decrease was an increase in compensation and benefits costs of $1.4 million, which was primarily driven by the consolidation of the operating expenses of TUKA and TUKSA. The costs incurred by TUKA and TUKSA are substantially recovered by the Company through pool management fees charged to TIL and TISL, as discussed in the “Other Operating Income” section above.
Other Operating Expenses
See Note 15, “Other Operating Expenses,” to the accompanying condensed consolidated financial statements for additional information on these expenses.
Other Income
Other income of $2.6 million and $1.8 million for the three months ended March 31, 2026 and 2025, respectively, is primarily comprised of interest income earned on invested cash. The quarter-over-quarter increase in interest income reflects the impact of a higher average balance of invested cash during the three months ended March 31, 2026.
34
The components of interest expense are as follows:
Interest before items shown below
10,532
12,589
Interest cost on defined benefit pension obligation
207
197
Impact of interest rate hedge derivatives
Capitalized interest
(1,305)
(738)
8,959
11,452
Interest expense decreased during the first quarter of 2026 compared to the first quarter of 2025 as a result of (i) a reduction in the average outstanding principal balance under the Company’s floating rate debt facilities, due to voluntary repayments of certain of such facilities, (ii) the repayment in full of the OCY Lease Financing in November 2025, and (iii) the decline of SOFR rates during the first quarter of 2026 compared to 2025. See Note 10, “Debt,” in the accompanying condensed consolidated financial statements for further information on the Company’s debt facilities.
Taxes
The Company believes it will qualify for an exemption from U.S. federal income taxes under Section 883 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and U.S. Treasury Department regulations for the 2026 calendar year, so long as less than 50 percent of the total value of the Company’s stock is held by one or more shareholders who own 5% or more of the Company’s stock for more than half of the days of 2026. There can be no assurance at this time that INSW will continue to qualify for the Section 883 exemption beyond calendar year 2026. Should the Company not qualify for the exemption in the future, INSW will be subject to U.S. federal income taxation of 4% of its U.S. source shipping income on a gross basis without the benefit of deductions. Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the U.S. will be considered to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the U.S. would be considered to be 100% derived from sources within the United States, but INSW does not and cannot engage in transportation that gives rise to such income, except pursuant to any applicable waiver given by the U.S. government.
All of the Company’s vessel-owning subsidiaries and certain intermediate holding company subsidiaries are domiciled in Bermuda. The Bermuda Corporate Income Tax Act (the “Bermuda CIT Act”) provides an exclusion for Qualifying International Shipping Income (as defined in the Bermuda CIT Act), provided that applicable economic substance requirements relating to strategic or commercial management in Bermuda are satisfied. In compliance with the Bermuda CIT Act and applicable economic substance requirements, the strategic management of the Company’s international shipping income-generating subsidiaries and their intermediate parent holding companies is carried out from Bermuda. Based on the foregoing, the Company currently expects that its international shipping income will qualify for the Qualifying International Shipping Income exclusion under the Bermuda CIT Act. Under current Bermuda tax law, including the Bermuda CIT Act, Bermuda does not impose withholding taxes on distributions from the Company’s Bermuda subsidiaries.
EBITDA and Adjusted EBITDA
EBITDA represents net income 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 are presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA and Adjusted EBITDA do not represent, and should not be considered a substitute for, net income or cash flows from operations determined in accordance with GAAP.
35
EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results reported under GAAP. Some of the limitations are:
While EBITDA and Adjusted EBITDA are frequently used by companies as a measure of operating results and performance, neither of those items as prepared by the Company is necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.
The following table reconciles net income, as reflected in the condensed consolidated statements of operations, to EBITDA and Adjusted EBITDA:
EBITDA
335,669
100,722
Adjusted EBITDA
243,579
90,701
Liquidity and Sources of Capital:
Our business is capital intensive. Our ability to successfully implement our strategy is dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business to meet near-term and long-term debt repayment obligations is dependent on maintaining sufficient liquidity.
Liquidity
As of March 31, 2026, we had total liquidity on a consolidated basis of $917.9 million comprised of $376.8 million of cash and short-term investments and $541.1 million of undrawn revolver capacity.
Working capital at March 31, 2026 and December 31, 2025 was $575.7 million and $268.2 million, respectively. Current assets are highly liquid, consisting principally of cash, interest-bearing deposits, and receivables. Current liabilities include current installments of long-term debt of $28.2 million and $25.8 million at March 31, 2026 and December 31, 2025, respectively.
The Company’s cash and cash equivalents increased by $24.9 million during the three months ended March 31, 2026. The increase principally reflects the net impact of (i) $141.1 million of cash provided by operating activities; (ii) $222.8 million of proceeds from the disposal of vessels and other assets; (iii) $42.6 million of borrowings under the ECA Credit Facility; (iv) $185 million in net cash invested in short-term investments; (v) $71.0 million in other expenditures for vessels, vessel improvements and other property, of which $69.4 million was construction in progress payments; (vi) $4.5 million cash consideration paid for the purchase of equity method investment, net of cash acquired; (vii) $106.4 million of cash dividends paid to shareholders; and (viii) $6.3 million in regularly scheduled principal amortization of the Company’s lease financing arrangements and ECA Credit Facility.
36
Our cash and cash equivalents balances generally exceed Federal Deposit Insurance Corporation insured limits. We place our cash and cash equivalents in what we believe to be credit-worthy financial institutions. In addition, certain of our money market accounts invest in U.S. Treasury securities or other obligations issued or guaranteed by the U.S. government or its agencies, floating rate and variable demand notes of U.S. and foreign corporations, commercial paper rated in the highest category by Moody’s Investor Services and Standard & Poor’s, certificates of deposit and time deposits, asset-backed securities, and repurchase agreements.
As of March 31, 2026, we had total debt outstanding of $602.1 million (net of deferred financing costs of $12.4 million) and net debt to capital of 9.3%, compared with 16.5% at December 31, 2025.
Sources, Uses and Management of Capital
Focused on our business strategy goals, during 2026 to date, we have continued to (i) make substantial returns to shareholders and (ii) use incremental liquidity generated from operations and the proceeds from disposal of older tonnage at strong prices to enhance our balance sheet and liquidity position as well as invest in renewing and growing our fleet.
In addition to future operating cash flows, our other future sources of funds are proceeds from issuances of equity securities, additional borrowings as permitted under our loan agreements and proceeds from the opportunistic sales of our vessels. Our current uses of funds are to fund working capital requirements, maintain the quality of our vessels, purchase vessels, pay newbuilding construction costs, comply with international shipping standards and environmental laws and regulations, repay or repurchase our outstanding loan facilities, pay a regular quarterly cash dividend, and from time to time, repurchase shares of our common stock and pay supplemental cash dividends.
The following is a summary of the significant capital allocation and strategic fleet optimization activities we executed so far during 2026 and sources of capital we have at our disposal for future use as well as the Company’s current commitments for future uses of capital:
Returns to Shareholders
Fleet Renewal and Growth
We executed the following fleet renewal and growth transactions:
37
As of March 31, 2026, the Company has contractual commitments for the construction of three dual-fuel ready LR1s and the purchase and installation of various performance efficiency devices for the fleet. The Company’s debt service commitments and aggregate purchase commitments for vessel construction and betterments as of March 31, 2026, are presented in the Aggregate Contractual Obligations Table below.
Outlook
Our strong balance sheet, as evidenced by a substantial level of liquidity, 25 unencumbered vessels as of March 31, 2026, and diversified financing sources with debt maturities spread out between 2030 and 2038, positions us to support our operations over the next twelve months as we continue to advance our vessel employment strategy, which seeks to achieve an optimal mix of spot (voyage charter) and long-term (time charter) charters. Our balance sheet strength and balanced fleet position us to continue pursuing our disciplined capital allocation strategy of fleet renewal, incremental debt reduction and returns to shareholders and pursue potential strategic opportunities that may arise within the diverse sectors in which we operate.
Aggregate Contractual Obligations
A summary of the Company’s long-term contractual obligations as of March 31, 2026 follows:
Beyond
$500 Million Revolving Credit Facility(1)
1,983
2,338
2,010
1,671
125
8,127
$160 Million Revolving Credit Facility(1)
669
811
730
161
2,371
ECA Credit Facility - floating rate(2)
8,322
11,830
11,581
11,281
10,995
119,717
173,726
2030 Bonds - fixed rate
8,906
17,812
17,813
267,813
330,156
BoComm Lease Financing - fixed rate(3)
17,902
23,761
23,827
23,762
142,272
231,524
Toshin Lease Financing - fixed rate(3)
1,620
2,151
2,223
2,052
2,829
12,927
Hyuga Lease Financing - fixed rate(3)
1,674
2,232
2,160
2,256
2,000
12,482
Kaiyo Lease Financing - fixed rate(3)
1,847
2,214
2,127
10,616
Kaisha Lease Financing - fixed rate(3)
1,663
2,287
10,592
Operating lease obligations(4)
Time Charter-in
Vessel and vessel betterment commitments(5)
122,049
168,537
66,691
65,926
64,405
431,004
127,148
923,711
38
Risk Management:
The Company is exposed to market risk from changes in interest rates, which could impact its results of operations and financial condition. The Company manages this exposure to market risk through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. To manage its interest rate risk exposure associated with changes in variable interest rate payments due on its credit facilities in a cost-effective manner, the Company, from time-to-time, enters into interest rate swap, collar or cap agreements, in which it agrees to exchange various combinations of fixed and variable interest rates based on agreed upon notional amounts or to receive payments if floating interest rates rise above a specified cap rate. The Company uses such derivative financial instruments as risk management tools and not for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of major financial institutions in order to manage exposure to nonperformance on such instruments by the counterparties.
At March 31, 2026, there have been no material changes in the information disclosed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Risk Management” and “— Interest Rate Sensitivity” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Available Information
The Company makes available free of charge through its internet website, www.intlseas.com, its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the Securities and Exchange Commission.
The SEC maintains a web site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at https://www.sec.gov.
The Company also makes available on its website, its corporate governance guidelines, its Code of Business Conduct and Ethics, insider trading policy, anti-bribery and corruption policy, incentive compensation recoupment policy, and charters of the Audit Committee, the Human Resources and Compensation Committee, Sustainability and Safety Committee and the Corporate Governance and Risk Assessment Committee of the Board of Directors. The Company is required to disclose any amendment to a provision of its Code of Business Conduct and Ethics. The Company intends to use its website as a method of disseminating this disclosure, as permitted by applicable SEC rules. Any such disclosure will be posted to the Company website within four business days following the date of any such amendment. Neither our website nor the information contained on that site, or connected to that site, is incorporated by reference into this Quarterly Report on Form 10-Q.
39
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s current disclosure controls and procedures were effective as of March 31, 2026 to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in the Company’s internal control over financial reporting during the three months ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
See Note 16, “Contingencies,” to the accompanying condensed consolidated financial statements for a description of the current legal proceedings, which is incorporated by reference in this Part II, Item 1.
Item 1A. Risk Factors
In addition to the other information set forth below in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our 2025 Form 10-K. The risks described in that document are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. The risk factor set forth below updates and should be read together with the risk factors in our 2025 Form 10-K:
Risks Related to Our Industry
International hostilities between Iran and the United States and Israel could adversely affect the tanker industry, which could adversely affect INSW’s business.
On February 28, 2026, the United States, Israel and Iran began to engage in active hostilities and military action in and around the Arabian Gulf (the “AG”). These operations have continued, damaging the energy infrastructure of the AG region. As of late April 2026, more than 30 merchant vessels had been attacked by Iran in the AG and the Strait of Hormuz (the entrance to the AG), Iran has declared a blockade (while allowing limited vessel passage under certain conditions) and may have mined portions of the AG and the U.S. has declared a blockade of Iran-linked shipping, with vessel traffic through the Strait decreasing by approximately 90-95%, compared with prior periods, largely resulting in a continued closure of the Strait as a practical matter. This is particularly significant to the tanker industry as industry estimates suggest that as much as 20% of oil consumed worldwide moves through the Strait of Hormuz and its closure has had a particularly significant effect on the VLCC tanker fleet. Despite declaration of a two-week ceasefire in early April 2026, which has informally been extended, limited attacks by all three nations have continued, passage currently remains disrupted, and more significant hostilities may resume. The Company has no vessels in the AG and none of these attacks, seizures or sinkings have to date involved the Company’s vessels. These developments have impacted the tanker industry more broadly, including through higher charter rates, increased operating costs (including in particular bunker costs and insurance
40
premiums) and market volatility, and have resulted in increases in the Company’s costs. To date, the hostilities have not had a material adverse effect on INSW’s operations, financial condition, results of operations or cash flow. The extent of any future impact will depend on how the situation develops, including the duration of any continued disruption in the Strait of Hormuz and its effect on global energy markets, including with respect to reduced inventory levels which could impact the tanker industry. No assurance can be given that these hostilities (and related consequences) will not have a material adverse effect on INSW’s business, financial condition, results of operations and cash flow in the future.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
No stock repurchases were made during the three months ended March 31, 2026 other than shares withheld to cover tax withholding liabilities relating to the vesting of outstanding restricted stock units or the exercise of stock options held by employees and certain members of management.
See Note 11, “Capital Stock and Stock Compensation,” to the accompanying condensed consolidated financial statements for additional information about the stock repurchase plan and a description of shares withheld to cover the cost of stock options exercised by certain members of management and tax withholding liabilities relating to the vesting of previously-granted equity awards to certain members of management, which is incorporated by reference in this Part II, Item 2.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Insider Trading Arrangements and Policies
During the first quarter of 2026, none of our directors or executive officers adopted Rule 10b5-1 trading plans and none of our directors or executive officers terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
41
Item 6. Exhibits
4.1
Second Amended and Restated Rights Agreement, dated as of April 9, 2026, between the Registrant and Computershare Trust Company, N.A., a federally chartered trust company, as Rights Agent, which includes the form of Right Certificate as Exhibit A and the Summary of Rights to Purchase Common Stock as Exhibit B (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated April 9, 2026 and incorporated herein by reference).
10.1
Joinder Agreement dated March 27, 2026 by Hendricks Tanker Company LLC to the $500 Million RCF among the Registrant, the Borrower, the other Guarantors from time to time party thereto, the Lenders from time to time party thereto, Nordea Bank Abp, New York Branch, as administrative agent for the lenders and as collateral agent and security trustee for the Secured Parties (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated March 31, 2026 and incorporated herein by reference).
*31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.
*31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.
*32
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
EX-101.INS
Inline XBRL Instance Document
EX-101.SCH
Inline XBRL Taxonomy Extension Schema
EX-101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
EX-101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
EX-101.LAB
Inline XBRL Taxonomy Extension Label Linkbase
EX-101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
EX-104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
42
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 thereunto duly authorized.
(Registrant)
Date: May 7, 2026
/s/ Lois K. Zabrocky
Lois K. Zabrocky
Chief Executive Officer
/s/ Jeffrey D. Pribor
Jeffrey D. Pribor
Chief Financial Officer