Tsakos Energy Navigation : 2024 Financials

Published: 2025-07-01 09:17:07 ET TEN

Published on 07/01/2025 at 09:17

Reports of Independent Registered Public Accounting Firm (PCAOB ID #1457) F-2 Consolidated Balance Sheets as of December 31, 2024 and 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6 Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and

2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

Consolidated Statements of Other Comprehensive Income for the years ended December 31, 2024, 2023

and 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9

Consolidated Statements of Stockholders' Equity for the years ended December 31, 2024, 2023 and

2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10

Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 . . . . . . . . F-12 Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14

We have audited the accompanying consolidated balance sheets of Tsakos Energy Navigation Limited and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, other comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 11, 2025 expressed an unqualified opinion thereon.

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment indicators for vessels held and used

Description of the matter As of December 31, 2024, the carrying value of the Company's vessels,

including unamortized dry-docking costs was $2,957,918. As discussed in Note 1(i), 4 and 5 to the consolidated financial statements, the Company assesses whether events or changes in circumstances have occurred that could indicate that the carrying amounts of its vessels plus unamortized dry-docking costs may not be recoverable, in accordance with the guidance in ASC 360 -Property, Plant and Equipment ("ASC 360").

Auditing the Company's impairment indicator assessment was complex due to the judgement and estimation uncertainty required to evaluate events or changes in circumstances affecting the market and economic conditions in a cyclical and volatile industry, as well as the subjectivity involved in assessing potential indicators of impairment.

How we addressed the matter in our audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's impairment indicator assessment process concerning controls over management's identification of impairment indicators.

We analyzed management's impairment assessment of vessel impairment indicators against the accounting guidance in ASC 360. In order to test management's assessment of the developments in market conditions, our procedures included, among others, performing an analysis over the market charter rates and market prices, recent sale and purchase activity for secondhand tanker and LNG vessels, as well as changes in third-party valuations using market information derived from external industry data. Our procedures also included sensitivity analyses to evaluate the impact from potential sales. We assessed the Company's disclosures in Notes 1(i), 4 and 5 to the consolidated financial statements.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A. We have served as the Company's auditor since 2002.

Athens, Greece April 11, 2025

We have audited Tsakos Energy Navigation Limited and subsidiaries' internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Tsakos Energy Navigation Limited and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, other comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated April 11, 2025 expressed an unqualified opinion thereon.

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A. Athens, Greece

April 11, 2025

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2024, AND 2023

(Expressed in thousands of U.S. Dollars-except share and per share data)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 343,373

$ 372,032

Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,939

4,662

Margin deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,270

Trade accounts receivable, net (Note 1(f)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,451

46,698

Capitalized voyage expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,437

1,448

Due from related parties (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,842

5,287

Advances and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,284

26,275

Vessels held for sale (Note 1(j)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,985

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,948

22,513

Prepaid insurance and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,380

3,913

Receivable, short-term (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,370

Current portion of financial instruments-Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . .

509

1,253

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

451,803

509,336

FINANCIAL INSTRUMENTS-FAIR VALUE, net of current portion . . . . . . . .

RIGHT OF USE ASSETS UNDER OPERATING LEASES (Note 3) . . . . . . . . .

15,937

36,969

LONG-TERM RECEIVABLE (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,183

23,812

INVESTMENT IN DEBT SECURITIES (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . .

25,230

5,064

FIXED ASSETS (Note 4)

Advances for vessels under construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246,392

150,575

Vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,030,874

3,616,223

Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,111,091)

(1,016,202)

Vessels' Net Book Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,919,783

2,600,021

Total fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,166,175

2,750,596

DEFERRED CHARGES AND LEASEHOLD IMPROVEMENTS, net

(Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39,110

38,313

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 3,706,522

$ 3,364,090

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Current portion of long-term debt and other financial liabilities (Note 6) . . . . . . . . . .

$ 251,752

$ 191,974

Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55,846

40,207

Due to related parties (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

880

3,558

Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49,901

33,391

Unearned revenue (Note 1n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,410

31,902

Current portion of obligations under operating leases (Note 3) . . . . . . . . . . . . . . . . . .

11,608

21,031

Current portion of financial liability under operating leases (Note 3) . . . . . . . . . . . . .

1,097

1,067

Current portion of financial instruments-Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 408,519

$ 323,202

2024

2023

LONG-TERM DEBT AND OTHER FINANCIAL LIABILITIES, net of current

portion (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,495,342

$1,370,683

LONG-TERM OBLIGATIONS UNDER OPERATING LEASES (Note 3) . . . . . .

4,329

15,937

FINANCIAL LIABILITY UNDER OPERATING LEASES, net of current

portion (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,097

LIABILITIES ASSUMED FROM TIME CHARTERS ATTACHED

(Note 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,135

FINANCIAL INSTRUMENTS-FAIR VALUE, net of current portion . . . . . . . .

524

STOCKHOLDERS' EQUITY (Note 8)

Preferred Shares, $ 1.00 par value; 25,000,000 shares authorized, 4,745,947 Series E

Preferred Shares and 6,747,147 Series F Preferred Shares issued and outstanding at

December 31, 2024 and December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,493

Common shares, $ 5.00 par value; 60,000,000 shares authorized at December 31,

2024 and December 31, 2023; 30,805,776 shares issued and 30,127,603 shares

outstanding at December 31, 2024 and 30,183,776 shares issued and 29,505,603

shares outstanding at December 31, 2023 respectively. . . . . . . . . . . . . . . . . . . . . . . .

151,541

150,919

Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

919,718

912,214

Cost of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,791)

Accumulated other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(904)

2,485

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

652,651

548,237

Total Tsakos Energy Navigation Limited stockholders' equity . . . . . . . . . . . . . . . .

1,727,708

1,618,557

Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39,489

34,090

Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,767,197

1,652,647

Total liabilities and stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,706,522

$3,364,090

The accompanying notes are an integral part of the consolidated financial statements.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

(Expressed in thousands of U.S. Dollars-except share and per share data)

2024

2023

2022

VOYAGE REVENUES: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 804,061 EXPENSES:

$ 889,566

$ 860,400

Voyage expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152,875

155,724

209,890

Charter hire expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,966

24,680

32,774

Vessel operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198,049

194,914

190,268

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159,902

144,241

140,821

General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . 45,373

33,339

29,854

(Gain) Loss on sale of vessels (Note 4) . . . . . . . . . . . . . . . . . . . . . . . (48,662)

(81,198)

440

Impairment charges (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -

26,367

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525,503

498,067

604,047

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278,558

391,499

256,353

OTHER INCOME (EXPENSES):

Interest and finance costs, net (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . (112,151)

(100,821)

(50,253)

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,124

14,582

2,000

Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

(176)

366

Total other expenses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96,928)

(86,415)

(47,887)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181,630

305,084

208,466

Less: Net income attributable to the non-controlling interest . . . . . . . (5,399)

(4,902)

(4,232)

Net income attributable to Tsakos Energy Navigation

Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 176,231

$ 300,182

$ 204,234

Effect of preferred dividends (Note 10) . . . . . . . . . . . . . . . . . . . . . . . (27,000)

(30,184)

(34,724)

Deemed dividend on Series D Preferred Shares (Note 10) . . . . . . . . . -

(3,256)

Undistributed income to Series G participants . . . . . . . . . . . . . . . . . . -

(1,250)

stock (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (959)

Energy Navigation Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 148,272

266,742

168,260

Undistributed income allocated to non-vested restricted common Net income attributable to common stockholders of Tsakos Earnings per share, basic attributable to Tsakos

EnergyNavigation Limited common stockholders . . . . . . . . . . .

$ 5.03

$ 9.04

$ 6.01

Weighted average number of shares, basic . . . . . . . . . . . . . . . . . . .

29,505,603

27,970,799

Weighted average number of shares, diluted . . . . . . . . . . . . . . . . .

29,505,603

28,188,064

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

(Expressed in thousands of U.S. Dollars-except share and per share data)

2024

2023

2022

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other comprehensive income

$181,630

$305,084

$ 208,466

Unrealized (loss) income on interest rate swaps,

net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,389)

(5,180)

24,840

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . .

178,241

299,904

233,306

Less: comprehensive income attributable to the

non-controlling interest . . . . . . . . . . . . . . . . . . . . . .

(5,399)

(4,902)

(4,232)

Comprehensive income attributable to Tsakos Energy Navigation Limited . . . . . . . . . . . . . . . . .

$172,842

$295,002

$ 229,074

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

(Expressed in thousands of U.S. Dollars-except for share and per share data)

Net income . . . . - - - - - 204,234 - 204,234 4,232 208,466

Issuance of Common

Shares . . . . . - 23,167 20,674 - - - - 43,841 - 43,841

Partial

redemption of Class B preferred shares of

subsidiary . . . - - - - - - - - (2,500) (2,500)

Partial

redemption of Series G convertible preferred

shares . . . . . . (459) 1,531 (1,072) - - - - - - -

Sale of Series D preferred

shares . . . . . . - - 1 - - - - 1 - 1

Sale of Series E preferred

shares . . . . . . 2 - 50 - - - - 52 - 52

Sale of Series F preferred

shares . . . . . . 6 - 133 - - - - 139 - 139

Cash dividends paid ($0.25 per common

share) . . . . . . - - - - - (7,289) - (7,289) - (7,289)

Dividends paid on Class B preferred shares of

subsidiary . . . - - - - - - - - (1,698) (1,698)

Dividends paid on Series D preferred

shares . . . . . . - - - - - (7,694) - (7,694) - (7,694)

Dividends paid on Series E preferred

shares . . . . . . - - - - - (10,975) - (10,975) - (10,975)

Dividends paid on Series F preferred

shares . . . . . . - - - - - (16,024) - (16,024) - (16,024)

- - - - - (31)

(31)

- - - - - -

24,840

Dividends paid on Series G Convertible preferred shares . . . . . .

Other

comprehensive income . . . . .

Net income . . . . - - - - - 300,182 - 300,182 4,902 305,084

Redemption of Class B preferred shares of

subsidiary . . . - - - - - - - - (20,388) (20,388)

Redemption of Series D preferred

shares . . . . . . (3,517) - (81,154) - - (3,256) - (87,927) - (87,927)

Cash dividends paid ($1.0 per common

share) . . . . . . - - - - - (29,508) - (29,508) - (29,508)

Dividends paid on Class B preferred shares of

subsidiary . . . - - - - - - - - (1,446) (1,446)

Dividends paid on Series D preferred

shares . . . . . . - - - - - (3,907) - (3,907) - (3,907)

Dividends paid on Series E preferred

shares . . . . . . - - - - - (10,976) - (10,976) - (10,976)

Dividends paid on Series F preferred

shares . . . . . . - - - - - (16,024) - (16,024) - (16,024)

Other

comprehensive

loss . . . . . . . . - - - - - - (5,180) (5,180) - (5,180)

Net income . . . . - - - - - 176,231 - 176,231 5,399 181,630

Issuance and forfeiture of restricted shares

622,000 . . . . - 622 (622) - - - - - - -

Cash dividends paid ($1.50 per common

share) . . . . . . - - - - - (44,817) - (44,817) - (44,817)

Dividends paid on Series E preferred

shares . . . . . . - - - - - (10,976) - (10,976) - (10,976)

Dividends paid on Series F preferred

shares . . . . . . - - - - - (16,024) - (16,024) - (16,024)

Stock based compensation

expense . . . . - - 8,126 - - - - 8,126 - 8,126

Other

comprehensive

loss . . . . . . . . - - - - - - (3,389) (3,389) - (3,389)

The accompanying notes are an integral part of these consolidated financial statements.

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

(expressed in thousands of U.S. dollars)

2024

2023

2022

Cash Flows from Operating Activities:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 181,630

$ 305,084

$ 208,466

Adjustments to reconcile net income to net cash provided by operating

activities

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of deferred dry-docking costs and leasehold

improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138,396

20,091

122,811

21,124

120,459

19,246

Amortization of deferred finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,626

3,623

4,052

Amortization of right of use assets for finance lease . . . . . . . . . . . . . . . . . . .

1,415

306

1,116

Amortization of assumed liabilities from time charters attached . . . . . . . . .

(15,792)

Amortization of revenue escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,013

(3,984)

(2,004)

Stock based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,126

Interest expense on long term receivable, net . . . . . . . . . . . . . . . . . . . . . . . .

(541)

(505)

(403)

Interest income from debt securities, accrued . . . . . . . . . . . . . . . . . . . . . . . .

(166)

(64)

Change in fair value of derivative instruments . . . . . . . . . . . . . . . . . . . . . . .

(3,541)

(5,868)

(5,923)

(Gain) Loss on sale of vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(48,662)

(81,198)

440

Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,367

Payments for dry-docking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(24,738)

(19,071)

(29,445)

Proceeds from swaps terminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Increase) Decrease in:

Receivables and other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,866

28,371

16,195

(35,238)

Margin deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,579

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,565

3,704

(3,299)

Prepaid insurance and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,398)

2,905

(4,957)

Capitalized voyage expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase (Decrease) in:

Payables and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,961

456

(11,830)

(65)

(27,064)

Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,314

(2,805)

8,345

Unearned revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,508

5,853

17,029

Net Cash provided by Operating Activities . . . . . . . . . . . . . . . . . . . . . . . .

307,684

395,279

288,529

Cash Flows from Investing Activities:

Advances for vessels under construction . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(160,413)

(134,741)

(31,809)

Vessel acquisitions and/or improvements . . . . . . . . . . . . . . . . . . . . . . . . . . .

(489,609)

(163,644)

(301,560)

Investments in debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(20,000)

(5,000)

Proceeds from sale of vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

228,416

165,944

31,555

Net Cash used in Investing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(441,606)

(137,441)

(301,814)

Cash Flows from Financing Activities:

Proceeds from long-term debt and other financial liabilities . . . . . . . . . . . . .

410,632

411,424

701,105

Financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,805)

(3,952)

(6,296)

Payments of long-term debt and other financial liabilities . . . . . . . . . . . . . .

(226,085)

(426,315)

(494,171)

Payments on principal portion of financial liabilities . . . . . . . . . . . . . . . . . .

(2,385)

(1,564)

(2,933)

Redemption of Series D preferred shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(87,927)

Redemption of Series B preferred shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(20,388)

(2,500)

Proceeds from stock issuance program, net . . . . . . . . . . . . . . . . . . . . . . . . . .

43,841

Proceeds from preferred stock issuance, net . . . . . . . . . . . . . . . . . . . . . . . . .

192

Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(71,817)

(61,861)

(43,711)

Net Cash provided by (used in) Financing Activities . . . . . . . . . . . . . . . .

105,540

(190,583)

195,527

2024

2023

2022

Net (decrease) increase in cash and cash equivalents and restricted

cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (28,382)

$ 67,255

$182,242

Cash and cash equivalents and restricted cash at beginning of period . . .

376,694

309,439

127,197

Cash and cash equivalents and restricted cash at end of period . . . . . . . .

$348,312

$ 376,694

$309,439

Interest paid

Cash paid for interest net of amounts capitalized $108,648

$ 101,344

$ 48,946

Reconciliation of cash and cash equivalents and restricted cash at end of

period:

Current Assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

343,373

372,032

304,367

Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,939

4,662

5,072

Total Cash and cash equivalents and restricted cash . . . . . . . . . . . . . . . . .

348,312

376,694

309,439

The accompanying notes are an integral part of these consolidated financial statements.

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

Basis of presentation and description of business: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and include the accounts of Tsakos Energy Navigation Limited (the "Holding Company"), and its wholly-owned and majority-owned subsidiaries (collectively, the "Company"). All intercompany balances and transactions have been eliminated upon consolidation.

The Company owns and operates a fleet of crude oil and product carriers including three vessels chartered-in and two liquified natural gas ("LNG") carriers providing worldwide marine transportation services under long, medium or short-term charters.

Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and expenses, reported in the consolidated financial statements and the accompanying notes. Although actual results could differ from those estimates, management does not believe that such differences would be material.

Other Comprehensive Income (Loss): The consolidated statement of other comprehensive income (loss), presents the change in equity (net assets) during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by shareholders and distributions to shareholders. Reclassification adjustments are presented out of accumulated other comprehensive income (loss) on the face of the statement in which the components of other comprehensive income (loss) are presented or in the notes to the consolidated financial statements. The Company follows the provisions of ASC 220 "Comprehensive Income", and presents items of net income, items of other comprehensive income ("OCI") and total comprehensive income in two separate and consecutive statements.

Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar because the Company's vessels operate in international shipping markets in which the U.S. Dollar is utilized to transact most business. The accounting books of the Company are also maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. Dollars at the year-end exchange rates. Resulting gains or losses are reflected within Vessel operating expenses in the accompanying consolidated statements of comprehensive income.

Cash, Cash Equivalents and Restricted Cash: The Company classifies highly liquid investments such as time deposits and certificates of deposit and their equivalents with original maturities of three months or less as cash and cash equivalents. Cash deposits with certain banks that may only be used for special purposes (including loan repayments) are classified as Restricted cash. Interest earned on cash and cash equivalents and cash deposits is presented as interest income in the accompanying consolidated statements of comprehensive income.

Trade Accounts Receivable, Net and Credit Losses Accounting: Trade accounts receivable, net at each balance sheet date includes estimated recoveries from charterers for hire, freight and demurrage and revenue earned but not yet billed, net of any allowance for receivables deemed uncollectible. Trade accounts receivable are recorded when the right to consideration becomes unconditional. The Company's management at each balance sheet date reviews all outstanding invoices and provides allowance for receivables deemed uncollectible primarily based on the aging of such balances and any amounts in dispute. During 2024, 2023 and 2022, the Company had no write offs of trade accounts receivable, deemed uncollectible.

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

As of January 1, 2020, the Company adopted ASC 326 which requires entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade accounts receivable. The Company maintains an allowance for credit losses for expected uncollectable accounts receivable, which is recorded as an offset to trade accounts receivable and changes in such, if any, are classified as allowance for credit losses in the consolidated statements of comprehensive income.

The Company assessed collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considered historical collectability based on past due status. The Company also considered customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to determine adjustments to historical loss data.

Impairment of accounts receivable arising from operating leases, i.e. time charters, should be accounted in accordance with ASC 842, and not in accordance with Topic 326. Impairment of accounts receivable arising from voyage charters, which are accounted in accordance with ASC 606, are within the scope of Subtopic 326 and must therefore, be assessed for expected credit losses. No allowance was warranted for the years ended December 31, 2024, and December 31, 2023.

In addition, no allowance was recorded for cash equivalents as the majority of cash balances as of the balance sheet date were on time deposits with highly reputable credit institutions, for which periodic evaluations of the relative credit standing of those financial institutions are performed. No allowance was recorded on insurance claims as of December 31, 2024, and December 31, 2023.

Inventories: Inventories consist of bunkers, lubricants, victualling and stores and are stated at the lower of cost or net realizable value. The cost is determined primarily by the first-in, first-out method. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in earnings in the period in which it occurs.

Fixed Assets: Fixed assets consist of vessels and vessels under construction. Vessels are stated at cost, less accumulated depreciation. The cost of vessels includes the contract price and pre-delivery costs incurred during the construction and upon delivery of new buildings, including capitalized interest, and expenses incurred upon the acquisition of second-hand vessels. Subsequent expenditures for conversions and major improvements are capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, they are charged to expense as incurred. Expenditures for routine repairs and maintenance are expensed as incurred.

Depreciation is provided on the straight-line method based on the estimated remaining economic useful lives of the vessels, less an estimated residual value based on a scrap price.

Impairment of Fixed Assets and Right-of-use assets: The Company reviews vessels for impairment whenever events or changes in circumstances indicate that the carrying amount of a vessel including any unamortized dry-docking costs (Note 1(k)) may not be recoverable, in accordance with ASC 360 "Property, Plant and Equipment". When such indicators are present, a vessel to be held and used is tested for recoverability by comparing the estimate of future undiscounted net operating cash flows expected to be generated by the use of the vessel over its remaining useful life and its eventual disposition to its carrying amount. Net operating cash

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

flows are determined by applying various assumptions regarding the use or probability of sale of each vessel, future revenues net of commissions, operating expenses, scheduled dry-dockings, expected off-hire and scrap values, and taking into account historical revenue data and published forecasts on future world economic growth and inflation. Should the carrying value of the vessel, including any unamortized dry-docking costs, exceed its estimated future undiscounted net operating cash flows, impairment is measured based on the excess of the carrying amount plus any unamortized dry-docking costs over the fair market value of the asset. The Company determines the fair value of its vessels based on management estimates and assumptions and by making use of available market data and taking into consideration third-party valuations. In cases where sale and purchase activity in the market does not exist or is limited, the Company uses future discounted net operating cash flows or a combination of future discounted net operating cash flows and third-party valuations to estimate the fair value of an impaired vessel, respectively. The review of the carrying amounts in connection with the estimated recoverable amount for the Company's vessels and advances for vessels under construction as of December 31, 2024, indicated no impairment charge compared to the impairment charge of $26,367 recorded for the year ended December 31, 2023, and $nil for the year ended December 31, 2022 (Note 4).

In addition, the Company reviews and tests its right-of-use-assets under operating leases for impairment, under ASC 360 "Property, Plant and Equipment", whenever events or changes in circumstances indicate by comparing their carrying amount plus any unamortized leasehold improvements (Note 1(k)) with the estimated future undiscounted net operating cash flows expected to be generated by the use of the vessel, considering three-year charter rates estimates and the average of those, over the remaining lease term (Note 4). The review of the carrying amount in connection with the estimated recoverable amount for the Company's right-of-use assets as of December 31, 2024, 2023 and 2022, indicated no impairment charge.

Reporting Assets held for sale: It is the Company's policy to dispose of vessels when suitable opportunities occur and not necessarily to keep them until the end of their useful life. Long-lived assets are classified as held for sale when all applicable criteria enumerated under ASC 360 "Property, Plant, and Equipment" are met and are measured at the lower of their carrying amount or fair value less cost to sell. These assets are not depreciated once they meet the criteria to be held for sale. An impairment charge for an asset held for sale is recognized when its fair value less cost to sell is lower than its carrying value at the date it meets the held for sale criteria and upon subsequent measurement. At December 31, 2024, there were no vessels held for sale. On December 6, 2023, the Company considered that the suezmax tanker Eurochampion 2004 met the criteria to be classified as held for sale and reclassified the amount of $20,985 as held for sale, based on the lower of its carrying amount and Level 1 inputs indicative of the vessel's sale price less cost to sell. Vessel delivered to its new owner on January 11, 2024. There was no impairment charge for vessels classified as held for sale as at December 31, 2023.

Accounting for Special Survey, Dry-docking Costs and Leasehold improvements: The Company follows the deferral method of accounting for dry-docking and special survey costs whereby actual costs incurred are reported in Deferred Charges and leasehold improvements and are amortized on a straight-line basis over the period through the date the next dry-docking is scheduled to become due (approximately every five years during the first fifteen years of the vessels' life and every two and a half years within the remaining useful life of the vessels). Costs relating to routine repairs and maintenance are expensed as incurred. The unamortized portion of special survey and dry-docking costs for a vessel that is sold and/or classified as held for sale, is included as part of the carrying amount of the vessel in determining the gain or loss on sale of the vessel.

The Company follows the deferral method of accounting for leasehold improvement costs whereby actual costs incurred are reported in Deferred Charges and leasehold improvements and are amortized on a straight-line basis over the shorter of the useful life of those leasehold improvements and the remaining lease term, unless the lease

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

transfers ownership of the underlying asset to the lessee or the lessee is reasonably certain to exercise an option to purchase the underlying asset, in which case the lessee shall amortize the leasehold improvements to the end of their useful life.

Loan Costs: Costs incurred for obtaining new loans or refinancing of existing loans, upon application of certain criteria, are capitalized and amortized over the term of the respective loan, using the effective interest rate method. Capitalized expenses for undrawn loan amounts as of the balance sheet date are deferred. Any unamortized balance of costs relating to loans repaid or refinanced as debt extinguishments is expensed in the period the repayment or extinguishment is made. Deferred financing costs, net of accumulated amortization, are presented as a reduction of long-term debt (Note 6).

Accounting for Leases (Company act as lessee): Leases, where the Company is regarded as the lessee, are classified as either operating leases or finance leases, based on an assessment of the terms of the lease. According to the provisions of ASC 842-20-30-1, at the commencement date, a lessee shall measure both of the following:

a) The lease liability at the present value of the lease payments not yet paid, discounted using the discount rate for the lease at lease commencement and b) The right-of-use assets, which shall consist of all of the following: i) The amount of the initial measurement of the lease liability, ii) Any lease payments made to the lessor at or before the commencement date, minus any lease incentives received and iii) Any initial direct costs incurred by the lessee.

After lease commencement, the Company measures the lease liability for an operating lease at the present value of the remaining lease payments using the discount rate determined at lease commencement. The right-of-use assets is subsequently measured at the amount of the remeasured lease liability, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term and any unamortized initial direct costs.

After lease commencement, the Company measures the lease liability for finance leases by increasing the carrying amount to reflect interest on the lease liability and reducing the carrying amount to reflect the lease payments made during the period. The right-of-use asset is amortized from the lease commencement date to the remaining useful life of the underlying asset since the Company has either the obligation or is reasonably certain to exercise its option to purchase the underlying asset. For finance leases, interest expense is determined using the effective interest method and is included under interest and finance cost, net in the consolidated statements of comprehensive income. Upon exercise of the option to purchase the underlying asset and settlement of the remaining lease liability, if the right-of-use asset was not previously presented together with vessels, the Company reclassifies the right-of-use asset to Fixed Assets under the consolidated balances sheets and applies Topic 360 to the asset beginning on the date the purchase option was exercised.

Any changes made to leased assets to customize it for a particular use or need of the lessee are capitalized as leasehold improvements. Amounts attributable to leasehold improvements are presented separately from the related right-of-use assets, whereas amortization on the leasehold improvements is recognized on a straight-line basis and is included under depreciation and amortization in the consolidated statements of comprehensive income. (Note 1(k)).

Sale and Leaseback transactions: In accordance with ASC 842, the Company, as seller-lessee, determines whether the transfer of an asset should be accounted as a sale in accordance with ASC 606. The existence of an option for the seller-lessee to repurchase the asset precludes the accounting for the transfer of the asset as a sale unless both of the following criteria are met: (1) the exercise price of the option is the fair value of the asset at the

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

time the option is exercised and (2) there are alternative assets, substantially the same as the transferred asset, readily available in the marketplace; and the classification of the leaseback as a finance lease or a sales-type lease, precludes the buyer-lessor from obtaining control of the asset. The existence of an obligation for the Company, as seller-lessee, to repurchase the asset precludes accounting for the transfer of the asset as sale as the transaction would be classified as a financing arrangement by the Company as it effectively retains control of the underlying asset. If the transfer of the asset meets the criteria of sale, the Company, as seller-lessee recognizes the proceeds from the sale when the buyer-lessor obtains control of the asset, derecognizes the carrying amount of the underlying asset and accounts for the lease in accordance with ASC 842. If the transfer does not meet the criteria of sale, the Company does not derecognize the transferred asset, accounts for any amounts received as a financing arrangement and recognizes the difference between the amount of consideration received and the amount of consideration to be paid as interest.

The Company has three and five sale and leaseback transactions accounted for as operating leases as of December 31, 2024, and 2023, respectively, and one accounted for as a financing arrangement as of December 31, 2024, and 2023 (Note 3 & 6).

Accounting for Revenues and Expenses: Voyage revenues are generated from voyage charter agreements and contracts of affreightment, bareboat charter, time charter agreements (including profit sharing clauses) or pooling arrangements.

Demurrage revenue, which is included in voyage revenues, represents charterers' reimbursement for any potential delays exceeding the allowed lay time as per charter party agreement and is recognized as the performance obligation is satisfied.

Thus, time and bareboat charter agreements are accounted as operating leases (Company acts as lessor), ratably on a straight line over the duration of the charter agreement and therefore, fall under the scope of ASC 842.

For vessels operating in pooling arrangements, the Company earns a portion of the generated total revenues, net of expenses incurred by the pool. Revenues and voyage expenses are pooled and allocated to each pool's

Disclaimer

TEN - Tsakos Energy Navigation Limited published this content on July 01, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on July 01, 2025 at 13:15 UTC.