Thank you for standing by ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call for the Third Quarter 2019 Financial Results. We have with us Chairman of the Board; Mr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr. George Saroglou, Chief Operating Officer of the company.At this time all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I must advise you the conference is being recorded today.I’ll now pass the floor to Mr. Nicolas Bornozis, President of Capital Link, Investor Relations Adviser for Tsakos Energy Navigation. Please go ahead, sir.

Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis of Capital Link, Investor Relations Advisor to Tsakos Energy Navigation.This morning the company publicly released its financial results for the third quarter and the nine months period of 2019. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or e-mail us at ten@capitallink.com and we will have a copy for you e-mailed right away.Please note that parallel to today's conference call there is also a live audio and slide webcast, which can be accessed on the company's website on the front page at www.tenn.gr.The conference call will follow the presentation slides, so please we urge you to access the presentation slides on the company's website. Please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation are user controlled, and that means that by clicking on the proper button you can move to the next or to the previous slide on your own.At this time, I would like to read the Safe Harbor Statement. This conference call and slide presentation of the webcast contain certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which may affect TEN's business prospects and results of operations.And at this moment, at this time I would like to pass the floor to Mr. Nikolas Tsakos, President and Chief Executive Officer of Tsakos Energy Navigation. Please go ahead, sir.

Thank you, Nicolas, and good morning ladies and gentlemen. Again, it’s a pleasure to report the company’s growth, developments and results, and it’s even more a pleasure because we are able to finally do this is a much better, long term positive environment, I would say after a very long period of time.The nine – the year so far has been really a roller-coaster, started with a market that was positive and started giving us indications of things that were there to come. We've got a cold shower very quickly in the second and third quarter with the market dropping to significantly, and then of course we have goy this significant freight strengthening eruption that is gaining strength-to-strength day-to-day.So overall, an interesting year and TEN always has been for 26 years, now navigating harsh conditions, and always able to be successful through them. We took advantage of the harsh conditions of the second and third quarter to do our housekeeping, which means takeout ships preemptively out of service and prepare them for the change in legislations or for water ballast and of course 2020, and I think looking back it was a wise move. It has of course affected the third quarter results, but it has kept us profitable for the year and for sure, the fourth quarter we're going to be rewarded for these actions.In the meantime, we still grow the business. Our LNG footprint is growing. It's a business that we believe there is a future into it. However, we're not willing to sacrifice shareholders equity in participating in this market, accepting very low rates, and that's why we're very choosy when we look at these transactions; however, we have doubled our footprint in this at the right time when their value over those assets were at the…

Thank you, Nikolas, and good morning to you. We are very pleased to report a profitable nine months for 2019 operations as a result of a better freight market environment that started gradually improving since the end of the fourth quarter in 2018. Both long-term and short-term market fundamentals are favorable for tankers.We have a low order book, an aging fleet, growing of global oil demand and shorter term effect created by sanctions, geopolitical events, delays in retrofits, vessel storage ahead of the new IMO regulations, stronger to second-half 2019 demand for oil due to seasonality and return of refineries from longer maintenance than typical.This combination created from the end of September a freight market that initially broke records for the VLCC class before eventually trading down to the rest of the tanker [ph] asset classes. In this strong freight environment, TEN is well positioned to take advantage over the market's current upside, as today we have 36 vessels out of pro forma fleet of 70 that have their freight income related to the spot market.Next year with 23 vessels during 2020 up for re-charter in arising markets, the number of TEN vessels with revenue will be related to the spot market increases to 50 or about 75% of the pro forma fleets.In the last three years the company built 21 vessels and this number includes the option we have for one LNG carrier, mostly against long-term industrial business. TEN is in the final stages of the current expansion, undertaken at competitive levels during the lower levels of the cycle. 16 ships have already been successfully delivered, financed and employed on long-term accretive charters to first-class end users.During 2020 the remaining three vessels, all fully financed and chartered to major oil concerns for a minimum of five years will complete…

Yes, thank you George. Well, having enjoyed a strong first half, a weaker seasonal market followed in quarter three affecting all tanker companies. For the nine months TEN achieved a profit of $2 million, but in the quarter incurred a loss of $9.5 million. Thanks to our charter strategy, that was $5 million better than in the prior quarter three and we avoided the heavy losses suffered by those operators mainly in the spot market.We had five vessels in dry dock in quarter three as Nikolas has mentioned, mostly brought forward in preparation of 2020 and to take advantage of the slowing market; the fleet still achieving 93% utilization, 96% in the nine months.Quarter three revenue was up 4%, constrained by the market and dry dockings, but up 12% in the nine months due to the good half-year and accretive renewal of charter, notably for the LNG carriers.Operating income was over $58 million for the nine months and $12 million in quarter three, a six-fold improvement. Later in quarter three we saw strong rates had continued in quarter four and may even continue through 2020, which will let our vessels on spot and with profit share enjoys significant earnings.LETC per vessel in quarter three was $19,000 and $20,000 in the nine months, above average market rates, generating strong EBITDA of $47 million in quarter three, a 17% increase, and over $167 million in the nine months.Average daily OpEx per vessel remained at $7,600 and dry-dock costs being partly offset by a strengthening of the dollar, while other expenses were stable or fell from prior quarter three. However, finance costs increased by $4 million in quarter three, mainly relating to bunker hedges. But loan interest remains stable with increased interest rates offset by the impact, a $94 million reduction in outstanding debt since the prior quarter three and reduced margins.Net debt was reduced to $1.54 billion by the end of quarter three with net debt-to-capital at 48%, and is scheduled to be reduced further in quarter four. We believe that crude tanker spot market will remain strong through 2020 as George has mentioned, with product carriers also likely to do well. With 40 vessels on spot and profit share and with other tankers freeing up in the next months, we will benefit from what appears to be a sustainable recovery for the near future.We have four vessels on order; an Aframax, two Suezmaxes and an LNG carrier. The total cost is $380 million. $60 million has been paid to-date. $187 million will be paid in 2020 and $135 million in 2021. Most will be paid through bank finance, largely already arranged at competitive terms. And finally, we emphasize that we are a growth company with a long term vision, but also have an eye to selling our older vessels as opportunities arise, which is very possible in the current buoyant market.And now, I will hand the call back to Nikolas.

Thank you, Paul, and thank you George for looking at the presentation. As I said, about a year ago when Fearnleys came out with a report, I have to say, I was of the opinion that it's a typical Norwegian's – Norwegian's are usually never in doubt, but very often wrong. But I'm very, very happy to announce that this time to our own surprise, they have been very right. So I hope they would continue with this positive news.You will see in our presentation that Mike has expectations in there. We have positioned the company in order to be able to – to take advantage right now of this and we have been enjoying the fruits of our hard labor. I would say for the last, for the fourth quarter, I’m looking forward to continue in the first quarter and for the majority of 2020.What is also very important, which we very often do not talk is the reduction of debt, a significant reduction of debt, more than a $0.25 billion in the last two years on average. On top of that another $50 million of preferred repayment and still maintaining close to $180 million and hopefully more by the end of the years of cash ones we're paying a dividend. So I think we are preparing the company for hopefully finally a very exciting super cycle going forward, which we hope to be able to share also in our share price and our dividend yields.And with that, I would like to open the floor for any questions. Thank you.

Thank you. [Operator Instructions] We have our first question. Please go ahead, your line is open.

Hello! This is George Burman calling from Capital Large Securities [Ph]. How are you today?

Very well, thanks George.

Good. I got a couple of quick questions for you. How big is your profit share in the current season of your tankers. I understand that a lot of them are being renewed in the upcoming year, but what kind of profit sharing? Do you usually have 50/50 at a certain level or how exactly does that work

Yes, that's a good point. Although we do not want to spill all the beans in case any of our competitors are listening, but I think if you go to page – I would say in the presentation, which is page three of the presentation where we have – you see our time charter income and our expense income there in the column.

Yeah.

So you see what we try to do is cover all our expenses by the minimum, by the minimum rate on a profit share, and usually then go 50/50 above that. Many times we have been able to secure depending on the time of the negotiations, an additional $5,000, all coming to us based on the index and then 50/50. But, I would say on average it’s – I would say 55 plus 45 overall.

Okay. Next question, how many of these preferred series do you have outstanding and at what interest rates at this point time? I know you paid off completely one series earlier this year, right.

Yes, yes. I mean we have four; one is coming due in October of this year or next year 2020, which most probably again we will be repaying out of our cash and then we would be down to three, with an average that – with an average yield of issue yield of just under 9%.

Yeah. In today's environment and with your lower leverage as a company, I would consider that pretty high and being a company based in Europe, with interest rates currently at many times negative, it would seem to me that there would be opportunities for you to somehow refinance these prefer series, because if you take the dividends that you have to pay on top of your loss generated, the numbers don't look too strong and I think they are single handedly the reason for the somewhat very disappointing performance of your common shares. And I'm wondering if that is something that you might look at into the future.

I think George you are very correct, and we feel the same way. As I said, you have of course to look at the environment when we were, we had to raise the – we had to raise finance for our growth. As you know, in shipping in order to make a good return you have to be counter cyclical, which means that you have to go out, order and buy a ship at the time that no one wants to talk about tankers or ships at all. And of course that’s a time that you will have to be able to finance this growth at a higher rate.I agree with you, and that's why we have paid one. We are paying the next one in less than a year and in the meantime we are looking to refinance, at least to one or two of the remaining ones; although they are perpetuals, at much, much more on a competitive level. But if you go back to the, I would call it the dark ages of 2013 when those – when we were issuing our preferreds, we were using of course the proceeds to order ships that today have gone up to value by more than 30% or 40%. But I agree to your point.

And if you were to sell some of the older vessels at today's elevated prices due to the rates, you might be able to use the proceeds there also to reduce or buyback some of those preferred shares?

I agree, yes, and this is – we are in the process of perhaps announcing transactions even this side of the year.

Right. How many dry docks do you have scheduled for the fourth quarter and into next year?

We don't have any more for this year, as they finished.

As we said, we did a lot of priority ones in order to be able to take advantage of the fourth year and most of the - sorry, Paul.

And we are looking for in quarter one, two more, so I’ll do it by quarter. Quarter one we got two vessels scheduled; quarter two we have three vessels scheduled; quarter three looks like another difficult quarter, because we got four scheduled, and then one at the end of the year. But all this of course might change here in the course of the year when we might have to take advantage of the given situations.

Thank you. [Operator Instructions]. Thank you. Please go ahead, your line is open. Thank you.

Howdy gentlemen, it's Randy Giveans from Jefferies. How’s it going?

Hi

Hi Randy.

Hey! You mentioned the kind of outside exposure, obviously with current spot rates well above your profit-sharing splits, plus you have, I don't know, $177 million in cash on hand, your share price obviously trading at a pretty steep discount to NAV. So, kind of use of cash going forward with the expected kind of uplift here in the fourth quarter, looking at share repurchases, possibly increasing the dividend, what are your thoughts on those two options for returning capital to shareholders?

Yes. Well, as I said our first – increasing the dividend is our first priority. I mean we believe that's the best way to reward the existing shareholders who have stuck with us over long years. So this is something that will come up as you know with our results in the middle of March for the end of the year, and that's when we will be looking to hopefully significantly top up the existing dividend in this new era.So that would be – and the second one would be reduced, further reducing debt. We are putting aside money to purchase in October our 8.5 – 8 seven-eighths yield in preferred, which is due to be paid at the end of October, so I think - and at the same time, of course we are looking at opportunities.

Okay. And then what about your kind of quarter-to-date rate. Can you give any guidance on what you've booked now that we're kind of at the end of November?

I think if you say that the nine months were in the average 20, I think we might be able to you know – the average across the board for the fleet be in the high 20s or start with the three. That which is you know a significant – and if the market maintains, then with 23 ships coming up and within 2020, on top of the 27 purely spot vessels, I think you have a graph in there that shows you know we are looking, and I think a crude calculation we have is that for every thousand dollars increase of the spot market we get the $0.06 to the bottom line.

Got it, okay. And then I guess lastly, you mentioned there was still some interest in scrubbers outstanding by your charterers. Has that kind of increased or kind of remained the same in the past few months? And then any clarity or maybe details you can provide on the scrubber premiums you're getting, where the charters are increasing the daily charter rate.

Yes, I have seen I think for two reasons. We have seen actually charterers of existing vessels are reluctant to take ships out of the market in order to retrofit the scrubbers. Because of course if you are making $50,000, $60,000, $70,000 a day, you don't want to take a ship out for two months at that time, so that's one of the reasons.On the other side, which means that you have more, the more – the biggest the delay, the more time works, because the oil companies can provide 0.5. I think today you have a premium on every category of ship, on average of about 10% for scrubbers treated vessels. But really there is no, we have not seen any charter refusing to charter long term non-scrubber ships.

Got it! Alright, well hey, that’s it from me. Thank you so much for the time.

Thank you. [Operator Instructions] There are no more questions coming through on the line. I’ll now pass the floor back – just bear with me please, one second. No questions coming through on the line, sir.

Well, thank you very much. And again, looking to wish everybody a very, very happy, peaceful Thanksgiving coming up, and looking forward to end this quarter with very good results and looking for a very exciting 2020.Thanks to our shareholders that have stuck with us for all these years. Thank you for our technical managers, Tsakos Shipping and Trading, the crew on our ships. It's been a long period of ten years without a lot of significant positive news that seems to have turned and looking for a much more exciting 2020. We have prepared the company right now and we're ready to take advantage of it, almost than any other of our peer group out there.And with that again Happy Thanksgiving and thank you very much.

Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.