Exhibit 99.1

Diamond S Shipping Inc.
and Subsidiaries

Unaudited Condensed Consolidated Financial Statements
as of June 30, 2021 and December 31, 2020
and for the Three and Six Months Ended
June 30, 2021 and 2020

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
as of June 30, 2021 and December 31, 2020

(In Thousands, except for share and per share data)

(Unaudited)

	June 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	95,289		$	98,059
Due from charterers – Net of provision for doubtful accounts of $1,780 and $1,577, respectively		45,217			39,141
Inventories		23,667			17,457
Vessels held for sale		—			45,351
Prepaid expenses and other current assets		9,509			7,737
Restricted cash		6,392			6,140
Total current assets		180,074			213,885

Noncurrent assets:
Vessels – Net of accumulated depreciation of $700,159 and $650,259, respectively		1,654,035			1,702,749
Other property – Net of accumulated depreciation of $1,014 and $886, respectively		234			359
Deferred drydocking costs – Net of accumulated amortization of $33,362 and $27,343, respectively		29,368			32,391
Advances to Norient pool		8,205			8,001
Time charter contracts acquired – Net of accumulated amortization of $5,654 and $4,686, respectively		1,246			2,214
Derivative asset		369			—
Other noncurrent assets		5,116			2,244
Total noncurrent assets		1,698,573			1,747,958
Total assets	$	1,878,647		$	1,961,843

Liabilities and Equity
Current liabilities:
Current portion of long-term debt – Net of deferred financing costs of $101 and $0, respectively	$	168,725		$	196,325
Accounts payable and accrued expenses		29,868			25,817
Deferred charter hire revenue		1,575			3,051
Derivative liability		552			580
Total current liabilities		200,720			225,773

Long-term debt – Net of deferred financing costs of $10,640 and $12,531, respectively		499,156			506,065
Derivative liability		—			569
Total liabilities		699,876			732,407

Commitments and contingencies (Note 15)

Equity:
Common stock, par value $0.001; 100,000,000 shares authorized; issued and outstanding 40,181,305 and 39,968,323 shares at June 30, 2021 and December 31, 2020, respectively		40			40
Treasury stock – at cost; 137,289 shares at June 30, 2021 and December 31, 2020		(1,418	)		(1,418	)
Additional paid-in capital		1,243,637			1,241,822
Accumulated other comprehensive loss		(182	)		(1,149	)
Accumulated deficit		(99,945	)		(45,250	)
Total Diamond S Shipping Inc. equity		1,142,132			1,194,045
Noncontrolling interests		36,639			35,391
Total equity		1,178,771			1,229,436
Total liabilities and equity	$	1,878,647		$	1,961,843

See notes to condensed consolidated financial statements.

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
for the Three and Six Months Ended June 30, 2021 and 2020

(In Thousands)
(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021			2020			2021			2020
Revenue:
Spot revenue	$	53,288		$	162,419		$	102,089		$	350,071
Time charter revenue		13,824			20,815			28,675			42,888
Pool revenue		29,459			319			53,527			319
Voyage revenue		96,571			183,553			184,291			393,278

Operating expenses:
Voyage expenses		36,760			49,349			69,810			124,030
Vessel expenses		38,898			41,738			80,860			83,274
Depreciation and amortization expense		28,019			28,771			56,070			57,531
General and administrative expenses		6,522			7,485			13,040			15,609
Other corporate expenses		393			—			5,173			—
Total operating expenses		110,592			127,343			224,953			280,444
Operating (loss) income		(14,021	)		56,210			(40,662	)		112,834
Other (expense) income:
Interest expense		(5,979	)		(9,711	)		(12,150	)		(21,087	)
Other income		—			3			2			336
Total other expense – Net		(5,979	)		(9,708	)		(12,148	)		(20,751	)
Net (loss) income		(20,000	)		46,502			(52,810	)		92,083
Less: Net income attributable to noncontrolling interest		1,053			790			1,885			1,327
Net (loss) income attributable to Diamond S Shipping Inc.	$	(21,053	)	$	45,712		$	(54,695	)	$	90,756

Net (loss) income per share – basic	$	(0.53	)	$	1.15		$	(1.37	)	$	2.28
Net (loss) income per share – diluted	$	(0.53	)	$	1.14		$	(1.37	)	$	2.26

Weighted average common shares outstanding – basic		40,074,727			39,920,559			40,074,821			39,861,943
Weighted average common shares outstanding – diluted		40,074,727			40,111,348			40,074,821			40,091,647

See notes to condensed consolidated financial statements.

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive (Loss) Income
for the Three and Six Months Ended June 30, 2021 and 2020
(In Thousands)

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021			2020			2021			2020
Net (loss) income	$	(20,000	)	$	46,502		$	(52,810	)	$	92,083
Unrealized loss on cash flow hedges		(96	)		(896	)		(182	)		(896	)
Other comprehensive loss		(96	)		(896	)		(182	)		(896	)
Comprehensive (loss) income		(20,096	)		45,606			(52,992	)		91,187
Less: comprehensive income attributable to noncontrolling interest		1,053			790			1,885			1,327
Comprehensive (loss) income attributable to Diamond S Shipping Inc.	$	(21,149	)	$	44,816		$	(54,877	)	$	89,860

See notes to condensed consolidated financial statements.

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity
for the Six Months Ended June 30, 2021 and 2020
(In Thousands)

(Unaudited)

	Common Stock		Treasury Stock			Additional Paid- in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Noncontrolling Interests			Total
Balance – January 1, 2021	$	40	$	(1,418	)	$	1,241,822		$	(1,149	)	$	(45,250	)	$	35,391		$	1,229,436
Stock-based compensation		—		—			1,086			—			—			—			1,086
NT Suez Holdco LLC distribution		—		—			—			—			—			(637	)		(637	)
Unrealized gain on cash flow hedges		—		—			—			1,063			—			—			1,063
Net (loss) income		—		—			—			—			(33,642	)		832			(32,810	)
Balance – March 31, 2021		40		(1,418	)		1,242,908			(86	)		(78,892	)		35,586			1,198,138
Stock-based compensation		—		—			1,107			—			—			—			1,107
Unrealized loss on cash flow hedges		—		—			—			(96	)		—			—			(96	)
Equity awards net settled to cover employee withholding taxes		—		—			(378	)					—			—			(378	)
Net (loss) income		—		—			—			—			(21,053	)		1,053			(20,000	)
Balance – June 30, 2021	$	40	$	(1,418	)	$	1,243,637		$	(182	)	$	(99,945	)	$	36,639		$	1,178,771

	Common Stock		Treasury Stock			Additional Paid- in Capital			Accumulated Other Comprehensive Loss			(Accumulated Deficit) Retained Earnings			Noncontrolling Interests			Total
Balance – January 1, 2020	$	40	$	—		$	1,237,658		$	—		$	(68,567	)	$	34,811		$	1,203,942
Stock-based compensation		—		—			1,334			—			—			—			1,334
NT Suez Holdco LLC distribution		—		—			—			—			—			(1,568	)		(1,568	)
Shares repurchased		—		(1,418	)		—			—			—			—			(1,418	)
Net income		—		—			—			—			45,044			537			45,581
Balance – March 31, 2020		40		(1,418	)		1,238,992			—			(23,523	)		33,780			1,247,871
Stock-based compensation		—		—			1,109			—			—			—			1,109
NT Suez Holdco LLC distribution		—		—			—			—			—			(343	)		(343	)
Unrealized loss on cash flow hedges		—		—			—			(896	)		—			—			(896	)
Equity awards net settled to cover employee withholding taxes		—		—			(693	)					—			—			(693	)
Net income		—		—			—			—			45,712			790			46,502
Balance – June 30, 2020	$	40	$	(1,418	)	$	1,239,408		$	(896	)	$	22,189		$	34,227		$	1,293,550

See notes to condensed consolidated financial statements.

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 2021 and 2021
(In Thousands)

(Unaudited)

	For the Six Months Ended June 30,
	2021			2020
Cash flows from Operating Activities:
Net (loss) income	$	(52,810	)	$	92,083
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization expense		56,070			57,531
Amortization of deferred financing costs		1,790			1,771
Amortization of time charter hire contracts acquired		968			1,518
Stock-based compensation expense		2,194			2,443
Changes in assets and liabilities		(13,584	)		6,802
Cash paid for drydocking		(2,337	)		(3,014	)
Net cash (used in) provided by operating activities		(7,709	)		159,134

Cash flows from Investing Activities:
Proceeds from sale of vessels		46,240			—
Payments for vessel additions and other property		(3,734	)		(7,481	)
Net cash provided by (used in) investing activities		42,506			(7,481	)

Cash flows from Financing Activities:
Principal payments on long-term debt		(89,299	)		(67,195	)
Borrowings on revolving credit facilities		53,000			—
Repayments on revolving credit facilities		—			(45,000	)
NT Suez Holdco LLC distribution		(637	)		(1,911	)
Shares repurchased		—			(1,418	)
Cash paid to net settle employee withholding taxes on equity awards		(379	)		(693	)
Payments for deferred financing costs		—			(584	)
Net cash used in financing activities		(37,315	)		(116,801	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(2,518	)		34,852
Cash, cash equivalents and restricted cash – Beginning of period		104,199			89,219
Cash, cash equivalents and restricted cash – End of period	$	101,681		$	124,071

Supplemental disclosures:
Cash paid for interest	$	9,965		$	20,036
Unpaid vessel additions in Accounts payable and accrued expenses at the end of the period	$	533		$	—

See notes to condensed consolidated financial statements.

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

(In Thousands, except for share and per share data)

Notes to Condensed Consolidated Financial Statements
(Unaudited)

BUSINESS AND BASIS OF PRESENTATION

Business — Diamond S Shipping Inc. (“DSSI” or the “Company”) is a seaborne transporter of crude oil and refined petroleum products, operating in the international shipping industry. As of June 30, 2021, through its wholly owned subsidiaries, the Company owns and operates 62 tanker vessels: 11 Suezmax crude carriers, one Aframax crude carrier and 50 medium range (“MR”) product carriers. The Company also controls and operates two Suezmax vessels through a joint venture (Refer to Note 3 — Joint Venture Investments).

Merger Transaction — On March 30, 2021, the Company, International Seaways, Inc. (“INSW”), and Dispatch Transaction Sub, Inc., a wholly owned subsidiary of INSW (“Merger Sub”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will, upon the terms and subject to the conditions set for in the Merger Agreement, merge with and into DSSI in a stock-for-stock transaction (the “Merger Transaction”). After the Merger, DSSI will continue as the surviving corporation that will be a wholly owned subsidiary of INSW.

On July 16, 2021 (the “Effective Time”), the Merger Transaction was effected whereby the Company became a wholly owned subsidiary of INSW and each common share of the Company (the “Diamond S Common Shares”) issued and outstanding immediately prior to the Effective Time was converted into the right to receive 0.55375 of a share of common stock of INSW (“INSW Common Stock”). The aforementioned 0.55375 exchange ratio set forth in the Merger Agreement resulted in INSW shareholders owning approximately 55.75% of the outstanding shares of INSW Common Stock following the Effective Time and the Company’s shareholders owning approximately 44.25% of the outstanding shares of INSW Common Stock following the Effective Time.

In connection with the Merger Transaction, lenders under the Company’s existing credit facilities agreed, among other things, to consent to the Merger Transaction and waive any event of default that would arise as a result of the Merger Transaction. Lenders under two of the Company’s existing credit facilities entered into amended and restated facility agreements (the “A&R Debt Agreements) (Refer to Note 8 — Long-Term Debt) as of the Effective Time. In addition, INSW has agreed to become a credit party to the A&R Debt Agreements and has guaranteed the Company’s obligations under the A&R Debt Agreements upon their effectiveness.

Summary of SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation — The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which includes the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation — The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2020 and notes thereto included in the Company’s annual report on Form 10-K. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2021.

Prior to the Merger Transaction, the Company was an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, during this time period, the Company was eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company was able to take advantage of the benefits of this extended transition period for as long as it was available. The Company’s condensed consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Section 107 of the JOBS Act provides that the decision not to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Cash and Cash Equivalents, and Restricted Cash — The following table provides a reconciliation of Cash and cash equivalents and Restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the condensed consolidated statements of cash flows:

	June 30, 2021		December 31, 2020		June 30, 2020		December 31, 2019
Cash and cash equivalents	$	95,289	$	98,059	$	118,392	$	83,609
Restricted cash		6,392		6,140		5,679		5,610
Total Cash and cash equivalents, and Restricted cash shown in the condensed consolidated statements of cash flows	$	101,681	$	104,199	$	124,071	$	89,219

Amounts included in restricted cash represent those required to be set aside by the $66 Million Facility, as defined in Note 8 below. The restriction will lapse when the related long-term debt is retired.

Revenue and Voyage Expense Recognition — Total revenue includes revenue earned on fixed rate time charters, spot market voyage charters, spot market-related time charters and pools. Pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” which was adopted as of January 1, 2019, revenue for spot market voyage charters is recognized ratably over the total transit time of each voyage, which commences at the time the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port.

As a result of the adoption of the new revenue recognition guidance on January 1, 2019, the Company recorded a net increase to the opening accumulated deficit of $2,784 for the cumulative impact of adopting the new guidance. The impact related primarily to the change in accounting for spot market voyage charters. Prior to the adoption of the new guidance, revenue for spot market voyage charters was recognized ratably over the total transit time of the voyage, which previously commenced at the later of when the vessel departed from its last discharge port or when an agreement was entered into with the charterer, and ended at the time the discharge of cargo was completed at the discharge port. As a result of the adoption of the new guidance, revenue for spot market voyage charters is now being recognized ratably over the total transit time of the voyage which now begins when the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port. Additionally, the Company has identified that the contract fulfillment costs of spot market voyage charters consist primarily of the fuel consumption that is incurred by the Company from the end of the previous vessel employment until the arrival at the loading port. The fuel consumption during this period is deferred and recorded as deferred voyage costs included in Prepaid expenses and other current assets in the condensed consolidated balance sheet and is amortized ratably over the total transit time of the voyage from arrival at the loading port until the vessel departs from the discharge port and recognized as part of Voyage expenses. Refer also to Note 6 — Prepaid expenses and other current assets.

In time charters, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These voyage expenses are borne by the Company when engaged in spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company.

The Company recognizes revenue from pool arrangements based on its portion of the net distributions reported by the pool, which represents the net voyage revenue of the pool after voyage expenses and certain pool manager fees.

Recent Accounting Pronouncements

New accounting standards to be implemented — In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which establishes a comprehensive new lease accounting model. ASU 2016-02 clarifies the definition of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. For the Company, ASU 2016-02 is effective for annual periods beginning after December 15, 2021, and interim reporting periods within annual reporting periods beginning after December 15, 2022, with early adoption permitted. The most significant effects of adoption relate to the recognition of right-of-use assets and lease liabilities on the balance sheet for operating leases and providing new disclosures about the Company’s leasing activities. The Company is currently analyzing its contracts and will then calculate the right-of-use assets and lease liabilities as of January 1, 2022 based on the present value of the Company’s remaining minimum lease payments, primarily due to the recognition of right-of-use assets and lease liabilities with respect to operating leases.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326)” (“ASU 2016-13”), which amends several aspects of the measurement of credit losses on financial instruments based on an estimate of current expected credit losses. ASU 2016-13 will apply to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. ASU 2016-13 will also apply to debt securities and other financial assets measured at fair value through other comprehensive income. For the Company, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of Topic 326 is not expected to have a material impact on the condensed consolidated financial statements.

JOINT VENTURE INVESTMENTS

NT Suez Holdco LLC — In September 2014, the Company formed a joint venture, NT Suez Holdco LLC (“NT Suez”), to purchase two Suezmax newbuildings. The two vessels were delivered in October and November 2016.

NT Suez is owned 51% by the Company and 49% by WLR/TRF Shipping S.a.r.l (“WLR/TRF”). WLR/TRF is indirectly owned by funds managed or jointly managed by WL Ross & Co, LLC (“WLR”), including WLR Recovery Fund V DSS AIV, L.P. and WLR V Parallel ESC, L.P., which are also shareholders of the Company. WLR is a fund manager that manages the Company’s largest shareholders.

As of June 30, 2021 and December 31, 2020, the investments NT Suez received from the Company and WLR/TRF aggregated $74,104, which was used for shipyard installment payments and working capital. During the six months ended June 30, 2021, NT Suez distributed $663 and $637 to the Company and WLR/TRF, respectively. During six months ended June 30, 2020, NT Suez distributed $1,989 and $1,911 to the Company and WLR/TRF, respectively.

Management has determined that NT Suez qualifies as a variable interest entity, and, when aggregating the variable interests held by the related parties (i.e. the Company and WLR/TRF), the Company is the primary beneficiary as the Company has the ability to direct the activities that most significantly impact NT Suez’s economic performance. Accordingly, the Company consolidates NT Suez.

Diamond Anglo Ship Management Pte. Ltd. — In January 2018, the Company and Anglo Eastern Investment Holdings Ltd. (“AE Holdings”), a third party, formed a joint venture, Diamond Anglo Ship Management Pte. Ltd. (“DASM”). DASM is owned 51% by the Company and 49% by AE Holdings as of June 30, 2021 and December 31, 2020, and was formed to provide ship management services to the Company’s vessels.

As of June 30, 2021 and December 31, 2020, the investments DASM received from the Company and AE Holdings totaled $51 and $49, respectively, which were used for general and administrative expenses.

Management has determined that DASM qualifies as a variable interest entity, and the Company is the primary beneficiary as the Company has the ability to direct the activities that most significantly impacts DASM’s economic performance. Accordingly, the Company consolidates DASM.

Net (Loss) earnings Per Share

The computation of basic net (loss) earnings per share is based on the weighted-average number of common shares outstanding during the reporting period. The computation of diluted net (loss) earnings per share assumes the vesting of nonvested stock awards (refer to Note 14 — Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive. All nonvested shares and RSUs outstanding as of June 30, 2021 were excluded from the computation of diluted net loss per share because all were potentially anti-dilutive. Of the 616,157 nonvested shares and RSUs outstanding as of June 30, 2020, 218,248 were excluded from the computation of diluted net earnings per share because these were potentially anti-dilutive (refer to Note 14 — Stock-Based Compensation).

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Common shares outstanding, basic:
Weighted-average common shares outstanding, basic		40,074,727		39,920,559		40,024,821		39,861,943

Common shares outstanding, diluted:
Weighted-average common shares outstanding, basic		40,074,727		39,920,559		40,024,821		39,861,943
Dilutive effect of restricted stock awards		—		190,789		—		229,704
Weighted-average common shares outstanding, diluted		40,074,727		40,111,348		40,024,821		40,091,647

Vessel Dispositions

In December 2020, the Company’s Board of Directors approved selling the Aias and Amoureux, both 2008-built MR vessels. The Company reached an agreement to sell the Aias for $22.6 million in aggregate gross proceeds, and the Amoureux for $22.5 million in aggregate gross proceeds. The delivery of the Aias and Amoureux occurred in January and February 2021, respectively. The total loss of $26.3 million on the sale of the vessels was recorded to the condensed consolidated statement of operations in the year ended December 31, 2020. In connection with the sale of these two vessels, the Company repaid debt on the $360 Million Facility, as defined in Note 8 below, of $25.3 million and the revolving loan capacity was reduced by $6,980 during the six months ended June 30, 2021 in conjunction with the delivery of the Aias and Amoureux.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following as of June 30, 2021 and December 31, 2020:

	June 30, 2021		December 31, 2020
Advances to Capital Ship Management Corp. (“CSM”) (Refer to Note 13 — Related Party Transactions)	$	4,722	$	1,453
Advances to technical managers		114		164
Insurance claims receivable		1,088		1,636
Prepaid insurance		1,009		1,234
Advances to agents		882		1,091
Deferred voyage costs		778		915
Other		916		1,244
Total prepaid expenses and other current assets	$	9,509	$	7,737

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following as of June 30, 2021 and December 31, 2020:

	June 30, 2021		December 31, 2020
Trade accounts payable and accrued expenses	$	3,844	$	6,609
Accrued vessel and voyage expenses		25,061		17,232
Accrued interest		119		86
Accrued vessel and voyage expenses and Other current liabilities (Refer to Note 13 — Related Party Transactions)		844		1,890
Total accounts payable and accrued expenses	$	29,868	$	25,817

LONG-TERM DEBT

Long-term debt at June 30, 2021 and December 31, 2020 was comprised of the following:

	June 30, 2021			December 31, 2020
$360 Million Facility	$	220,896		$	227,500
$525 Million Facility		412,500			440,000
$66 Million Facility		45,226			47,421
Total		678,622			714,921
Less: Unamortized deferred financing costs		(10,741	)		(12,531	)
Less: Current portion		(168,725	)		(196,325	)
Long-term debt, net of deferred financing costs	$	499,156		$	506,065

$360 Million Facility — The $360 Million Facility consists of a term loan of $300,000 and a revolving loan of $60,000, and is collateralized by 28 vessels, with principal reductions based on a 17 year age-adjusted amortization schedule, payable on a quarterly basis. The term loan component of the $360 Million Facility bears interest at the Eurodollar Rate for a three-month interest period, plus a 2.65% interest rate margin, and the interest is paid quarterly. Commitment fees on undrawn amounts related to the revolving loan component of the $360 Million Facility are 1.06%. As of June 30, 2021, $53,000 of the revolving loan was drawn, while $20 was available and undrawn.

The $360 Million Facility permits the Company to pay dividends so long as the payment of dividends does not cause an event of default, and limits dividends payable so that they do not exceed in any fiscal quarter an amount that is equal to 50% of the adjusted consolidated net income of the Company in such fiscal quarter.

In connection with the Merger Agreement signing, the Company, Nordea Bank Abp, New York Branch (“Nordea”), as administrative agent and collateral agent, and the lenders under the $360 Million Facility entered into a consent letter dated March 30, 2021 (the “$360M Consent Letter”), pursuant to which the lenders party thereto consented to the Merger Transaction and waived any existing default or event of default and any default or event of default that would arise as a result of the Merger Transaction. Pursuant to the terms of the $360M Consent Letter, in connection with the consummation of the Merger Transaction, the $360 Million Facility was amended and restated (the “$360 Million A&R Facility”) to more closely mirror the representations, warranties and covenants of INSW’s credit facilities and to include INSW as a credit party. In addition, INSW provided a guaranty of the Company’s obligations under the $360 Million A&R Facility. The $360 Million A&R Facility includes covenants relating to, among other things, the ability to incur indebtedness, the ability to pay dividends, maintaining a minimum cash balance, collateral maintenance, maintaining a net debt to capitalization ratio and other customary restrictions. The $360 Million A&R Facility provided for customary events of default.

Each lender under the $360 Million Facility which provided its consent to the Merger Transaction and executed and delivered the $360 A&R Facility received a non-refundable consent fee equal to 0.20% of the aggregate principal amount of loans made available by such lender (including any undrawn commitment), and the fee was due and payable at the Effective Time and paid by the Company.

$525 Million Facility — The $525 Million Facility consists of a term loan of $375,000 and a revolving loan of $150,000, and is collateralized by 36 vessels, with principal reductions based on a 17 year age-adjusted amortization schedule, payable on a quarterly basis. The term loan component of the $525 Million Facility bears interest at the Eurodollar Rate for a three-month interest period, plus a 2.50% interest rate margin, and the interest is paid quarterly. Commitment fees on undrawn amounts related to the revolving loan component of the $525 Million Facility are 0.875%. As of June 30, 2021, the entirety of the $150,000 available revolving loan was drawn.

The $525 Million Facility permits the Company to pay dividends so long as the payment of dividends does not cause an event of default, and limits dividends payable so that they do not exceed in any fiscal quarter an amount that is equal to 50% of the adjusted consolidated net income of the Company in the preceding fiscal quarter.

In connection with the Merger Agreement signing, the Company, Nordea, as administrative agent and collateral agent, and the lenders under the $525 Million Facility entered into a consent letter dated March 30, 2021 (the “$525M Consent Letter”), pursuant to which the lenders party thereto consented to the Merger Transaction and waived any existing default or event of default and any default or event of default that would arise as a result of the Merger Transaction. Pursuant to the terms of the $525M Consent Letter, in connection with the consummation of the Merger Transaction, the $525 Million Facility was amended and restated (the “$525 Million A&R Facility”) to more closely mirror the representations, warranties and covenants of INSW’s credit facilities and to include INSW as a credit party. In addition, INSW provided a guaranty of the Company’s obligations under the $525 Million A&R Facility. The $525 Million A&R Facility includes covenants relating to, among other things, the ability to incur indebtedness, the ability to pay dividends, maintaining a minimum cash balance, collateral maintenance, maintaining a net debt to capitalization ratio and other customary restrictions. The $525 Million A&R Facility provides for customary events of default.

Each lender under the $525 Million Facility that provided its consent to the Merger Transaction and executed and delivered the $525 Million A&R Facility received a non-refundable consent fee equal to 0.20% of the aggregate principal amount of loans made available by such lender (including any undrawn commitment), and the fee was due and payable at the Effective Time and paid by the Company.

$66 Million Facility — The $66 Million Facility, which is collateralized by the two vessels controlled through NT Suez, is a nonrecourse term loan with reductions that are based on a 15-year amortization schedule, and are payable on a quarterly basis. Interest is paid quarterly, and the $66 Million Facility bears interest at the Eurodollar Rate for a three-month interest period, plus a 3.25% interest rate margin.

The $66 Million Facility permits the NT Suez joint venture to pay dividends so long as the payment of dividends does not cause an event of default, and does not exceed an amount equal to 75% of the consolidated net income, as determined in accordance with GAAP, of the borrower, which is the consolidated accounts of NT Suez.

In connection with the Merger Transaction, lenders under the $66 Million Facility have agreed pursuant to a consent and amendment letter dated March 30, 2021 (the “NT Suez Debt Consent”), among other things, to consent to the Merger Transaction (including waiving a mandatory prepayment that would otherwise be triggered by the Merger Transaction) and waive any existing event of default and any event of default that would arise as a result of the Merger Transaction. In addition, lenders under the $66 Million Facility agreed to amend the definition of “change of control” upon the closing of the Merger Transaction to reflect the ownership structure of INSW and its subsidiaries.

Each lender under the $66 Million Facility that provided its consent under the NT Suez Debt Consent received a non-refundable consent fee equal to 0.20% of the aggregate principal amount of loans of such lender, and was due and payable at the Effective Time and paid by NT Suez.

Interest Rates – The following table sets forth the effective interest rate associated with the interest costs for the Company’s debt facilities, including the rate differential between the fixed pay rate and the variable receive rate on the interest rate swap agreements that were in effect (refer to Note 9 — Interest Rate Swaps), combined, as well as the cost associated with the commitment fees. Additionally, the table includes the range of interest rates on the debt, excluding the impact of swaps and commitment fees:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Effective interest rate		2.95%		4.09%		2.98%		4.36%
Range of interest rates (excluding impact of swaps and unused commitment fees)		2.63% to 3.46%		3.95% to 4.71%		2.63% to 3.51%		3.95% to 5.32%

Restrictive Covenants — The Company’s credit facilities contain restrictive covenants and other non-financial restrictions. As of June 30, 2021, the $360 Million Facility and $525 Million Facility include, among other things, restrictions on the Company’s ability to incur indebtedness, limitations on dividends, minimum cash balance, collateral maintenance, leverage ratio requirements, minimum working capital requirements, and other customary restrictions. The $66 Million Facility includes restrictions and financial covenants including, among other things, restrictions on the Company’s ability to incur indebtedness, limitations on dividends, minimum cash balance, collateral maintenance, and other customary restrictions. The Company was in compliance with its financial covenants as of June 30, 2021.

Maturities – The aggregate maturities of debt during the remaining six months of the year ending December 31, 2021, and annually for the years ending December 31 are as follows:

2021 (for the remaining six months of the year)	$	107,026
2022		123,600
2023		123,600
2024		324,396
Total	$	678,622

INTEREST RATE SWAPS

The Company uses interest rate swaps for the management of interest rate risk exposure, as the interest rate swaps effectively convert a portion of the Company’s debt from a floating to a fixed rate. The interest rate swaps are agreements between the Company and counterparties to pay, in the future, a fixed-rate payment in exchange for the counterparties paying the Company a variable payment. The amount of the net payment obligation is based on the notional amount of the swap contract and the prevailing market interest rates. The Company may terminate the swap contracts prior to their expiration dates, at which point a realized gain or loss would be recognized. The value of the Company’s commitment would increase or decrease based primarily on the extent to which interest rates move against the rate fixed for each swap. All derivatives are recognized on the Company’s Consolidated Balance Sheets at their fair values. For accounting hedges, on the date the derivative contract is entered into, the Company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value” hedge) or (2) a hedge of a forecasted transaction (“cash flow” hedge).

On April 29, 2020, the Company entered into interest rate swap transactions, with multiple counterparties, which were designated as cash flow hedges. In accordance with these transactions, the Company will pay an average fixed-rate interest amount of 0.54% and will receive floating rate interest amounts based on three-month LIBOR settings. These interest rate swaps are designated as cash flow hedges with a start date of June 30, 2020 and an end date of December 23, 2024, with an aggregate notional amount outstanding of $171,931 at June 30, 2021.

The derivative asset and liability balances at June 30, 2021 and December 31, 2020 are as follows:

	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
	Balance Sheet Location	June 30, 2021		December 31, 2020		Balance Sheet Location	June 30, 2021		December 31, 2020
Derivatives designated as hedging instruments
Interest rate contracts	Derivative asset (Current assets)	$	—	$	—	Derivative liability (Current liabilities)	$	552	$	580
Interest rate contracts	Derivative asset (Noncurrent assets)		369		—	Derivative liability (Noncurrent liabilities)		—		569
Total derivatives designated as hedging instruments			369		—			552		1,149
Total Derivatives		$	369	$	—		$	552	$	1,149

The components of Accumulated other comprehensive loss included in the Condensed Consolidated Balance Sheets consist of net unrealized loss on cash flow hedges as of June 30, 2021 and December 31, 2020.

The following table presents the gross amounts of these liabilities with any offsets to arrive at the net amounts recognized in the Condensed Consolidated Balance Sheets at June 30, 2021 and December 31, 2020:

			Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the		Gross Amounts not Offset in the Condensed Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Condensed Consolidated Balance Sheets		Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
June 30, 2021 Derivatives	$	552	$	—	$	552	$	—	$	—	$	552
December 31, 2020 Derivatives		1,149		—		1,149		—		—		1,149

The following table presents the gross amounts of these assets with any offsets to arrive at the net amounts recognized in the Condensed Consolidated Balance Sheets at June 30, 2021 and December 31, 2020:

			Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts not Offset in the Condensed Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Condensed Consolidated Balance Sheets		Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
June 30, 2021 Derivatives	$	369	$	—	$	369	$	—	$	—	$	369
December 31, 2020 Derivatives		—		—		—		—		—		—

10.

ACCUMULATED OTHER COMPREHENSIVE Loss

The components of Accumulated other comprehensive loss income included in the Condensed Consolidated Balance Sheets consist of net unrealized loss on cash flow hedges as of June 30, 2021 and December 31, 2020.

The changes in Accumulated other comprehensive loss by component are as follows:

	For the Six Months Ended June 30,
	2021			2020
Accumulated other comprehensive loss – January 1,	$	(1,149	)	$	—
Other comprehensive income before reclassifications		1,265			(896	)
Amounts reclassified from Accumulated other comprehensive loss		(298	)		—
Other comprehensive income (loss) for the period		967			(896	)
Accumulated other comprehensive loss – June 30,	$	(182	)	$	(896	)

The realized loss for the six months ended June 30, 2021 reclassified from Accumulated other comprehensive loss consists of a realized loss of $298 related to interest rate swap contracts. The realized gain reclassified from Accumulated other comprehensive loss are presented in Interest expense in the Condensed Consolidated Statements of Operations.

11.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values and carrying amounts of the Company’s financial instruments at June 30, 2021 and December 31, 2020 that are required to be disclosed at fair value, but not recorded at fair value, are as follows:

	June 30, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Cash and cash equivalents	$	95,289	$	95,289	$	98,059	$	98,059
Restricted cash		6,392		6,392		6,140		6,140
Variable rate debt		678,622		678,622		714,921		714,921

The following methods and assumptions are used in estimating the fair value of disclosures for financial instruments:

Cash and cash equivalents, and Restricted cash: The carrying amounts reported in the condensed consolidated balance sheets for Cash and cash equivalents, and Restricted cash approximate fair value. Cash and cash equivalents, and Restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities.

Variable Rate Debt: The fair value of variable rate debt is based on management’s estimate of rates the Company could obtain for similar debt of the same remaining maturities. Additionally, the Company considers its creditworthiness in determining the fair value of variable rate debt under the credit facilities. The carrying amounts in the above table, which exclude the impact of deferred financing costs, approximate the fair market value for the variable rate debt. Variable rate debt is considered to be a Level 2 item as the Company considers the estimate of rates it could obtain for similar debt.

The fair value of an asset or liability is based on assumptions that market participants would use in pricing the asset or liability. The hierarchies of inputs used when determining fair value are described below:

Level 1: Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

Level 2: Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3: Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial instruments and the placement of financial instruments within the fair value hierarchy.

The table below provides the financial instruments carried at fair value based on the levels of hierarchy as of the valuation date listed:

	Level 1		Level 2		Level 3		Total
June 30, 2021
Derivative assets	$	—	$	369	$	—	$	369
Derivative liabilities		—		552		—		552

December 31, 2020
Derivative liabilities		—		1,149		—		1,149

Derivative Assets and Liabilities: The fair value of the derivative assets and liabilities, which relate to the interest rate swaps used for hedging purposes, is the estimated amount the Company would receive or pay for the asset or liability to terminate the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the swap counterparties. Interest rate swaps are considered to be a Level 2 item as the Company, using the income approach to value the derivatives, uses observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact. Level 2 inputs for the valuations are limited to quoted prices for similar assets in active markets (specifically, futures contracts on LIBOR for the first two years) and inputs other than quoted prices that are observable for the asset (specifically, LIBOR, cash and swap rates and credit risk at commonly quoted intervals). Mid-market pricing is used as a practical expedient for fair value measurements. Refer to Note 9 — Interest Rate Swaps for further information regarding the Company’s interest rate swap agreements.

The Company does not currently have any Level 3 financial assets and there have been no transfers in and/or out of Level 3 during the six months ended June 30, 2021 and 2020.

12.

REVENUE FROM TIME CHARTERS

The future minimum revenues, before inclusion of profit-sharing revenue, if any, expected to be received on irrevocable time charters for which revenues can be reasonably estimated and the related revenue days that the vessels are available for employment, and not including charterers’ renewal options for the remaining six months of the year ending December 31, 2021, and annually for the year ending December 31, 2022 are as follows:

2021 (for the remaining six months of the year)	$	16,780
2022		13,511
Total future committed revenue	$	30,291

13.

Related Party Transactions

During the three and six months ended June 30, 2021 and 2020, the Company had the following related party transactions.

Capital Ship Management Corp. (“CSM”) —CSM was contracted to provide commercial and technical management services for certain vessels acquired in March 2019.

Concurrently with the execution and delivery of the Merger Agreement, the Company entered into a termination agreement with CSM (the “Capital Termination Agreement”), dated as of March 30, 2021, whereby, upon the completion of certain events and obligations, including consummation of the Merger Transaction, the following managerial agreements were terminated: (i) the commercial management agreement, dated as of March 27, 2019, by and between the Company and CSM; (ii) the management and services agreement, dated as of March 27, 2019, by and between the Company and CSM; and (iii) each technical management agreement, dated as of March 27, 2019, by and between certain of the Company’s vessel-owning subsidiaries and CSM (also referred to as part II shipman 2009 standard ship management agreement).

Pursuant to the Capital Termination Agreement, at the Effective Time, the Company (i) paid, or cause to be paid to CSM, an amount equal to $30 million minus a certain specified termination fee adjustment amount and (ii) delivered, or cause to be delivered, an amount equal to $4 million minus a certain specified adjustment amount, to be held in escrow and distributed to CSM on the first day on which certain vessels currently managed by CSM have been transitioned.

The Capital Termination Agreement provides that, with respect to each vessel managed by CSM that is on a time charter, the parties jointly approach the time charterers to agree to a change in technical management as soon as reasonably practicable following the Effective Time. However, if an earlier transition cannot be agreed upon, then CSM provides technical management services to such vessel through the end of the time charter and, if necessary, for a period of time until a transition is reasonably practicable. In addition, CSM has agreed to provide (i) commercial management services until each such vessel is transitioned and (ii) the certain additional services outlined in the Capital Termination Agreement. With respect to vessels not on a time charter, the parties to the Capital Termination Agreement have agreed to use their reasonable best efforts to (A) commence planning and coordination for the transition of commercial and technical management of such vessels that are not on a time charter from CSM and/or its affiliates and (B) facilitate such transition on the earliest practical date after the Effective Time.

For more information, please see the Capital Termination Agreement filed as an exhibit to the 8-K/A dated April 7, 2021.

As of June 30, 2021 and following the sales of the M/T Aias and M/T Amoureux in January 2021 and February 2021, respectively, CSM managed 23 vessels. For the three and six months ended June 30, 2021 and 2020, the following transactions were recorded for these services:

●

For the three and six months ended June 30, 2021, $2,086 and $3,891, respectively, and for the three and six months ended June 30, 2020, $1,934 and $3,867, respectively, was incurred for technical management services, which is included in Vessel expenses in the condensed consolidated statements of operations and have been paid as of June 30, 2021.

●

For the three and six months ended June 30, 2021, $501 and $983, respectively, and for the three and six months ended June 30, 2020, $622 and $1,367, respectively, was incurred for commercial management services, which is included in Voyage expenses in the condensed consolidated statements of operations. As of June 30, 2021, $448 remains unpaid, and is included in Accounts payable and accrued expenses in the condensed consolidated balance sheet.

●

For the three and six months ended June 30, 2021, $499 and $992, respectively, and for the three and six months ended June 30, 2020, $499 and $996, respectively, was incurred for general management services, which is included in General and administrative expenses in the condensed consolidated statements of operations. As of June 30, 2021, $164 remains unpaid, and is included in Accounts payable and accrued expenses in the condensed consolidated balance sheet.

Working capital is advanced to CSM to procure both voyage and vessel costs. At June 30, 2021, the net funds advanced totaled $3,878 of which $4,722 is included in Prepaid Expense and Other Current Assets in the condensed consolidated balance sheet (refer to Note 6 — Prepaid Expenses and Other Current Assets), and the $844 liability is included in Accounts payable and accrued expenses in the condensed consolidated balance sheet (refer to Note 7 — Accounts Payable and Accrued Expenses). At December 31, 2020, the net funds owed totaled $437, of which $1,453 is included in Prepaid Expense and Other Current Assets in the condensed consolidated balance sheet, and the $1,890 liability is included in Accounts payable and accrued expenses in the condensed consolidated balance sheet.

14.

Stock-Based Compensation

2019 Equity Incentive Plan — Under the 2019 Equity Incentive Plan (“2019 Plan”), the Company’s Board of Directors, the Compensation Committee, or their designees may grant a variety of stock-based incentive awards representing an aggregate of 3,989,000 shares of common stock to the Company’s officers, directors, employees, and consultants. Such awards include stock options, stock appreciation rights, restricted (nonvested) stock, restricted stock units, and unrestricted stock.

Restricted Stock Units — The Company has issued restricted stock units (“RSUs”) under the 2019 Plan to certain members of the Board of Directors, an executive and certain employees of the Company, which represent the right to receive a share of common stock, or in the sole discretion of the Company’s Compensation Committee, the value of a share of common stock on the date that the RSU vests. Such shares of common stock will only be issued to certain directors, an executive and employees when their RSUs vest under the terms of their grant agreements and 2019 Plan described above.

The RSUs that have been issued to certain members of the Board of Directors vest one year from the date of grant. The RSUs that have been issued to other individuals vest ratably on each of the three anniversaries of the determined vesting date. The table below summarizes the Company’s unvested RSUs for the six months ended June 30, 2021:

				Weighted
	Number of			Average Grant
	RSUs			Date Price
Outstanding at January 1, 2021		63,270		$	12.97
Granted		51,056			10.15
Vested		(36,233	)		11.45
Forfeited		—			—

Outstanding at June 30, 2021		78,093		$	11.83

The following table summarizes certain information of the RSUs unvested and vested as of June 30, 2021:

Unvested RSUs

Vested RSUs

June 30, 2021

Weighted

Average

Weighted

Average

Remaining

Average

Number of

Grant Date

Contractual

Number of

Grant Date

RSUs

Price

Life

RSUs

Price

78,093

11.83

1.5

88,795

12.72

The Company is amortizing these grants over the applicable graded vesting periods. Forfeitures are taken into account when they occur. As of June 30, 2021, unrecognized compensation cost of $599 related to RSUs will be recognized over a weighted-average period of 1.5 years. For the three and six months ended June 30, 2021, the Company recognized $162 and $315, respectively, three and six months ended June 30, 2020, the Company recognized $160 and $370, respectively, of nonvested stock amortization expense for the RSUs, which is included in General and administrative expenses.

Restricted Stock — Under the 2019 Plan, grants of restricted common stock were issued to certain members of the Board of Directors, executives and employees. The restricted common stock issued to certain members of the Board of Directors vest one year from the date of grant. The restricted common stock issued to certain executives and employees ordinarily vest ratably on each of the three anniversaries of the determined vesting date. The table below summarizes the Company’s nonvested stock awards for the six months ended June 30, 2021 which were issued under the 2019 Plan:

				Weighted
	Number of			Average Grant
	Shares			Date Price
Outstanding at January 1, 2021		465,314		$	12.96
Granted		172,410			8.40
Vested		(208,034	)		13.09
Forfeited		(2,140	)		13.70

Outstanding at June 30, 2021		427,550		$	11.49

The Company is amortizing these grants over the applicable graded vesting periods. Forfeitures are taken into account when they occur. As of June 30, 2021, unrecognized compensation cost of $2,514 related to nonvested stock will be recognized over a weighted-average period of 2.0 years. For the three and six months ended June 30, 2021, the Company recognized $698 and $1,473, respectively, and for the three and six months ended June 30, 2020, the Company recognized $856 and $1,980, respectively, in nonvested stock amortization expense for the 2019 Plan restricted stock, which is included in General and administrative expenses.

Performance Awards — The Company granted performance awards that contain service, performance-based and/or market-based vesting criteria. Vesting occurs if the recipient remains employed and depends on the degree to which performance goals are achieved during the three-year performance period (as defined in the award agreements). The table below summarizes the Company’s nonvested performance awards for the six months ended June 30, 2021 which were issued under the 2019 Plan:

			Weighted
	Number of		Average Grant
	Shares		Date Price
Outstanding at January 1, 2021		133,305	$	12.60
Granted		141,419		9.19
Vested		—		—
Forfeited		—		—

Outstanding at June 30, 2021		274,724	$	10.84

For the three and six months ended June 30, 2021, the Company recognized $248 and $406, respectively, and $93 for the three and six months ended June 30, 2020, in nonvested stock amortization expense for the 2019 Plan performance awards, which is included in General and administrative expenses. As of June 30, 2021, unrecognized compensation cost of $2,200 related to nonvested stock will be recognized over a weighted-average period of 2.3 years.

The future compensation to be recognized for the aforementioned RSUs, restricted stock and performance awards as of June 30, 2021 is as follows:

2021 (for the remaining six months of the year)	$	1,899
2022		2,370
2023		915
2024		129
Total	$	5,313

In connection with the Merger Transaction, 78,093, 279,803 and 274,724 RSUs, shares of restricted stock and performance award shares, respectively, vested at the Effective Time in connection with the change of control provisions in the applicable agreements.

15.

COMMITMENTS AND CONTINGENCIES

Commitments — The Company’s contracts for the construction and installation of ballast water treatment systems contain differing prices depending on where the ballast water treatment systems are installed. After the contracts were signed, China was selected as the location to install the systems. However, during the second quarter of 2021, the installation location was changed in Turkey, which caused an increase of $3,985 in cost that will be paid throughout the remainder of 2021.

Contingencies — From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of its business. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material effect on the Company, its financial condition, results of operations or cash flows.

16.

SEGMENT REPORTING

The Company is engaged primarily in the ocean transportation of crude oil and petroleum products in the international market through the ownership and operation of a diversified fleet of vessels. The international shipping industry has many distinct market segments based, in large part, on the size and design configuration of vessels required. Rates in each market segment are determined by a variety of factors affecting the supply and demand for vessels to move cargoes in the trades for which they are suited. Tankers are not bound to specific ports or schedules and therefore can respond to market opportunities by moving between trades and geographical areas. The Company’s vessels regularly navigate in international waters, over hundreds of trade routes, to hundreds of ports and, as a result, the disclosure of geographic information is impracticable. The Company charters its vessels primarily on voyage charters and on time charters.

The Company has two reportable segments, Crude Tankers and Product Carriers. Segment results are evaluated based on income from operations. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s consolidated financial statements.

Results for the Company’s revenue and loss from operations by segment for the three and six months ended June 30, 2021 and 2020 are as follows:

	Crude Tankers			Product Carriers			Total
Three Months Ended June 30, 2021
Total revenue	$	33,456		$	63,115		$	96,571
Voyage expenses		(18,535	)		(18,225	)		(36,760	)
Vessel expenses		(9,037	)		(29,861	)		(38,898	)
Depreciation and amortization		(8,970	)		(19,049	)		(28,019	)
General, administrative and management fees⁽¹⁾		(1,386	)		(5,136	)		(6,522	)
Other corporate expenses		(86	)		(307	)		(393	)
Loss from operations	$	(4,558	)	$	(9,463	)	$	(14,021	)

Three Months Ended June 30, 2020
Voyage revenue	$	69,873		$	113,680		$	183,553
Voyage expenses		(14,660	)		(34,689	)		(49,349	)
Vessel expenses		(12,662	)		(29,076	)		(41,738	)
Depreciation and amortization		(9,974	)		(18,797	)		(28,771	)
General, administrative and management fees⁽¹⁾		(1,829	)		(5,656	)		(7,485	)
Income from operations	$	30,748		$	25,462		$	56,210

	Crude Tankers			Product Carriers			Total
Six Months Ended June 30, 2021
Voyage revenue	$	63,394		$	120,897		$	184,291
Voyage expenses		(32,794	)		(37,016	)		(69,810	)
Vessel expenses		(18,830	)		(62,030	)		(80,860	)
Depreciation and amortization		(17,944	)		(38,126	)		(56,070	)
General, administrative and management fees⁽¹⁾		(2,735	)		(10,305	)		(13,040	)
Other corporate expenses		(1,067	)		(4,106	)		(5,173	)
Loss from operations	$	(9,976	)	$	(30,686	)	$	(40,662	)

Six Months Ended June 30, 2020
Voyage revenue	$	160,502		$	232,776		$	393,278
Voyage expenses		(43,009	)		(81,021	)		(124,030	)
Vessel expenses		(23,884	)		(59,390	)		(83,274	)
Depreciation and amortization		(19,921	)		(37,610	)		(57,531	)
General, administrative and management fees⁽¹⁾		(3,806	)		(11,803	)		(15,609	)
Income from operations	$	69,882		$	42,952		$	112,834

(1)

Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on a formula).

The reconciliations of total assets of the segments to amounts included in the condensed consolidated balance sheets are as follows:

	June 30, 2021		December 31, 2020
Crude Tankers	$	750,128	$	812,261
Product Carriers		1,122,179		1,144,562
Corporate unrestricted cash and cash equivalents		4,680		3,357
Other unallocated amounts		1,660		1,663
Consolidated total assets	$	1,878,647	$	1,961,843

17.

SUBSEQUENT EVENTS

The Company has evaluated all subsequent events through September 30, 2022, the date that these condensed consolidated financial statements were available to be issued, to ensure that these condensed consolidated financial statements include appropriate recognition and disclosure of recognized events as of June 30, 2021. Other than as disclosed elsewhere in these condensed consolidated financial statements, there were no subsequent events that the Company believes require recognition or disclosure.

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information of the combined company is presented to illustrate the combination of International Seaways Inc. (INSW or the Company) and Diamond S.

On July 16, 2021 (the “Effective Time”), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated as of March 30, 2021, by and among INSW, Diamond S, and Dispatch Transaction Sub, Inc., a Republic of the Marshall Islands corporation and wholly-owned subsidiary of INSW (“Merger Sub”), Merger Sub merged with and into Diamond S (the “Merger”), with Diamond S surviving such merger as a wholly owned subsidiary of INSW. Immediately following the Effective Time, the Company contributed all of the outstanding stock of Diamond S to International Seaways Operating Corporation, a direct wholly-owned subsidiary of INSW.

The unaudited pro forma condensed combined balance sheet as of June 30, 2021 and unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 and for the six months ended June 30, 2021 are based upon, derived from, and should be read in conjunction with the following: (i) the historical audited consolidated financial statements of INSW, which are available in INSW’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 12, 2021 and which is incorporated by reference in this Form 8-K, (ii) the historical audited consolidated financial statements of Diamond S, which are available in Diamond S’ Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 16, 2021 and which is incorporated by reference in this Form 8-K; (iii) the historical unaudited consolidated financial statements of INSW, which are available in INSW’s Form 10-Q for the quarter ended June 30, 2021, as filed with the SEC on August 9, 2021 and which is incorporated by reference in this Form 8-K, and (iv) the historical unaudited consolidated financial statements of Diamond S for the quarter ended June 30, 2021, which are available as Exhibit 99.1 to this Form 8-K.

For additional information regarding the accounting for the Merger, refer to INSW’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on March 2, 2022 and which is incorporated by reference in this Form 8-K.

The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X, as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaced the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or reasonably expected to occur (“Management’s Adjustments”). The combined company has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined balance sheet gives effect to the combination as if it had been consummated on June 30, 2021 and the unaudited pro forma condensed combined statement of operations gives effect to the combination as if it had been consummated on January 1, 2020.

The unaudited pro forma condensed combined financial information is subject to the assumptions and adjustments described in the accompanying notes. The pro forma adjustments are based on available information and assumptions that the Company’s management believes are reasonable under the circumstances. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information.

The combination has been treated as an asset acquisition under the guidelines of Accounting Standard Codification (“ASC”) 805, Business Combinations, and Accounting Standard Update (“ASU”) 2017-01, Business Combinations (Topic 805), whereby all assets acquired and liabilities assumed are recorded at the cost of the acquisition, including transaction costs, on the basis of their relative fair values. For purposes of the pro forma condensed combined financial information, the fair values of Diamond S’ identifiable tangible and intangible assets acquired and liabilities assumed are based on an estimate of fair value. Occasionally, upon allocating the cost of the asset acquisition to the individual assets acquired and liabilities assumed based on their relative fair values under ASC 805, an acquiring entity may determine that the total cost of the acquisition may be less than the fair value of the identifiable net assets acquired. In this case the acquirer shall reassess whether it has correctly identified all of the assets acquired and all of the liabilities assumed and shall recognize any additional assets or liabilities that are identified in that review. If the fair value of the identifiable net assets still exceeds the cost of the acquisition, the excess of fair value over cost should be allocated on a relative fair value basis to all qualifying assets, which will result in recognizing qualifying assets at less than fair value and recognizing non-qualifying assets and the assumed liabilities at fair value. INSW’s management believes that the estimated fair values utilized for the assets to be acquired and liabilities assumed for purposes of the pro forma condensed combined financial information, are based on reasonable estimates and assumptions.

The unaudited pro forma condensed combined financial information is provided for illustrative and information purposes only and is not intended to represent or necessarily be indicative of the combined company’s results of operations or financial condition had the Transaction been completed on the dates indicated, nor do they purport to project our results of operations or financial condition for any future period or as of any future date. The unaudited pro forma condensed combined financial information does not include any expected cost savings or operating synergies, which may be realized subsequent to the combination.

This unaudited pro forma condensed combined financial information should be read in conjunction with the accompanying notes as well as the above referenced historical consolidated financial statements of both INSW and Diamond S.

INTERNATIONAL SEAWAYS, INC.

PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2021

DOLLARS IN THOUSANDS

(UNAUDITED)

							Transaction
	INSW			Diamond S			Accounting				Pro Forma
	Historical			Historical			Adjustments			Notes	Combined
ASSETS
Current Assets:
Cash and cash equivalents	$	117,391		$	95,289		$	(81,323	)	(1)	$	131,357
Voyage receivables, net of allowance for credit losses including unbilled amounts		50,981			45,217			1,116		(2)		97,314
Other receivables		6,324			—			—				6,324
Inventories		2,103			23,667			(6,598	)	(3)		19,172
Prepaid expenses and other current assets		6,365			9,509			2,323		(2)		18,197
Vessels held for sale		29,146			—			—				29,146
Restricted cash		—			6,392			—				6,392
Total Current Assets		212,310			180,074			(84,482	)			307,902
Restricted cash		16,173			—			—				16,173
Vessels and other property, net		1,055,747			1,654,269			(723,075	)	(4)		1,986,941
Vessels construction in progress		14,606			—			—				14,606
Deferred drydock expenditures, net		39,405			29,368			(29,368	)	(4)		39,405
Operating lease right-of-use assets		16,999			—			3,853		(5)		20,852
Investments in and advances to affiliated companies		149,580			8,205			—				157,785
Long-term derivative assets		6,526			369			—				6,895
Time charter contracts acquired, net		—			1,246			3,400		(6)		4,646
Other assets		7,519			5,116			(4,741	)	(4)		7,893
Total Assets	$	1,518,865		$	1,878,647		$	(834,413	)		$	2,563,099

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities	$	29,453		$	31,443		$	—			$	60,896
Current portion of operating lease liabilities		7,226			—			847		(5)		8,073
Current installments of long-term debt		61,483			168,725			—				230,208
Current portion of derivative liabilities		3,950			552			—				4,502
Total Current Liabilities		102,112			200,720			847				303,679
Long-term operating lease liabilities		7,541			—			4,421		(5)		11,962
Long-term debt		444,566			499,156			10,741		(7)		954,463
Long-term portion of derivative liabilities		3,782			—			—				3,782
Other liabilities		13,410			—			—				13,410
Total Liabilities		571,411			699,876			16,009				1,287,296

Equity:
Capital		1,278,365			1,242,259			(944,797	)	(8)		1,575,827
Accumulated deficit		(307,994	)		(99,945	)		99,945		(8)		(307,994	)
		970,371			1,142,314			(844,852	)			1,267,833
Accumulated other comprehensive loss		(22,917	)		(182	)		182		(8)		(22,917	)
Total equity before noncontrolling interest		947,454			1,142,132			(844,670	)			1,244,916
Noncontrolling interest		—			36,639			(5,752	)	(9)		30,887
Total Equity		947,454			1,178,771			(850,422	)			1,275,803
Total Liabilities and Equity	$	1,518,865		$	1,878,647		$	(834,413	)		$	2,563,099

See accompanying notes to the unaudited pro forma condensed combined financial information

INTERNATIONAL SEAWAYS, INC.

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2020

DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS

(UNAUDITED)

							Transaction
	INSW			Diamond S			Accounting				Pro Forma
	Historical			Historical			Adjustments			Notes	Combined
Shipping Revenues:
Pool revenues, including revenues from companies accounted for by the equity method	$	272,980		$	51,130		$	—			$	324,110
Time and bareboat charter revenues		88,719			79,397			(4,903	)	(1)		163,213
Voyage charter revenues		59,949			465,383			(5,251	)	(2)		520,081
		421,648			595,910			(10,154	)			1,007,404

Operating Expenses:
Voyage expenses		19,643			188,581			(2,217	)	(2)		206,007
Vessel expenses		128,373			171,193			462		(3)		300,028
Charter hire expenses		30,114			—			—				30,114
Depreciation and amortization		74,343			115,783			(60,887	)	(4)		129,239
General and administrative		29,047			30,005			518		(5)		59,570
Transaction and other costs related to merger		—			—			46,708		(6)		46,708
Provision for credit losses, net		(71	)		—			—				(71	)
Third-party debt modification fees		232			—			—				232
Loss on disposal of vessels and other property, including impairments		100,087			29,551			—				129,638
Total operating expenses		381,768			535,113			(15,416	)			901,465
Income from vessel operations		39,880			60,797			5,262				105,939
Equity in income of affiliated companies		4,119			—			—				4,119
Operating income		43,999			60,797			5,262				110,058
Other (expense)/income		(12,817	)		341			—				(12,476	)
Income before interest expense and income taxes		31,182			61,138			5,262				97,582
Interest expense		(36,712	)		(34,742	)		3,558		(7)		(67,896	)
(Loss)/income before income taxes		(5,530	)		26,396			8,820				29,686
Income tax (provision)/benefit		(1	)		—			—				(1	)
Net (loss)/income		(5,531	)		26,396			8,820				29,685
Less: Net income attributable to noncontrolling interest		—			3,079			(1,038	)	(8)		2,041
Net (loss)/income attributable to the combined company	$	(5,531	)	$	23,317		$	9,858			$	27,644


Weighted Average Number of Common Shares Outstanding:
Basic		28,372,375						22,536,647				50,909,022
Diluted		28,372,375						22,536,647				50,909,022

Per Share Amounts:
Basic net (loss)/income per share	$	(0.20	)				$	0.44			$	0.54
Diluted net (loss)/income per share	$	(0.20	)				$	0.44			$	0.54

See accompanying notes to the unaudited pro forma condensed combined financial information

INTERNATIONAL SEAWAYS, INC.

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2021

DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS

(UNAUDITED)

							Transaction
	INSW			Diamond S			Accounting				Pro Forma
	Historical			Historical			Adjustments			Notes	Combined
Shipping Revenues:
Pool revenues, including revenues from companies accounted for by the equity method	$	51,114		$	53,527		$	—			$	104,641
Time and bareboat charter revenues		26,412			28,675			(2,847	)	(1)		52,240
Voyage charter revenues		15,534			102,089			(890	)	(2)		116,733
		93,060			184,291			(3,737	)			273,614

Operating Expenses:
Voyage expenses		3,173			69,810			(137	)	(2)		72,846
Vessel expenses		54,204			80,860			(21	)	(3)		135,043
Charter hire expenses		11,604			—			—				11,604
Depreciation and amortization		33,833			56,070			(30,780	)	(4)		59,123
General and administrative		14,969			13,040			256		(5)		28,265
Merger and integration related costs		481			5,173			(5,173	)	(6)		481
Provision for credit losses, net		43			—			—				43
Loss on disposal of vessels and other property, including impairments		4,016			—			—				4,016
Total operating expenses		122,323			224,953			(35,855	)			311,421
(Loss)/income from vessel operations		(29,263	)		(40,662	)		32,118				(37,807	)
Equity in income of affiliated companies		10,843			—			—				10,843
Operating (loss)/income		(18,420	)		(40,662	)		32,118				(26,964	)
Other income		559			2			—				561
(Loss)/income before interest expense and income taxes		(17,861	)		(40,660	)		32,118				(26,403	)
Interest expense		(14,286	)		(12,150	)		1,789		(7)		(24,647	)
(Loss)/income before income taxes		(32,147	)		(52,810	)		33,907				(51,050	)
Income tax (provision)/benefit		(1	)		—			—				(1	)
Net (loss)/income		(32,148	)		(52,810	)		33,907				(51,051	)
Less: Net income attributable to noncontrolling interest		—			1,885			(513	)	(8)		1,372
Net (loss)/income attributable to the combined company	$	(32,148	)	$	(54,695	)	$	34,420			$	(52,423	)


Weighted Average Number of Common Shares Outstanding:
Basic		28,037,957						22,536,647				50,574,604
Diluted		28,037,957						22,536,647				50,574,604

Per Share Amounts:
Basic net (loss)/income per share	$	(1.15	)				$	1.53			$	(1.04	)
Diluted net (loss)/income per share	$	(1.15	)				$	1.53			$	(1.04	)

See accompanying notes to the unaudited pro forma condensed combined financial information

Notes to the Unaudited Pro Forma Condensed Combined Financial Information

1. Description of Transaction

At the Effective Time, each common share of Diamond S (the “Diamond S Common Shares”) issued and outstanding immediately prior to the Effective Time (excluding Diamond S Common Shares owned by Diamond S, the Company, Merger Sub or any of their respective direct or indirect wholly-owned subsidiaries) was cancelled in exchange for the right to receive 0.55375 of a share of common stock of the Company (the “INSW Common Stock”) and cash payable in respect of fractional shares. The aforementioned 0.55375 exchange ratio set forth in the Merger Agreement resulted in the issuance of 22,536,647 shares of INSW Common Stock, with the pre-Merger INSW shareholders and the former Diamond S shareholders owning approximately 55.75% and 44.25%, respectively, of the 50,674,393 issued and outstanding common stock of the Company immediately following the Effective Time.

As provided for under the terms of the Merger Agreement, on July 15, 2021, prior to the Effective Time, INSW paid a special dividend to its shareholders of record as of July 14, 2021 in an aggregate amount equal to $31.5 million ($1.12 per share).

The merger valued the entire issued and outstanding common stock of Diamond S, including outstanding restricted stock and restricted stock unit awards, at approximately $360.6 million based on a share price of INSW Common Stock of $16.00 on July 16, 2021.

Prior to the Merger, INSW common stock was listed for trading on the NYSE under the trading symbol “INSW,” and Diamond S common stock was listed for trading on NYSE under the trading symbol “DSSI.” Following the closing of the merger, INSW common stock has continued to be listed on the NYSE and Diamond S common shares were delisted from NYSE.

2. Accounting Policies

During the preparation of this unaudited pro forma condensed combined financial information, management of INSW performed a review and comparison of INSW’s U.S. GAAP accounting policies with those of Diamond S. For purposes of preparing the unaudited pro forma condensed combined financial information, both INSW’s and Diamond S’ historical audited consolidated financial statements were prepared under U.S. GAAP. The only differences in the application of U.S. GAAP are noted in 4.A and 5.A below. Adjustments have been made to Diamond S historical financial statements to conform its accounting policies to those adopted by INSW. The resulting pro forma condensed combined financial information has not been audited.

3. Accounting for the Combination

Following the guidelines of ASC 805 and ASU 2017-01, the Merger is accounted for identifying INSW as the accounting acquirer. The factors that were considered in determining that INSW should be treated as the accounting acquirer in the Merger were the relative voting rights in the combined company and the composition of senior management and board of directors of the combined company. With respect to the relative voting rights in the combined company, after the completion of the merger, the INSW shareholders and Diamond S shareholders owned approximately 55.75% and 44.25% of the combined company, respectively. In addition, following the Merger, the senior management of INSW remained in their roles and have led the combined company and the board of directors of the combined company was comprised of seven representatives designated by the board of directors of INSW and three representatives designated by the board of directors of Diamond S.

Based on the terms of the merger agreement, the Merger was determined to not meet the requirements of a business combination under ASU 2017-01. The Merger consists of acquiring vessels and associated assets and liabilities, which are concentrated in a group of similar identifiable assets, and therefore not considered a business. As a result, the Merger is accounted for as an asset acquisition, which values the acquired assets and liabilities at the cost of the acquisition, including transaction costs, on the basis of their relative fair values.

The following table presents a summary of how the consideration paid by INSW for the net assets acquired was determined:

(Dollars in thousands, except per share data)	Amounts
Diamond S outstanding shares as of the Effective Time		40,566,455
Exchange ratio		0.55375
INSW common stock issued to Diamond S shareholders		22,463,653
Replacement unvested restricted stock awards issued to Diamond S employees		72,994	(a)
Total INSW common stock issued		22,536,647
Closing price per share on July 16, 2021	$	16.00
Total value of INSW common stock and replacement awards issued	$	360,586
Replacement awards allocated to post-combination vesting	$	(556	)(a)
Consideration transferred	$	360,030
Consideration transferred not related to value of net assets acquired	$	(31,053	)(b)
Consideration transferred related to value of net assets acquired	$	328,976

^(a)

Unvested Diamond S restricted stock awards of 131,845 as of the Effective Time were assumed by INSW and replaced with INSW restricted stock awards of 72,994, after giving effect to the exchange ratio and appropriate adjustments to reflect the consummation of the Merger. ASC 805, Business Combinations, requires an allocation of the fair-value-based measure of a replacement award to pre-combination service and post-combination service, with the value attributable to pre-combination service included in the consideration transferred and the value attributable to post-combination service recognized as compensation cost by the acquirer. The fair-value-based measure of such replacement award attributable to post-combination service was determined to be $0.6 million.

^(b)

ASC 805 requires an evaluation of all consideration transferred by the acquirer to identify the inclusion of any payments that might be related to goods and services that are separate from the combination. Pursuant to the Merger Agreement, Diamond S’ management services agreements with Capital Ship Management Corp (“CSMC”) were terminated and a termination fee of approximately $31.1 million was paid by Diamond S. As INSW is the recipient of the future economic benefits of such restructuring activities, such termination fee is deemed to be a cost incurred by the acquiree on behalf of the acquirer and is considered as part of the consideration transferred that is not related to the fair value of the net assets acquired. As a result, the consideration transferred allocated to the net assets acquired was reduced by termination fee amount.

The pro forma condensed combined financial information reflects the following fair values of tangible and intangible assets acquired and liabilities assumed based on management’s valuations and historical balances as of June 30, 2021. The final valuation at closing of the merger may result in different fair values from that presented in the pro forma condensed combined balance sheet:

(Dollars in thousands)	Book Value			Transaction Accounting and Fair Value Adjustments			Fair Value
Vessels, deferred drydock expenditures and other property, net	$	1,683,637		$	(423,172	)(a)	$	1,260,465
Cash		95,289			(44,536	)		50,753
Other current assets		84,785			(3,159	)		81,626
Advances to Norient pool		8,205			—			8,205
Time charter contracts acquired, net		1,246			3,922			5,168
Operating lease right-of-use assets		—			5,268			5,268
Other noncurrent assets		5,485			(4,742	)		743
Accounts payable, accrued expenses and other current liabilities		(31,443	)		—			(31,443	)
Operating lease liabilities		—			(5,268	)		(5,268	)
Current and noncurrent debt		(667,881	)		(10,741	)		(678,622	)
Derivative liabilities		(552	)		—			(552	)
Noncontrolling interests		(36,639	)		5,752			(30,887	)
Net asset value acquired	$	1,142,132		$	(476,676	)	$	665,456

Consideration transferred							$	328,976
Excess of net asset value acquired over consideration transferred							$	336,480

^(a)

The $1,260.5 million fair value of the 64 vessels acquired is comprised of (i) $1,249.1 million in vessel fair values assessed in accordance with ASC 820, Fair Value Measurement, using an average of current valuations obtained from third-party vessel appraisals as of the Effective Time, (ii) $6.6 million of the initial lube oil inventory on board the vessels on June 30, 2021 and (iii) $4.8 million in deposits for ballast water treatment system installations.

4. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments as of June 30, 2021

Conforming Accounting Policies

While both INSW and Diamond S prepared historical financial statements in accordance with U.S. GAAP, INSW has adopted ASC 842, Leases, and ASC 326, Financial Instruments — Credit Losses, for the reporting period commencing January 1, 2019 and January 1, 2020, respectively. As an emerging growth company, Diamond S had not adopted ASC 842 or ASC 326.

For a voyage charter that contains a lease component, INSW recognizes revenue and expenses based on a lease commencement-to-discharge basis and the lease commencement date is the latter of discharge of the previous cargo or voyage charter contract signing. For voyage charters that do not have a lease component, INSW recognizes revenue and expenses based on a load-to-discharge basis. As Diamond S has not adopted ASC 842, consistent with industry practice they recognize revenue and expenses based on a load-to-discharge basis for all voyage charters. In addition, for voyage charters that contain a lease component, INSW expenses fuel costs as incurred whereas Diamond S defers fuel costs incurred prior to the commencement of the voyage. Transaction accounting adjustments have been made to reflect the net changes in the amount of voyage charter revenues and voyage expenses during the year ended December 31, 2020 and during the six months ended June 30, 2021 and the changes to the balances of voyage receivables and prepaid expenses and other current assets as of June 30, 2021. In relation to the lease for Diamond S’ headquarters office space, adjustments have been made to recognize operating lease right-of-use assets and corresponding current and long-term operating lease liabilities associated with the office lease.

The effect of the adoption of ASC 326 was determined to be insignificant for purposes of the pro forma condensed combined financial information as Diamond S’ voyage receivables are operating lease receivables due from charterers, which are not in the scope of ASC 326.

In addition, Diamond S capitalizes lube oil inventory when purchased and expenses the inventory as it is consumed. INSW has an accounting policy to expense lube oil inventory when purchased. Transaction accounting adjustments have been made to reflect the net changes in the amount of vessel expenses during the year ended December 31, 2020 and during the six months ended June 30, 2021 and eliminate the balance of lube oil inventory from the June 30, 2021 pro forma condensed combined balance sheet.

Pro Forma Adjustments

(1) Cash and cash equivalents

The decrease in cash and cash equivalents of $81.3 million is composed of the following:

(Dollars in thousands)	Amounts
Special cash dividend	$	(31,514	)(a)
Transaction costs paid by cash		(15,655	)(b)
Management services termination fee		(31,053	)(c)
Other costs related to the merger		(3,101	)(d)
	$	(81,323	)

^(a)

Immediately prior to the closing of the Merger, existing INSW shareholders received a special cash dividend in an aggregate amount equal to $31.5 million.

^(b)

Total transaction costs approximated $26.5 million, which includes $10.8 million of INSW’s transaction costs directly related to the asset acquisition as discussed in 4.B.(4) below and $15.7 million of similar costs incurred by Diamond S which includes debt consent fees as discussed in 4.B.(7) below. Approximately $10.8 million of such costs are included in the accounts payable, accrued expenses and other current liabilities line of the historical June 30, 2021 balance sheets of INSW and Diamond S, respectively. Accordingly, only the balance of $15.7 million is reflected as a proforma adjustment to the historical June 30, 2021 cash balance.

^(c)

The aggregate termination fees to CSMC of approximately $31.1 million is included in the pro forma condensed combined balance sheet and condensed combined statement of operations as a nonrecurring cost.

^(d)

Represents the net cash insurance premium payment for the tail policy to Diamond S’ current directors and officers liability insurance policy to cover potential claims arising from facts or events occurring at or prior to the effective date (the “D&O Insurance”). Pursuant to the merger agreement, such policy shall be maintained by the combined company for an aggregate period of six years from the Closing Date.

(2) Voyage receivables and prepaid expenses and other current assets

The increase in voyage receivables of $1.1 million and the decrease in prepaid expenses and other current assets of $0.8 million represents adjustments made to reflect the application of ASC 842 to Diamond S’ voyage charters as discussed above in 4.A.

In addition, prepaid expenses and other current assets includes a $3.1 million D&O Insurance premium adjustment as discussed above in (1).

(3) Inventories

The decrease in inventory of $6.6 million represents adjustment made to Diamond S’ historical June 30, 2021 balance sheet to eliminate the lube oil inventory balance as discussed above in 4.A.

(4) Vessels and other property and deferred drydock expenditures

The $931.2 million aggregate balance in the “Diamond S Historical” and “Transaction Accounting Adjustments” columns as of June 30, 2021, is primarily comprised of (i) the estimated fair value of the vessels of $1,249.1 million, which is based on the current market values obtained from third-party vessel appraisals as of the Effective Date, (ii) $5.3 million of the total transaction costs incurred directly by INSW of $10.8 million, as such amount represents the costs that were not yet incurred and included in the June 30, 2021 historical financial statements, (iii) $6.6 million of the initial lube oil inventory on board the vessels as of June 30, 2021, and (iv) $4.8 million in deposits for ballast water treatment system installations, (v) reduced by a $334.5 million allocation of the excess of the net asset value acquired over consideration transferred in the Merger. Deferred drydock expenditures are taken into consideration in the vessel appraisals obtained to determine the market values of the vessels acquired and are therefore eliminated for purposes of the pro forma condensed combined financial information.

(5) Operating lease right-of-use assets and liabilities

The operating lease right-of-use asset of $5.3 million and the corresponding current and long-term operating lease liabilities of $0.8 million and $4.4 million, respectively, relate to Diamond S’ headquarters office lease expiring July 2026, and have been reflected in the pro forma condensed combined balance sheet in order to reflect the application of ASC 842. The right of use asset was reduced to $3.9 million by a $1.4 million allocation of the excess of the net asset value acquired over consideration transferred in the Merger.

(6) Time charter contracts acquired, net

In accordance with ASC 820, the above market time charter contracts are recorded at estimated fair value at the time of acquisition. For purposes of the unaudited pro forma condensed combined financial information, the Company estimates $5.2 million to be the value of above market time charter contracts (assets) as of June 30, 2021. The fair value estimate takes into consideration future cash flows under the time charters compared to estimated future market-based charter rates, using a discounted cash flow model. The value of the time charter contracts acquired was adjusted down to $4.6 million after the allocation of $0.5 million of the $336.5 million excess of net assets acquired over the consideration transferred.

(7) Long-term debt

All unamortized deferred financing costs associated with existing financing arrangements of Diamond S of $10.7 million were eliminated as part of the fair value measurement. The preliminary cost allocation estimates the fair value of Diamond S’ secured borrowings, all of which will be assumed as part of the merger. Fair value was measured using the income approach, which takes into account the future cash flows that a market participant would expect to receive from holding the liability as an asset. The carrying amount of the variable rate borrowings under the secured debt facilities as of June 30, 2021 approximates the fair value estimated based on current market rates and an appropriate credit spread. The credit spread is estimated as the margin over LIBOR in Diamond S’ recently entered secured debt facilities, which varies from 2.5% to 3.25%, and represents INSW management’s best estimate of such credit spreads.

In connection with and as a condition to the consummation of the merger, lenders under Diamond S’ existing credit facilities, have agreed, among other things, to consent to the merger and waive any event of default that would arise as a result of the merger. Lenders under Diamond S’ $360 Million Facility and $525 Million Facility also agreed to enter into amended and restated credit agreements to amend the terms of such credit facilities to more closely mirror the representations, warranties and covenants of INSW’s credit facilities and to include INSW as a credit party. In addition, INSW agreed to provide a guaranty of Diamond S’ obligations under the amended and restated debt agreements. The amended and restated credit agreements were entered into on May 27, 2021.

(8) Equity

The following increases/(decreases) have been made to total equity before noncontrolling interest:

						Accumulated
						Other
				Accumulated		Comprehensive		Total
(Dollars in thousands)	Capital			Deficit		Loss		Equity
Pro forma condensed combined balance sheet adjustments:
Cost of net assets acquired	$	328,976		$	—	$	—	$	328,976
Elimination of Diamond S historic equity balances		(1,242,259	)		99,945		182		(1,142,132	)
Special cash dividend to INSW shareholders		(31,514	)		—		—		(31,514	)
	$	(944,797	)	$	99,945	$	182	$	(844,670	)

(9) Noncontrolling Interest

In connection with the Merger, INSW acquired 51% of the net assets of two joint venture entities which were determined to be variable interest entities ("VIEs") of which the combined company is considered the primary beneficiary. According to ASC 805, a primary beneficiary’s initial consolidation of a VIE whose assets and liabilities do not constitute a business is excluded from the scope of business combination. Accordingly, the Company applied ASC 810, Consolidation, for initial measurement and recognition of the net assets of the two joint ventures upon initial consolidation. The net assets of the VIEs, and related noncontrolling interests, are measured at fair value in accordance with ASC 805.

5. Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments for the Year Ended December 31, 2020 and for the six months ended June 30, 2021

Conforming Accounting Policies

For a voyage charter that contains a lease component, INSW recognizes revenue and expenses based on a lease commencement-to-discharge basis and the lease commencement date is the latter of discharge of the previous cargo or voyage charter contract signing. For voyage charters that do not have a lease component, INSW recognizes revenue and expenses based on a load-to-discharge basis. Diamond S recognizes revenue and expenses based on a load-to-discharge basis for all voyage charters. In addition, for voyage charters that contain a lease component, INSW expenses fuel costs as incurred whereas Diamond S defers fuel costs incurred prior to the commencement of the voyage. Transaction accounting adjustments have been made to reflect the net changes in the amount of voyage charter revenues and voyage expenses during the year ended December 31, 2020 and during the six months ended June 30, 2021 and the changes to the balances of voyage receivables and prepaid expenses and other current assets as of June 30, 2021. In relation to the lease for Diamond S’ headquarters office space, adjustments have been made to recognize operating lease right-of-use assets and corresponding current and long-term operating lease liabilities associated with the office lease.

The effect of adoption of ASC 326 was determined to be insignificant for purposes of the pro forma condensed combined financial information as Diamond S’ voyage receivables are operating lease receivables due from charterers, which are not in the scope of ASC 326.

Pro Forma Adjustments

(1) Time and bareboat charter revenues

For the year ended December 31, 2020, time and bareboat charter revenues have been decreased by $4.9 million to eliminate Diamond S’ historical amortization of time charter contracts acquired of $2.8 million and reflect the $7.7 million in amortization of the revalued asset for time charter contracts acquired, as noted above in “4.B.(6) Time charter contracts acquired, net”.

For the six months ended June 30, 2021, time and bareboat charter revenues have been decreased by $2.8 million to eliminate Diamond S’ historical amortization of time charter contracts acquired of $1.0 million and reflect the $3.8 million in amortization of the revalued asset for time charter contracts acquired.

(2) Voyage charter revenues and voyage expenses

For the year ended December 31, 2020, the decrease in voyage charter revenues of $5.3 million and the decrease in voyage expenses of $2.2 million represent the net adjustments made to conform Diamond S’ revenue and expense recognition policy for voyage charters to that of INSW as discussed above in 5.A.

For the six months ended June 30, 2021, such adjustments resulted in decreases of $0.9 million and $0.1 million in voyage charter revenues and voyage expenses, respectively.

(3) Vessel expenses

The increase in vessel expenses of $0.5 million for the year ended December 31, 2020 and the decrease in vessel expenses of less than $0.1 million for the six months ended June 30, 2021 represent the net adjustments made to conform Diamond S’ lube oil expense recognition policy to that of INSW as discussed above in 5.A.

(4) Depreciation and amortization

For the year ended December 31, 2020, depreciation and amortization expense has been reduced by $60.9 million as a result of the fair value adjustment to the carrying value of the vessels acquired as of January 1, 2020. Consistent with INSW’s and Diamond S’ accounting policies, depreciation is calculated on a straight-line basis over the anticipated remaining useful life of 25 years from each vessel’s date of delivery down to the vessel’s estimated salvage value, using the vessel’s lightweight tonnage multiplied by an estimated scrap steel price of $300 per ton.

For the six months ended June 30, 2021, such adjustment amounted to $30.8 million.

(5) General and administrative

Amortization of the D&O Insurance policy as discussed in Note 4.B.(1) above amounted to $0.5 million and $0.3 million, respectively, for the year ended December 31, 2020 and for the six months ended June 30, 2021.

For purposes of the pro forma condensed combined financial information, the $5.2 million of transaction costs recorded in the merger and integration related costs line item of Diamond S’ historical statement of operations for the six months ended June 30, 2021 were eliminated in the pro forma condensed combined statement of operations for the six months ended June 30, 2021 as such costs were included in the transaction and other costs related to merger line of the pro forma condensed combined statement of operations for the year ended December 31, 2020.

(6) Transaction and other costs related to merger

As discussed in Note 4.B.(1) above, the table below includes costs that are directly related to the Merger and other costs not related to the accounting for the Merger but that are incurred only as a result of the Merger are not expected to recur.

(Dollars in thousands)	For the Year ended December 31, 2020		For the Six Months ended June 30, 2021
Transaction costs paid by cash	$	15,655	$	—
Other integration costs		—		481
Management services termination fee		31,053		—
	$	46,708	$	481

(7) Interest expense

Unamortized deferred financing costs relating to Diamond S’ debt facilities were eliminated and reflected in the fair value assessment of the debt. Diamond S recognized $3.6 million and $1.8 million as amortization expense in connection with these deferred financing costs during the year ended December 31, 2020 and during the six months ended June 30, 2021, respectively, which were eliminated for purposes of the pro forma condensed combined financial information.

(8) Net income attributable to noncontrolling interest

The adjustments to (increase)/decrease net income attributable to the noncontrolling interests in the VIEs noted in Note 4.B.(9) above are as follows:

(Dollars in thousands)	For the Year ended December 31, 2020			For the Six Months ended June 30, 2021
Pro forma condensed combined statement of operations adjustments:
Depreciation and amortization	$	(406	)		(203	)
Interest expense – amortization of deferred financing costs		(119	)		(59	)
Time and bareboat charter revenues – amortization of fair value adjustments of time charter contracts		1,563			775
	$	1,038			513

6. Net Income/(Loss) Per Share

The unaudited pro forma condensed combined basic and diluted earnings per share calculations are based on the aggregate basic and diluted weighted average shares of the combined company. The pro forma basic and diluted weighted average shares outstanding are determined using the exchange ratio stated in the merger agreement of 0.55375 share of INSW common stock per Diamond S common share issued and outstanding immediately prior to the Effective Time.

The weighted average numbers of common shares outstanding were calculated as follows:

	For the Year ended December 31, 2020		For the Six Months ended June 30, 2021
Weighted average number of common shares – historical		28,372,375		28,037,957
Pro forma number of common shares issued to Diamond S shareholders		22,536,647		22,536,647
Pro forma weighted average number of common shares – basic		50,909,022		50,574,604

Marshall Islands		98-0467117
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Symbol	Name of each exchange on which registered
Common Stock (no par value)	INSW	New York Stock Exchange
Rights to Purchase Common Stock	N/A true	New York Stock Exchange

	INTERNATIONAL SEAWAYS, INC. (Registrant)


Date: December 23, 2022	By:		/s/ James D. Small III
		Name:	James D. Small III
		Title:	Chief Administrative Officer, Senior Vice President, Secretary and General Counsel

Exhibit No.		Description
99.1		Condensed Consolidated Financial Statements of Diamond S Shipping Inc.
99.2		Pro Forma Condensed Combined Financial Information
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)