EX-99.1 4 v452107_exh99x1.htm EX-99.1

Exhibit 99.1

Preliminary and Subject to Completion, dated November 4, 2016

[GRAPHIC MISSING]

           , 2016

Dear Overseas Shipholding Group, Inc. Stockholder,

I am pleased to inform you that on October 21, 2016, the board of directors of Overseas Shipholding Group, Inc. (“OSG”) approved the spin-off of our subsidiary, International Seaways, Inc. (“INSW”). INSW owns and operates a fleet of oceangoing vessels engaged primarily in the transportation of crude oil and petroleum products in the International Flag trades. Each holder of OSG Class A common stock (“OSG common stock”) will receive 0.3333 shares of INSW common stock for every one share of OSG common stock held on            , 2016, the record date for this transaction. Each holder of OSG Class A warrants (“OSG warrants”) will receive 0.3333 shares of INSW common stock for every one share of OSG common stock they would have received if they exercised their warrants immediately prior to the Distribution (or approximately 0.06332 INSW shares per warrant).

The spin-off transaction will separate OSG and INSW into two distinct businesses with separate management and, eventually, ownership. We believe this transaction will better enable both companies to capitalize on significant opportunities for growth. OSG will continue to focus on its U.S. Flag fleet and Jones Act operations. INSW will emerge as an independent, publicly-owned company and pursue its growth strategies and prioritize investment spending as it believes appropriate, without having to compete for capital or senior management resources with other OSG businesses. This transaction will provide holders of OSG common stock with separate and distinct ownership interests in both OSG and INSW, each with management teams focused on the unique needs and opportunities of their respective businesses.

The spin-off transaction will be in the form of a pro rata dividend to holders of OSG common stock and OSG warrants. The dividend will represent all of the common stock of INSW owned by OSG. OSG currently owns 100% of the issued and outstanding shares of the common stock of INSW.

We encourage you to read the attached information statement, which is being provided to all holders of OSG common stock and OSG warrants. It describes the spin-off transaction in detail and contains important business and financial information about INSW.

We believe the spin-off transaction is a positive event for our businesses and our stockholders. We look forward to your continued support as a stockholder of OSG and remain committed to working on your behalf to build long-term stockholder value.

Sincerely,
 
Ian T. Blackley
President and Chief Executive Officer
           , 2016


 
 

International Seaways, Inc.

[GRAPHIC MISSING]

           , 2016

Dear Future International Seaways, Inc. Stockholder,

On behalf of the entire team at International Seaways, Inc. (“INSW”), I want to welcome you as a future stockholder. Our business consists of owning and operating a fleet of oceangoing vessels engaged primarily in the transportation of crude oil and petroleum products in the International Flag trades. At June 30, 2016, the Company owned or operated a fleet of 55 vessels (totaling an aggregate of 6.5 million deadweight tons (“dwt”)) and 864,800 cubic meters (“cbm”), including ownership interests through joint venture partnerships in four liquefied natural gas (“LNG”) carriers and two floating storage and offloading (“FSO”) service vessels, all of which operated in the International Flag market.

As an independent, publicly-owned company, we believe we can more effectively execute on our strategic plans and deliver long-term value to you as a stockholder.

I encourage you to learn more about INSW and the strategies we are pursuing by reading the attached information statement. We look forward to our future as an independent, public company and your continued support as an INSW stockholder.

Sincerely,
 
Lois K. Zabrocky
President
           , 2016


 
 

Information contained herein is subject to completion or amendment. A registration statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

SUBJECT TO COMPLETION
PRELIMINARY INFORMATION STATEMENT DATED NOVEMBER 4, 2016

[GRAPHIC MISSING]

International Seaways, Inc.

Common Stock
no par value

This Information Statement is being furnished to you as a stockholder or warrantholder of Overseas Shipholding Group, Inc. (“OSG”) in connection with the planned distribution (the “Distribution” or the “spin-off”) by OSG to its equityholders of all the shares of common stock, no par value, of International Seaways, Inc. (“INSW”) (the “Common Stock”) held by OSG immediately prior to the spin-off. Immediately prior to the time of the Distribution, OSG will hold 100% of INSW outstanding shares of Common Stock.

At the time of the Distribution, OSG will distribute all of the outstanding shares of Common Stock held by OSG on a pro rata basis to holders of OSG’s Class A common stock (“OSG common stock”) and Class A warrants (“OSG warrants”). Every share of OSG common stock outstanding as of 5:00 PM, Eastern Time, on            , 2016, the record date for the spin-off (the “Record Date”), will entitle the holder thereof to receive 0.3333 shares of Common Stock. Each holder of OSG warrants will receive 0.3333 shares of Common Stock for every one share of OSG common stock they would have received if they exercised their warrants immediately prior to the Distribution (or approximately 0.06332 shares of Common Stock per warrant). The Distribution will be made in book-entry form. Fractional shares of Common Stock will not be distributed in the spin-off. Holders of OSG common stock and OSG warrants will receive cash in lieu of fractional shares of Common Stock. The Distribution Agent is Computershare, Inc. (the “Distribution Agent”).

The Distribution will be effective as of 5:00 PM Eastern Time, on            , 2016, which we refer to hereinafter as the “Distribution Date.” Immediately after the Distribution is completed, we will be a publicly traded company independent from OSG.

No action will be required of you to receive shares of Common Stock, which means that:

no vote of OSG stockholders is required in connection with this Distribution and we are not asking you for a proxy and you are requested not to send us a proxy;
you will not be required to pay for the shares of Common Stock that you receive in the Distribution; and
you do not need to surrender or exchange any of your shares of OSG common stock or your OSG warrants in order to receive shares of Common Stock, or take any other action in connection with the spin-off.

There is currently no trading market for Common Stock, although we expect that a limited market, commonly known as a “when-issued” trading market, will develop on or shortly before the Record Date for the Distribution and we expect “regular-way” trading of Common Stock on a major U.S. national securities exchange to begin on the first trading day following the completion of the Distribution. INSW has applied to list its Common Stock on the New York Stock Exchange (“NYSE”) under the symbol “INSW.”

In reviewing this Information Statement, you should carefully consider the matters described under “Risk Factors” beginning on page 21 of this Information Statement.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS INFORMATION STATEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Information Statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this Information Statement is            , 2016.


 
 

References in this Information Statement to the “Company,” “INSW,” “we,” “us,” or “our” refer to International Seaways, Inc. and, unless the context otherwise requires or otherwise is expressly stated, its consolidated subsidiaries. References in this Information Statement to “OSG” refer to Overseas Shipholding Group, Inc., and, unless the context otherwise requires or otherwise is expressly stated, its consolidated subsidiaries other than INSW.

A glossary of shipping terms (the “Glossary”) that should be used as a reference when reading this Information Statement can be found immediately after the Table of Contents. Capitalized terms that are used in this Information Statement are either defined when they are first used or in the Glossary.

All dollar amounts are stated in thousands of U.S. dollars unless otherwise stated.

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TABLE OF CONTENTS

 
  Page
GLOSSARY     4  
QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF     7  
SUMMARY     12  
RISK FACTORS     21  
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS     44  
THE SPIN-OFF     46  
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION     49  
MARKET PRICE INFORMATION AND DIVIDENDS     53  
CAPITALIZATION     54  
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS     55  
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA     61  
BUSINESS     64  
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS     83  
MANAGEMENT     108  
COMPENSATION DISCUSSION AND ANALYSIS     113  
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT     136  
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS, AFFILIATES AND AFFILIATED ENTITIES     139  
DESCRIPTION OF OUR CAPITAL STOCK     144  
WHERE YOU CAN FIND MORE INFORMATION     148  
ENFORCEABILITY OF CIVIL LIABILITIES     148  
INDEX TO FINANCIAL STATEMENTS     F-1  

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SUPPLEMENTARY FINANCIAL INFORMATION

The Company reports its financial results in accordance with generally accepted accounting principles of the United States of America (“GAAP”). However, the Company has included certain non-GAAP financial measures and ratios that it believes provide useful information to both management and readers of this report in measuring the financial performance and financial condition of the Company. These measures do not have a standardized meaning prescribed by GAAP and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to other titled measures determined in accordance with GAAP.

The Company presents three non-GAAP financial measures: time charter equivalent revenues, EBITDA and Adjusted EBITDA. Time charter equivalent revenues, or TCE revenues, represent shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. EBITDA represents operating earnings before interest expense and income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. See “Selected Historical Consolidated Financial Data” for reconciliations of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure.

This Information Statement includes industry data that we have prepared based, in part, on information obtained from industry publications and surveys. Third-party industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. In addition, certain statements regarding our market position in this report are based on information derived from the Company’s market studies and research reports. Unless we state otherwise, statements about the Company’s relative competitive position in this report are based on our management’s beliefs, internal studies and management’s knowledge of industry trends.

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GLOSSARY

Unless otherwise noted or indicated by the context, the following terms used in this Information Statement on Form 10 have the following meanings:

Aframax — A medium-size crude oil tanker of approximately 80,000 to 120,000 deadweight tons. Aframaxes can generally transport from 500,000 to 800,000 barrels of crude oil and are also used in lightering. A coated Aframax operating in the refined petroleum products trades may be referred to as an LR2.

ballast — Any heavy material, including water, carried temporarily or permanently in a vessel to provide desired draft and stability.

bareboat charter — A charter under which a customer pays a fixed daily or monthly rate for a fixed period of time for use of the vessel. The customer pays all costs of operating the vessel, including voyage and vessel expenses. Bareboat charters are usually long term.

b/d — Barrels per day.

CERCLA — The U.S. Comprehensive Environmental Response, Compensation, and Liability Act.

charter — A contract entered into with a customer for the use of the vessel for a specific voyage at a specific rate per unit of cargo (“voyage charter”), or for a specific period of time at a specific rate per unit (day or month) of time (“time charter”).

Classification Societies — Organizations that establish and administer standards for the design, construction and operational maintenance of vessels. As a practical matter, vessels cannot trade unless they meet these standards.

commercial management or commercially managed — The management of the employment, or chartering, of a vessel and associated functions, including seeking and negotiating employment for vessels, billing and collecting revenues, issuing voyage instructions, purchasing fuel and appointing port agents.

commercial management agreement or CMA — A contract under which the commercial management of a vessel is outsourced to a third-party service provider.

commercial pool or pool — A commercial pool is a group of similar size and quality vessels with different shipowners that are placed under one administrator or manager. Pools allow for scheduling and other operating efficiencies such as multi-legged charters and contracts of affreightment and other operating efficiencies.

contract of affreightment or COA — An agreement providing for the transportation between specified points for a specific quantity of cargo over a specific time period but without designating specific vessels or voyage schedules, thereby allowing flexibility in scheduling since no vessel designation is required. COAs can either have a fixed rate or a market-related rate. One example would be two shipments of 70,000 tons per month for two years at the prevailing spot rate at the time of each loading.

crude oil — Oil in its natural state that has not been refined or altered.

cubic meters or cbm — The industry standard for measuring the carrying capacity of an LNG Carrier.

deadweight tons or dwt — The unit of measurement used to represent cargo carrying capacity of a vessel, but including the weight of consumables such as fuel, lube oil, drinking water and stores.

demurrage — Additional revenue paid to the shipowner on its voyage charters for delays experienced in loading and/or unloading cargo that are not deemed to be the responsibility of the shipowner, calculated in accordance with specific charter terms.

double hull — A hull construction design in which a vessel has an inner and an outer side and bottom separated by void space, usually two meters in width.

drydocking — An out-of-service period during which planned repairs and maintenance are carried out, including all underwater maintenance such as external hull painting. During the drydocking, certain mandatory

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Classification Society inspections are carried out and relevant certifications issued. Normally, as the age of a vessel increases, the cost and frequency of drydockings increase.

Exclusive Economic Zone — An area that extends up to 200 nautical miles beyond the territorial sea of a state’s coastline (land at lowest tide) over which the state has sovereign rights for the purpose of exploring, exploiting, conserving and managing natural resources.

floating storage offloading unit or FSO — A converted or new build barge or tanker, moored at a location to receive crude or other products for storage and transfer purposes. FSOs are not equipped with processing facilities.

Handysize product carrier — A small size product carrier of approximately 29,000 to 45,000 deadweight tons. This type of vessel generally operates on shorter routes (short haul).

International Energy Agency or IEA — An intergovernmental organization established in the framework of the Organization for Economic Co-operation and Development in 1974. Among other things, the IEA provides research, statistics, analysis and recommendations relating to energy.

International Maritime Organization or IMO — An agency of the United Nations, which is the body that is responsible for the administration of internationally developed maritime safety and pollution treaties, including MARPOL.

International Flag — International law requires that every merchant vessel be registered in a country. International Flag refers to those vessels that are registered under a flag other that of the United States.

International Flag fleet — Our International Flag vessels.

International Flag vessel — A vessel that is registered under a flag other than that of the United States.

lightering — The process of off-loading crude oil or petroleum products from large size tankers, typically VLCCs, into smaller tankers and/or barges for discharge in ports from which the larger tankers are restricted due to the depth of the water, narrow entrances or small berths.

LNG Carrier — A vessel designed to carry liquefied natural gas, that is, natural gas cooled to —  163° centigrade, turning it into a liquid and reducing its volume to  1/600 of its volume in gaseous form. LNG is the abbreviation for liquefied natural gas.

LR1 — A coated Panamax tanker. LR is an abbreviation of long range.

LR2 — A coated Aframax tanker.

MarAd — The Maritime Administration of the U.S. Department of Transportation.

MARPOL — International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto. This convention includes regulations aimed at preventing and minimizing pollution from ships by accident and by routine operations.

MR — MR is an abbreviation of medium range. This type of vessel, a product carrier of approximately 45,000 to 53,000 deadweight tons, generally operates on medium-range routes.

OECD — Organization for Economic Cooperation and Development, which is a group of developed countries in North America, Europe and Asia.

OPA 90 — OPA 90 is the abbreviation for the U.S. Oil Pollution Act of 1990.

OPEC — The Organization of Petroleum Exporting Countries, which is an international organization established to coordinate and unify the petroleum policies of its members.

P&I insurance or P&I — Protection and indemnity insurance, commonly known as P&I insurance, is a form of marine insurance provided by a P&I club. A P&I club is a mutual (i.e., a co-operative) insurance association that provides cover for its members, who will typically be ship-owners, ship-operators or demise charterers.

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Panamax — A medium size vessel of approximately 53,000 to 80,000 deadweight tons. A coated Panamax operating in the refined petroleum products trades may be referred to as an LR1.

product carrier — General term that applies to any tanker that is used to transport refined oil products, such as gasoline, jet fuel or heating oil.

safety management system or SMS — A framework of processes and procedures that addresses a spectrum of operational risks associated with quality, environment, health and safety. The SMS is certified by ISM (International Safety Management Code), ISO 9001 (Quality Management) and ISO 14001 (Environmental Management).

scrapping — The disposal of vessels by demolition for scrap metal.

special survey — An extensive inspection of a vessel by classification society surveyors that must be completed once within every five year period. Special Surveys require a vessel to be drydocked.

Suezmax — A large crude oil tanker of approximately 120,000 to 200,000 deadweight tons. Suezmaxes can generally transport about one million barrels of crude oil.

technical management or technically managed — The management of the operation of a vessel, including physically maintaining the vessel, maintaining necessary certifications, and supplying necessary stores, spares, and lubricating oils. Responsibilities also generally include selecting, engaging and training crew, and arranging necessary insurance coverage.

time charter — A charter under which a customer pays a fixed daily or monthly rate for a fixed period of time for use of the vessel. Subject to any restrictions in the charter, the customer decides the type and quantity of cargo to be carried and the ports of loading and unloading. The customer pays all voyage expenses such as fuel, canal tolls, and port charges. The shipowner pays all vessel expenses such as the technical management expenses.

time charter equivalent or TCE — TCE is the abbreviation for time charter equivalent. TCE revenues, which is voyage revenues less voyage expenses, serves as an industry standard for measuring and managing fleet revenue and comparing results between geographical regions and among competitors.

ton-mile demand — A calculation that multiplies the average distance of each route a tanker travels by the volume of cargo moved. The greater the increase in long haul movement compared with shorter haul movements, the higher the increase in ton-mile demand.

ULCC — ULCC is an abbreviation for Ultra Large Crude Carrier, a crude oil tanker of more than 350,000 deadweight tons. ULCCs can transport three million barrels of crude oil and are mainly used on the same long haul routes as VLCCs or for storage.

vessel expenses — Includes crew costs, vessel stores and supplies, lubricating oils, maintenance and repairs, insurance and communication costs associated with the operations of vessels.

VLCC — VLCC is the abbreviation for Very Large Crude Carrier, a large crude oil tanker of approximately 200,000 to 320,000 deadweight tons. VLCCs can generally transport two million barrels or more of crude oil. These vessels are mainly used on the longest (long haul) routes from the Arabian Gulf to North America, Europe, and Asia, and from West Africa to the United States and Far Eastern destinations.

voyage charter — A charter under which a customer pays a transportation charge for the movement of a specific cargo between two or more specified ports. The shipowner pays all voyage expenses, and all vessel expenses, unless the vessel to which the charter relates has been time chartered in. The customer is liable for demurrage, if incurred.

voyage expenses — Includes fuel, port charges, canal tolls, cargo handling operations and brokerage commissions paid by the Company under voyage charters. These expenses are subtracted from shipping revenues to calculate time charter equivalent revenues for voyage charters.

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QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF

The following questions and answers briefly address some commonly asked questions about the spin-off. They may not include all the information that is important to you. We encourage you to read carefully this entire Information Statement and the other documents to which we have referred you. We have included references in certain parts of this section to direct you to a more detailed discussion of each topic presented in this Information Statement. Unless the context otherwise requires, any references to “we,” “our,” “us” and the “Company” refer to INSW and its consolidated subsidiaries as in effect upon the completion of the Distribution. References to “OSG” generally refer to Overseas Shipholding Group, Inc. and its consolidated subsidiaries, unless the context requires otherwise.

Why is OSG spinning off INSW?

OSG’s board of directors periodically reviews strategic alternatives. The OSG board of directors determined upon careful review and consideration in accordance with the applicable standard of review under Delaware law that the spin-off of INSW is in the best interests of OSG. The board’s determination was based on a number of factors, including, without limitation, those set forth below.

Enhanced strategic and management focus.  The separation will allow OSG and INSW to more effectively pursue their distinct operating priorities and strategies and enable management of both companies to focus on opportunities for long-term growth and profitability.
Enhanced ability to evaluate the business.  The two companies will have different growth, margins and returns, different market cycle exposure, and different risk/reward profiles. The spin-off will allow investors to evaluate the merits, performance and future prospects of each company’s respective business and to invest in each company separately based on these distinct characteristics.
Direct access to capital markets.  The separation will create an independent equity structure that will afford each company with direct access to the capital markets. As a result, each company will have more flexibility to capitalize on its unique growth opportunities.
Broadening of investor base may enhance value.  Separate companies that focus on the International Flag and U.S. Flag markets may attract a broader base of stockholders by providing them with choice and flexibility to allocate investments between two distinctly different opportunities. This may attract new investors to each business who may not have properly assessed the value of the businesses as stand-alone entities relative to the value they are currently accorded.
Acquisitions.  The spin-off will improve the ability of both OSG and INSW to use their respective stock as acquisition currency.
Alternative transaction structures.  The board of directors considered other available alternative transaction structures for separating INSW including a merger/sale transaction, and whether a spin-off is the most advantageous option.

The anticipated benefits of the spin-off are based on a number of assumptions, and those benefits may not materialize to the extent anticipated or at all. If the spin-off does not result in such benefits, the costs associated with the transaction and the expenses INSW will incur as an independent public company, including management compensation and general and administrative expenses, could have a negative effect on each company’s financial condition and ability to make distributions to its stockholders. For more information about the risks associated with the separation, see “Risk Factors.”

What will OSG stockholders and warrantholders receive in the spin-off?

To effect the spin-off, OSG will make a distribution of all of the outstanding shares of Common Stock held by OSG to OSG common stockholders and OSG warrantholders as of the Record Date, which will be 5:00 PM, Eastern Time, on            , 2016. For every share of OSG common stock held on the Record Date for the Distribution, OSG will distribute 0.3333 shares of Common Stock. Each holder of OSG warrants will receive 0.3333 shares of Common Stock for every one share of OSG common stock they would have received if they exercised their warrants immediately prior to the Distribution (or approximately 0.06332 shares of Common Stock per warrant). The Distribution will be made in book-entry form. Fractional shares of Common Stock

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will not be distributed in the spin-off. Instead, as soon as practicable after the spin-off, the Distribution Agent will aggregate the fractional shares of our Common Stock and sell these shares in the open market at prevailing market prices and distribute the applicable portion of the aggregate net cash proceeds of these sales to each holder who otherwise would have been entitled to receive a fractional share in the spin-off. You will not be entitled to any interest on the amount of the cash payment made in lieu of fractional shares.

OSG stockholders and warrantholders will not be required to pay for shares of our Common Stock received in the Distribution, or to surrender or exchange any shares of OSG common stock or OSG warrants or take any other action to be entitled to receive our Common Stock. The Distribution of our Common Stock will not cancel or affect the number of outstanding shares of OSG common stock or the number of outstanding OSG warrants.

Immediately after the Distribution, holders of OSG common stock and OSG warrants as of the Record Date are expected to hold all of the outstanding shares of our Common Stock. Based on the number of shares of OSG common stock and OSG warrants outstanding on            , 2016, OSG expects to distribute all outstanding shares of our Common Stock in the spin-off. For a more detailed description, see “The Spin-Off” in this Information Statement.

Will I be taxed on the shares of INSW Common Stock that I receive in the Distribution?

Yes. OSG intends to treat the Distribution as a taxable dividend to OSG stockholders and warrantholders. In that case, an amount equal to the fair market value of the shares of our Common Stock received by you will be treated as a taxable dividend to the extent of your ratable share of any current or accumulated earnings and profits of OSG, with the excess treated as a non-taxable return of capital to the extent of your tax basis in OSG common stock or OSG warrants and any remaining excess treated as capital gain. For a more detailed discussion, see “Certain U.S. Federal Income Tax Consequences of the Distribution — Tax Consequences of the Distribution.”

You should consult your own tax advisor as to the particular tax consequences of the Distribution to you, including the applicability of any U.S. federal, state, local and foreign tax laws.

How will the Distribution affect my tax basis and holding period in OSG common stock or OSG warrants?

Assuming that the Distribution is treated as a taxable dividend, your tax basis in OSG common stock or OSG warrants held at the time of the Distribution will be reduced (but not below zero) to the extent the fair market value of the shares of our Common Stock distributed by OSG in the Distribution exceeds OSG’s current and accumulated earnings and profits, as adjusted to take account of other distributions made by OSG in the taxable year that includes the Distribution. Your holding period for such OSG common stock or OSG warrants will not be affected by the Distribution. See “Certain U.S. Federal Income Tax Consequences of the Distribution — Tax Consequences of the Distribution.”

You should consult your own tax advisor as to the particular tax consequences of the Distribution to you, including the applicability of any U.S. federal, state, local and foreign tax laws.

What will my tax basis and holding period be for the stock of INSW that I receive in the Distribution?

Assuming that the Distribution is treated as a taxable dividend, your tax basis in the shares of our Common Stock received will equal the fair market value of such shares on the date of the Distribution. Your holding period for such shares will begin the day after the date of the Distribution. See “Certain U.S. Federal Income Tax Consequences of the Distribution — Tax Consequences of the Distribution.”

You should consult your own tax advisor as to the particular tax consequences of the Distribution to you, including the applicability of any U.S. federal, state, local and foreign tax laws.

What businesses will OSG engage in after the spin-off?

OSG will continue to operate in the U.S. Flag market.

Who is entitled to receive shares of our Common Stock in the spin-off?

Holders of OSG common stock and OSG warrants as of 5:00 PM, Eastern Time, on            , 2016, the Record Date for the spin-off, will be entitled to receive shares of our Common Stock in the spin-off.

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When will the Distribution occur?

We expect that OSG will distribute the shares of our Common Stock at 5:00 PM, Eastern Time, on            , 2016 to holders of record of OSG common stock and OSG warrants as of 5:00 PM, Eastern Time, on            , 2016, subject to certain conditions described under “The Spin-Off — Conditions to the Distribution.”

Will the number of OSG shares I own change as a result of the Distribution?

No. The number of shares of OSG common stock or OSG warrants you own will not change as a result of the Distribution.

What will happen to the listing of OSG common stock?

Nothing. It is expected that after the distribution of INSW Common Stock, OSG common stock will continue to be traded on the NYSE under the symbol “OSG.”

Will the Distribution affect the market price of my OSG shares?

Yes. As a result of the Distribution, we expect the trading price of shares of OSG common stock immediately following the Distribution to be lower than immediately prior to the Distribution because the trading price will no longer reflect the value of INSW’s assets. Furthermore, until the market has fully analyzed the value of OSG without INSW’s assets, the price of OSG shares may fluctuate significantly. In addition, although OSG believes that over time following the separation, the common stock of the separated companies should have a higher aggregate market value, on a fully distributed basis and assuming the same market conditions, than if OSG were to remain under its current configuration, nonetheless the combined trading prices of OSG common stock and INSW Common Stock after the Distribution may be equal to or less than the trading price of shares of OSG common stock before the Distribution.

Are there risks associated with the spin-off and our business after the spin-off?

Yes. You should carefully review the risks described in this Information Statement under the heading “Risk Factors” beginning on page 21.

Is stockholder approval needed in connection with the spin-off?

No vote of OSG stockholders is required in connection with the spin-off.

What do I need to do to receive my shares of INSW Common Stock?

Nothing, but we urge you to read this Information Statement carefully. Stockholders who hold OSG common stock or OSG warrants as of the Record Date will not need to take any action to receive your shares of Common Stock in the Distribution. No stockholder approval of the Distribution is required or sought. We are not asking you for a proxy, and you are requested not to send us a proxy. You will not be required to make any payment, surrender or exchange your shares of OSG common stock or OSG warrants or take any other action to receive your shares of Common Stock. If you own OSG common stock or OSG warrants as of 5:00 PM, Eastern Time, on the Record Date, OSG, with the assistance of the Distribution Agent, will electronically issue shares of our Common Stock to you or to your brokerage firm on your behalf by way of direct registration in book-entry form. The Distribution Agent will mail you a book-entry account statement that reflects your shares of INSW Common Stock, or your bank or brokerage firm will credit your account for the shares. If you sell shares of OSG common stock in the “regular-way” market through the Distribution Date, you will also sell your right to receive shares of Common Stock in the Distribution. Following the Distribution, stockholders whose shares are held in book-entry form may request that their shares of Common Stock held in book-entry form be transferred to a brokerage or other account at any time, without charge.

Will I receive physical certificates representing shares of INSW Common Stock following the Distribution?

No. OSG, with the assistance of the Distribution Agent, will electronically issue shares of our Common Stock to you or to your bank or brokerage firm on your behalf by way of direct registration in book-entry form. The Distribution Agent will mail you a book-entry account statement that reflects your shares of Common Stock, or your bank or brokerage firm will credit your account for the shares. A benefit of issuing stock electronically

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in book-entry form is that there will be none of the physical handling and safekeeping responsibilities that are inherent in owning physical stock certificates. Record Holders of INSW Common Stock that wish to receive physical stock certificates after the distribution date should contact our transfer agent.

What will govern my rights as an INSW stockholder?

Your rights as an INSW stockholder will be governed by Marshall Islands law, as well as our amended and restated articles of incorporation and our amended and restated by-laws. A description of these rights is included in this Information Statement under the heading “Description of Our Capital Stock.”

Who will be the stockholders of INSW Common Stock after the Distribution?

Immediately following the Distribution, we expect OSG stockholders as of the Record Date for the Distribution will own all of our Common Stock.

Where will I be able to trade shares of INSW Common Stock?

There is not currently a public market for Common Stock. INSW has applied to list its Common Stock on the NYSE under the symbol “INSW.” We anticipate that trading in shares of our Common Stock will begin on a “when-issued” basis on or shortly before the Record Date and will continue through the Distribution Date and that “regular-way” trading in shares of our Common Stock will begin on the first trading day following the Distribution Date. If trading begins on a “when-issued” basis, you may purchase or sell our Common Stock up to and including through the Distribution Date, but your transaction will not settle until after the Distribution Date. We cannot predict the trading prices for our Common Stock before, on or after the Distribution Date. If the Distribution is cancelled, your transaction will not settle and will have to be disqualified.

Does INSW plan to pay dividends?

INSW has not yet determined whether to pay cash dividends or other distributions with respect to its Common Stock once it becomes a stand-alone public company. Any future determinations to pay dividends on its Common Stock will be at the discretion of its board of directors and will depend upon many factors, including INSW’s future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors its board of directors may deem relevant. The timing, declaration, amount and payment of any future dividends will be at the discretion of INSW’s board of directors.

INSW has no obligation to, and may not be able to, declare or pay dividends on its Common Stock. If INSW does not declare and pay dividends on its Common Stock, its share price could decline. See “Market Price Information and Dividends — Dividends.”

What if I want to sell my OSG common stock or INSW Common Stock?

You should consult with your financial advisors, such as your stockbroker, bank or tax advisor. Neither OSG nor INSW makes any recommendations on the purchase, retention or sale of OSG common stock or the shares of INSW Common Stock to be distributed in the spin-off.

If you decide to sell any shares before the Distribution, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your OSG common stock or the shares of Common Stock you will receive in the Distribution. If you sell your OSG common stock in the “regular-way” market up to and including the Distribution Date, you will also sell your right to receive shares of Common Stock in the Distribution. If you own OSG common stock as of 5:00 PM, Eastern Time, on the Record Date and sell those shares on the “ex-distribution” market up to and including the Distribution Date, you will still receive the shares of Common Stock that you would be entitled to receive in respect of the OSG common stock you owned as of 5:00 PM, Eastern Time, on the Record Date. See “The Spin-Off — Trading Between the Record Date and Distribution Date” in this Information Statement for more information.

Can OSG decide to cancel the Distribution or modify its terms if all conditions to the Distribution have been met?

Yes. The Distribution is subject to the satisfaction or waiver of certain conditions, and OSG has the right to not complete the Distribution if at any time prior to the Distribution Date (even if all such conditions are satisfied), its board of directors determines, in its sole discretion, that the Distribution is not in the best interest of OSG or that market conditions are such that it is not advisable to separate INSW from OSG.

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Where can OSG stockholders get more information?

Before the Distribution, if you have any questions relating to the Distribution, you should contact:

Overseas Shipholding Group, Inc.
Attn: Investor Relations
600 Third Avenue, 39th Floor
New York, New York 10016
 
After the Distribution, if you have any questions relating to our Common Stock, you should contact:
 
International Seaways, Inc.
Attn: Investor Relations
600 Third Avenue, 39th Floor
New York, New York 10016

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SUMMARY

This summary of certain information contained in this Information Statement may not include all the information that is important to you. To understand fully and for a more complete description of the terms and conditions of the spin-off, you should read this Information Statement in its entirety and the documents to which you are referred. See “Where You Can Find More Information.”

Overview

International Seaways, Inc., a Marshall Islands corporation incorporated in 1999, and its wholly owned subsidiaries own and operate a fleet of oceangoing vessels engaged primarily in the transportation of crude oil and petroleum products in the International Flag trades. At September 30, 2016, the Company owned or operated a fleet of 55 vessels (totaling an aggregate of 6.5 million deadweight tons (“dwt”) and 864,800 cubic meters (“cbm”)) all of which operated in the International Flag market. The Marshall Islands is the principal flag of registry of the Company’s vessels. Additional information about the Company’s fleet, including its ownership profile, is set forth under “Business — Fleet Operations — Fleet Summary,” as well as on Overseas Shipholding Group, Inc.’s website, www.osg.com. We have included OSG’s website address only as an inactive textual reference and do not intend it to be an active link to its website. Neither OSG’s website nor the information contained on that site, or connected to that site, is incorporated by reference in this Information Statement, except to the extent otherwise included herein.

The Company’s vessel operations are organized into two segments: International Crude Tankers and International Product Carriers. Our 55-vessel fleet consists of ULCC, VLCC, Aframax, and Panamax crude tankers, as well as LR1, LR2 and MR product carriers. Through joint venture partnerships (the “JVs”), the Company also has ownership interests in four liquefied natural gas (“LNG”) carriers and two floating storage and offloading (“FSO”) service vessels. For a more detailed discussion of our LNG Carrier and FSO service vessel JVs, see “Business — Fleet Operations — Joint Ventures.”

INSW generally charters its vessels to customers either for specific voyages at spot rates or for specific periods of time at fixed daily amounts through time charters or bareboat charters. Spot market rates are highly volatile, while time charter and bareboat charter rates provide more predictable streams of time charter equivalent (“TCE”) revenues because they are fixed for specific periods of time. For a more detailed discussion on factors influencing spot and time charter markets, see “Business — Fleet Operations — Commercial Management” below.

Our Emergence from Bankruptcy

During the period from November 14, 2012 through August 4, 2014, OSG and its subsidiaries, including certain INSW debtor entities, conducted business in the ordinary course as debtors-in-possession under the protection of the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). OSG emerged from bankruptcy on August 5, 2014. Pursuant to a plan of reorganization filed with and confirmed by the Bankrupcty Court (the “Equity Plan”), all claims allowed by the Bankruptcy Court (other than subordinated claims) were either reinstated or paid in full in cash plus interest for the period from November 14, 2012 through August 5, 2014, which was the effective date of the Equity Plan (the “Effective Date”), at either the contractual rate as provided by statute, or, at the rate of 2.98%, as set forth in the Equity Plan.

As part of an overall strategy to position the Company to successfully emerge from Chapter 11 with a smaller, more-concentrated fleet without the need for costly systems, multiple offices and the associated expenses, OSG embarked on an organizational restructuring process. Elements of that process include (i) rejecting 25 executory contracts relating to above-market charter agreements (17 of the vessels were redelivered and 8 were renegotiated), (ii) exiting our full service Crude Tankers Lightering business to focus only on ship-to-ship Lightering services and (iii) outsourcing the technical and commercial management of our conventional tanker fleet using a combination of cash on hand and proceeds from two exit financing facilities (one for INSW and the other for the U.S. Flag business of OSG) and an equity offering by OSG. We believe these actions have positioned us to compete more effectively in the markets in which we operate.

See Note 2, “Chapter 11 Filing and Emergence from Bankruptcy,” to the Company’s audited consolidated financial statements included elsewhere in this Information Statement for additional information relating to OSG’s emergence from bankruptcy.

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Vessel Summary

As of September 30, 2016, our operating fleet included 55 vessels, 42 of which were owned, 7 of which were chartered-in, and six in which we had an ownership interest through the JVs.

       
  Vessels
Owned
  Vessels
Chartered-In(1)
  Total at September 30, 2016
Vessel Fleet and Type   Number   Number   Total Vessels   Total dwt
International Flag Fleet
                                   
Crude Tankers
                                   
VLCC and ULCC     9             9       2,875,775  
Aframax     7             7       787,859  
Panamax     8             8       555,504  
Total     24             24       4,219,138  
Product Carriers
                                   
LR2     1             1       109,999  
LR1     4             4       297,710  
MR     13       7       20       955,968  
Total     18       7       25       1,363,677  
Total Owned and Operated Fleet     42       7       49       5,582,815  
JV Vessels
                                   
FSO     2             2       873,916  
LNG Carriers     4             4       864,800 (2) 
Total     6             6        
Total Operating Fleet (including JV Vessels)     48       7       55       6,456,731 dwt
and 864,800 cbm
 

(1) Includes both bareboat charters and time charters, but excludes vessels chartered-in where the duration of the charter was one year or less at inception.
(2) LNG Carrier capacity described in cbm.

Strengths

Our competitive strengths position us as a leader in the International Flag tanker market, provide us with differentiated chartering and strategic opportunities due to our size and global presence, and drive our primary objective of maximizing shareholder value. Our fleet maintains full vetting approvals and operates in well-established and top-performing commercial pools, enhancing our revenues, and we maintain vetting approvals in accordance with the requirements of the pooling arrangements. Our personnel working with V. Ships strive to ensure that the vessels are maintained and operated to a standard that is acceptable to the oil majors. Our customers independently verify that the vessels meet these standards.

Leading operator of International Flag vessels.

Our operating fleet (excluding our JV vessels) comprises 20 MR tankers, 12 Panamax/LR1s, eight Aframaxes/LR2s, eight VLCCs and one ULCC. The weighted-average age (by carrying capacity) of our total owned and operated fleet was 11.3 years as of September 30, 2016, compared with an average of 9.5 years for the world International Flag tanker fleet of vessels over 10,000 dwt. Twenty-five of our tankers can be shifted between the crude oil and refined product trades depending on market conditions. This provides us with flexibility to employ our vessels in the most attractive market segments. We believe the scale, flexibility and diversity of our fleet enable us to capitalize on chartering opportunities that are not available to many vessel owners with smaller or less-diverse fleets.

Large and diverse International Flag fleet is well-positioned to benefit from current market fundamentals.

We own and operate one of the largest fleets of international crude and product tankers worldwide. Our fleet trades predominantly in the spot market (which has over protracted periods of time outperformed a strategy

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based on medium- or long-term time charters), generally through commercial pools, which facilitate deployment of our vessels globally. Commercial pools allow shipowners to collectively achieve scale in a particular vessel class without requiring large capital commitments from any individual owner. For a more detailed discussion on the material services provided under the pooling arrangements, including how revenues are allocated among members of each of the pools, see “Business — Fleet Operations — Commercial Management — Commercial Pools and other Commercial Management Arrangements.” We participate in commercial pools because we believe that combining vessels of similar size and capability in an integrated system creates scale and offers our customers greater flexibility and higher service levels, and were a founding member of two of the largest commercial pools in which we participate, Tankers International (“TI”) and Panamax International (“PI”). The size and scope of these commercial pools enable us to secure greater utilization through more backhaul voyages and COAs, reduced waiting time and shorter ballast voyages, thereby generating higher TCE revenues than otherwise might be obtainable in the spot market. As of September 30, 2016, 35 out of 55 of our vessels participated in six commercial pools. The six pools currently commercially manage the following approximate number of vessels, including those of INSW: TI — 52, Sigma Tankers (“SIGMA”) — 41, Handytankers (“HDT”) — 62, PI — 31, Clean Products Tankers Alliance (“CPTA”) — 28 and Navig8 Tankers — Alpha8 (“Navig8”) — 16. The international spot charter market recovered well throughout 2014 and posted healthy results for 2015 and the first six months of 2016, with our fleet’s spot charter rates averaging blended TCE rates of $17,917/day for 2014, $30,627/day for 2015 and $26,797/day for the first six months of 2016. We believe that our exposure to the spot market and participation in leading commercial pools provide strong returns to stockholders over time.

Strategy

Our primary objective is to maximize stockholder value by generating strong cash flows through the combination of the higher returns available from time to time in the spot market and from our participation in commercial pools with selective short-term time charters; actively managing the size and composition of our fleet over the course of market cycles to increase investment returns and available capital; and entering into value-creating transactions. The key elements of our strategy are:

Generate strong cash flows by capitalizing on our long-standing customer relationships.

We believe we are well-positioned to generate strong cash flows by identifying and taking advantage of attractive chartering opportunities in the International Flag market. Our fleet maintains one of the largest global footprints in the tanker market. Our market position allows us or the commercial pools in which we participate to maintain our long-standing relationships with many of the largest energy companies, which in some cases date back for more than 16 years. We selectively seek out time charters on certain of our vessels, usually one to two years, to major oil companies, traders and our pool partners to complement our spot market exposure. We will continue to pursue an overall chartering strategy which blends short-term time charters that provides stable cash flows with a substantial spot rate exposure that provides us with higher returns when the more volatile spot market is stronger.

Significantly enhance cash flows through spot market exposure and participation in commercial pools.

We expect to continue to deploy the majority of our fleet on a spot rate basis to benefit from market volatility and what we believe are the traditionally higher returns the spot market offers compared with time charters. We believe this strategy presently offers significant upside exposure to the spot market and an opportunity to capture enhanced profit margins at times when vessel demand exceeds supply. We also anticipate continuing to use commercial pools as our principal means of participation in the spot market. We currently participate in six commercial pools — TI, SIGMA, HDT, PI, CPTA and Navig8 — each selected for specific expertise in its respective market. Our continued participation in pools allows us to benefit from economies of scale and higher vessel utilization rates, resulting in TCE revenues that exceed those we believe could be achieved operating those vessels outside of a commercial pool.

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Generate stable cash flows through time charters.

We seek to employ a portion of our vessels on short-term time charters. The prevailing contango in crude oil pricing (when the future price of oil exceeds the current price of oil, encouraging the temporary storage of crude oil at sea) enabled us to place our ULCC, the Overseas Laura Lynn (the former TI Oceania), on a storage charter through March 2017. One of our VLCCs, the Overseas Sakura, is on charter to a major oil company through August 2017 and five of our Panamax/LR1s are on time charters to our partners in the PI pool that expire in the first half of 2017. We may seek to place other tonnage on time charters, for storage or transport, when we can do so at attractive rates.

Actively manage our fleet to maximize return on capital over market cycles.

We plan to actively manage the size and composition of our fleet through opportunistic accretive acquisitions and dispositions as part of our effort to achieve above-market returns on capital for our vessel assets and renew our fleet. Using our commercial, financial and operational expertise, we plan to opportunistically grow our fleet through the timely and selective acquisition of high-quality secondhand vessels or existing newbuild contracts when we believe those acquisitions will result in attractive returns on invested capital and increased cash flow. We also intend to engage in opportunistic dispositions where we can achieve attractive values for our vessels relative to their anticipated future earnings from operations as we assess the market cycle. Taken together, we believe these activities will help us to maintain a diverse, high-quality and modern fleet of crude oil and refined product vessels with an enhanced return on invested capital. We believe our diverse and versatile fleet, our experience and our long-standing relationships with participants in the crude and refined product shipping industry, position us to identify and take advantage of attractive acquisition opportunities in any vessel class in the international market.

Maintain a strong and flexible financial profile.

As of June 30, 2016, we had total liquidity on a consolidated basis of $329 million, comprised of $279 million of cash and $50 million of undrawn revolver capacity. We seek to maintain a strong balance sheet as we believe it will provide financial flexibility to take advantage of attractive strategic opportunities we may identify.

Positive Industry Fundamentals

Freight rates in tanker market surged higher in 2015 and continued to be firm in the opening months of 2016. Four major factors led to the firmness in tanker earnings in 2015 and the first half of 2016 — strong growth in global oil trade, sluggish expansion of the fleet, a sharp increase in floating storage and lower bunker prices. After subdued growth during 2011-14, global crude oil trade surged in 2015 as a steep decline in oil prices ensured high refinery margins which in turn kept refinery runs high. In addition to this, low oil prices also kept global oil demand and stocking activity high. On the other hand, the pace of global oil trade growth during 2011-14 was hurt by weakness in global economy and decline in US imports due to rising domestic production. Drewry estimated that total ton mile demand for crude tankers increased from 8.6 trillion ton miles in 2011 to 8.8 trillion ton miles in 2014, before jumping by 3.3% to 9.3 trillion ton miles in 2015. The refined petroleum products market, which represented about 25% of total 2015 worldwide tanker trade measured by ton mile demand, grew by a compound annual growth rate of 3.5% from 2.6 trillion to 3.0 trillion ton miles between 2011 and 2015. During this period the United States became the largest refined product exporter in the world, with most U.S. product exports moving on MR tankers into South America and Europe. The annual growth rate of the world tanker fleet, which has moderated since peaking at 9% in 2009, dropped off significantly to approximately 3% to 4% a year through 2012, and had net increases below 2% in 2013 and below 1% in 2014 before finally increasing by 3% in 2015 and 5% in the first nine months of 2016. Monthly contracting volumes in the 10 years ended December 31, 2015 averaged approximately 3.2 million dwt while the monthly average for the first nine months of 2016 was only 0.7 million dwt. This decline indicates that fleet growth in the 2017 to 2018 period could start to moderate. Vessel earnings in both the crude and product markets are, however, highly sensitive to changes in the demand for, and supply of, shipping capacity, which has historically caused these markets to be cyclical and volatile in nature. Tanker earnings in the third quarter of 2016 have been softer than rates in the first half of 2016 reflecting normal seasonality factors as well as high crude oil inventory levels and increased vessel deliveries.

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Fleet List

The following tables set forth information regarding vessels in our fleet as of September 30, 2016:

         
Vessel Name   Type   Dwt   Year Built   Employment   Shipyard
Owned Vessels
                                            
Overseas Laura Lynn     ULCC       441,585       2003       Time Charter       Daewoo  
Overseas Kilimanjaro     VLCC       296,999       2012       Pool       Dalian  
Overseas McKinley     VLCC       296,971       2011       Pool       Dalian  
Overseas Everest     VLCC       296,907       2010       Pool       Shanghai Jiangnan  
Overseas Rosalyn     VLCC       317,979       2003       Pool       Hyundai  
Overseas Mulan     VLCC       318,518       2002       CMA       Hyundai  
Overseas Tanabe     VLCC       298,561       2002       Pool       Hitachi  
Overseas Sakura     VLCC       298,641       2001       Time Charter       Hitachi  
Overseas Raphael     VLCC       309,614       2000       Time Charter       Hyundai  
Overseas Redwood     Aframax       112,792       2013       Pool       SPP  
Overseas Yellowstone     Aframax       112,989       2009       Pool       New Times  
Overseas Yosemite     Aframax       112,905       2009       Pool       New Times  
Overseas Portland     Aframax       112,139       2002       Pool       Hyundai  
Overseas Josefa Camejo     Aframax       112,860       2001       Pool       Hyundai  
Overseas Fran     Aframax       112,118       2001       Pool       Hyundai  
Overseas Shirley     Aframax       112,056       2001       Pool       Hyundai  
Overseas Shenandoah     LR2       109,999       2014       Pool       SPP  
Overseas Reymar     Panamax       69,636       2004       Time Charter (1)      Daewoo  
Cabo Hellas     Panamax       69,636       2003       Time Charter (1)      Daewoo  
Overseas Jademar     Panamax       69,697       2002       Pool       Daewoo  
Overseas Pearlmar     Panamax       68,014       2002       Pool       Daewoo  
Overseas Goldmar     Panamax       69,684       2002       Pool       Daewoo  
Overseas Rosemar     Panamax       69,629       2002       Pool       Daewoo  
Overseas Silvermar     Panamax       69,609       2002       Pool       Daewoo  
Overseas Rubymar     Panamax       69,599       2002       Time Charter (1)      Daewoo  
Overseas Leyte     LR1       73,944       2011       Pool       SPP  
Overseas Samar     LR1       73,925       2011       Time Charter (1)      SPP  
Overseas Visayas     LR1       74,933       2006       Time Charter (1)      STX  
Overseas Luzon     LR1       74,908       2006       Time Charter (1)      STX  
Overseas Athens     MR       50,342       2012       Pool       SPP  
Overseas Milos     MR       50,378       2011       Pool       SPP  
Overseas Kythnos     MR       50,284       2010       Pool       SPP  
Overseas Skopelos     MR       50,222       2009       Pool       SPP  
Overseas Alcmar     MR       46,248       2004       Pool       STX  
Overseas Alcesmar     MR       46,214       2004       Pool       STX  
Overseas Ariadmar     MR       46,205       2004       Pool       STX  
Overseas Andromar     MR       46,195       2004       Pool       STX  
Overseas Atalmar     MR       46,177       2004       Pool       STX  
Overseas Antigmar     MR       46,168       2004       Pool       STX  
Victory     MR       47,236       1998       Bareboat       Onomichi  
Overseas Ambermar     MR       35,970       2002       Pool       Daedong  
Overseas Petromar     MR       35,768       2001       Pool       Daedong  
Chartered In Vessels
                                            
Alexandros II     MR       51,257       2008       CMA       STX  
Overseas Sifnos     MR       51,225       2008       Time Charter       STX  

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Vessel Name   Type   Dwt   Year Built   Employment   Shipyard
Overseas Kimolos     MR       51,218       2008       CMA       STX  
Sextans     MR       51,218       2007       Pool       STX  
Cygnus     MR       51,218       2007       Pool       STX  
PTI Hercules     MR       51,218       2006       Pool       STX  
PTI Orion     MR       51,218       2006       Pool       STX  
JV Vessels
                                            
FSO Vessels
                                            
FSO Africa(2)     FSO       432,023       2002       Service Contract       Daewoo  
FSO Asia(2)     FSO       441,893       2002       Service Contract       Daewoo  
LNG Carriers
                                            
Al Gattara(3)     LNG       216,200 (4)      2007       Time Charter       Hyundai  
Tembek(3)     LNG       216,200 (4)      2007       Time Charter       Samsung  
Al Gharrafa(3)     LNG       216,200 (4)      2008       Time Charter       Hyundai  
Al Hamla(3)     LNG       216,200 (4)      2008       Time Charter       Samsung  

(1) These vessels entered into short-term time charters with our PI commercial pool partners.
(2) JV Vessels in which we hold a 50% ownership interest.
(3) JV Vessels in which we hold a 49.9% ownership interest.
(4) LNG Carrier capacity described in cbm.

Risk Factors

Our business is subject to numerous risks. See “Risk Factors.” In particular, our business may be adversely affected by:

our lack of history operating as an independent public company;
the highly cyclical nature of the industry, which may lead to volatile changes in charter rates and significant fluctuations in the market value of vessels;
declines in charter rates and other market deterioration;
an increase in the supply of vessels without a commensurate increase in demand for such vessels, which could cause charter rates to become depressed;
our insurance not being adequate to cover our losses;
changes in the regulatory environment in which we operate;
acts of piracy on ocean-going vessels;
terrorist attacks and international hostilities and instability;
compliance with the complex laws and regulations that govern our operations, including environmental laws and regulations;
constraints on capital availability; and
our significant indebtedness.

Corporate Information

Our executive offices are located at 600 Third Avenue, 39th Floor, New York, New York 10016, and our telephone number is (212) 953-4100. Following completion of the Spin-off, our Internet website address will be www.intlseas.com. Information on, or accessible through, our website is not incorporated into, nor should it be considered part of, this prospectus. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website.

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Summary of the Spin-Off

The following is a summary of the terms of the spin-off. See “The Spin-Off” in this Information Statement for a more detailed description of the matters described below.

Distributing company    
    OSG is the distributing company in the spin-off. Immediately following the Distribution, OSG will not own any capital stock of INSW.
Distributed company    
    INSW is the distributed company in the spin-off.
Primary purposes of the spin-off    
    For the reasons more fully discussed in “Questions and Answers About the Spin-off — Why is OSG spinning off INSW?”, OSG believes that separating INSW from OSG is in the best interests of both OSG and INSW.
Distribution ratio    
    Each holder of OSG common stock will receive 0.3333 shares of INSW’s Common Stock for every share of OSG common stock held on            , 2016, the Record Date for the Distribution. Each holder of OSG warrants will receive 0.3333 shares of INSW Common Stock for every one share of OSG common stock they would have received if they exercised their warrants immediately prior to the Distribution (or approximately 0.06332 shares of Common Stock per warrant). Fractional shares of INSW Common Stock will not be distributed in the spin-off. Holders of OSG common stock and OSG warrants will receive cash in lieu of fractional shares of INSW Common Stock.
Securities to be distributed    
    All of the shares of INSW Common Stock owned by OSG, which will be 100% of our Common Stock outstanding immediately prior to the Distribution.
    Based on the     shares of OSG common stock and the      OSG warrants outstanding on            , 2016, and the distribution ratio of 0.3333 shares of INSW Common Stock for every share of OSG common stock,     shares of our Common Stock will be distributed to OSG stockholders and warrantholders. The number of shares of Common Stock that OSG will distribute to its stockholders and warrantholders will be reduced to the extent that cash payments are made or will be made in lieu of the issuance of fractional INSW Common Stock.
Record Date    
    The Record Date for the Distribution is 5:00 P.M., Eastern Time, on            , 2016.
Distribution Date    
    The Distribution Date will be 5:00 P.M., Eastern Time, on            , 2016.
The Distribution    
    On the Distribution Date, OSG, with the assistance of the Distribution Agent, will electronically issue shares of our Common Stock to you or to your bank or brokerage firm on your behalf by way of direct registration in book-entry form. You will not be required to make any payment, surrender or exchange your shares of OSG common stock or OSG warrants or take any other action to receive your shares of our Common Stock. If you sell shares of OSG common stock in the “regular-way” market through the Distribution Date, you will also sell your right to receive shares of INSW Common Stock in the Distribution. Registered stockholders will receive additional information from the Distribution Agent

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    shortly after the Distribution Date. Following the Distribution, stockholders whose shares are held in book-entry form may request that their shares of INSW Common Stock be transferred to a brokerage or other account at any time, without charge. Beneficial stockholders that hold shares through brokerage firms will receive additional information from their brokerage firms shortly after the Distribution Date.
    Fractional shares of Common Stock will not be distributed in the spin-off. Holders of OSG common stock and OSG warrants will receive cash in lieu of fractional shares of INSW Common Stock. The Distribution Agent, will aggregate all fractional shares of INSW common stock into whole shares, sell the whole shares in the open market at prevailing market prices on behalf of holders entitled to receive a fractional share, and distribute the aggregate net cash proceeds of the sales pro rata to these holders.
Conditions to Distribution    
    The Distribution of our Common Stock is subject to the satisfaction or waiver of a number of conditions, including the following:
   

•  

the Securities and Exchange Commission (“SEC”) shall have declared effective our registration statement on Form 10, of which this Information Statement is a part, and no stop order relating to the registration statement shall be in effect;

   

•  

all consents required in connection with the Distribution and related transactions shall have been received;

   

•  

OSG shall have received an opinion of outside legal counsel or tax advisors regarding the U.S. federal income tax treatment of the contribution, the separation and the Distribution, in form and substance satisfactory to OSG in its sole discretion;

   

•  

the board of directors of OSG shall have received an opinion from a nationally recognized appraisal, valuation and investment banking firm, in form and substance satisfactory to OSG in its sole discretion regarding: (A) the solvency of each of OSG and INSW after the contribution, separation and Distribution and (B) the existence of surplus after OSG has made the Distribution;

   

•  

the listing of and our Common Stock on the NYSE shall have been approved, subject to official notice of issuance; and

   

•  

no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the Distribution or any of the transactions related thereto, shall be in effect.

    OSG has the right not to complete the Distribution if, at any time prior to the Distribution Date (even if all such conditions are satisfied), its board of directors determines, in its sole discretion, that the Distribution is not in the best interest of OSG or that market conditions are such that it is not advisable to separate INSW from OSG.

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NYSE listing    
    We have applied to list our shares of Common Stock on the NYSE under the ticker symbol “INSW.” We anticipate that on or shortly before the Record Date for the Distribution, trading of shares of our Common Stock will begin on a “when-issued” basis and will continue up to and including the Distribution Date. See “The Spin-Off — Market for Common Stock — Trading Between the Record Date and Distribution Date,” included elsewhere in this Information Statement.
    It is expected that after the distribution of our Common Stock, OSG common stock will continue to be traded on the NYSE under the symbol “OSG.”
Distribution Agent    
    Computershare, Inc.
Tax considerations    
    The Distribution of our Common Stock likely will not qualify for tax-free treatment. Assuming that is the case, an amount equal to the fair market value of the shares of our Common Stock received by you on the date of Distribution will be treated as a taxable dividend to the extent of your ratable share of any current or accumulated earnings and profits of OSG. The excess will be treated as a non-taxable return of capital to the extent of your tax basis in OSG common stock or OSG warrants and any remaining excess will generally be treated as capital gain. Your tax basis in OSG common stock or OSG warrants held at the time of the Distribution will be reduced (but not below zero) to the extent the fair market value of the shares of our Common Stock distributed by OSG in the Distribution exceeds OSG’s current and accumulated earnings and profits, as adjusted to take account of other distributions made by OSG in the taxable year that includes the Distribution. Your holding period for such OSG common stock or OSG warrants will not be affected by the Distribution. OSG will not be able to advise stockholders and warrantholders of the amount of earnings and profits of OSG until after the end of the 2016 calendar year. For a more detailed discussion, see “Certain U.S. Federal Income Tax Consequences of the Distribution — Tax Consequences of the Distribution.”

Emerging Growth Company Status

We qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We do not intend to take advantage of the exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Such exemptions include, but are not limited to, scaled disclosure provisions with respect to financial information and executive compensation, compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the requirements to hold a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. Under the JOBS Act, we retain the ability to take advantage of these reporting exemptions until we are no longer considered an emerging growth company, which in certain circumstances could be up to five years.

In addition, Section 107 of the JOBS Act provides that an emerging growth company may take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for complying with new or revised accounting standards applicable to public companies. In other words, we may delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected not to take advantage of this extended transition period, and our election is irrevocable pursuant to Section 107(b) of the JOBS Act.

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RISK FACTORS

The following important risk factors could cause actual results to differ materially from those contained in the forward-looking statements made in this report or presented elsewhere by management from time to time. If any of the circumstances or events described below actually arise or occur, INSW’s business, results of operations and financial condition could be materially adversely affected. Actual dollar amounts are used in this “Risk Factors” section.

Risks Related to Our Industry

The highly cyclical nature of the industry may lead to volatile changes in charter rates and vessel values, which could adversely affect the Company’s earnings and available cash.

The tanker industry is both cyclical and volatile in terms of charter rates and profitability. Fluctuations in charter rates and vessel values result from changes in supply and demand both for tanker capacity and for oil and oil products. Factors affecting these changes in supply and demand are generally outside of the Company’s control. The nature, timing and degree of changes in industry conditions are unpredictable and could adversely affect the values of the Company’s vessels or result in significant fluctuations in the amount of charter revenues the Company earns, which could result in significant volatility in INSW’s quarterly results and cash flows. Factors influencing the demand for tanker capacity include:

supply and demand for, and availability of, energy resources such as oil, oil products and natural gas, which affect customers’ need for vessel capacity;
global and regional economic and political conditions, including armed conflicts, terrorist activities and strikes, that among other things could impact the supply of oil, as well as trading patterns and the demand for various vessel types;
regional availability of refining capacity and inventories;
changes in the production levels of crude oil (including in particular production by OPEC, the United States and other key producers);
developments in international trade generally;
changes in seaborne and other transportation patterns, including changes in the distances that cargoes are transported, changes in the price of crude oil and changes to the West Texas Intermediate and Brent Crude Oil pricing benchmarks;
environmental and other legal and regulatory developments and concerns;
construction or expansion of new or existing pipelines or railways;
weather and natural disasters;
competition from alternative sources of energy; and
international sanctions, embargoes, import and export restrictions, nationalizations and wars.

Factors influencing the supply of vessel capacity include:

availability and pricing of other energy resources such as natural gas;
the number of newbuilding deliveries;
the scrapping rate of older vessels;
the number of vessels being used for storage or as FSO service vessels;
the conversion of vessels from transporting oil and oil products to carrying dry bulk cargo or vice versa;
the number of vessels that are removed from service;

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availability and pricing of other energy sources such as natural gas for which tankers can be used or to which construction capacity may be dedicated;
port or canal congestion; and
environmental and maritime regulations.

Many of the factors that influence the demand for tanker capacity will also, in the longer term, effectively influence the supply of tanker capacity, since decisions to build new capacity, invest in capital repairs, or to retain in service older obsolescent capacity are influenced by the general state of the marine transportation industry from time to time.

The market value of vessels fluctuates significantly, which could adversely affect INSW’s liquidity or otherwise adversely affect its financial condition.

The market value of vessels has fluctuated over time. The fluctuation in market value of vessels over time is based upon various factors, including:

age of the vessel;
general economic and market conditions affecting the tanker industry, including the availability of vessel financing;
number of vessels in the world fleet;
types and sizes of vessels available;
changes in trading patterns affecting demand for particular sizes and types of vessels;
cost of newbuildings;
number of vessels on order;
prevailing level of charter rates;
competition from other shipping companies and from other modes of transportation; and
technological advances in vessel design and propulsion.

Worldwide vessel market values declined after 2010 before bottoming out in the second half of 2013. Crude vessel values generally rose throughout 2014 and 2015, reflecting the higher TCE rates in the market. In 2016, vessel sales have been very sporadic and financing has been difficult for many companies to obtain. This has resulted in downward pressure on vessel values, while at the same time limiting new orders for newbuildings that would be delivered after 2017.

These factors will affect the value of the Company’s vessels at the time of any vessel sale. If INSW sells a vessel at a sale price that is less than the vessel’s carrying amount on the Company’s financial statements, INSW will incur a loss on the sale and a reduction in earnings and surplus. In addition, declining values of the Company’s vessels could adversely affect the Company’s liquidity by limiting its ability to raise cash by refinancing vessels.

Declines in charter rates and other market deterioration could cause INSW to incur impairment charges.

The Company evaluates events and changes in circumstances that have occurred to determine whether they indicate that the carrying amounts of the vessel assets might not be recoverable. This review for potential impairment indicators and projection of future cash flows related to the vessels is complex and requires the Company to make various estimates, including future freight rates, earnings from the vessels, market appraisals and discount rates. All of these items have historically been volatile. The Company evaluates the recoverable amount of a vessel asset as the sum of its undiscounted estimated future cash flows. If the recoverable amount is less than the vessel’s carrying amount, the vessel’s carrying amount is then compared to its estimated fair value, which is determined based on vessel valuations. If the vessel’s carrying amount is less than its fair value, it is deemed impaired. The carrying values of the Company’s vessels may differ significantly from their fair market value. The Company currently estimates that it will record vessel

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impairment charges aggregating approximately $50 million in the third quarter of 2016 as a result of industry-wide declines in vessel valuations during 2016, and specifically from June 30, 2016 to September 30, 2016, and forecasted charter rates in the near term. The remaining 24 vessels tested had carrying values that were approximately $210 million in excess of their respective estimated market values at September 30, 2016.

An increase in the supply of vessels without a commensurate increase in demand for such vessels could cause charter rates to decline, which could adversely affect INSW’s revenues, profitability and cash flows, as well as the value of its vessels.

INSW depends on short term duration, or “spot,” charters, for a significant portion of its revenues, which exposes INSW to fluctuations in market conditions. In the six months ended June 30, 2016 and the years ended December 31, 2015, 2014 and 2013, INSW derived approximately 78%, 90%, 87% and 88%, respectively, of its TCE revenues in the spot market.

The marine transportation industry has historically been highly cyclical, as the profitability and asset values of companies in the industry have fluctuated based on changes in the supply and demand of vessels. If the number of new ships of a particular class delivered exceeds the number of vessels of that class being scrapped, available capacity in that class will increase. The newbuilding order book (representing vessels in various stages of planning or construction) equaled 15%, 19%, 13% and 12% of the existing world tanker fleet as of September 30, 2016, December 31, 2015, 2014 and 2013, respectively.

Vessel supply is also affected by the number of vessels being used for floating storage, since vessels used for storage are not available to transport crude oil or petroleum products. Utilization of vessels for storage is affected by expectations of changes in the price of oil and petroleum products, with utilization generally increasing if prices are expected to increase more than storage costs and generally decreasing if they are not. A reduction in vessel utilization for storage will generally increase vessel supply. In 2010, for example, 81 vessels were released from storage and reentered the trading fleet. Since the 2010 release until near the end of 2014, storage on vessels at sea has been low, in part because then-current prices of crude oil generally exceeded the future prices, a condition that allows companies to replace inventories at lower price encouraging the drawdown of commercial inventories. Supply has exceeded demand during the past five years, resulting in lower charter rates across the International Flag fleet. Since December 2014, current prices of crude oil have generally been below future prices, resulting in an increase in vessels used for storage. However, the duration of this trend of higher future prices cannot be predicted. If this trend ceases or reverses, the charter rates for the Company’s International Flag vessels could decrease to levels experienced from 2010 – 2014, which were well below historical averages. Any such development, particularly if sustained over a long period of time, would have a material adverse effect on INSW’s revenues, profitability and cash flows.

Shipping is a business with inherent risks, and INSW’s insurance may not be adequate to cover its losses.

INSW’s vessels and their cargoes are at risk of being damaged or lost because of events including, but not limited to:

marine disasters;
bad weather;
mechanical failures;
human error;
war, terrorism and piracy;
grounding, fire, explosions and collisions; and
other unforeseen circumstances or events.

In addition, transporting crude oil creates a risk of business interruptions due to political circumstances in foreign countries, hostilities, labor strikes, port closings and boycotts. These hazards may result in death or injury to persons; loss of revenues or property; the payment of ransoms; environmental damage; higher insurance rates; damage to INSW’s customer relationships; and market disruptions, delay or rerouting, which

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may also subject INSW to litigation. The operation of tankers also has unique operational risks associated with the transportation of oil. An oil spill may cause significant environmental damage and the associated costs could exceed the insurance coverage available to the Company. Compared to other types of vessels, tankers are also exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil transported in tankers. Furthermore, any such incident could seriously damage INSW’s reputation and cause INSW either to lose business or to be less likely to enter into new business (either because of customer concerns or changes in customer vetting processes). Any of these events could result in loss of revenues, decreased cash flows and increased costs.

While the Company carries insurance to protect against certain risks involved in the conduct of its business, risks may arise against which the Company is not adequately insured. For example, a catastrophic spill could exceed INSW’s $1 billion per vessel insurance coverage and have a material adverse effect on its operations. In addition, INSW may not be able to procure adequate insurance coverage at commercially reasonable rates in the future, and INSW cannot guarantee that any particular claim will be paid by its insurers. In the past, new and stricter environmental regulations have led to higher costs for insurance covering environmental damage or pollution, and new regulations could lead to similar increases or even make this type of insurance unavailable. Furthermore, even if insurance coverage is adequate to cover the Company’s losses, INSW may not be able to timely obtain a replacement ship in the event of a loss. INSW may also be subject to calls, or premiums, in amounts based not only on its own claim records but also the claim records of all other members of the protection and indemnity associations through which INSW obtains insurance coverage for tort liability. INSW’s payment of these calls could result in significant expenses which would reduce its profits and cash flows or cause losses.

Constraints on capital availability have adversely affected the tanker industry and INSW’s business.

Constraints on capital that have occurred during recent years have adversely affected the financial condition of certain of the Company’s customers, financial lenders and suppliers. Entities that suffer a material adverse impact on their financial condition may be unable or unwilling to comply with their contractual commitments to INSW including the refusal or inability of customers to pay charter hire to INSW or the inability or unwillingness of financial lenders to honor their commitments to lend funds. While INSW seeks to monitor the financial condition of its customers, financial lenders and suppliers, the availability and accuracy of information about the financial condition of such entities and the actions that INSW may take to reduce possible losses resulting from the failure of such entities to comply with their contractual obligations may be limited. Any such failure could have a material adverse effect on INSW’s revenues, profitability and cash flows. In addition, adverse financial conditions may inhibit these entities from entering into new commitments with INSW, which could also have a material adverse effect on INSW’s revenues, profitability and cash flows.

The Company also faces other potential constraints on capital relating to counterparty credit risk and constraints on INSW’s ability to borrow funds. See also “— Risks Related to Our Company — The Company is subject to credit risks with respect to its counterparties on contracts and failure of such counterparties to meet their obligations could cause the Company to suffer losses on such contracts, decreasing revenues and earnings” and “— Risks Related to Our Company — INSW has incurred significant indebtedness which could affect its ability to finance its operations, pursue desirable business opportunities and successfully run its business in the future, all of which could affect INSW’s ability to fulfill its obligations under that indebtedness.”

The current state of the global financial markets and current economic conditions may adversely impact the Company’s ability to obtain additional financing on acceptable terms and otherwise negatively impact the Company’s business.

Global financial markets and economic conditions have been, and continue to be, volatile. In recent years, businesses in the global economy have faced tightening credit, weakening demand for goods and services, deteriorating international liquidity conditions, volatile interest rates, and declining markets. There has been a general decline in the willingness of banks and other financial institutions to extend credit, particularly in the

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shipping industry, due to the historically volatile asset values of vessels. As the shipping industry is highly dependent on the availability of credit to finance and expand operations, it has been negatively affected by this decline.

In addition, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets has increased as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced, and in some cases ceased to provide, funding to borrowers. Due to these factors, additional financing may not be available if needed and to the extent required, on acceptable terms or at all. If additional financing is not available when needed, or is available only on unfavorable terms, the Company may be unable to meet its obligations as they come due or the Company may be unable to execute its business strategy, complete additional vessel acquisitions, or otherwise take advantage of potential business opportunities as they arise.

INSW conducts its operations internationally, which subjects it to changing economic, political and governmental conditions abroad that may adversely affect its business.

The Company conducts its operations internationally, and its business, financial condition, results of operations and cash flows may be adversely affected by changing economic, political and government conditions in the countries and regions where its vessels are employed, including:

regional or local economic downturns;
changes in governmental policy or regulation;
restrictions on the transfer of funds into or out of countries in which INSW or its customers operate;
difficulty in staffing and managing (including ensuring compliance with internal policies and controls) geographically widespread operations;
trade relations with foreign countries in which INSW’s customers and suppliers have operations, including protectionist measures such as tariffs and import or export licensing requirements;
general economic and political conditions, which may interfere with, among other things, the Company’s supply chain, its customers and all of INSW’s activities in a particular location;
difficulty in enforcing contractual obligations in non-U.S. jurisdictions and the collection of accounts receivable from foreign accounts;
different regulatory regimes in the various countries in which INSW operates;
inadequate intellectual property protection in foreign countries;
the difficulties and increased expenses in complying with multiple and potentially conflicting U.S. and foreign laws, regulations, security, product approvals and trade standards, anti-bribery laws, government sanctions and restrictions on doing business with certain nations or specially designated nationals;
import and export duties and quotas;
demands for improper payments from port officials or other government officials;
U.S. and foreign customs, tariffs and taxes;
currency exchange controls, restrictions and fluctuations, which could result in reduced revenue and increased operating expense;
international incidents;
transportation delays or interruptions;
local conflicts, acts of war, terrorist attacks or military conflicts;
changes in oil prices or disruptions in oil supplies that could substantially affect global trade, the Company’s customers’ operations and the Company’s business;

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the imposition of taxes by flag states, port states and jurisdictions in which INSW or its subsidiaries are incorporated or where its vessels operate; and
expropriation of INSW’s vessels.

The occurrence of any such event could have a material adverse effect on the Company’s business.

INSW must comply with complex non-U.S. and U.S. laws and regulations, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other local laws prohibiting corrupt payments to government officials; anti-money laundering laws; and anti-competition regulations. Moreover, the shipping industry is generally considered to present elevated risks in these areas. Violations of these laws and regulations could result in fines and penalties, criminal sanctions, restrictions on the Company’s business operations and on the Company’s ability to transport cargo to one or more countries, and could also materially affect the Company’s brand, ability to attract and retain employees, international operations, business and operating results. Although INSW has policies and procedures designed to achieve compliance with these laws and regulations, INSW cannot be certain that its employees, contractors, joint venture partners or agents will not violate these policies and procedures. INSW’s operations may also subject its employees and agents to extortion attempts.

The vote by the United Kingdom to leave the European Union could adversely affect us.

The recent United Kingdom referendum on its membership in the European Union (“E.U.”) resulted in a majority of U.K. voters voting to exit the E.U. (“Brexit”). We have operations in the United Kingdom and the E.U., and as a result, we face risks associated with the potential uncertainty and disruptions that may follow Brexit, including with respect to volatility in exchange rates and interest rates, and potential material changes to the regulatory regime applicable to our business or global trading parties. Brexit could adversely affect European or worldwide political, regulatory, economic or market conditions and could contribute to instability in global political institutions, regulatory agencies and financial markets. Any of these effects of Brexit, and others we cannot anticipate or that may evolve over time, could have a material adverse effect on INSW’s business, financial condition, results of operations and cash flows.

Changes in fuel prices may adversely affect profits.

Fuel is a significant, if not the largest, expense in the Company’s shipping operations when vessels are under voyage charter. Accordingly, an increase in the price of fuel may adversely affect the Company’s profitability if these increases cannot be passed onto customers. The price and supply of fuel is unpredictable and fluctuates based on events outside the Company’s control, including geopolitical developments; supply and demand for oil and gas; actions by OPEC, and other oil and gas producers; war and unrest in oil producing countries and regions; regional production patterns; and environmental concerns. Fuel may become much more expensive in the future, which could reduce the profitability and competitiveness of the Company’s business compared to other forms of transportation.

Acts of piracy on ocean-going vessels could adversely affect the Company’s business.

The frequency of pirate attacks on seagoing vessels remains high, particularly in the western part of the Indian Ocean, off the west coast of Africa and in the South China Sea. If piracy attacks result in regions in which the Company’s vessels are deployed being characterized by insurers as “war risk” zones, as the Gulf of Aden has been, or Joint War Committee “war and strikes” listed areas, premiums payable for insurance coverage could increase significantly, and such insurance coverage may become difficult to obtain. Crew costs could also increase in such circumstances due to risks of piracy attacks.

In addition, while INSW believes the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and it is therefore entitled to cancel the charter party, a claim the Company would dispute. The Company may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on the Company. In addition, hijacking as a result of an act of piracy against the Company’s vessels, or an increase in the cost (or unavailability) of insurance for those vessels, could have a material adverse impact on INSW’s business, financial condition, results of operations and cash flows. Such attacks may also impact the Company’s customers, which could impair their ability to make payments to the Company under their current charters.

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Terrorist attacks and international hostilities and instability can affect the tanker industry, which could adversely affect INSW’s business.

Terrorist attacks, the outbreak of war, or the existence of international hostilities could damage the world economy, adversely affect the availability of and demand for crude oil and petroleum products and adversely affect both the Company’s ability to charter its vessels and the charter rates payable under any such charters. In addition, INSW operates in a sector of the economy that is likely to be adversely impacted by the effects of political instability, terrorist or other attacks, war or international hostilities. In the past, political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. These factors could also increase the costs to the Company of conducting its business, particularly crew, insurance and security costs, and prevent or restrict the Company from obtaining insurance coverage, all of which could have a material adverse effect on INSW’s business, financial condition, results of operations and cash flows.

Public health threats could have an adverse effect on the Company’s operations and financial results.

Public health threats and other highly communicable diseases, outbreaks of which have already occurred in various parts of the world near where INSW operates, could adversely impact the Company’s operations, the operations of the Company’s customers and the global economy, including the worldwide demand for crude oil and the level of demand for INSW’s services. Any quarantine of personnel, restrictions on travel to or from countries in which INSW operates, or inability to access certain areas could adversely affect the Company’s operations. Travel restrictions, operational problems or large-scale social unrest in any part of the world in which INSW operates, or any reduction in the demand for tanker services caused by public health threats in the future, may impact INSW’s operations and adversely affect the Company’s financial results.

Risks Related to Our Company

INSW has incurred significant indebtedness which could affect its ability to finance its operations, pursue desirable business opportunities and successfully run its business in the future, all of which could affect INSW’s ability to fulfill its obligations under that indebtedness.

As of June 30, 2016, INSW had approximately $520 million of outstanding indebtedness, net of discounts and deferred finance costs. INSW’s substantial indebtedness and interest expense could have important consequences, including:

limiting INSW’s ability to use a substantial portion of its cash flow from operations in other areas of its business, including for working capital, capital expenditures and other general business activities, because INSW must dedicate a substantial portion of these funds to service its debt;
to the extent INSW’s future cash flows are insufficient, requiring the Company to seek to incur additional indebtedness in order to make planned capital expenditures and other expenses or investments;
limiting INSW’s ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions, and other expenses or investments planned by the Company;
limiting the Company’s flexibility and ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation, and INSW’s business and industry;
limiting INSW’s ability to satisfy its obligations under its indebtedness;
increasing INSW’s vulnerability to a downturn in its business and to adverse economic and industry conditions generally;
placing INSW at a competitive disadvantage as compared to its less-leveraged competitors;
potentially limiting the Company’s ability to enter certain commercial pools;

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limiting the Company’s ability, or increasing the costs, to refinance indebtedness; and
limiting the Company’s ability to enter into hedging transactions by reducing the number of counterparties with whom INSW can enter into such transactions, as well as the volume of those transactions.

In connection with the Spin-Off, INSW is currently negotiating amendments to the INSW Facilities to reflect certain changes to its corporate structure. The amended INSW Facilities may be on terms less favorable to us than the existing INSW facilities and may include more restrictive covenants (including restrictions on the ability of subsidiaries of INSW to make dividend payments to INSW).

INSW’s ability to continue to fund its obligations and to reduce debt may be affected by general economic, financial market, competitive, legislative and regulatory factors, among other things. Additionally, if our credit-ratings are downgraded, our ability to obtain financing and the costs of any future financing could be adversely affected. An inability to fund the Company’s debt requirements or reduce debt could have a material adverse effect on INSW’s business, financial condition, results of operations and cash flows.

Additionally, the actual or perceived credit quality of the Company’s or its pools’ charterers (as well as any defaults by them) could materially affect the Company’s ability to obtain the additional capital resources that it will require to purchase additional vessels or significantly increase the costs of obtaining such capital. The Company’s inability to obtain additional financing at an acceptable cost, or at all, could materially affect the Company’s results of operation and its ability to implement its business strategy.

The Company may not be able to generate sufficient cash to service all of its indebtedness, and could in the future breach covenants in its credit facilities and term loans.

The Company’s earnings, cash flow and the market value of its vessels vary significantly over time due to the cyclical nature of the tanker industry, as well as general economic and market conditions affecting the industry. As a result, the amount of debt that INSW can manage in some periods may not be appropriate in other periods and its ability to meet the financial covenants to which it is subject or may be subject in the future may vary. Additionally, future cash flow may be insufficient to meet the Company’s debt obligations and commitments. Any insufficiency could negatively impact INSW’s business.

The INSW Facilities contain certain restrictions relating to new borrowings as set forth in the loan agreement. In addition, the INSW Facilities have a covenant to maintain the aggregate Fair Market Value of the Collateral Vessels (each as defined in that loan agreement) at greater than or equal to $500.0 million at the end of each fiscal quarter. While the Company was in compliance with these requirements as of June 30, 2016, a decrease in vessel values or a failure to meet this ratio could cause the Company to breach certain covenants in its existing credit facilities and term loans, or in future financing agreements that the Company may enter into from time to time. If the Company breaches such covenants and is unable to remedy the relevant breach or obtain a waiver, the Company’s lenders could accelerate its debt and foreclose on the Company’s owned vessels.

A range of economic, competitive, financial, business, industry and other factors will affect future financial performance, and, accordingly, the Company’s ability to generate cash flow from operations and to pay debt and to meet the financial covenants under the INSW Facilities. Many of these factors, such as charter rates, economic and financial conditions in the tanker industry and the global economy or competitive initiatives of competitors, are beyond the Company’s control. If INSW does not generate sufficient cash flow from operations to satisfy its debt obligations, it may have to undertake alternative financing plans, such as:

refinancing or restructuring its debt;
selling tankers or other assets;
reducing or delaying investments and capital expenditures; or
seeking to raise additional capital.

Undertaking alternative financing plans, if necessary, might not allow INSW to meet its debt obligations. The Company’s ability to restructure or refinance its debt will depend on the condition of the capital markets, its access to such markets and its financial condition at that time. Any refinancing of debt could be at higher

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interest rates and might require the Company to comply with more onerous covenants, which could further restrict INSW’s business operations. In addition, the terms of existing or future debt instruments may restrict INSW from adopting some alternative measures. These alternative measures may not be successful and may not permit INSW to meet its scheduled debt service obligations. The Company’s inability to generate sufficient cash flow to satisfy its debt obligations, to meet the covenants of its credit agreements and term loans and/or to obtain alternative financing in such circumstances, could materially and adversely affect INSW’s business, financial condition, results of operations and cash flows.

The Company will be required to make additional capital expenditures to expand the number of vessels in its fleet and to maintain all of its vessels, which depend on additional financing.

The Company completed the construction of eight International Flag vessels during the five years ended December 31, 2015 (none of which was completed in 2015). The Company’s business strategy is based in part upon the expansion of its fleet through the purchase of additional vessels at attractive points. If INSW is unable to fulfill its obligations under any memorandum of agreement or newbuilding construction contract for future vessel acquisitions, the sellers of such vessels may be permitted to terminate such contracts and the Company may be required to forfeit all or a portion of the down payments it made under such contracts and it may also be sued for any outstanding balance. In addition, as a newbuilding vessel must be drydocked within five years of its delivery from a shipyard, with survey cycles of no more than 60 months for the first three surveys, and 30 months thereafter, not including any unexpected repairs, the Company will incur significant maintenance costs for its existing and any newly-acquired vessels. As a result, if the Company does not utilize its vessels as planned, these maintenance costs could have material adverse effects on the Company’s business, financial condition, results of operations and cash flows.

The Company depends on third party service providers for technical and commercial management of its International Flag fleet.

The Company currently outsources to third party service providers certain management services of its International Flag fleet, including technical management, certain aspects of commercial management and crew management. In particular, the Company has entered into ship management agreements with VShips UK Limited (“V.Ships”) that assign technical management responsibilities to V.Ships for each conventional tanker in the Company’s fleet (collectively, the “Ship Management Agreements”). The Company has also transferred commercial management of much of its International Flag fleet to certain other third party service providers, principally commercial pools.

In such outsourcing arrangements, the Company has transferred direct control over technical and commercial management of the relevant vessels, while maintaining significant oversight and audit rights, and must rely on third party service providers to, among other things:

comply with contractual commitments to the Company, including with respect to safety, quality and environmental compliance of the operations of the Company’s vessels;
comply with requirements imposed by the U.S. government, the United Nations (“U.N.”) and the E.U. (i) restricting calls on ports located in countries that are subject to sanctions and embargoes and (ii) prohibiting bribery and other corrupt practices;
respond to changes in customer demands for the Company’s vessels;
obtain supplies and materials necessary for the operation and maintenance of the Company’s vessels; and
mitigate the impact of labor shortages and/or disruptions relating to crews on the Company’s vessels.

The failure of third-party service providers to meet such commitments could lead to legal liability or other damages to the Company. The third-party service providers the Company has selected may not provide a standard of service comparable to that the Company provided for such vessels prior to any outsourcing. The Company relies on its third-party service providers to comply with applicable law, and a failure by such providers to comply with such laws may subject the Company to liability or damage its reputation even if the Company did not engage in the conduct itself. Furthermore, damage to any such third party’s reputation,

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relationships or business may reflect on the Company directly or indirectly, and could have a material adverse effect on the Company’s reputation and business.

V.Ships has the right to terminate the Ship Management Agreements at any time with 90 days’ notice. If V.Ships exercises that right, the Company will be required either to enter into substitute agreements with other third parties or to assume those management duties. The Company may not succeed in negotiating and entering into such agreements with other third parties and, even if it does so, the terms and conditions of such agreements may be less favorable to the Company. Furthermore, if the Company is required to dedicate internal resources to managing the International Flag fleet (including, but not limited to, hiring additional qualified personnel or diverting existing resources), that could result in increased costs and reduced efficiency and profitability. Any such changes could disrupt the Company’s business and have a material adverse effect on the Company’s business, results of operations and financial condition.

The contribution of the Company’s joint ventures to its profits and losses may fluctuate, which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

The Company currently owns an interest in six of its vessels through two joint ventures, one in which the Company has a 50% ownership interest and the second in which the Company has a 49.9% ownership interest, together with other third-party vessel owners and operators in the Company’s industry. See “Business — Fleet Operations.” The Company’s ownership in these joint ventures is accounted for using the equity method, which means that the Company’s allocation of profits and losses of the applicable joint venture is included in its consolidated financial statements. The contribution of the Company’s joint ventures to the Company’s profits and losses may fluctuate, including the distributions that it may receive from such entities, which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

A joint venture involves certain risks such as:

INSW may not have voting control over the joint venture;
INSW may not be able to maintain good relationships with its joint venture partner;
The joint venture partner at any time may have economic or business interests that are inconsistent with INSW’s and may seek concessions from INSW;
The joint venture partner may fail to fund its share of capital for operations or to fulfill its other commitments, including providing accurate and timely accounting and financial information to INSW;
The joint venture may experience operating difficulties and financial losses, which may lead to asset write-downs or impairment charges that could negatively impact the operating results of the joint venture and INSW;
The joint venture or venture partner could lose key personnel; and
The joint venture partner could become bankrupt requiring INSW to assume all risks and capital requirements related to the joint venture project, and the related bankruptcy proceedings could have an adverse impact on the operation of the partnership or joint venture.

In addition, the charters under which INSW’s two FSO joint venture vessels currently operate expire in 2017 and may not be renewed. Qatar Petroleum announced in June 2016 that it had awarded a 30% interest in the concession covering the field on which the FSO vessels operate to a new development partner. As a result, any renewal of the charters under which the FSO joint venture vessels operate would need to be negotiated with this new development partner and may not be comparable to the existing agreements with respect to rates and other material terms. The carrying amount of the Company’s investment in and advances to the FSO joint venture was $269,751 as of June 30, 2016. If events relating to any of these risks were to come to pass, that could terminate or adversely affect the Company’s participation in the relevant joint venture, which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

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INSW’s business depends on voyage charters, and any future decrease in spot charter rates could adversely affect its earnings.

Voyage charters, including vessels operating in commercial pools that predominantly operate in the spot market, constituted 78% of INSW’s aggregate TCE revenues in the six months ended June 30, 2016, 90% of INSW’s aggregate TCE revenues in 2015, 87% in 2014 and 88% in 2013. Accordingly, INSW’s shipping revenues are significantly affected by prevailing spot rates for voyage charters in the markets in which the Company’s vessels operate. The spot charter market may fluctuate significantly from time to time based upon tanker and oil supply and demand. The spot market is very volatile, and, in the past, there have been periods when spot charter rates have declined below the operating cost of vessels. For example, over the past five years, VLCC spot market rates (expressed as a time charter equivalent) have ranged from a high of $115,780 per day to negative values, in December 2015 were $108,529 per day and in June 2016 were $24,029 per day on the benchmark route between the Middle East Gulf and Japan. The successful operation of INSW’s vessels in the competitive spot charter market depends on, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. If spot charter rates decline in the future, then INSW may be unable to operate its vessels trading in the spot market profitably, or meet its other obligations, including payments on indebtedness. Furthermore, as charter rates for spot charters are fixed for a single voyage, which may last up to several weeks during periods in which spot charter rates are rising or falling, INSW will generally experience delays in realizing the benefits from, or experiencing the detriments of those changes. See also “Business — Operations — Charter Types.”

INSW may not be able to renew time charters when they expire or enter into new time charters.

INSW’s ability to renew expiring contracts or obtain new charters will depend on the prevailing market conditions at the time of renewal. As of September 30, 2016, INSW employed 11 vessels on time or bareboat charters, with two of those charters expiring in 2016, eight expiring in 2017 and one expiring in 2018 (excluding the joint ventures). The Company’s existing time charters may not be renewed at comparable rates or if renewed or entered into, those new contracts may be at less favorable rates. In addition, there may be a gap in employment of vessels between current charters and subsequent charters. If at a time when INSW is seeking to arrange new charters for its vessels, market participants expect that less capacity will be necessary in the future (for example, if it is expected that oil and natural gas prices will decrease in the future, which could suggest that future oil and gas production levels will decline from then-current levels), INSW may not be able to obtain charters at attractive rates or at all. If, upon expiration of the existing time charters, INSW is unable to obtain time charters or voyage charters at desirable rates, the Company’s business, financial condition, results of operations and cash flows may be adversely affected.

Termination of, or a change in the nature of, INSW’s relationship with any of the commercial pools in which it participates could adversely affect its business.

As of June 30, 2016, five of the Company’s eight VLCCs participate in the TI pool; all seven Aframaxes participate in the SIGMA pool; five of the Company’s eight crude Panamaxes and one of its four LR1s participate directly in the PI pool; its only LR2 participates in the Navig8 pool; 14 of its MRs participate in the CPTA pool; and two of its MRs participate in the HDT pool (an aggregate of 16 MRs out of a total of 20). INSW’s participation in these pools is intended to enhance the financial performance of the Company’s vessels through higher vessel utilization. Any participant in any of these pools has the right to withdraw upon notice in accordance with the relevant pool agreement. Changes in the management of, and the terms of, these pools, decreases in the number of vessels participating in these pools, or the termination of these pools, could result in increased costs and reduced efficiency and profitability for the Company.

In addition, in recent years the E.U. has published guidelines on the application of the E.U. antitrust rules to traditional agreements for maritime services such as commercial pools. While the Company believes that all the commercial pools it participates in comply with E.U. rules, there has been limited administrative and judicial interpretation of the rules. Restrictive interpretations of the guidelines could adversely affect the ability to commercially market the respective types of vessels in commercial pools.

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In the highly competitive international market, INSW may not be able to compete effectively for charters.

The Company’s vessels are employed in a highly competitive market. Competition arises from other vessel owners, including major oil companies, which may have substantially greater resources than INSW does. Competition for the transportation of crude oil and other petroleum products depends on price, location, size, age, condition, and the acceptability of the vessel operator to the charterer. The Company believes that because ownership of the world tanker fleet is highly fragmented, no single vessel owner is able to influence charter rates. To the extent INSW enters into new geographic regions or provides new services, it may not be able to compete profitably. New markets may involve competitive factors that differ from those of the Company’s current markets, and the competitors in those markets may have greater financial strength and capital resources than INSW does.

INSW may not realize the benefits it expects from past acquisitions or acquisitions it may make in the future.

INSW’s business strategy includes ongoing efforts to engage in material acquisitions of ownership interests in entities in the tanker industry and of individual tankers. The success of INSW’s acquisitions will depend upon a number of factors, some of which may not be within its control. These factors include INSW’s ability to:

identify suitable tankers and/or shipping companies for acquisitions at attractive prices, which may not be possible if asset prices rise too quickly;
obtain financing;
identify businesses engaged in managing, operating or owning tankers for acquisitions or joint ventures;
integrate any acquired tankers or businesses successfully with INSW’s then-existing operations; and
enhance INSW’s customer base.

INSW intends to finance these acquisitions by using available cash from operations and through incurrence of debt or bridge financing, either of which may increase its leverage ratios, or by issuing equity, which may have a dilutive impact on its existing shareholders. At any given time INSW may be engaged in a number of discussions that may result in one or more acquisitions, some of which may be material to INSW as a whole. These opportunities require confidentiality and may involve negotiations that require quick responses by INSW. Although there can be no certainty that any of these discussions will result in definitive agreements or the completion of any transactions, the announcement of any such transaction may lead to increased volatility in the trading price of INSW’s securities.

Acquisitions can also involve a number of special risks and challenges, including:

diversion of management time and attention from the Company’s existing business and other business opportunities;
delays in closing or the inability to close an acquisition for any reason, including third-party consents or approvals;
any unanticipated negative impact on the Company of disclosed or undisclosed matters relating to any vessels or operations acquired; and
assumption of debt or other liabilities of the acquired business, including litigation related to the acquired business.

The success of acquisitions or strategic investments depends on the effective integration of newly acquired businesses or assets into INSW’s current operations. Such integration is subject to risks and uncertainties, including realization of anticipated synergies and cost savings, the ability to retain and attract personnel and clients, the diversion of management’s attention from other business concerns, and undisclosed or potential legal liabilities of the acquired company or asset. INSW may not realize the strategic and financial benefits that it expects from any of its past acquisitions, or any future acquisitions. Further, if a portion of the purchase price of a business is attributable to goodwill and if the acquired business does not perform up to expectations

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at the time of the acquisition some or all of the goodwill may be written off, adversely affecting INSW’s earnings. INSW has recorded material write-offs of goodwill and intangible assets in prior years related to earlier acquisitions it consummated.

Operating costs and capital expenses will increase as the Company’s vessels age and may also increase due to unanticipated events relating to secondhand vessels and the consolidation of suppliers.

In general, capital expenditures and other costs necessary for maintaining a vessel in good operating condition increase as the age of the vessel increases. As of June 30, 2016, the weighted average age of the Company’s total owned and operated fleet was 11 years. In addition, older vessels are typically less fuel-efficient than more recently constructed vessels due to improvements in engine technology. Accordingly, it is likely that the operating costs of INSW’s currently operated vessels will increase. In addition, changes in governmental regulations and compliance with Classification Society standards may restrict the type of activities in which the vessels may engage and/or may require INSW to make additional expenditures for new equipment. Every commercial tanker must pass inspection by a Classification Society authorized by the vessel’s country of registry. The Classification Society certifies that a tanker is safe and seaworthy in accordance with the applicable rule and regulations of the country of registry of the tanker and the international conventions of which that country is a member. If a Classification Society requires the Company to add equipment, INSW may be required to incur substantial costs or take its vessels out of service. Market conditions may not justify such expenditures or permit INSW to operate its older vessels profitably even if those vessels remain operational. If a vessel in INSW’s fleet does not maintain its class and/or fails any survey, it will be unemployable and unable to trade between ports. This would negatively impact the Company’s results of operation.

In addition, the Company’s fleet includes a number of secondhand vessels. While the Company typically inspects secondhand vessels before it purchases them, those inspections do not necessarily provide INSW with the same level of knowledge about those vessels’ condition that INSW would have had if these vessels had been built for and operated exclusively by it. The Company may not discover defects or other problems with such vessels before purchase, which may lead to expensive, unanticipated repairs, and could even result in accidents or other incidents for which the Company could be liable.

Furthermore, recent mergers have reduced the number of available suppliers, resulting in fewer alternatives for sourcing key supplies. With respect to certain items, INSW is generally dependent upon the original equipment manufacturer for repair and replacement of the item or its spare parts. Supplier consolidation may result in a shortage of supplies and services, thereby increasing the cost of supplies or potentially inhibiting the ability of suppliers to deliver on time. These cost increases or delays could result in downtime, and delays in the repair and maintenance of the Company’s vessels and have a material adverse effect on INSW’s business, financial condition, results of operations and cash flows.

The Company’s operating leases could be replaced on less favorable terms or may not be replaced.

The Company’s operating fleet includes seven vessels that have been chartered-in under operating leases. The operating leases of the Company expire in 2017 and 2018 and may not be replaced at all or on as favorable terms, which could have a material adverse effect on the Company’s future financial position, results of operations and cash flows.

The Company is subject to credit risks with respect to its counterparties on contracts, and any failure by those counterparties to meet their obligations could cause the Company to suffer losses on such contracts, decreasing revenues and earnings.

The Company has entered into, and in the future will enter into, various contracts, including charter agreements and other agreements associated with the operation of its vessels. The Company charters its vessels to other parties, who pay the Company a daily rate of hire. The Company also enters COAs and voyage charters. Historically, the Company has not experienced material problems collecting charter hire but the global economic downturn of recent years has affected charterers more severely than the prior recessions that have occurred since the Company’s establishment more than 47 years ago. The Company also time charters or bareboat charters some of its vessels from other parties and its continued use and operation of such

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vessels depends on the vessel owners’ compliance with the terms of the time charter or bareboat charter. Additionally, the Company enters into derivative contracts (interest rate swaps and caps) from time to time. As a result, the Company is subject to credit risks. The ability of each of the Company’s counterparties to perform its obligations under a contract with it will depend on a number of factors that are beyond the Company’s control and may include, among other things, general economic conditions; availability of debt or equity financing; the condition of the maritime and offshore industries; the overall financial condition of the counterparty; charter rates received for specific types of vessels; and various expenses. Charterers are sensitive to the commodity markets and may be impacted by market forces affecting commodities such as oil. In addition, in depressed market conditions, the Company’s charterers and customers may no longer need a vessel that is currently under charter or contract or may be able to obtain a comparable vessel at lower rates. As a result, the Company’s customers may fail to pay charter hire or attempt to renegotiate charter rates. If the counterparties fail to meet their obligations, the Company could suffer losses on such contracts which would decrease revenues, cash flows and earnings.

The Company’s executive officers have limited experience in running a public company and some members of our management team are new to their current roles.

As a public company, INSW will be highly dependent on the expertise of its senior management, certain of whom have not acted in their current capacities for a public company. In addition, certain key members of INSW’s management team were hired recently or have yet to be hired. Therefore, they will not have been involved with INSW’s business and will not have worked together as a team for a significant period of time. Consequently, their focus and attention may be diverted while they familiarize themselves with INSW’s business.

The Company may face unexpected drydock costs for its vessels.

Vessels must be drydocked periodically. The cost of repairs and renewals required at each drydock are difficult to predict with certainty, can be substantial and the Company’s insurance does not cover these costs. In addition, vessels may have to be drydocked in the event of accidents or other unforeseen damage, and INSW’s insurance may not cover all of these costs. Vessels in drydock will generally not generate any income. Large drydocking expenses could adversely affect the Company’s results of operations and cash flows. In addition, the time when a vessel is out of service for maintenance is determined by a number of factors including regulatory deadlines, market conditions, shipyard availability and customer requirements, and accordingly the length of time that a vessel may be off-hire may be longer than anticipated, which could adversely affect the Company’s business, financial condition, results of operations and cash flows.

Technological innovation could reduce the Company’s charter income and the value of the Company’s vessels.

The charter rates and the value and operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel’s physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new tankers are built that are more efficient or more flexible or have longer physical lives than the Company’s vessels, competition from these more technologically advanced vessels could adversely affect the amount of charter payments the Company receives for its vessels once their initial charters expire and the resale value of the Company’s vessels could significantly decrease. As a result, the Company’s business, financial condition, results of operations and cash flows could be adversely affected.

Interruption or failure of INSW’s information technology and communications systems could impair its ability to operate and adversely affect its business.

INSW is highly dependent on information technology systems. These dependencies include accounting, billing, disbursement, cargo booking and tracking, vessel scheduling and stowage, equipment tracking, customer service, banking, payroll and communication systems. Information technology and communication systems are subject to reliability issues, integration and compatibility concerns, and security-threatening

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intrusions. INSW may experience failures caused by the occurrence of a natural disaster, computer hacking or viruses or other unanticipated problems at INSW’s facilities, aboard its vessels or at third-party locations. Any failure of INSW’s or third-party systems could result in interruptions in service, reductions in its revenue and profits, damage to its reputation or liability for the release of confidential information.

INSW’s revenues are subject to seasonal variations.

INSW operates its tankers in markets that have historically exhibited seasonal variations in demand for tanker capacity, and therefore, charter rates. Peaks in tanker demand quite often precede seasonal oil consumption peaks, as refiners and suppliers anticipate consumer demand. Charter rates for tankers are typically higher in the fall and winter months as a result of increased oil consumption in the Northern Hemisphere. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling. Because a majority of the Company’s vessels trade in the spot market, seasonality has affected INSW’s operating results on a quarter-to-quarter basis and could continue to do so in the future. Such seasonality may be outweighed in any period by then current economic conditions or tanker industry fundamentals.

Effective internal controls are necessary for the Company to provide reliable financial reports and effectively prevent fraud.

The Company maintains a system of internal controls to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The process of designing and implementing effective internal controls is a continuous effort that requires the Company to anticipate and react to changes in its business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy its reporting obligations as a public company.

Any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. Any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase the Company’s operating costs and harm its business. Furthermore, investors’ perceptions that the Company’s internal controls are inadequate or that the Company is unable to produce accurate financial statements on a timely basis may harm its stock price. See “— Risks Related to the Spin-Off — INSW’s accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which it will be subject following the spin-off.”

Work stoppages or other labor disruptions may adversely affect INSW’s operations.

INSW could be adversely affected by actions taken by employees of other companies in related industries (including third parties providing services to INSW) against efforts by management to control labor costs, restrain wage or benefits increases or modify work practices or the failure of other companies in its industry to successfully negotiate collective bargaining agreements.

Risks Related to Legal and Regulatory Matters

Governments could requisition the Company’s vessels during a period of war or emergency, which may negatively impact the Company’s business, financial condition, results of operations and available cash.

A government could requisition one or more of the Company’s vessels for title or hire. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of the Company’s vessels may negatively impact the Company’s business, financial condition, results of operations and available cash.

The Company’s vessels may be directed to call on ports located in countries that are subject to restrictions imposed by the U.S. government, the U.N. or the E.U., which could negatively affect the trading price of the Company’s common shares.

From time to time, certain of the Company’s vessels, on the instructions of the charterers or pool manager responsible for the commercial management of such vessels, have called and may again call on ports located

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in countries or territories, and/or operated by persons, subject to sanctions and embargoes imposed by the U.S. government, the U.N. or E.U. and countries identified by the U.S. government, the U.N. or the E.U. as state sponsors of terrorism. The U.S., U.N. and E.U. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or expanded over time. Some sanctions may also apply to transportation of goods (including crude oil) originating in sanctioned countries (particularly Iran), even if the vessel does not travel to those countries, or otherwise acting on behalf of sanctioned persons. Sanctions may include the imposition of penalties and fines against companies violating national law or companies acting outside the jurisdiction of the sanctioning power themselves becoming the target of sanctions.

Although INSW believes that it is in compliance with all applicable sanctions and embargo laws and regulations and intends to maintain such compliance, and INSW does not, and does not intend to, engage in sanctionable activity, INSW might fail to comply or may engage in a sanctionable activity in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation or sanctionable activity could result in fines or other penalties, or the imposition of sanctions against the Company, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in the Company and negatively affect INSW’s reputation and investor perception of the value of INSW’s common stock.

Compliance with complex laws, regulations, and, in particular, environmental laws or regulations, including those relating to the emission of greenhouse gases, may adversely affect INSW’s business.

The Company’s operations are affected by extensive and changing international, national and local environmental protection laws, regulations, treaties, conventions and standards in force in international waters, the jurisdictional waters of the countries in which INSW’s vessels operate, as well as the countries of its vessels’ registration. Many of these requirements are designed to reduce the risk of oil spills. They also regulate other water pollution issues, including discharge of ballast water and effluents and air emissions, including emission of greenhouse gases. These requirements impose significant capital and operating costs on INSW, including, without limitation, ones related to engine adjustments and ballast water treatment.

Environmental laws and regulations also can affect the resale value or significantly reduce the useful lives of the Company’s vessels, require a reduction in carrying capacity, ship modifications or operational changes or restrictions (and related increased operating costs) or retirement of service, lead to decreased availability or higher cost of insurance coverage for environmental matters or result in the denial of access to, or detention in, certain jurisdictional waters or ports. Under local, national and foreign laws, as well as international treaties and conventions, INSW could incur material liabilities, including cleanup obligations, in the event that there is a release of petroleum or other hazardous substances from its vessels or otherwise in connection with its operations. INSW could also become subject to personal injury or property damage claims relating to the release of or exposure to hazardous materials associated with its current or historic operations. Violations of or liabilities under environmental requirements also can result in substantial penalties, fines and other sanctions, including in certain instances, seizure or detention of the Company’s vessels.

INSW could incur significant costs, including cleanup costs, fines, penalties, third-party claims and natural resource damages, as the result of an oil spill or liabilities under environmental laws. The Company is subject to the oversight of several government agencies, including the U.S. Coast Guard (“USCG”) and the Environmental Protection Agency (“EPA”). OPA 90 affects all vessel owners shipping oil or hazardous material to, from or within the United States. OPA 90 allows for potentially unlimited liability without regard to fault for owners, operators and bareboat charterers of vessels for oil pollution in U.S. waters. Similarly, the International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended, which has been adopted by most countries outside of the United States, imposes liability for oil pollution in international waters. OPA 90 expressly permits individual states to impose their own liability regimes with regard to hazardous materials and oil pollution incidents occurring within their boundaries. Coastal states in the United States have enacted pollution prevention liability and response laws, many providing for unlimited liability. Similarly, the International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended, which has been adopted by most countries outside of the United States, imposes liability for oil pollution in international waters.

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In addition, in complying with OPA 90, IMO regulations, E.U. directives and other existing laws and regulations and those that may be adopted, shipowners likely will incur substantial additional capital and/or operating expenditures in meeting new regulatory requirements, in developing contingency arrangements for potential spills and in obtaining insurance coverage. Key regulatory initiatives that are anticipated to require substantial additional capital and/or operating expenditures in the next several years include more stringent limits on the sulfur content of fuel oil for vessels operating in certain areas and more stringent requirements for management and treatment of ballast water.

Beginning in 2016, two of INSW’s vessels will become subject to more stringent numeric discharge limits of ballast water under the EPA’s Vessel General Permit (“VGP”), with additional vessels becoming subject in future years. Two additional INSW vessels will have treatment systems installed within the 12 months following their 2016 scheduled drydockings and may not be in compliance with EPA VGP discharge requirements during this 12-month period. The EPA has determined that it cannot issue extensions for ballast water discharges under the VGP but has stated that vessels that (i) have received an extension from the USCG, (ii) are in compliance with all of the VGP requirements other than numeric discharge limits and (iii) meeting certain other requirements will be entitled to “low enforcement priority.” While INSW believes that any vessel that may become subject to the more stringent numeric discharge limits of ballast water meets the conditions for “low enforcement priority,” no assurance can be given that they will do so. If the EPA determines to enforce the limits for such vessels, such action could have a material adverse effect on INSW. See “Business — Environmental and Security Matters Relating to Bulk Shipping.”

Other government regulation of vessels, particularly in the areas of safety and environmental requirements, can be expected to become stricter in the future and require the Company to incur significant capital expenditures on its vessels to keep them in compliance, or even to scrap or sell certain vessels altogether. Such expenditures could result in financial and operational impacts that may be material to INSW’s financial statements. Additionally, the failure of a shipowner or bareboat charterer to comply with local, domestic and foreign regulations may subject it to increased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. If any of our vessels are denied access to, or are detained in, certain ports, reputation, business, financial results and cash flows could be materially and adversely affected.

Accidents involving highly publicized oil spills and other mishaps involving vessels can be expected in the tanker industry, and such accidents or other events could be expected to result in the adoption of even stricter laws and regulations, which could limit the Company’s operations or its ability to do business and which could have a material adverse effect on INSW’s business, financial results and cash flows. In addition, the Company is required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to its operations. The Company believes its vessels are maintained in good condition in compliance with present regulatory requirements, are operated in compliance with applicable safety and environmental laws and regulations and are insured against usual risks for such amounts as the Company’s management deems appropriate. The vessels’ operating certificates and licenses are renewed periodically during each vessel’s required annual survey. However, government regulation of tankers, particularly in the areas of safety and environmental impact may change in the future and require the Company to incur significant capital expenditures with respect to its ships to keep them in compliance.

Due to concern over the risk of climate change, a number of countries, including the United States, and international organizations, including the E.U., the IMO and the U.N., have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These regulatory measures include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards, and incentives or mandates for renewable energy. Such actions could result in significant financial and operational impacts on the Company’s business, including requiring INSW to install new emission controls, acquire allowances or pay taxes related to its greenhouse gas emissions, or administer and manage a greenhouse gas emission program. See “Business — Environmental and Security Matters Relating to Bulk Shipping.” In addition to the added costs, the concern over climate change and regulatory measures to reduce greenhouse gas emissions may reduce global demand for oil and oil products, which would have an adverse effect on INSW’s business, financial results and cash flows.

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The employment of the Company’s vessels could be adversely affected by an inability to clear the oil majors’ risk assessment process.

The shipping industry, and especially vessels that transport crude oil and refined petroleum products, is heavily regulated. In addition, the “oil majors” such as BP, Chevron Corporation, ConocoPhillips Company, Exxon Mobil Corp., Royal Dutch Shell and Total S.A. have developed a strict due diligence process for selecting their shipping partners out of concerns for the environmental impact of spills. This vetting process has evolved into a sophisticated and comprehensive risk assessment of both the vessel manager and the vessel, including audits of the management office and physical inspections of the ship. Under the terms of the Company’s charter agreements (including those entered into by pools in which the Company participates), the Company’s charterers require that the Company’s vessels and the technical managers pass vetting inspections and management audits, respectively. The Company’s failure to maintain any of its vessels to the standards required by the oil majors could put the Company in breach of the applicable charter agreement and lead to termination of such agreement. Should the Company not be able to successfully clear the oil majors’ risk assessment processes on an ongoing basis, the future employment of the Company’s vessels could be adversely affected since it might lead to the oil majors’ terminating existing charters.

The Company may be subject to litigation and government inquiries or investigations that, if not resolved in the Company’s favor and not sufficiently covered by insurance, could have a material adverse effect on it.

The Company has been and is, from time to time, involved in various litigation matters and subject to government inquiries and investigations. These matters may include, among other things, regulatory proceedings and litigation arising out of or relating to contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other disputes that arise in the ordinary course of the Company’s business.

Although the Company intends to defend these matters vigorously, it cannot predict with certainty the outcome or effect of any such matter, and the ultimate outcome of these matters or the potential costs to resolve them could involve or result in significant expenditures or losses by the Company, or result in significant changes to INSW’s tariffs, rates, rules and practices in dealing with its customers, all of which could have a material adverse effect on the Company’s future operating results, including profitability, cash flows, and financial condition. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent which may have a material adverse effect on the Company’s financial condition. The Company’s recorded liabilities and estimates of reasonably possible losses for its contingent liabilities are based on its assessment of potential liability using the information available to the Company at the time and, as applicable, any past experience and trends with respect to similar matters. However, because litigation is inherently uncertain, the Company’s estimates for contingent liabilities may be insufficient to cover the actual liabilities from such claims, resulting in a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. See “Business — Legal Proceedings” in this Information Statement, Note 19, “Contingencies,” to the Company’s audited consolidated financial statements and Note 15, “Contingencies,” to the Company’s unaudited condensed consolidated financial statements included elsewhere in this Information Statement.

The smuggling of drugs or other contraband onto the Company’s vessels may lead to governmental claims against the Company.

The Company expects that its vessels will call in ports where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent the Company’s vessels are found with contraband, whether inside or attached to the hull of our vessels and whether with or without the knowledge of any of its crew, we may face governmental or other regulatory claims which could have an adverse effect on the Company’s business, financial condition, results of operations and cash flows.

Maritime claimants could arrest INSW’s vessels, which could interrupt cash flows.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or

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attachment of one or more of the Company’s vessels could interrupt INSW’s cash flow and require it to pay a significant amount of money to have the arrest lifted. In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any “associated” vessel, meaning any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one vessel in the Company’s fleet for claims relating to another vessel in its fleet which, if successful, could have an adverse effect on the Company’s business, financial condition, results of operations and cash flows.

Risks Related to the Spin-Off

The combined post-separation value of OSG and INSW shares may not equal or exceed the pre-separation value of OSG common stock.

As a result of the spin-off, OSG expects the trading price of OSG common stock immediately following the spin-off to be lower than the “regular-way” trading price of such shares immediately prior to the spin-off because the trading price will no longer reflect the value of the INSW business. There can be no assurance that the aggregate market value of the OSG common stock and the INSW common stock following the spin-off will be higher than or the same as the market value of OSG common stock would have been if the spin-off did not occur.

INSW has no history of operating as an independent public company, and our historical and pro forma financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

The historical information about INSW contained in this Information Statement refers to our business as operated by and integrated with OSG. Our historical and pro forma financial information included in this Information Statement is derived from the historical financial statements and accounting records of OSG. Accordingly, the historical and pro forma financial information included in this Information Statement does not necessarily reflect the financial condition, operating performance or cash flows that we would have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future, including as a result of the following factors:

Prior to the spin-off, OSG or one of its affiliates performed various corporate functions for INSW, such as treasury, accounting, auditing, legal, investor relations and finance. Our historical and pro forma results reflect allocations of corporate expenses from OSG for such functions. While OSG intends to provide certain of these services under transition services arrangements, we may incur additional expenses for services that are not provided by OSG or that we choose to obtain from other sources or provide internally.
In addition to the transition services arrangements we will enter into with OSG, INSW will be required to establish the necessary infrastructure and systems to perform certain services, which INSW previously shared with OSG, on an ongoing basis. Replacing this infrastructure and systems could be time consuming and distracting to management and the process of becoming a stand-alone public company could be challenging. We may not be able to replace these services provided by OSG in a timely manner or on terms and conditions as favorable as those we receive from OSG or we may face disruptions to our operations. Any of these could adversely affect our results of operations and ability to grow.
Currently, our business is partially integrated with the other businesses of OSG. Although we will enter into transition services arrangements with OSG, these arrangements may not fully capture the benefits that INSW has enjoyed as a result of being integrated with OSG and may result in us paying higher charges than in the past for these services. This could have a material adverse effect on our competitive position, financial condition, operating results or cash flows following the completion of the spin-off.
After the completion of the spin-off, the cost of capital for INSW’s business may be higher than OSG’s cost of capital prior to the spin-off.

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Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from OSG. For additional information about the past financial performance of our business see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical and pro forma financial statements and accompanying notes included elsewhere in this Information Statement.

The unaudited pro forma condensed consolidated financial statements are subject to the assumptions and adjustments described in the accompanying notes. While we believe that these assumptions and adjustments are reasonable under the circumstances and given the information available at this time, these assumptions and adjustments are subject to change as we finalize the terms of the spin-off and our agreements related to the spin-off.

Until the spin-off occurs, OSG has sole discretion to change the terms of the spin-off in ways which may be unfavorable to INSW.

Until the spin-off occurs, INSW will be a wholly owned subsidiary of OSG. Accordingly, OSG will effectively have the sole and absolute discretion to determine and change the terms of the spin-off, including the establishment of the record date for the Distribution and the distribution date, as well as the terms of the separation and distribution agreement and other separation-related agreements. These changes could be unfavorable to INSW. In addition, OSG may decide at any time not to proceed with the spin-off.

The Company may not achieve some or all of the expected benefits of the spin-off, and the spin-off may adversely affect our business.

The Company may not be able to achieve the full strategic and financial benefits expected to result from the spin-off, or such benefits may be delayed or not occur at all. The Company has described those anticipated benefits elsewhere in this Information Statement. See “The Spin-Off.” The Company may not achieve these and other anticipated benefits for a variety of reasons, including, among others:

the spin-off will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing the Company’s business;
following the spin-off, the Company may be more susceptible to market fluctuations and other adverse events than if INSW were still a part of OSG;
following the spin-off, INSW’s business will be less diversified than OSG’s business prior to the spin-off; and
the other actions required to separate OSG’s and INSW’s respective businesses could disrupt INSW’s operations.

If the Company fails to achieve some or all of the benefits expected to result from the spin-off, or if such benefits are delayed, it could have a material adverse effect on INSW’s competitive position, financial condition, operating results or cash flows.

OSG may fail to perform under various transaction agreements that will be executed as part of the spin-off, including a transition services agreement pursuant to which OSG is expected to provide certain key services required for the operation of our business, or INSW may fail to have necessary systems and services in place when certain of the relevant agreements expire.

In connection with the spin-off, OSG and INSW will enter into a separation and distribution agreement and will also enter into various other agreements, including transition services arrangements and an employee matters agreement. These agreements will determine the allocation of assets and liabilities between the companies following the spin-off for those respective areas and will include any necessary indemnifications related to liabilities and obligations. The transition services arrangements will also provide for the performance of certain services by OSG for the benefit of INSW for a period of time. The services provided by OSG to INSW pursuant to the transition services arrangements are currently expected to include certain information technology, finance, accounting and similar back office support services. INSW will rely on OSG to satisfy its obligations under these agreements, and if it is not able to do so, INSW could incur

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operational difficulties or losses. If INSW does not have in place its own systems and services, or systems or services of equal or better quality, which could be costly and time-consuming to implement and INSW may not be successful in implementing these systems or services or in transitioning data from OSG’s systems, or if INSW does not have agreements with other providers of these systems or services at all or of equal or better quality once certain agreements expire, INSW may not be able to operate its business effectively and its profitability may decline.

Our board of directors and shareholder base will largely overlap with that of OSG.

Following the Distribution, 8 of our 9 directors will serve on both our board of directors and OSG’s board of directors and the chairman of our board of directors will also serve as the chairman of OSG’s board of directors. Additionally, we expect that there will be substantial overlap between our shareholders and those of OSG and that our largest shareholders will also be the largest shareholders of OSG following the Distribution. Shareholders and members of our board of directors that overlap with those of OSG may have differing interests than other INSW shareholders with respect to any ongoing or future relationship and competition between INSW and OSG, including under the Separation and Distribution Agreement and Transition Services Agreement.

The Distribution likely will not qualify for tax-free treatment and may be taxable to you as a dividend.

The Distribution likely will not qualify for tax-free treatment and may be taxable to you as a dividend. An amount equal to the fair market value of the shares of our Common Stock received by you on the date of the Distribution will be treated as a taxable dividend to the extent of your ratable share of any current or accumulated earnings and profits, as determined under federal income tax principles, of OSG, with the excess treated first as a non-taxable return of capital to the extent of your tax basis in your shares of OSG common stock or OSG warrants and then as capital gain. In addition, OSG or other applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the distribution payable to non-U.S. stockholders or warrantholders, and OSG or any such agent would satisfy any such withholding obligation by withholding and selling a portion of the INSW Common Stock otherwise distributable to non-U.S. stockholders or warrantholders or by withholding from other property held in the non-U.S. stockholders or warrantholders account with the withholding agent. Your tax basis in of OSG common stock or OSG warrants held at the time of the Distribution will be reduced (but not below zero) to the extent the fair market value of the shares of our Common Stock distributed to you in the Distribution exceeds your ratable share of OSG’s current and accumulated earnings and profits. Your holding period for such shares of OSG stock will not be affected by the Distribution. OSG will not be able to advise stockholders or warrantholders of the amount of current or accumulated earnings and profits of OSG until after the end of the 2016 calendar year.

Although OSG will be ascribing a value to the shares of our Common Stock distributed in the Distribution for tax purposes, this valuation is not binding on the Internal Revenue Service (the “IRS”) or any other tax authority. These taxing authorities could ascribe a higher valuation to the shares of our Common Stock, particularly if our Common Stock trades at prices significantly above the value ascribed to our Common Stock by OSG in the period following the Distribution. Such a higher valuation may cause a larger reduction in the tax basis of your OSG common stock or OSG warrants or may cause you to recognize additional dividend or capital gain income.

You should consult your own tax advisor as to the particular tax consequences of the Distribution to you.

INSW’s accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which it will be subject following the spin-off.

INSW’s financial results previously were included within the consolidated results of OSG, and it believes that its financial reporting and internal controls were appropriate for those of subsidiaries of a public company. However, INSW was not directly subject to the reporting and other requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In connection with the spin-off, INSW will become directly subject to reporting and other obligations under the Exchange Act. Beginning with our Annual Report on Form 10-K for fiscal year 2017, we will be required to comply with Section 404 of the Sarbanes-Oxley Act

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of 2002 (the “Sarbanes-Oxley Act”), which will require annual management assessments of the effectiveness of INSW’s internal control over financial reporting and a report by its independent registered public accounting firm addressing these assessments. These reporting and other obligations may place significant demands on INSW’s management, administrative and operational resources, including accounting systems and resources.

Under the Sarbanes-Oxley Act, INSW will be required to maintain effective disclosure controls and procedures and internal controls over financial reporting. To comply with these requirements, it may need to upgrade its systems; implement additional financial and management controls, reporting systems and procedures; and hire additional accounting and finance staff. INSW expects to incur additional annual expenses for the purpose of addressing these requirements, and those expenses may be significant. If INSW is unable to establish effective financial and management controls, reporting systems, information technology systems and procedures or hire the necessary employees or contractors in a timely and effective fashion, its ability to comply with our financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired. Any failure to achieve and maintain effective internal controls could have a material adverse effect on our competitive position, financial condition, operating results or cash flows.

Risks Related to the Common Stock

There is no existing market for the Common Stock and a trading market that will provide you with adequate liquidity may not develop for the Common Stock. In addition, once the Common Stock begins trading, the market price of our shares may fluctuate widely.

There is currently no public market for the Common Stock. It is anticipated that on or shortly before the Record Date for the Distribution, trading of shares of the Common Stock will begin on a “when-issued” basis and will continue up to and including through the Distribution Date. However, an active trading market for our Common Stock may not develop as a result of the Distribution, or be sustained in the future.

The Company cannot predict the prices at which our Common Stock may trade after the Distribution. The market price of the Common Stock may fluctuate widely, depending upon many factors, some of which may be beyond the Company’s control, including:

the Company’s business profile and market capitalization may not fit the investment objectives of OSG stockholders;
a shift in our investor base;
our quarterly or annual earnings, or those of other comparable companies;
actual or anticipated fluctuations in our operating results;
changes in accounting standards, policies, guidance, interpretations or principles;
announcements by us or our competitors of significant investments, acquisitions or dispositions;
the failure of securities analysts to cover our Common Stock after the Distribution;
changes in earnings estimates by securities analysts or our ability to meet those estimates;
the operating and stock price performance of other comparable companies;
overall market fluctuations; and
general economic conditions.

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the trading price of the Common Stock.

Your percentage ownership in INSW may be diluted in the future.

The Company may issue equity in order to raise capital or in connection with future acquisitions and strategic investments, which would dilute investors’ percentage ownership in INSW. In addition, your percentage ownership may be diluted if the Company issues equity instruments such as debt and equity financing.

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If the Company’s board of directors makes grants of equity awards to the Company’s directors, officers and employees pursuant to any such plan, any such grants would cause further dilution.

INSW has not yet determined whether to pay cash dividends on its Common Stock.

INSW has not yet determined whether to pay cash dividends or other distributions with respect to its Common Stock once it becomes a stand-alone public company. Any future determinations to pay dividends on its Common Stock will be at the discretion of its board of directors and will depend upon many factors, including INSW’s future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors its board of directors may deem relevant. The timing, declaration, amount and payment of any future dividends will be at the discretion of INSW’s board of directors.

INSW has no obligation to, and may not be able to, declare or pay dividends on its Common Stock. If INSW does not declare and pay dividends on our Common Stock, its share price could decline.

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CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS

This Information Statement contains forward-looking statements. In addition, we may make or approve certain statements in future filings with the SEC, in press releases, or oral or written presentations by representatives of the Company. All statements other than statements of historical facts should be considered forward-looking statements. Words such as “may,” “will,” “should,” “would,” “could,” “appears,” “believe,” “intends,” “expects,” “estimates,” “targeted,” “plans,” “anticipates,” “goal” and similar expressions are intended to identify forward-looking statements but should not be considered as the only means through which these statements may be made. Such forward-looking statements represent the Company’s reasonable expectation with respect to future events or circumstances based on various factors and are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors, many of which are beyond the control of the Company, that could cause the Company’s actual results to differ materially from the expectations expressed or implied in these statements. Undue reliance should not be placed on any forward-looking statements and consideration should be given to the following factors when reviewing such statements. Such factors include, but are not limited to:

our lack of history operating as an independent public company;
the highly cyclical nature of INSW’s industry;
fluctuations in the market value of vessels;
declines in charter rates, including spot charter rates or other market deterioration;
an increase in the supply of vessels without a commensurate increase in demand;
the impact of adverse weather and natural disasters;
the adequacy of INSW’s insurance to cover its losses, including in connection with maritime accidents or spill events;
constraints on capital availability;
changing economic, political and governmental conditions in the United States and/or abroad and general conditions in the oil and natural gas industry;
changes in fuel prices;
acts of piracy on ocean-going vessels;
terrorist attacks and international hostilities and instability;
the impact of public health threats and outbreaks of other highly communicable diseases;
the effect of the Company’s indebtedness on its ability to finance operations, pursue desirable business operations and successfully run its business in the future;
the Company’s ability to generate sufficient cash to service its indebtedness and to comply with debt covenants;
the Company’s ability to make additional capital expenditures to expand the number of vessels in its fleet and to maintain all its vessels;
the availability and cost of third party service providers for technical and commercial management of the Company’s fleet;
the Company’s ability to renew its time charters when they expire or to enter into new time charters;
termination or change in the nature of INSW’s relationship with any of the commercial pools in which it participates;
competition within the Company’s industry and INSW’s ability to compete effectively for charters with companies with greater resources;

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the Company’s ability to realize benefits from its past acquisitions or acquisitions or other strategic transactions it may make in the future;
increasing operating costs and capital expenses as the Company’s vessels age, including increases due to limited shipbuilder warranties or the consolidation of suppliers;
the Company’s ability to replace its operating leases on favorable terms, or at all;
changes in credit risk with respect to the Company’s counterparties on contracts;
the failure of contract counterparties to meet their obligations;
the Company’s ability to attract, retain and motivate key employees;
work stoppages or other labor disruptions by the unionized employees of INSW or other companies in related industries;
unexpected drydock costs;
the potential for technological innovation to reduce the value of the Company’s vessels and charter income derived therefrom;
the impact of an interruption in or failure of the Company’s information technology and communication systems upon the Company’s ability to operate;
seasonal variations in INSW’s revenues;
government requisition of the Company’s vessels during a period of war or emergency;
the Company’s compliance with requirements imposed by the U.S. government, the U.N. or the E.U. restricting calls on ports located in countries subject to sanctions and embargoes;
the Company’s compliance with complex laws, regulations and, in particular, environmental laws and regulations, including those relating to the emission of greenhouse gases and ballast water treatment;
any non-compliance with the U.S. Foreign Corrupt Practices Act of 1977 or other applicable regulations relating to bribery;
the impact of litigation, government inquiries and investigations;
governmental claims against the Company;
the arrest of INSW’s vessels by maritime claimants;
changes in laws, treaties or regulations;
the Company’s ability to operate as a separate public company;
changes made by OSG to the terms of the spin-off;
failures by OSG to satisfy the terms of agreements related to the spin-off; and
the impact that Brexit might have on global trading parties.

Investors should carefully consider these risk factors and the additional risk factors outlined in more detail in this Information Statement and in other reports hereafter filed by the Company with the SEC under the caption “Risk Factors.” The Company assumes no obligation to update or revise any forward looking statements. Forward looking statements in this Information Statement and written and oral forward looking statements attributable to the Company or its representatives after the date of this Information Statement are qualified in their entirety by the cautionary statement contained in this paragraph and in other reports hereafter filed by the Company with the SEC.

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THE SPIN-OFF

Background

On October 21, 2016, OSG, a Delaware corporation incorporated in 1969, announced that its board of directors had unanimously approved a plan to separate its international operations from its U.S. domestic operations. The spin-off will result in OSG and INSW becoming two independent, publicly-traded companies.

At 5:00 P.M., Eastern Time, on            , 2016, the Distribution Date, each OSG shareholder will receive 0.3333 shares of INSW Common Stock for every share of OSG common stock held on the Record Date for the Distribution. Each holder of OSG warrants will receive 0.3333 shares of INSW common stock for every one share of OSG common stock they would have received if they exercised their warrants immediately prior to the Distribution (or approximately 0.06332 shares of INSW Common Stock per warrant). You will not be required to make any payment, surrender or exchange your shares of OSG common stock or OSG warrants or take any other action to receive your shares of INSW’s Common Stock in the Distribution. The Distribution of INSW’s Common Stock as described in this Information Statement is subject to the satisfaction or waiver of certain conditions. For a more detailed description of these conditions, see “— Conditions to the Spin-Off.”

Purpose of the Spin-Off

OSG’s board of directors periodically reviews strategic alternatives. The OSG board of directors determined upon careful review and consideration in accordance with the applicable standard of review under Delaware law that the spin-off of INSW is in the best interests of OSG. The board’s determination was based on a number of factors, including, without limitation, those set forth below.

Enhanced strategic and management focus.  The separation will allow OSG and INSW to more effectively pursue their distinct operating priorities and strategies and enable management of both companies to focus on opportunities for long-term growth and profitability.
Enhanced ability to evaluate the business.  The two companies will have different growth, margins and returns, different market cycle exposure, and different risk/reward profiles. The spin-off will allow investors to evaluate the merits, performance and future prospects of each company’s respective business and to invest in each company separately based on these distinct characteristics
Direct access to capital markets.  The separation will create an independent equity structure that will afford each company with direct access to the capital markets. As a result, each company will have more flexibility to capitalize on its unique growth opportunities.
Broadening of investor base may enhance value.  Separate companies that focus on the International Flag and U.S. Flag markets may attract a broader base of stockholders by providing them with choice and flexibility to allocate investments between two distinctly different opportunities. This may attract new investors to each business who may not have properly assessed the value of the businesses as stand-alone entities relative to the value they are currently accorded.
Acquisitions.  The spin-off will improve the ability of both OSG and INSW to use their respective stock as acquisition currency.
Alternative transaction structures.  The board of directors considered other available alternative transaction structures for separating INSW, including a merger/sale transaction, and whether a spin-off is the most advantageous option.

The anticipated benefits of the spin-off are based on a number of assumptions, and those benefits may not materialize to the extent anticipated or at all. If the spin-off does not result in such benefits, the costs associated with the transaction and the expenses INSW will incur as an independent public company, including management compensation and general and administrative expenses, could have a negative effect on each company’s financial condition and ability to make distributions to its stockholders. For more information about the risks associated with the separation, see “Risk Factors” included elsewhere in this Information Statement.

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The OSG board of directors also considered a number of other factors in evaluating the spin-off, including the loss of shared services, increased costs resulting from operating as a separate public entity (including financing costs), one-time costs of the spin-off, continued transition expenses and the risk of not realizing the anticipated benefits of the spin-off. The OSG board of directors concluded that the potential benefits of the spin-off outweighed these factors.

Mechanics of the Spin-Off

OSG will distribute the shares of our Common Stock at 5:00 PM, Eastern Time, on            , 2016, the Distribution Date. Computershare, Inc. will serve as Distribution Agent and registrar for INSW’s Common Stock and as Distribution Agent in connection with the Distribution.

If you own OSG common stock or OSG warrants as of 5:00 PM, Eastern Time, on the Record Date, the shares of INSW Common Stock that you are entitled to receive in the Distribution will be issued electronically, as of the Distribution Date, to you or to your bank or brokerage firm on your behalf by way of direct registration in book-entry form. Registration in book-entry form refers to a method of recording stock ownership when no physical share certificates are issued to stockholders, as is the case in the Distribution.

Transferability of Shares You Receive

The shares of INSW Common Stock distributed to OSG stockholders and warrantholders will be freely transferable, except for shares received by persons who may be deemed to be INSW “affiliates” under the Securities Act. Persons who may be deemed to be affiliates of INSW after the Distribution generally include individuals or entities that control, are controlled by or are under common control with INSW and may include directors and certain officers or principal stockholders of INSW. INSW affiliates will be permitted to sell their shares of INSW Common Stock only pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act, such as the exemption afforded by Rule 144.

Trading Between the Record Date and Distribution Date

Beginning shortly before the Record Date and continuing up to and through the Distribution Date, we expect that there will be two markets in OSG common stock: a “regular-way” market and an “ex-distribution” market. Shares of OSG common stock that trade on the regular way market will trade with an entitlement to shares of our Common Stock distributed pursuant to the Distribution. Shares that trade on the “ex-distribution” market will trade without an entitlement to shares of our Common Stock distributed pursuant to the Distribution. Therefore, if you sell shares of OSG common stock in the “regular-way” market through the Distribution Date, you will also sell your right to receive shares of INSW common stock in the Distribution. If you own shares of OSG common stock as of 5:00 PM, Eastern Time, on the Record Date and sell those shares on the “ex-distribution” market through the Distribution Date, you will still receive the shares of our Common Stock that you would be entitled to receive pursuant to your ownership of the shares of OSG common stock on the Record Date.

Furthermore, beginning on or shortly before the Record Date and continuing up to and through the Distribution Date, we expect that there will be a “when-issued” market in our Common Stock. “When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The “when-issued” trading market will be a market for shares of our Common Stock that will be distributed to OSG stockholders on the Distribution Date. If you owned shares of OSG common stock as of 5:00 P.M., Eastern Time, on the Record Date, you would be entitled to shares of our Common Stock distributed pursuant to the Distribution. You may trade this entitlement to shares of our Common Stock, without trading the shares of OSG common stock you own, on the “when-issued” market. On the first trading day following the Distribution Date, “when-issued” trading with respect to our Common Stock will end and “regular-way” trading will begin.

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Conditions to the Distribution

We expect that the Distribution will occur at 5:00 PM, Eastern Time, on            , 2016, the Distribution Date, provided that, among other conditions described in the Separation and Distribution Agreement, the following conditions shall have been satisfied:

the SEC shall have declared effective our registration statement on Form 10, of which this Information Statement is a part, and no stop order relating to the registration statement shall be effect;
all consents required in connection with the Distribution and related transactions shall have been received;
OSG shall have received an opinion of outside legal counsel or tax advisors regarding the U.S. federal income tax treatment of the contribution, the separation and the Distribution, in form and substance satisfactory to OSG in its sole discretion;
the board of directors of OSG shall have received an opinion from a nationally recognized appraisal, valuation and investment banking firm, in form and substance satisfactory to OSG in its sole discretion regarding: (A) the solvency of each of OSG and INSW after the contribution, separation and Distribution and (B) the existence of surplus after OSG has made the Distribution;
the listing of our Common Stock on the NYSE shall have been approved, subject to official notice of issuance; and
no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the Distribution or any of the transactions related thereto, shall be in effect.

OSG has the right not to complete the Distribution if, at any time prior to the Distribution Date (even if all such conditions are satisfied), the board of directors of OSG determines, in its sole discretion, that the Distribution is not in the best interests of OSG or that market conditions are such that it is not advisable to separate INSW from OSG.

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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION

The following is a summary of material U.S. federal income tax consequences of the Distribution and ownership and disposition of INSW Common Stock that may be relevant to beneficial owners of OSG common stock and OSG warrants (together, “OSG equity”). This summary does not constitute legal or tax advice. For purposes of this section under the heading “Certain U.S. Federal Income Tax Consequences of the Distribution,” references to “INSW,” “we,” “our” and “us” mean only International Seaways, Inc. and not its subsidiaries or other lower-tier entities, except as otherwise indicated.

This summary is based on laws, regulations, rulings and decisions now in effect, all of which are subject to change, possibly with retroactive effect. We have not sought any ruling from the IRS with respect to the statements made and the conclusions reached in this discussion, and there can be no assurance that the IRS will agree with these statements and conclusions.

This summary does not address all possible tax considerations that may be relevant to a holder. The discussion does not deal with special classes of holders, such as dealers in securities or currencies, banks, financial institutions, insurance companies, tax-exempt organizations, entities classified as partnerships and the partners therein, persons holding equity as a position in a “straddle” or conversion transaction, or as part of a “synthetic security” or other integrated financial transaction or persons that have a functional currency other than the U.S. dollar. The discussion does not address the alternative minimum tax, the Medicare tax on net investment income or other aspects of U.S. federal income or state, local, and foreign taxation that may be relevant to a holder in light of the holder’s particular circumstances.

This discussion assumes that investors hold their OSG equity, and will hold their INSW Common Stock, as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”).

For purposes of this discussion under the heading “Certain U.S. Federal Income Tax Consequences of the Distribution,” a U.S. holder is a beneficial owner of OSG equity or INSW Common Stock that is a citizen or resident of the United States or a domestic corporation or otherwise subject to U.S. federal income tax on a net income basis in respect of its OSG equity or INSW Common Stock. A non-U.S. holder is a beneficial owner of OSG equity or INSW Common Stock that is not a U.S. holder.

You are urged to consult your tax advisor regarding the federal, state, local, and foreign income and other tax consequences to you of the Distribution and the holding and disposing of INSW Common Stock in light of your particular investment or tax circumstances.

Tax Consequences of the Distribution

Tax Classification of the Distribution in General

Although the matter is not entirely free from doubt, we believe that the Distribution likely will not qualify under Section 355 of the Code as a tax-free corporate division, because among other matters, we believe that INSW will not be viewed as engaged in an “active trade or business” within the meaning of that Code section. Accordingly, this disclosure assumes that Section 355 will not apply to the Distribution and that, as a result, the Distribution will be treated for U.S. federal income tax purposes as a taxable distribution by OSG to OSG’s common stockholders and warrant holders (together, “OSG equity holders”) in an amount equal to the fair market value of the shares of INSW Common Stock received by such OSG equity holders, determined as of the date of the Distribution. The tax consequences of the Distribution for beneficial owners of OSG equity are thus generally the same as the tax consequences of a distribution of cash by OSG.

OSG will be required to recognize any taxable gain, but will not be permitted to recognize any taxable loss, with respect to our Common Stock that it distributes in the Distribution, although we expect OSG’s basis in our Common Stock to exceed the fair market value of our Common Stock.

Tax Basis and Holding Period of INSW Common Stock Received by Holders of OSG Equity

A beneficial owner of shares of our Common Stock will generally have a tax basis in the shares received in the Distribution that equals the fair market value of such shares on the date of Distribution, and the holding period of such shares will begin the day after the date of the Distribution.

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Tax Treatment of the Distribution

U.S. Holders

The portion of the amount distributed pursuant to the Distribution that is payable out of OSG’s current or accumulated earnings and profits, as determined under federal income tax principles, will be taken into account by a U.S. holder as dividend income. Subject to certain exceptions for short-term (60 days or less) and hedged positions, the Distribution received by U.S. holders that are individuals, trusts and estates will be eligible for taxation at the maximum rate of 20% as “qualified dividends.”

If and to the extent that the amount distributed pursuant to the Distribution is in excess of OSG’s current and accumulated earnings and profits, it will generally represent a return of capital and will generally not be taxable to a U.S. holder. Rather, the Distribution will reduce the adjusted basis of the holder’s OSG equity (but not below zero) by the extent to which the value of the amount distributed exceeds OSG’s current and accumulated earnings and profits. A U.S. holder will however recognize gain to the extent that this excess exceeds the adjusted basis of its OSG equity. Any such gain will generally be long-term capital gain if the holder has held its OSG equity for more than one year at the time of the Distribution.

Non-U.S. Holders

The amount distributed pursuant to the Distribution generally will constitute a dividend for U.S. federal income tax purposes to the extent of OSG’s current or accumulated earnings and profits, as determined under federal income tax principles. The amount treated as a dividend will be subject to U.S. withholding tax at the rate of 30%, unless reduced or eliminated by an applicable treaty. Even if a holder is eligible for a lower treaty rate, U.S. federal tax will generally be required to be withheld at a 30% rate (rather than the lower treaty rate) on dividend payments to a holder, unless (i) the holder has furnished to the applicable U.S. withholding agent a valid IRS Form W-8BEN, Form W-8 BEN-E or other documentary evidence establishing its entitlement to the lower treaty rate with respect to such payments, and (ii) if the holder is a non-financial entity required to do so, it has provided the applicable U.S. withholding agent with certain information with respect its direct and indirect U.S. owners, and, if the holder holds OSG equity through a non-U.S. financial institution, such institution (x) has entered into an agreement with the U.S. government to collect and provide to the U.S. tax authorities information about its accountholders (including certain investors in such institution), (y) qualifies for an exception from the requirement to enter into such an agreement or (z) complies with the terms of an applicable intergovernmental agreement between the U.S. government and the jurisdiction in which such foreign financial institution is organized, is resident or operates, as the case may be.

The amount distributed pursuant to the Distribution, to the extent not made out of OSG’s current or accumulated earnings and profits, will not be subject to U.S. income tax. If OSG cannot determine at the time of the Distribution whether or not the amount distributed pursuant to the Distribution will exceed current and accumulated earnings and profits, the aggregate amount distributed will be subject to withholding at the rate applicable to ordinary dividends, as described above.

Gain in respect of any non-dividend portion of the Distribution will nonetheless be taxable to a non-U.S. holder if the non-U.S. holder is a nonresident alien individual who was present in the U.S. for 183 days or more during the taxable year, and certain other conditions are met.

If OSG is required to withhold any amounts otherwise distributable to a non-U.S. holder in the Distribution, OSG or other applicable withholding agents may collect the amount required to be withheld by reducing to cash for remittance to the IRS a sufficient portion of Common Stock that such non-U.S. holder would otherwise receive or by withholding from other property held in the non-U.S. equity holder’s account with the withholding agent. Such holder may bear brokerage or other costs for this withholding procedure. A non-U.S. holder may seek a refund from the IRS of any amounts withheld if it is subsequently determined that the amounts withheld exceeded the non-U.S. holder’s U.S. tax liability for the year in which the Distribution occurred.

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Tax Considerations for Holders of INSW Common Stock

The following discussion is a summary of certain U.S. federal income tax considerations generally applicable to the ownership and disposition of INSW Common Stock. This discussion deals only with INSW Common Stock held as “capital assets” within the meaning of Section 1221 of the Code, by holders who received Common Stock pursuant to the Distribution.

Tax Treatment of U.S. Holders

Tax Treatment of Dividends

Subject to the discussion in “— Passive Foreign Investment Company Rules” below, in the event that we make a distribution of cash or property with respect to our Common Stock, such distributions generally will constitute foreign source dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of a holder’s investment, up to such holder’s tax basis in our Common Stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described below in “— Tax Treatment of Sale, Exchange or Other Taxable Disposition.”

Subject to certain exceptions for short-term (60 days or less) and hedged positions, the dividends received by an individual U.S. holder in respect of qualified foreign corporation stock may be subject to taxation at a maximum rate of 20% if the dividends are “qualified dividends.” Dividends paid on Common Stock may be treated as qualified dividends if (1) the Common Stock are readily tradable on an established securities market in the United States and (2) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment company (a “PFIC”). The Common Stock is not currently readily tradable on an established securities market in the United States, so any dividends will not be treated as “qualified dividends.” However, we intend to apply to list our Common Stock in the NYSE in the future. We believe that we were not a PFIC in 2015, but see “— Passive Foreign Investment Company Rules” below regarding the application of the PFIC rules.

Distributions of additional shares in respect of Common Stock that are made as part of a pro-rata distribution to all of our Common Stockholders generally will not be subject to U.S. federal income tax.

Tax Treatment of Sale, Exchange, or Other Taxable Disposition

Subject to the discussion in “— Passive Foreign Investment Company Rules” below, upon a sale or other disposition of Common Stock, a U.S. holder will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the U.S. dollar value of the amount realized and such investor’s tax basis in the Common Stock. Generally, such gain or loss realized on the sale or other disposition of Common Stock will be treated as U.S. source capital gain or loss, and will be long-term capital gain or loss if the Common Stock were held for more than one year. The ability to offset capital losses against ordinary income is limited. Long-term capital gain recognized by an individual U.S. holder generally is subject to taxation at a maximum rate of 20%.

Passive Foreign Investment Company Rules

Special U.S. tax rules apply to companies that are considered to be PFICs. We will be classified as a PFIC in a particular taxable year if either

75 percent or more of our gross income for the taxable year is passive income; or
the average percentage of the value of our assets that produce or are held for the production of passive income is at least 50 percent.

We expect to derive sufficient active revenues and to hold sufficient active assets so that we will not be classified as a PFIC, but the PFIC tests must be applied each year, and it is possible that we may become a PFIC in a future year. In the event that, contrary to our expectation, we are classified as a PFIC in any year, and a U.S. holder does not make a mark-to-market election, as described in the following paragraph, the holder will be subject to a special tax at ordinary income tax rates on “excess distributions,” including certain distributions by us and gain that the holder recognizes on the sale of shares of Common Stock. The amount of

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income tax on any excess distributions will be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions were earned ratably over the period a U.S. holder holds shares of Common Stock. Classification as a PFIC may also have other adverse tax consequences, including, in the case of individuals, the denial of a step-up in the basis shares of Common Stock at death.

If our Common Stock is regularly traded on a “qualified exchange,” a U.S. holder can avoid the unfavorable rules described in the preceding paragraph by electing to mark the holder’s shares of Common Stock to market. A U.S. holder who makes this mark-to-market election will be required in any year in which we are a PFIC to include as ordinary income the excess of the fair market value of the shares at year-end over the holder’s basis in those shares. In addition, any gain recognized by the U.S. holder upon the sale of shares will be taxed as ordinary income in the year of sale. The Common Stock is not currently regularly traded on a qualified exchange. However, we intend to apply to list our Common Stock on the NYSE (which is a qualified exchange) in connection with the Distribution, although there can be no assurance that Common Stock will be regularly traded.

A U.S. holder that owns an equity interest in a PFIC must annually file IRS Form 8621, and may be required to file other IRS forms. A failure to file one or more of these forms as required may toll the running of the statute of limitations in respect of each of the U.S. holder’s taxable years for which such form is required to be filed. As a result, the taxable years with respect to which the U.S. holder fails to file the form may remain open to assessment by the IRS indefinitely, until the form is filed.

You should consult your own tax advisor regarding the U.S. federal income tax considerations discussed above and the desirability of making a mark-to-market election.

Tax Treatment of Non-U.S. Holders

A non-U.S. holder generally will not be subject to U.S. federal income tax with respect to distribution of cash or property with respect to our Common Stock.

A non-U.S. holder generally will not be subject to U.S. federal income tax with respect to gain recognized on a sale, exchange or other taxable disposition of our Common Stock unless the non-U.S. holder is an individual who was present in the United States for 183 days or more in the taxable year of the sale, exchange or other taxable disposition, and certain other conditions are met.

Information Reporting and Backup Withholding

Payments of dividends made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting unless the holder is an exempt recipient and may also be subject to backup withholding unless the holder (i) provides its taxpayer identification number and certifies that it is not subject to backup withholding or (ii) otherwise establishes an exemption from backup withholding. Investors may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim or refund with the IRS and filing any required information.

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MARKET PRICE INFORMATION AND DIVIDENDS

Market Price Data

There is no established trading market for shares of our Common Stock. Immediately prior to the spin-off, all of our shares were owned by OSG.

In connection with the spin-off, OSG will distribute all of the outstanding shares of our Common Stock on a pro rata basis to holders of OSG common stock and OSG warrants as of the Record Date for the spin-off. We intend to apply to list our Common Stock on the NYSE under the symbol “INSW.”

Dividends

We have not yet determined whether to pay cash dividends or other distributions with respect to our common stock once we become a stand-alone public company. Any future determinations to pay dividends on our Common Stock will be at the discretion of our board of directors and will depend upon many factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors our board of directors may deem relevant. The timing, declaration, amount and payment of any future dividends will be at the discretion of our board of directors.

We have no obligation to, and may not be able to, declare or pay dividends on our Common Stock. If we do not declare and pay dividends on our Common Stock, our share price could decline.

For a discussion of the application of withholding taxes on dividends, see “Certain U.S. Federal Income Tax Consequences of the Distribution — Tax Considerations for Holders of INSW Common Stock” and “Certain U.S. Federal Income Tax Consequences of the Distribution — Information Reporting and Backup Withholding.”

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CAPITALIZATION

The following table sets forth our cash and cash equivalents, restricted cash and our capitalization as of June 30, 2016:

You should read the following table in conjunction with the sections titled “Selected Historical Consolidated Financial Data,” “Unaudited Pro Forma Condensed Consolidated Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our historical financial statements and related notes included elsewhere in this Information Statement.

 
(in thousands)
Total cash
        
Cash and cash equivalents   $ 278,945  
Total cash and cash equivalents   $ 278,945  
Total debt(1)
        
INSW Term Loan   $ 519,901  
Total debt   $ 519,901  
Equity:
        
Common stock   $ 29,825  
Paid-in additional capital     1,323,705  
Retained earnings     80,977  
Accumulated other comprehensive loss     (70,563 ) 
Total stockholders’ equity     1,363,944  
Total capitalization   $ 1,883,845  

(1) Includes current portion.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of preparation

The unaudited pro forma condensed consolidated financial statements are comprised of our unaudited pro forma condensed consolidated balance sheet as of June 30, 2016 and our unaudited pro forma condensed consolidated statements of income for the year ended December 31, 2015 and the six months ended June 30, 2016. The unaudited pro forma condensed consolidated financial statements of the Company have been derived from our historical audited consolidated financial statements for the year ended December 31, 2015 and from our historical unaudited condensed consolidated financial statements for the six months ended June 30, 2016 included elsewhere in the Information Statement. Such unaudited pro forma condensed consolidated financial statements should be read in conjunction with (i) the audited consolidated GAAP financial statements and accompanying notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2015, (ii) the unaudited condensed consolidated financial statements and accompanying notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2016 and (iii) the risk factors outlined in detail under the caption “Risk Factors”, all of which are included elsewhere in this Information Statement.

The unaudited pro forma condensed consolidated financial statements give effect to the following (collectively, the “Transactions”):

Amendment No. 2 to the INSW Facilities;
Amendment No. 3 to the INSW Facilities; and
A forward stock split immediately prior to the Distribution Date of our common stock, which will be distributed to holders of OSG common stock and warrants, in the form of a pro rata dividend, to effect the spin-off of International Seaways Inc. (“Seaways”), formerly doing business as OSG International, Inc.

The unaudited pro forma condensed consolidated statements of income for the six months ended June 30, 2016 and for the year ended December 31, 2015, reflect our results as if the Transactions had occurred on January 1, 2015. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2016 gives effect to these Transactions as if they occurred on June 30, 2016.

The unaudited pro forma condensed consolidated financial statements are 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, that reflect the impacts of adjustments directly attributable to the Transactions that are factually supportable, and for purposes of the statements of income, are expected to have a continuing impact on the Company. The unaudited pro forma condensed consolidated statements of income exclude items of expense that, although directly attributable to the Transactions, will not have a continuing impact on the statement of income (i.e., one-time costs).

The unaudited pro forma condensed consolidated financial statements are provided for illustrative and information purposes only, and are not intended to represent or necessarily be indicative of the Company’s results of operations or financial condition had the Transactions 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 historical financial statements include certain corporate administrative expenses, reorganization costs and employee related costs that have been allocated to the Company by OSG, however, the amounts allocated may not be representative of the amounts that would have been incurred had the Company been an entity that operated independently of OSG. The unaudited pro forma condensed consolidated financial statements do not reflect any incremental costs the Company may potentially incur as an entity operating independently of OSG, or any cost savings that the Company’s management believes could have been achieved had the Transactions been completed on the dates indicated, as such charges and savings are judgmental and not factually supportable.

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INTERNATIONAL SEAWAYS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2016
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
(UNAUDITED)

     
  Historical   Pro Forma
Adjustments(a)
  Pro Forma
Shipping Revenues:
                          
Pool revenues   $ 157,234              $ 157,234  
Time and bareboat charter revenues     50,343                50,343  
Voyage charter revenues     24,161                24,161  
       231,738                231,738  
Operating Expenses:
                          
Voyage expenses     6,074                6,074  
Vessel expenses     69,538                69,538  
Charter hire expenses     16,809                16,809  
Depreciation and amortization     40,106                40,106  
General and administrative     17,174     $ (1,263 )(b)      15,911  
Gain on disposal of vessels and other property     (171 )               (171 ) 
Total Operating Expenses     149,530       (1,263 )      148,267  
Income from Vessel Operations     82,208       1,263       83,471  
Equity in Income of Affiliated Companies     23,605                23,605  
Operating Income     105,813       1,263       107,076  
Other Income     1,241                1,241  
Income before Interest Expense, Reorganization Items and Income Taxes     107,054       1,263       108,317  
Interest Expense     (20,432 )      1,601 (c)      (18,831 ) 
Income before Reorganization Items and Income Taxes     86,622       2,864       89,486  
Reorganization Items, net     3,951                3,951  
Income before Income Taxes     90,573       2,864       93,437  
Income tax Provision     (177 )               (177 ) 
Net Income   $ 90,396     $ 2,864     $ 93,260  
Weighted average number of shares outstanding     102.21                29,157,494 (f) 
Basic and diluted net income per share   $ 884,414.44              $ 3.20  

 
 
See accompanying notes to the unaudited pro forma condensed consolidated financial statements

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INTERNATIONAL SEAWAYS, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2015
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
(UNAUDITED)

     
  Historical   Pro Forma
Adjustments(a)
  Pro Forma
Shipping Revenues:
                          
Pool revenues   $ 360,218              $ 360,218  
Time and bareboat charter revenues     52,092                52,092  
Voyage charter revenues     85,324                85,324  
       497,634                497,634  
Operating Expenses:
                          
Voyage expenses     21,844                21,844  
Vessel expenses     143,925                143,925  
Charter hire expenses     36,802                36,802  
Depreciation and amortization     81,653                81,653  
General and administrative     41,516                41,516  
Technical management transition costs     39                39  
Gain on disposal of vessels and other property, including impairments     (4,459 )               (4,459 ) 
Total Operating Expenses     321,320                321,320  
Income from Vessel Operations     176,314                176,314  
Equity in Income of Affiliated Companies     45,559                45,559  
Operating Income     221,873                221,873  
Other Income     66                66  
Income before Interest Expense, Reorganization Items and Income Taxes     221,939                221,939  
Interest Expense     (42,970 )    $ 3,262 (c)      (39,708 ) 
Income before Reorganization Items and Income Taxes     178,969       3,262       182,231  
Reorganization Items, net     (5,659 )               (5,659 ) 
Income before Income Taxes     173,310       3,262       176,572  
Income Tax Provision     (140 )               (140 ) 
Net Income   $ 173,170     $ 3,262     $ 176,432  
Weighted average number of shares outstanding     102.21                29,157,494 (f) 
Basic and diluted net income per share   $ 1,694,256.92              $ 6.05  

 
 
See accompanying notes to the unaudited pro forma condensed consolidated financial statements

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INTERNATIONAL SEAWAYS, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2016
DOLLARS IN THOUSANDS
(UNAUDITED)

     
  Historical   Pro Forma
Adjustments(a)
  Pro Forma
ASSETS
                          
Current Assets:
                          
Cash and cash equivalents   $ 278,945     $ (175,683 )(d)    $ 103,262  
Voyage receivables     52,172                52,172  
Other receivables     2,006                2,006  
Inventories     255                255  
Prepaid expenses and other current assets     8,252                8,252  
Total Current Assets     341,630       (175,683 )      165,947  
Vessels and other property, less accumulated depreciation     1,208,097                1,208,097  
Deferred drydock expenditures, net     29,537                29,537  
Total Vessels, Deferred Drydock and Other Property     1,237,634                1,237,634  
Investments in and advances to affiliated companies     344,848                344,848  
Other assets     1,571                1,571  
Total Assets   $ 1,925,683     $ (175,683 )    $ 1,750,000  
LIABILITIES AND EQUITY
                          
Current Liabilities:
                          
Accounts payable, accrued expenses and other current liabilities   $ 26,938     $ 9,812 (b)    $ 36,750  
Due to parent for cost sharing reimbursements     7,236                7,236  
Current installments of long-term debt     6,183                6,183  
Total Current Liabilities     40,357       9,812       50,169  
Long-term debt     513,718       (80,801 )(e)      432,917  
Other liabilities     7,664                7,664  
Total Liabilities     561,739       (70,989 )      490,750  
Commitments and contingencies
                          
Equity:
                          
Common stock – no par value; 55,555,555 shares authorized; 29,157,494 shares outstanding(f)     29,825                29,825  
Paid-in additional capital     1,323,705       (23,717 )(g)      1,299,988  
Retained earnings/(accumulated deficit)     80,977       (80,977 )(g)       
       1,434,507       (104,694 )      1,329,813  
Accumulated other comprehensive loss     (70,563 )               (70,563 ) 
Total Equity     1,363,944       (104,694 )      1,259,250  
Total Liabilities and Equity   $ 1,925,683     $ (175,683 )    $ 1,750,000  

 
 
See accompanying notes to the unaudited pro forma condensed consolidated financial statements

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Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements (Dollars in Thousands)

(a) On July 18, 2016, the Company entered into a second amendment (the “Second INSW Credit Agreement Amendment”) to the INSW Facilities. The Second INSW Credit Agreement Amendment amends the conditions under which the INSW Facilities permit OSG to spin off INSW. In particular, the Second INSW Credit Agreement Amendment permits the distribution of OSG’s equity interests in INSW to OSG’s shareholders in conjunction with the transfer of substantially all of INSW’s assets (subject to certain exceptions) to a new wholly-owned subsidiary of INSW, subject to the satisfaction of other conditions set forth in the INSW Facilities and the Second INSW Credit Agreement Amendment.

On September 20, 2016, the Company entered into a third amendment (the “Third INSW Credit Agreement Amendment”) to the INSW Facilities. The Third INSW Credit Agreement Amendment, among other things, allows for INSW to distribute cash dividends in an aggregate amount not to exceed $100,000 to OSG between the effective date of the amendment and October 14, 2016. In accordance with the terms of the Third INSW Credit Agreement Amendment, INSW also prepaid $75,000 of the outstanding principal balance of the INSW Term Loan on September 20, 2016.

The pro-forma balance sheet and pro-forma statements of income give effect to the $75,000 INSW Term Loan prepayment referenced above and the debt amendment fees of approximately $472 and $7,801 relating to the Second INSW Credit Agreement Amendment and Third INSW Credit Agreement Amendment, respectively, as such items are deemed to be directly attributable to the Transactions.

(b) Represents adjustments made to remove one-time separation costs from general and administrative expense. Separation costs of $1,263 included in general and administrative expense for the six months ended June 30, 2016 including $244 paid and $1,019 unpaid as of June 30, 2016 are eliminated. In addition, we expect to incur approximately $10,495 in one-time separation costs subsequent to June 30, 2016. Such costs are reflected as an increase in accounts payable, accrued expenses and other current liabilities in the accompanying pro forma consolidated balance sheets as of June 30, 2016, and are comprised primarily of consulting and legal fees, severance costs and debt amendment fees. The $10,495 consists of deferred financing costs of $8,273, which are reflected as a reduction of long-term debt, and $2,222 that is reflected as a reduction of retained earnings.

Partially offsetting the $10,495 increase in the accounts payable, accrued expenses and other current liabilities in the accompanying pro forma consolidated balance sheets as of June 30, 2016 is a $683 reduction to reflect the assumed settlement of interest that had been accrued in the historical June 30, 2016 balance sheet related to the $75,000 outstanding INSW Term Loan principal that was prepaid in conjunction with the Third INSW Credit Agreement Amendment (see footnote (a) above).

(c) The adjustments to our historical interest expense for the six months ended June 30, 2016 and the year ended December 31, 2015 to give effect to the $75,000 prepayment of the INSW Term Loan and $8,273 of amendment fees are presented below:

   
  Six Months Ended
June 30, 2016
  Year Ended
December 31, 2015
Reduction to reflect $75,000 prepayment   $ 2,156     $ 4,313  
Reduced amortization to reflect write-off of historical deferred financing costs in relation to $75,000 prepayment     279       536  
Increase to reflect amortization of $8,273 in debt amendment fees     (834 )      (1,587 ) 
Total pro forma adjustments to interest expense   $ 1,601     $ 3,262  
(d) The adjustments to cash and cash equivalents on the condensed consolidated balance sheet as of June 30, 2016 are presented below:

 
Distribution by INSW to OSG (see Note (g))   $ (100,000 ) 
INSW Term Loan prepayment     (75,000 ) 
Settlement of interest accrued at June 30, 2016 in relation to $75,000 INSW Term Loan prepayment     (683 ) 
Total pro forma adjustments to cash and cash equivalents   $ (175,683 ) 

59


 
 

(e) The adjustments to long-term debt on the condensed consolidated balance sheet as of June 30, 2016 are presented below:

 
INSW Term Loan prepayment   $ (75,000 ) 
Write-off of historical deferred financing costs in relation to INSW Term Loan prepayment     2,472  
Debt amendment fees     (8,273 ) 
Total pro forma adjustments to long-term debt   $ (80,801 ) 

During the six months ended June 30, 2016 the Company made repurchases in the open market and mandatory principal prepayments under the INSW Term Loan of $68,922 and $8,832, respectively. The pro-forma statements of income do not give effect to such events as if they had occurred on January 1, 2015, as they were not deemed to be directly attributable to the Transactions.

(f) As discussed elsewhere in this Information Statement, the Company anticipates that it will amend and restate its Articles of Incorporation effective immediately prior to the Distribution. In accordance with the Amended and Restated Articles of Incorporation, immediately prior to the Distribution, the Company will effect a stock split on its 102.21 issued and outstanding shares of common stock to allow for a distribution in the form of a prorata dividend of such shares to the holders of OSG common stock and warrants. Our new capital structure is reflected in the pro forma condensed consolidated balance sheet (share amounts in units). For purposes of the pro-forma condensed consolidated balance sheet as of June 30, 2016, the adjustments were determined by applying a one-to-three ratio to the sum of OSG’s shares of Class A common stock and the common stock equivalent of penny warrants for OSG’s Class A common stock outstanding as of September 30, 2016, which totaled 87,472,485.

For pro-forma earnings per share purposes, the pro-forma basic weighted average shares outstanding were based on the number of OSG common shares and warrant common share equivalents outstanding as of September 30, 2016, adjusted for the assumed distribution ratio of one share of INSW stock for every three OSG shares of Class A common stock and common stock equivalent of Class A warrants issued and outstanding on the Record Date. While the actual impact of employee stock compensation plans upon diluted weighted average shares outstanding on a go-forward basis will depend on various factors, we do not believe that any such impact will result in pro forma diluted earnings per share being materially different from pro forma basic earnings per share.

(g) Represents $100,000 distribution by the Company to OSG in connection with the Transactions in September 2016. The distribution is presented as a reduction in retained earnings of $76,283, which is the balance reported on the unaudited condensed consolidated balance sheet as of June 30, 2016 after (i) the reduction of $2,222 for one-time separation costs expected to be incurred after June 30, 2016 (see footnote (b)), and (ii) the write-off of $2,472 deferred financing costs in relation to $75,000 principal payment of the INSW Term Loan (see footnotes (a) and (e)), and a reduction in paid-in additional capital of $23,717.

The adjustments to paid-in additional capital and retained earnings on the condensed consolidated balance sheet as of June 30, 2016 are presented below

   
  Paid-in
additional
Capital
  Retained
Earnings
One-time separation costs expected to be incurred after June 30, 2016   $     $ (2,222 ) 
Write-off of deferred financing costs associated with Term loan prepayment           (2,472 ) 
Distribution by INSW to OSG     (23,717 )      (76,283 ) 
Total pro forma adjustments   $ (23,717 )    $ (80,977 ) 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following tables set forth our selected historical consolidated financial data for the periods indicated below. Our selected historical consolidated income statement data for the twelve months ended December 31, 2015, 2014 and 2013 and balance sheet data as of December 31, 2015 and 2014 have been derived from our audited historical consolidated financial statements included elsewhere in this Information Statement, which have been audited by PricewaterhouseCoopers LLP, independent registered public accounting firm. The selected consolidated financial data for the years ended December 31, 2012 and 2011 and as of December 31, 2013, 2012 and 2011 are derived from our consolidated financial statements not appearing in this Information Statement, which have also been audited by PricewaterhouseCoopers LLP, except for the changes in presentation of debt issuance costs as a result of the retrospective adoption of the new guidance in ASU No. 2015-03 discussed in footnote (a) below. The unaudited selected consolidated financial data for the six months ended June 30, 2016 and 2015 and as of June 30, 2016 are derived from our unaudited condensed consolidated financial statements, included elsewhere in this Information Statement.

The financial statements included in this Information Statement may not necessarily reflect our financial position, results of operations and cash flows as if we had operated as a stand-alone public company during all periods presented. Accordingly, our historical results should not be relied upon as an indicator of our future performance.

The following selected historical financial and operating data should be read in conjunction with “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our historical and pro forma financial statements and related notes included elsewhere in this Information Statement.

In thousands, except share and per share amounts.

             
             
  For the year ended December 31,   For the six months
ended June 30,
     2015   2014   2013   2012   2011   2016   2015
Shipping revenues   $ 497,634     $ 517,018     $ 585,360     $ 686,666     $ 671,744     $ 231,738     $ 241,543  
Income/(loss) from vessel operations     176,314       4,604       (452,439 )      (470,261 )      (172,963 )      82,208       83,721  
Income/(loss) before reorganization items and income taxes     178,969       (13,827 )      (415,300 )      (460,990 )      (167,488 )      86,622       87,045  
Reorganization items, net     (5,659 )      (104,528 )      (304,288 )      (39,299 )            3,951       (3,555 ) 
Income/(loss) before income taxes     173,310       (118,355 )      (719,588 )      (500,289 )      (167,488 )      90,573       83,490  
Net income/(loss)     173,170       (119,099 )      (723,805 )      (500,373 )      (167,924 )      90,396       83,631  
Depreciation and amortization     81,653       84,931       108,675       132,155       115,247       40,106       40,053  
Net cash provided by/(used in) operating activities