Hello, everyone. Thank you for attending today's International Seaways, Inc. Fourth Quarter 2025 Earnings Conference Call. My name is William, and I will be your moderator today. [Operator Instructions] At this time, I would now like to pass the conference over to our host, James Small, General Counsel with International Seaways. James, you may go ahead.

Thank you, and good morning, everyone. Welcome to International Seaways Earnings Call for the Fourth Quarter and Full Year 2025. Before we begin, I would like to start off by advising everyone with us today of the following. During this call and in the accompanying presentation, management may make forward-looking statements regarding the company or the industry in which it operates, which may address, without limitation, the following topics: outlooks for the crude tanker and product tanker markets; changing trading patterns, forecasts of world and regional economic activity; forecasts covering the production of and demand for oil and petroleum products; the effects of ongoing and threatened conflicts around the world, the company's strategy and business prospects, expectations about revenues and expenses, including vessel, charter hire and G&A expenses; estimated future bookings. TCE rates and capital expenditures, projected dry dock and off-hire days, newbuild vessel construction, vessel sales and purchases, anticipated financing transactions and plans to issue dividends, economic, regulatory and political developments in the United States and globally. The company's ability to achieve its financing and other objectives and its consideration of strategic alternatives and the company's relationships with its stakeholders. Forward-looking statements take into account assumptions made by management based on various factors, including management's experience and perception of historical trends, current conditions, expected and future developments and other factors that management believes are appropriate to consider in the circumstances. Forward-looking statements are subject to risks, uncertainties and assumptions, many of which are beyond the company's control that could cause actual results to differ materially from those implied or expressed by the statements. Factors, risks and uncertainties that could cause the company's actual results to differ from expectations include those described in our annual report on Form 10-K for 2025 as well as in other filings that we have made or in the future may make with the U.S. Securities and Exchange Commission. Now let me turn the call over to Lois Zabrocky, our President and Chief Executive Officer. Lois?

Thank you very much, James. Good morning, everyone. Thank you for joining International Seaways earnings call for the fourth quarter and full year of 2025. On Slide 4 of the presentation, which you can find in the Investor Relations section of our website, net income for the fourth quarter was $128 million or $2.56 per diluted share. Excluding special items, adjusted net income for the fourth quarter was $122 million or $2.45 per diluted share, and adjusted EBITDA was $175 million. Today, we also announced the declaration of our largest ever quarterly dividend, which is a combined $2.15 per share to be paid in March. After this payment, Seaways will have paid over $1 billion in returns to our shareholders since 2020, a milestone that we are very proud of. As you can see in the upper right section of the slide, the dividend represents a payout ratio of 87% of our fourth quarter adjusted net income and is our sixth consecutive quarter with a payout ratio of at least 75%. We continue to believe in building on our track record of returning to shareholders as part of our consistent and balanced capital allocation strategy. We also have our $50 million share repurchase program in place until the end of 2026 as share repurchases remain an option for Seaways as an addendum to our payout ratio. On the lower part of the page, we are consolidating Tankers International, the leading VLCC pool by acquiring the remaining 50% interest and expanding Tankers International with a Suezmax platform. We took delivery of the Seaways Gibbs Hill and she delivered into Tankers International at the end of December. We paid $119 million for this high-spec scrubber-fitted VLCC after disposing of 10 older vessels with an average age of 18 years for proceeds of…

Thanks, Lois, and good morning, everyone. On Slide 8, net income for the fourth quarter was approximately $128 million or $2.56 per diluted share. Excluding special items, our net income was $122 million or $2.45 per diluted share. On the upper right chart, adjusted EBITDA for the fourth quarter was $175 million. In the appendix, we provided a reconciliation from reported earnings to adjusted earnings. On the lower left chart, I would point out that our TCE Revenues from crude and product have been evenly balanced over the past year, but the crude segment outperformed products in Q4 with the return of VLCCs as the leader in tanker earnings. While our revenue and expenses were largely within expectations for the year, fourth quarter vessel expenses were higher than our guidance due to timing of stores and spares at year-end. Lightering business in the fourth quarter had around $7 million in revenue and expenses. Turning to our cash bridge on Slide 9. We began the quarter with total liquidity of $985 million, composed of $413 million in cash and $572 million in undrawn revolving capacity. Following along the chart from left to right on the cash bridge, we had $175 million in adjusted EBITDA for the fourth quarter, plus $19 million in debt service and another $23 million of dry dock and capital expenditures. We therefore achieved our definition of free cash flow of about $135 million for the fourth quarter. We received $36 million in proceeds from the sale of vessels in Q4, which offsets the remaining expense of $107 million for the purchase of the Seaways Gibbs Hill, a 2020-built VLCC which delivered in the fourth quarter. We also paid about $6 million in LR1 newbuilding installments net of financing. As previously announced, we repaid the sale leasebacks on…

Thank you so much, Jeff. On Slide 12, we have provided you with Seaways investment highlights, which we encourage you to read in its entirety, and I will summarize here briefly. Over the last 10 years, International Seaways has built a strong track record of returning cash to shareholders, maintaining a healthy balance sheet and growing the company. Our total shareholder returns represent over 25% compounded annual return. We continue to renew our fleet so that our average age is about 10 years old in what we see as a sweet spot for tanker investments and returns. We've invested in a range of asset classes to cast a wide net for growth opportunities and to supplement our scale in each class we operate in larger pools. We aim to keep our balance sheet fortified for any downturn in the cycle. We have over $550 million in undrawn credit capacity to support our growth. Our net debt is under 13% of the fleet's current value, and we have 31 vessels that are unencumbered. And lastly, our spot ships only need to earn collectively under $15,000 per day to breakeven in 2026. At this point in the cycle, we expect to continue generating cash that we will put to work to create value for the company and for our shareholders. Thank you very much. And with that said, operator, we would now like to open up the lines for questions.

[Operator Instructions] Our first question comes from the line of Liam Burke with B. Riley.

Lois, I had a question on your MR partial fixtures for the first quarter '26. Your prepared comments, you mentioned that the refinery margins are at 5-year averages, but it doesn't seem that compelling to warrant the type of TCE rates that you've got fixed for first quarter. Is there anything out there in the macro that's driving up those rates?

Well, geopolitically, of course, now EU is not going to import refined Russian product. And that had previously been allowed from India. And so there's definitely a period of adjustment here that benefits the MRs versus the bigger clean LRs that normally would do that move, right? So that helps us logistically. And then Derek Solon, our Chief Commercial Officer. Derek, maybe talk about diesel spikes or the winter?

Thanks, both. I guess I would say, firstly, your main geopolitical point seems to be one of the big drivers of the MR rates being as strong as they are. Like you said, it's less refined product coming in from India that came from Russian crude. So that was previously coming in on bigger product carriers. So that's the benefit of the MRs. And also when you see less refined products coming from Turkey, which was previously refined from Russian crude, that's all coming from Atlantic -- a lot of that's coming from Atlantic Basin. So that's U.S. Gulf exports back to Europe, which is really helping the MRs. And of course, we've had a pretty challenging winter here in the Northeast as many of the listeners will know. And so when you get these weather delays, you get a lot of ships being disutilized or stuck in ports. So that sort of exacerbated the supply issue, which has helped us.

Great. And then Lois, you have been pretty nimble moving from spot to time charters. It looks like that you're pretty comfortable that rates -- spot rates are going to be healthy for the foreseeable future.

Yes, absolutely. The spot market is just going from strength to strength. This is not to say that we wouldn't layer in some time charters as we just see these outsized numbers, but we're going to be judicious. We -- I mean, part of what we hope to value add is to remain open to -- when you see the high utilization and then the geopolitical laid on top of it, even though we can't control that, to remain open to the possibilities of this market, which has just continued to impress us.

Our next question comes from the line of Sherif Elmaghrabi with BTIG.

At this point, the VLCC fleet is looking pretty modern and you guys have refreshed a good chunk of your MRs. Just looking across your diversified fleet, there's still some older vessels maybe on the Suezmax side. Can we think about that as the next up on your renewal campaign? Or maybe more broadly, where are you seeing the most attractive opportunities right now?

Yes. I'll flip it over to you, Derek, in a second. But we would definitely say, of course, you see us taking the remaining 4 of our 6 LR1s. The first 2 are already operating in the fleet, and that was just incredibly well timed on that renewal, really critical sector for us. And you saw us bring in a modern VLCC right before the market went crazy here. We still like the lineup of the big ships. And while recognizing that right now, the market, as I said, is going from strength to strength. I don't know if you want to add anything to that, Derek, or if that cuts it.

No, Lois. Thank you. That's the same answer, I get.

And then one for Jeff. You guys took the opportunity to exercise some repurchase options and that's all good stuff that lowers your cost of debt. Can you remind us just if there are any other repurchase options coming up on your remaining sale-leaseback vessels?

We've got flexibility on all of the remaining debt that we have that's structured as leases. So we have complete flexibility. But a real theme of 2025 was that we put our balance sheet in a place where we want to be. So I don't see us exercising those options, which is essentially additional deleveraging beyond where we are today because we like where we are, and that allows us maximum flexibility to do things like we did, which was increase our dividend.

Our next question comes from the line of Omar Nokta with Clarksons Securities.

Just a couple of questions on the company specifically. Obviously, seeing as low as you were just talking about, we're seeing rates go from strength to strength. And typically, when VLCCs hit this $200,000 level, it's almost like the culmination of some short squeeze, but it feels like this is a bit stickier. Just wanted to ask in terms of the your current VLCC footprint. You have the 3 VLCCs on contract to Shell that are -- that do have a profit share element. Can you just remind us how that profit split works on those ships?

Absolutely. Derek, why don't you describe how that's rewarding INSW right now?

Okay, Omar. The profit shares that we have on the Shell VLCCs, we have a base rate that we've had since the beginning of the time charter. And then there's a market element that is added to that based on the spot market and the Baltic graph. And then from there, we split the profits above that base rate, 50-50 with our charterer. So in a market like this, it will be quite beneficial.

Okay. So there's no full upside, there's no cap at the top in terms of where the spot rate. There's no color, for instance, on that.

Great question, Omar. Thanks. But no, there's no cap on top.

Okay. And then maybe I know this is obviously a Board decision. You stepped up the dividend here to that 87% threshold. The past maybe 4 or 5 quarters, you were around that 75% level. Is this a new range for us to expect going forward, especially just given the earnings power and the liquidity and the overall leverage or low leverage you have? Is 87% something we should kind of think about as a new base level going forward?

Omar, I'll start on that one and let Jeff -- that's where he lives. But we're super excited. This is our highest dividend return to shareholders, and this follows 6 quarters of at least 75%. And that's a lot of that's testament to the balance sheet. And Jeff, do you want to add to that?

Sure. Thanks, Lois. Yes, Omar, the definition of a high-quality problem is how to keep dividend providing a really good yield when your stock price is going up steadily. So I'm -- we're super pleased to have this dividend, as we noted, the one that puts us over the top over $1 billion in dividends in total. That's number one. Again, we -- I think you know because we've talked about it a lot, we really focus on free cash flow, right? And what we looked at was, hey, as we said, the balance sheet is in good shape. We don't need to allocate more cash to deleveraging. We had the $30 million of LR1 payments that Lois mentioned in her remarks was what we needed for fleet renewal this quarter. So we were able to direct all the rest of the free cash flow to a dividend. And that sort of worked out to be 215 or 87%. Again, we focus first on cash, but we know we're always going to lean into increasing the dividend, and we know people want to know how that is as a payout ratio. So yes, it's the highest yet. It represents a over 12% yield on an annualized basis. We will -- it's part of the pattern. As I said, we'll lean into always being able to share as much as we can with the shareholders.

[Operator Instructions] Our next question comes from the line of Chris Robertson with Deutsche Bank.

Just in terms of the current market strength, what is your assessment around the impact that Sinokor Maritime has had on the VLCC segment in particular? And do you think that this impact is enduring or fleeting?

Yes. So we only like to opine about ourselves. But without a doubt, the -- I would call it a restructuring of the ownership base where always tanker owners are highly, highly fragmented. So the fact that you now have a major player consolidating legitimate VLCC tonnage is a true strength in our market. And that indeed, as we've combined Suezmax's now into Tankers International, that is -- offers owners also a footprint to keep that commercial exposure. And come into a position of strength. So we really are excited about what we're seeing there. It is a fundamental shift in the ownership base and again, in a highly, highly fragmented market. Right now, you've got over 150 VLCCs on the OFAC sanctions list, players that are not maintaining the ships that are trading rogue barrels and the fact that in that market that this owner has recognized, now is the time to gather legitimate unsanctioned tonnage and really take advantage of the marketplace. It's that staying power, and it's very, very strong leadership and exciting to all the VLCC owners.

Yes. Interesting, Lois. Just kind of building on that, given the impact that it has had and owners are seeing the impact, what are your thoughts around further consolidation in the industry, either on the crude side or the refined product side? Do you think we'll see more of it now that these benefits are pretty clear?

I think so. And I also would say that our customer base recognizes this. These are -- you see a shift from the charters, the customers into recognizing and making sure that they have access to tonnage. So this just provides more drive and demand for owners where I think when the market looks like it doesn't have as high a utilization, customers can be more relaxed. So you're seeing customers saying, "Hey, I need to make sure that I have access to vessels" And all of that structurally is super positive for tanker owners.

Thank you. At this time, I would now like to pass the conference back over to Lois for any closing remarks.

We just want to thank everyone for joining us, International Seaways for our Q4 and full year 2025, and we look forward to talking to you next quarter with strong tanker markets. Thank you.

Thank you. That will conclude today's conference call. Thank you for your participation. You may now disconnect your lines.