Thank you for standing by ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the First Quarter 2020 Financial Results. We have with us, Mr. Efstratios Arapoglou, 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 that this conference is being recorded today, Thursday, 11 of June 2020. And now, I'll pass the floor over Mr. Nicolas Bornozis, President of Capital Link, Investor Relations, Advisor of 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 first quarter of 2020. 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, T-E-N @capitallink.com and we will have a copy for you emailed 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 this 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 at this moment, I would like to pass the floor to Mr. Efstratios Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir.

Thank you, Nicolas. Good morning and good morning to all. I hope that you and yours are all well and staying safe and healthy. Citing Q1 results, once more delivering consistent justification of TEN operating model. As we've said many times in the past a model that provides stability of earnings at all times and flexible enough to capture all market opportunities as they arise. This coupled with best-in-class cost containment and an impeccable health and safety record, allows us to comfortably meet our obligation to reduce debt. And as you've seen, increase our originally declared dividend by 50%, all of this we believe is gradually beginning to be reflected in our stock price, which is, in any case, expected to benefit from our announced reverse split, as it will make our shares, we hope more attractive to a much broader professional investor audience. Once again congratulations by all to Nikolas Tsakos and his team. We wish them continuation of the good market and greater success for the rest of the year. Thank you and over to you, Nikolas.

Thank you, Chairman and good morning to all of you. It is really very nice and I think to be able to be in touch with you again after 10 weeks where we have our last – our last earnings call. I think a lot has gone on there since then. A lot of or lots of experience unprecedented periods and many of us have had a lot of, I would say pain within the family due to COVID virus. We had our last meeting –last discussion on March 24th and at that time, I think we were in the beginning of a very uphill battle as far as personnel issues. But for us other than the personnel issues, very important has been the safety of the 2,000 seafarers on board, the ships all over the world that has to admit there has made our -- made all us greyer and wiser this -- less than 10 weeks. But we are happy to announce, not only that we were able to operate in this unprecedented time with 97% efficiency, but also not to have an -- award because it can happen at any means, as in the case of the virus – of the virus in any of our vessels. So, I think with that in mind, we not only we had a very profitable quarter but more importantly a healthy and safe quarter for all. And I think going forward, we believe that TEN has enable to navigate since the 28 years, we've been on the public markets for very significant extraordinary crisis, not the crisis coming out of shipping really. But I mean, we started -- we differed crisis of the older crowd around would remember between 1996 or 1997. And that was old. I would say this…

Thank you very much, Nikolas, and good morning to you all. 2020 has so far been a year for the history books. What started in China, as a local health problem ended up gradually spreading around the world, creating a global pandemic of unprecedented proportions, which almost put the whole world to a complete standstill, as a result of government mandates its lockdowns, social distancing measures, to contain the spread of the virus. In this global health crisis, our first priority was the health, safety and well-being of our families, our office personnel and the crude border vessels, of equal importance was to make sure that there was no business disruption, failure, or downtime as a result of working remotely. The lockdown and the difficulties global containment measures imposed on shipping. Both onshore and offshore personnel adapted quickly and successfully to the new reality, a big thank you to everybody. And while life, the economy and the world is opening again, let's be on guard until COVID-19 poses no longer any threat to anybody. We are pleased to report today a very strong and profitable first quarter. One of the best quarters for TEN as a result of favorable market conditions, low oil price environment, super contango with record land and floating storage of sea and limited new supply of tonnage, despite the unprecedented demand destruction from the global lockdown. There is a spillover effect of the strong rates into the second quarter. We are not currently at the headline record breaking rate levels, which are not sustainable, but the trade environment in the medium to long-term outlook continues to be very positive. Let's go to the slides of our presentation. In Slide 3, we see that since TEN's instruction 1993, as our CEO mentioned, we have faced four major…

Thank you, George. So we've had a strong quarter one, ending with significant cash reserves, mainly due to voyage revenues of $180 million helped by full employment and with only one dry docking. This was 22% higher than in the prior quarter one, and led to a doubling of operating income to $55 million and of net income to $21 million, after non-cash bunker hedge losses, and including a $1.6 million gain from the sale of the Suezmax C&T [ph]. Broken down, we had 46 tankers on pure time charter earning revenue of $80 million of these 16 vessels had profit share arrangement that provided a further $20 million. The two LNG carriers, enjoying increased rates together earn $10 million, also 17 vessels from aframax’s, LR2, handysize operated in the spot market earning $70 million. EBITDA amounted to $90 million, a 40% increase over the prior quarter one. In addition, free cash from vessel sales totaled $27 million. Operating expenses increased 4%, mainly due to loading of extra provisions and supplies, in light of the spreading pandemic, but daily average OPECs per vessel remained at $7,900 a day. The sale and leaseback of two Suezmaxes resulted in increased charter-in costs by $2.5 million, but much of this is offset by interest saved by repayment of the related loans. G&A costs increased $1 million, partly due to one-off professional fees. Otherwise, daily average G&A costs remained low, with no increase in management fees for many years. Falling oil prices led finance costs to rise to $33.6 million, of which non-cash negative bunker hedge valuations totaled $16 million. These are already reversing as oil markets rebalance. Actual loan interest fell by nearly $5 million due to reduced debt and lower interest rates. Vessel sales led to prepayments of $37.5 million related debt, and we also paid $50 million scheduled repayments in quarter one, reducing outstanding debt to $1.49 billion. For our two Suezmaxes being built, we will pay about $90 million for delivery by year end, mostly from arranged loans and for the LNG carrier $36 million by year end and $135 million next year. Indications are that quarter two will be a strong quarter, and as such, we have secured a number of our vessels on charters at attractive rates, as Nikolas mentioned, that has put us in a stronger position, but even in a weakening market, we will generate a healthy cash flow to meet all our obligations. However, we actually believe that the market will remain strong due to positive underlying fundamentals, plus the possible demand rebound as lockdown features fade. And now, I'll hand the call back to Nikolas.

Thank you, Paul. And keep on bringing us good news.

Will do.

That’s very good. And I think, with this, we would like to open the floor for any questions that you might have. Thank you very much.

Thank you. And your first question comes to the line of Ben Nolan with Stifel.

Yes. Hi. Good morning, guys. So I have a couple things. First of all, Nikolas, we’re fully appreciating the deal is not done, but you did allude to some things that you're working on. Could you maybe just characterize the kind of things that you're currently pursuing? I mean, are we talking about newbuilds with long-term contracts that we’ve seen -- as we’ve seen you’ve done before, or maybe the segment? Just a little bit more color as to sort of where your head's at with respect to opportunities?

Yes. So, I mean, you're going to spoil the surprise. Mr. Saroglou was already drafting a surprise press release for next month. Yes, I mean, similar to our strategy of long employments in specialized types of business, we are in close negotiations for up to three units that will have, of course, significant accretive double-digit locked-in returns. So, I think this is -- as you said directly, it is our strategy will always after your clients request and not really speculative it is in our business.

Okay, so, we do another question and I believe that the LNG carrier that’s on order does not have a contract through, what you're thinking about that appreciating that there's a little time before now and then, but obviously, that's a very expensive shift and getting employment on it, I'm sure is top of mind as a respect to your strategy?

I think this is a very good moment in other companies. We as a company have the luxury because we are -- if you look on slide four of our presentation, out of a 69 vessels, we have a very diversified fleet. So, we are actually -- we are looking at same business, but makes sense in oil and gas transportation. So, although we have been one of the first movers in gas, we were the first vessel, the very good -- back in 2004. We have never -- and I think, so far we have nothing to regretted it. We have not been convinced that these markets really -- because of all the infrastructure, demand behind it would skyrocket as our good brokers were trying to convince us when they were bringing a clutch of new building contracts for us to sign. But as we believe gas is an important integral part of our business and being a diversified company, we want to follow the developments, having one vessel with another option for the fourth quarter is something that, that even if that market does not grow as expectations, it will not -- we would not fill it in our 69 vessel fleet. So, in the sense, we are continuing to follow developments. We have one vessel very good performer of steam turbine. We followed with a dry fuel technology; this is one of our best earnings today, the marine energy. She's earning I think something like $75,000 a day for the next couple of years. So, I think that's a very accretive to our bottom-line. And then we have the new vessel unnamed -- still unnamed, but is for delivering in January 2022. So, I think, there is lot of time until then to play the market -- see the market -- there are people out there, but our offering as business for the shipper, it's nothing that will hear it one way or the other, the company, but it is our obligation and the [indiscernible] way to follow the development in that market.

Okay, that's helpful. And then lastly from me and I'll turn it over. From a capital allocation strategy, you guys are doing a lot of things. There's a little bit of a dividend increase. You're buying back preferred, you're -- it sounds like you're in the market to go spend for growth. Can you maybe just rank order what you're thinking about -- especially given you're optimistic for the future, but I think anybody would say it's still a little bit of an unknown. How are you balancing safety versus growth opportunities and where are the best places for your dollars?

Saroglou?

I think in the pecking order, repaying the expenses perhaps come first and then we can, as Nicolas said, investing in ships, it's a question of market and demand and prices. So, you can not drive that. This is always a priority, top priority. But in terms -- we have enough perhaps to repay before we find something else to do. Let’s put it this way.

Okay. All right. Very helpful. Appreciate it. Thank you.

Thank you.

Your next question comes from Randy Giveans with Jefferies. Randy, your line is open.

Howdy gentlemen? How is it going?

Hi, Randy, very well. Thank you. Latest Q4 is slow now this year.

I know, I know. Hopeful, nice buildup. Question around the profit sharing is, with the -- what was the amount there for the first quarter and was that a record? And then, just kind of the guidance for the second quarter, I know rates were reached on, especially in the product tankers in April and are just falling since then. Just to, again, may be give a little more commentary on the market as of today and where it is?

No, I think, the market -- yes, the market was very strong in the first quarter, and we had at least $20 million additional revenue from the profit sharing and this is 10%, this is significant. And, of course, the market has been very strong also until now. So, it is expected to have this continuation of the profit sharing, adding to the bottom-line as long as the market stays at these levels. Okay?

Yeah. And then I would say, in terms of the second quarter, are you expecting kind of something similar to that $20 million or a little more, a little less?

I think what we're expecting is perhaps might be similar and we might see a bit high revenues from the fixed vessels, because the fixed five ships going forward. So I think that's about -- could be the -- a similar profit sharing and then, hopefully, a little bit more from the spot vessels -- sorry, for the fixed vessels.

Got it. Okay. And then turning to the dividends, I guess, two questions around that. What would be kind of thinking about raising it by the $0.025, instead of keeping it flat or instead of doubling it, or whatever? So how did you kind of get to that $0.075 for the quarter? And then secondly, looking at the chart on slide seven, it seems like in 2017, there were four quarterly payments of $0.05 a share for $17 million, 2018 it was three payments of $0.05 a share for $13 million, 2019 there was two payments of $0.05 a share for $9 million. So is the dividend now semiannually or how should we think about that?

Well, yes. The dividend as gone semi-annual from 2018, that's why I think the – that's why you’ve seen 2018 the – the missing one quarterly payment. And then we have the semi-annual payments going forward. So the payment is…

Got it. Okay.

June and December.

Okay. And then just the…

That’s the calculation of the special dividends, it's not rocket science. We felt that because of a good market, our investors should be rewarded a bit more. And this is a one-off. Our base dividend continues to be; in our minds, $0.05 per share twice a year. And going forward, we'll see how the market develops and act accordingly.

Got it. And then last question on the reverse split, kind of same question around methodology, you think they are for 1 to 5 instead of a smaller or larger number, if you could get in that low double digit range?

Well, what do we try to do is find a figure that would not – would not completely dry up liquidity in the sense of how many shares that would be outstanding because if we have done 1 to10, we will be a 10 million shares outstanding would be a very small amount. So we decided to, with a 1 to 5 is a good platform. We'll be having the share at the $3 it will be higher than we started some time ago.

Got it. All right. Well, that's it for me. Thanks again. You all stay safe.

Your next question comes from J. Mintzmyer with Value Investor's Edge.

Good afternoon, gentlemen. Thanks for taking the questions.

Thank you.

So, first question I had is, it sounded like the first LNG carrier has been moved to January, 2020, just confirming – or 2022 just confirming that one? And then second, I know you have option for a second LNG carrier. What's the timeline on which you'd have to exercise that option or cancel that?

Well, I think it's within the third quarter. But of course the yards today, as you might know, I'm sure you have, because you follow things very closely there starve for orders and they are – they are willing to give more optionality as we say so.

Okay. Looking for the third quarter, maybe the ability to push that back and then of course, are you confirming January…

Yeah. I think – a decision by the end of the year.

Okay. We'll look for more color on that. And what was the – what was the agreed upon price for that option? That second one.

It is similar to the price we have for the – for the existing ship, but depending on market conditions, we might, if we decide to take it we might get a discount.

Okay. We'll have to continue to watch that. In terms of the remaining new builds, you have three more left, the two tankers and the LNG carrier. Can you remind us of the remaining CapEx and the timeline for those payments?

Paul – Paul, whether on the CapEx or the remaining CapEx?

Right. So as far as the two Aframaxes are concerned, take upon the Suezmaxes, I would have been, are going to be delivered towards the end of the year. We are looking at another $90 million or so that we have to pay. For the LNG carrier, we have about $36 million remaining this year, but another $135 million next year up until actual delivery.

Thank you for that. I'm tracking $90 million for the tankers and about $170 million for the LNG carriers. And then on your repurchase authorization, you started a $50 million program last quarter. It looks like in the press release, I didn't see any indications that you used that though, is that correct? No repurchases yet? And then secondly, I think there is a little bit of discussion earlier on this, but can you confirm your priority on that? Is that mainly for preferred or are you also considering repurchasing common at this time.

It’s mainly for preferred, but -- and, we have $50 million press [ph] that we intent to buy back as part in the first quarter, and of course, all for common shares as well. But the priority -- the first priority is on press.

And is that $50 million of authorization is that in excess of the $50 million that you have reserved for the Series C?

It’s in combination.

And a final question for you. I know you mentioned at the start of the call that you're looking into refinancing transactions. But prior to those, so just currently, as it stands, can you remind us of the amortization curve for 2020, and then the repayments for 2021 and 2022 as well?

For scheduled repayments for the whole year 2020 are about $130 million and in 2021 we're looking at about $160 million and 2022 $150 million, 2023 about $130 million. It will, of course, be balance that we usually assume that the balance will be refinanced.

That one makes sense. Thanks for your time today and thanks for taking the questions.

Thank you.

Thank you.

[Operator instructions]

I don’t think we have any more questions?

Thank you. And I’ll turn the call back over to Mr. Tsakos.

Thank you. Thank you very much. And again, we certainly would like to thank all of you. The last 10 weeks, since we last spoke, have been really life-changing for many of us. And for sure, our main target has been to make sure that the safety of our shippers around the world has been the most important case. And so far, we have been efficient and supportive of this and we could not achieve that with the help of the whole organization in the dark hours of the lockdown which we still experience in a much smaller fragment. So it's been a very interesting 10 weeks, since we spoke on March 24. The news that we are reporting today are very positive news but the most positive part of our news has been the safeguarding and the health and the safety of our shippers all over the world around our vessels. I swapped out the prospects for the market that TEN is a company that has gone through four crises in the past. Four crisis that are extraordinary to shipping, are not shipping crisis. We have quite a few of those in between. But we started with Far East crisis where the company came out stronger. Then we had 9/11 with two or three years of almost significant reduction of global trade because of the war. Again the company took the opportunity to come up out of it stronger. Then in 2009, the financial crises which really until 2019, we were still absorbing the over bill of that period. And as soon as we started enjoying a good market in 2019, the COVID crises, but again, with the help of everybody, the company, we believe is coming out stronger from that period. The fundamentals in front ahead of us…

So thank you all for joining us. Let's wish Nikolas and his team a successful quarter, the second quarter. And let's hope that the market continues to be buoyant, as it is, as it has been. And I am sure we will be able to announce to you equally good results next time. Thank you all. Stay safe.

Thank you for your participation. This concludes today's conference call. You may now disconnect.