Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the third quarter and nine months 2020 Financial Results. We have with us, Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr.

George Saroglou, Chief Operating Officer of the company. At this time, all participants are in a listen-only mode. There’ll be a presentation followed by a question-and-answer session. . I must advise you that this conference is being recorded today.

Nicolas Bornozis: Thank you very much, and good morning to all of our participants. I’m Nicolas Bornozis of Capital Link Investor Relations Advisor to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the nine months and third quarter ended September 30, 2020. In case we do not have a copy of today’s earnings release, please call us at 212-661-7566, or e-mail us at ten@capitallink.com, and we will have a copy emailed to you right away. Please note that parallel of today’s conference call, there’s also a live audio and slides webcast, which can be accessed on the company’s website on the front page at www.tenn.gr.

The conference call will follow the presentation slides, so please we urge you to access the presentation slides on the company’s website. Please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation are user controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. At this time, I would like to read the Safe Harbor statement. This conference call and slide presentation of the webcast contain certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

Investors are concerned that such forward-looking statements involve risks and uncertainties, which may affect TEN’s business prospects and results of operations. And at this moment, I would like to pass the floor on to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir.

Efstratios Arapoglou: Thank you, Nicolas. Good morning and good afternoon to all. Thank you for joining us on our call today, reporting third quarter and nine-month results. As you’ve seen, more than double increase year-on-year in operating income and positive quarterly results in such a weak market, while paying off all our obligations, replacing older tonnage with new accretive business, maintaining a comfortable cash position, redeeming recently our preferred issue and maintaining a healthy dividend. All this demonstrates alertness and flexibility by our management and fully validates our strategy and positioning in the market that you’ve been hearing all along.

These attributes will certainly allow us to benefit from the anticipating gradual recovery in the market, so that we can continue offering our shareholders value going forward.

Nikolas Tsakos: Thank you.

Efstratios Arapoglou: Nikolas, the floor is yours.

Nikolas Tsakos: Thank you, Chairman, and good morning to all of our participants. It has been, as described in the press release, a very, very strange, I would say, painful years on a personal basis for many of us.

However, in the meantime, we have been able to maintain a steady growth in taking TEN. One step further to its goal, which is the full appreciation of its shareholders’ value and the company’s growing business. As the Chairman was kind enough to mention, with the help of all on Board, our seafarers, our technical management team, the whole Tsakos’ organization, we have been able to maintain an unprecedented high utilization in very difficult times, operational difficult times. And the last quarter, the third quarter, which seasonally is a slow quarter, was actually also influenced by operational barriers to doing business as usual, caused by the pandemic. In the meantime, TEN was able to achieve its goals regardless of the circumstances.

The most important part of it has been the modernization of the fleet. In the first nine months, we have sold six of our older ladies, as we say, and we have replaced them with a significant four economically designed and environmentally designed vessels, all of them with accretive businesses. This has been, I think, also in our bottom line, we have been able to maintain our very high utilization, reduce debt, reduce our preferred obligations and prepare the company going forward in a much more normalized environment. We are seeing around us a significant signs in the other segments of the shipping business that go in parallel over the time lag, we’re seeing that the dry cargo market has turned the corner. And going from strength to strength, we’re seeing a very strong recovery from a very, very low starting point of the container sector.

And in the last since November, we are seeing similar signs of recovery in our business. So with this introduction, we are looking – going forward in an environment where the supply, which is usually business is very, very normalized. We have the lowest supply in the last 30 years and also a very significant scrapping. We finally – the pain of the last quarter has led to finally some of the older vessels is being scrapped after a very long time. And we already have seen 380 tankers been scrapped, a strong 7% of the tonnage out there been scrapped within this year and growing.

George Saroglou: Thank you, Nikolas. Good morning to all of you joining our earnings call. We reported today a profitable third quarter and nine-month of 2020 operation. It has been a roller coaster year for the tanker industry and the world because of the COVID-19 pandemic and its economic, social and health-related repercussions. We continue to successfully navigate the logistic and regulatory challenges of COVID-19 with no impact to our operations so far.

Thank God. The shipping industry because of the pandemic, the lockdowns, border closures and reduced airline capacity has experienced significant challenges with crew changes. We have safely performed crew changes, but the problems with restrictions and logistics remain as different parts of the world navigate through the second wave of the pandemic. We anticipated the second wave and blunt all crew changes before it arrived with no stoppages or disruption in our operations, no cases of contaminations for their sign on crew and border vessels and in full support of our charterers trade requirements, 24/7. It has been a Herculean task.

I want to take the opportunity to thank one more time and tell how proud we are for all our seafarers and onshore personnel for their hard work, patience, perseverance and professionalism during this unprecedented time. We will continue to work hard to normalize crew changes and bring seafarer safely back home to their families without disruption to the operational readiness and efficiency of the fleet. This has been and will continue to be a number one priority, while the pandemic lasts and until we return to normal industry practices for crew changes. Let us now go to the slides of our presentation. In Slide 3, we see that since TEN’s inception in 1993, we have faced four

major crisis: the Far East crisis in 1999; the 9/11 crisis; the credit crisis of the Great Recession in 2008/2009; and currently, the COVID-19 pandemic.

But each time, the company, thanks to its operating model, which is built to be crisis-resistant, has come out stronger from four modern vessels in 1993 to a pro forma fleet of 50 vessels for an average 15% annual growth in terms of deadweight tonnes in the four decades we operate.

Paul Durham: Thank you, George. As expected, on top of seasonal factors, quarter three results were impacted by pandemic lockdown, low oil demand and the continuous draw on oil inventories globally. Nevertheless, quarter three operating income was $15 million and net income, $1.4 million.. While in the nine months, operating income reached $117 million, doubled that of the prior quarter three, with net income of $54 million.

In a weak market, revenue in quarter three was still up 9% to $143 million, including $4 million profit share and 21% up in the nine months. TEN had two vessels dry docked in quarter three and three in the nine months and still achieve 93% utilization in quarter three, 95% employment in the nine months. Daily TCE per vessel in quarter three averaged nearly $21,000 and over $25,000 for the nine months, again, exceeding average market price. Time charter has generated $86 million in quarter three, enough to cover most expenses in the quarter, while vessels operating mainly in the spot market generated a further $57 million before voyage expenses. Turning to OPEC state at $45 million, an average daily OPEC per vessel increased to just $7,900 due to extra dry dock costs and a weaker dollar, but remained at about $7,700 for the nine months.

EBITDA in quarter three amounted to $48 million, just 2%, up from the prior quarter three due to the more difficult market, while nine-month EBITDA increased by 40% to $230 million. Quarter three finance costs totaled $13.5 million, down from $22 million in the prior quarter three. Due to reduced loan interest, our cost of debt falling from over 4% to about 2% due to LIBOR – lower LIBOR and margins. Also, average outstanding debt fell by about $79 million since the prior quarter three. There was also a $4 million positive turnaround in bunker hedge valuations since the prior quarter three.

In quarter three, total net debt did increase by $34 million, mainly due to the delivery installment for the new suezmax., but much of this has already been offset by repayments in quarter four. In fact, we are expecting total net debt in this year to have decreased by about $90 million by the year-end. Part of this decrease was due to the sale of six tankers earlier in the year, which in itself, reduced debt by $61 million and released $38 million cash, at the same time bringing the average age down. In addition to loan reductions, we also had the recent $50 million redemption of preferred stock paid from our strengthened cash reserves. Due to our increased cash in the year and the time charter’s strategy, we still remain in a comfortable liquidity position with our cash approaching the levels we had at the beginning of the year.

We now have just two vessels being built, an LNG carrier with delivery in a year and a shuttle tanker with $237 million remaining to be paid for these two vessels. And we are in the process of finalizing pre-delivery finance for both vessels at competitive terms. At the same time, we have three vessels under consideration for sale that are expected to free more cash after repayment of related debt. Finally, while several market observers focus on the tanker recovery in 2022, we are more confident in a return to normality within a shorter timeframe, assuming a reduction in new vessel deliveries and successful COVID vaccinations, releasing pent-up demand. And now, I’ll give the call back to Nikolas.

Nikolas Tsakos: Thank you, Paul. And I think as very well said by you and George, we have been able to tame the turbulent waters of most of 2020 and placed the company in the right track for being able to take advantage of what is going forward. With 40% of our fleet right now on the spot market and a significant part of our profit-sharing arrangements being able to take advantage over the higher market, we expect that as the beginning of the year finds the world in a bit more normalized state, both politically, but also health-wise. We are seeing the signs of a stronger movement. I mean, we have seen already significant hardening in the last month of the trade, the transatlantic trade on – in the product side.

We’re seeing the highest U.S. imports registered in production since 2016. And that’s – I think that’s a very strong signal and we’re seeing the majority of MRs and LRs trading in that part of the world. And we’re seeing a slow increase in the demand, of course, with crude basically supported from a strong appetite of exports coming from Libya, which has been very slow in the past. And now it’s increasing its output by about 1 million plus barrels a day, trying to become the major source of exports in the Med and competing very strongly with the Russian exports.

So we are seeing normalization and we are seeing trade happening much more than it – that we were reporting back a quarter ago. The signs are good. The supply is non-existent. I think, this is something that I have not seen. I have always been speaking and talking about actually importing and asking people and my colleagues through my position in the tanker some years ago.

And in order for it to stop ordering, it seems like if you ask too many times, someone listens to you, but I’m sure I’m not the reason. But the confusion on propulsion technology right now has created the lowest supply in tankers and vessels in general for a very – for a generation. So, I mean, as we speak today, we see about eight, – we have a fleet of 830 VLs in the water, some of them in storage, of which 220 are in excess of 15 years of age and normally 75 vessels being built. So that’s less than 9% on the VLs, and it’s a very similar situation across the Board as we speak forward. I think that would show that with the confusion of all the regulations that are coming out, shipowners very rightly show or preferring to slow stream rather than find other solutions in order to achieve their target, their environmental targets, their emission targets that are being set as recently as last week by the IMO.

So in general, I think, I have the feeling that unless something really unless we get a fared severe way and I’m knocking on wood of the virus keeping us at the time after Christmas, but we are getting as close of being out of the woods as possible and better days are ahead of us. In the meantime, we have been able to successfully navigate the difficult times. And with that, I would like to open the floor for any questions. Thank you. Q - Randy Giveans - Jefferies & Company Inc.: Giveans – it’s Randy Giveans at Jefferies.

How are you?

Nikolas Tsakos: Hello, Randy, very well. Thank you.

Randy Giveans: Great, great. Doing well. So I guess a couple of questions.

Can you provide maybe a little more color on that decision to repurchase the Series C preferreds? Do you plan on continuing to kind of look at repurchasing other preferreds? And then also, obviously, your cash balance is robust. You don’t really have any more newbuildings. Your share price is at a steep discount to NAV. Any appetite for common share repurchases?

Nikolas Tsakos: Yes, I think, as I said, our first obligation has been to repurchase actually within a bit more than a year. Within the last 18 months, we have spent $100 million of our hard-earned cash to repurchase the two step-up perpetuals.

So that was our obligation.

Randy Giveans: Yes.

Nikolas Tsakos: As George mentioned, we keep on – we have bought back since May 5% of the company, which is – it’s a significant amount. So there is buying. We have set targets what is buying also from the government and, of course, maintaining our dividend.

So it is a balanced priority to reduce expensive paper that is out there, but is our first priority. Our dividend is also significant to continue this 5.25. I think, it is, I think, a significant achievement. But when almost 20 years now, we have an average of 5.25 dividend yield. I think, today, we are closer to 7% with the last payment.

So I think in a world where – in an environment where you have a negative returns, in many cases, to have a dividend like that, it’s positive. So I think that’s how we look at it. Expensive paper has to be redeemed first; dividend, second; and of course, common – support to our common shares.

Randy Giveans: Great. All right.

Yes, it sounds like a prudent strategy there. Now looking at your fleet, as I’ve heard some differing reports. So can you just give an update on that LNG newbuilding option? It looks like you did not exercise that for later next year. And then on the shuttle tanker orders, it looks like you placed one firm order. When do you have to decide on the additional two shuttle tankers?

Nikolas Tsakos: Well, as you, I’m sure, follow us close as we do, the – right now, because of all of the issues I mentioned before, which many of them were commercial, economical and technical issues.

You have a very low demand for newbuildings, which means the shipyards are offering quite attractive propositions for people. So I don’t think we have lost anything. I mean, it was our choice not to take our options at the time, because we believe the way things have gone that we will get ships that will be technologically more advanced going forward and perhaps then at a lesser price. There are not people going to take those options. I think, we are in the front of the queue, as I say.

Randy Giveans: Got it. That’s fair. And then I guess, last question, on multiple calls in prior weeks, we’ve heard some of the crude players, we’ve heard from some of the product kind of product carrier only players. Which market are you more bullish on? Obviously, you have both crude tankers and refined products tankers. So do you kind of favor one of the other here in the next few months?

Nikolas Tsakos: First of all, I have to say that we are glad that we are diversified within the Energy segment.

This has been our strategy and policy going back to the families foundings, many many, many, many decades before. So we are a client-driven. We do not – I would say, we do not have an opinion in actually following something stronger. I believe we are light on the VLCCs on the crude. So this is something that we are looking positive going forward.

But both segments move within perhaps a quarter or six months lag between themselves. We have seen already a movement, as I mentioned earlier, on the production – our product carriers have taken advantage of that. And we hope that the crude will follow. There is less storage than it used to be some time a year or six months ago, which means there is less oil being stored, so more oil will be demanded or less oil been inventoried.

Randy Giveans: Yes, yes, that makes sense.

All right. Well, that’s it for me. Looks like the markets like in your responses today. So keep it up. Happy Thanksgiving.

Nikolas Tsakos: Thank you. Same to you.

Operator: Thank you. There are currently no further questions, sir. I’ll hand back to you for closing remarks.

Efstratios Arapoglou: Well, once again, thank you all. Great call. Unfortunately, not many questions, but then the stock price shows that you’re all happy. And we hope that our next call earlier – early next year will be even more successful than this one today. So happy Thanksgiving to everyone.

Nikolas would like to say a few words.

Nikolas Tsakos: Well, I hope the next presentation has not to – has not – I do not have to do it through a mask, which makes it a little blurry. But we wish everybody a very happy Thanksgiving and a very safe conclusion of this very strange year. And as Chairman said, early next year, hopefully, we will be able to talk about much more exciting and better things and a better and healthier visibility going forward. Thank you for your support.

And as I said, I think that we are out of the worst part and moving to better times. Thank you very much. Stay safe. Happy Thanksgiving.

Paul Durham: Bye.

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