TEN Ltd Tsakos Energy Navigation - Capital Linkforums.capitallink.com/shipping/2013newyork/pres/saroglou.pdfTEN Ltd Tsakos Energy Navigation ... − 2 Liquefied Natural Gas (“LNG”)

TEN Ltd

Tsakos Energy Navigation

March 2013

20 Years in the Capital Markets

Fleet Composition

2

Empire State 1,250

VLCC 1,100

300,000dwt

Suezmax 900

160,000dwt

Aframax 850

100,000dwt

Panamax 750

70,000dwt

Handymax 615’

50,000dwt

Handysize 570’

37,000dwt

Crude Product

1 10 8 9 6 8

Aframax 850

100,000dwt

3

LNG

LNG 750

85,000dwt

2

28 19

(1) Includes one LNG carrier under construction. Option not included

Sophisticated, multi-purpose fleet addresses all customer needs

(1)

1

Suezmax 900

160,000dwt

2


Corporate Highlights

World-Class, Experienced and Efficient Operator

High-Quality, Long-Term, Global Customer Base

Modern & Diversified Fleet

Strong Critical Mass in Tanker Markets

Growing Presence in LNG and Offshore Shuttle Tankers

Consistent Practice of Low-Cycle Investing

Successful Time-Charter Management Strategy

1

2

3

1

2

3

4

2

Positioned For Growth

Healthy financial position 4

Strong Platform


Traditional, client-focused, modern and diversified tanker and energy operator

One of the largest energy transportation companies in the world

− Carried 380 million barrels of oil in 2011, equivalent to ~5 days of global consumption or ~38 days of current US imports

Pro forma fleet consists of 49 vessels totaling 4.9 mm dwt

− 19 crude oil tankers

− 28 product tankers (including two DP2 Suezmax shuttle tankers)

− 2 Liquefied Natural Gas (“LNG”) vessels (including one under construction). TNP has also an option for a second LNG newbuilding

− $4 bn invested in 65 newbuild acquisitions since 1997

Cost effective technical management and strong balance sheet

− One of the lowest overhead cost tanker and energy operators globally

20 years as a public company

− 1993 listing on the Oslo Stock Exchange (delisted in 2005)

− NYSE listed since 2002

− $1 billion net income and ~$374 in dividend payments

Tsakos Foundation is largest shareholder (about 39%) and has never sold shares

Consistent dividend policy

TEN at a Glance

3


Established reputation as an operator of modern and well-maintained tankers

− Safe, cost-efficient and high-quality

The peer group’s lowest-overhead cost operator

Proactively meet customers’ energy transportation requirements globally

For 40+ years, Tsakos family has maintained relationships with the world’s leading oil companies and traders

Transparent management structure, 20 years as a public company, guided by strict adherence to corporate governance and a straightforward management style

Average utilization over last five years in excess of 95%

− World average high 80s/low 90s

World-Class and Experienced Operator

4


Modern & Efficient Fleet

Fleet Utilization – Consistent Market Outperformer

Safe, low-cost and fuel-efficient vessel portfolio

Modern, high-quality fleet

− Manufactured in Korean and Japanese shipyards

− Average Age 6.5 years vs. 8.7 years world tanker average

Enhanced safety and fuel-efficiency

Low operating costs

Meets spectrum of customer needs

− Ice-class capability

Multiple sister ships provide economies of scale

5


70.00%

75.00%

80.00%

85.00%

90.00%

95.00%

100.00%

2008 2009 2010 2011 2012

World Average

Modern & Diversified Fleet

(1) 51% ownership. (2) TEN retains the option for one additional LNG newbuild.

Supports full spectrum of customer needs 6


CLEAN/PRODUCT TANKERS

Dwt Built Hull Ice Class/Other

SUEZMAX - SHUTTLE1 Rio 2016 157,000 2013 DH DP2

2 Brasil 2014 157,000 2013 DH DP2

AFRAMAX - LR1 Proteas 117,055 2006 DH 1A

2 Promitheas 117,055 2006 DH 1A

3 Propontis 117,055 2006 DH 1A

PANAMAX1 World Harmony 74,200 2009 DH

2 Chantal 74,329 2009 DH

3 Selini 74,296 2009 DH

4 Salamina 74,251 2009 DH

5 Selecao 74,296 2008 DH

6 Socrates 74,327 2008 DH

7 Maya (1)

68,439 2003 DH

8 Inca (1)

68,439 2003 DH

9 Andes 68,439 2003 DH

HANDYMAX - MR 1A

1 Ariadne 53,021 2005 DH 1A

2 Artemis 53,039 2005 DH 1A

3 Afrodite 53,082 2005 DH 1A

4 Apollon 53,149 2005 DH 1A

5 Aris 53,107 2005 DH 1A

6 Ajax 53,095 2005 DH

HANDYSIZE - MR 1A

1 Andromeda 37,061 2007 DH 1A

2 Aegeas 37,061 2007 DH 1B

3 Byzantion 37,275 2007 DH 1B

4 Bosporos 37,275 2007 DH 1A

5 Amphitrite 37,061 2006 DH 1A

6 Arion 37,061 2006 DH

7 Didimon 37,432 2005 DH

8 Delphi 37,432 2004 DH

CRUDE TANKERS

Dwt Built Hull Ice Class/Other

VLCC1 Millennium 301,171 1998 DH

SUEZMAX

1 Spyros K 158,000 2011 DH

2 Dimitris P 158,000 2011 DH

3 Arctic 163,216 2007 DH 1A

4 Antarctic 163,216 2007 DH 1A

5 Archangel 163,216 2006 DH 1A

6 Alaska 163,250 2006 DH 1A

7 Eurochampion 2004 164,608 2005 DH 1C

8 Euronike 164,565 2005 DH 1C

9 Triathlon 164,445 2002 DH

10 Silia T 164,286 2002 DH

AFRAMAX

1 Uraga Princess 105,344 2010 DH

2 Sapporo Princess 105,354 2010 DH

3 Asahi Princess 105,372 2009 DH

4 Ise Princess 105,361 2009 DH

5 Maria Princess 105,346 2008 DH

6 Nippon Princess 105,392 2008 DH

7 Izumo Princess 105,374 2007 DH

8 Sakura Princess 105,365 2007 DH

LNG TANKERS

LNG (2)

1 Maria Energy 86,000 2015 DH 162,000m3

2 Neo Energy 85,602 2007 DH 150,000m3

Hidden Value / Valuation Imbalance

7

? The stock market ascribes no value to

more than two thirds of TEN’s operational

fleet…

Book Equity Value of TEN as of 9/30/12: $945 million

Market Cap 03/14: $228 million

Market values TNP as a 12-vessel company – 35 vessels operating at NO value


$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

1992

-01

1992

-11

1993

-09

1994

-07

1995

-05

1996

-03

1997

-01

1997

-11

1998

-09

1999

-07

2000

-05

2001

-03

2002

-01

2002

-11

2003

-09

2004

-07

2005

-05

2006

-03

2007

-01

2007

-11

2008

-09

2009

-07

2010

-05

2011

-03

2012

-01

8 Source: Clarkson Research Studies

Strategic Growth in Challenging Times

$85m

$35m $95m

$125m

9/11

Asian

Crisis

Gulf

War

Iraq

War

$20m

Credit

Crisis

4 Vessels 12 Vessels

26 Vessels

40 Vessels

50 Vessels

50 Vessels

$85m

$65m

54 Vessels


9

Operating Strategy

0

1

2

3

4

5

6

7

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Dw

t (i

n m

ill)

October 1993

4 vessels

0.2m dwt

March 2002

26 vessels

2.3m dwt

Continuous Growth Trajectory Since Inception

Over the long-term we have grown our fleet, but have waited peak-cycle investing

Dec. 2012

51 vessels

5.5m dwt

10



Top 10 Clients by 2012A Revenue

Long-term, blue-chip, recurring customer base consisting of major global energy companies

11


Dorado

2.30%

BP

5.40%

Exxon

5.50%

BG

6.20%

HMM

6.60% Shell

8.2%

Flopec

9.50%

Vitol

2.90%

Star Tankers

2.30%

Petrobras

16.70%

http://www.nesteoil.fi/

http://www.sunocoinc.com/

http://www.bp.com/home.do?categoryId=1&contentId=2006973

http://www.pdvsa.com/

http://www.ezimages.net/upload/ESISUBS/PEMEX.JPG

http://www.commondreams.org/files/article_images/shell.jpg

http://www.petroleumworld.com/imagesjul2004/petroec-logo.gif

http://images.google.com/imgres?imgurl=http://www.icbkuwait.com.kw/extlogo/kpc.JPG&imgrefurl=http://www.icbkuwait.com.kw/links.htm&usg=__MoHEtT2q_trNuvGwcv_JP1yCvVQ=&h=190&w=193&sz=5&hl=en&start=5&um=1&tbnid=aerlTYd4O8sxFM:&tbnh=101&tbnw=103&prev=/images%3Fq%3DKuwait%2BPetroleum%2Bcorporation%26hl%3Den%26sa%3DN%26um%3D1

Successful Time-Charter Strategy

(1) Includes delivery and employment of two DP2 Shuttle tankers currently under construction, the first from March 2013 and the second from April 2013.

Fixed vs. variable mix modified based on market conditions

Well-positioned to capitalize on improving charter rate environment

Current time charters account for over $1.1 billion in minimum gross revenues

Average employment, total fleet: 2.0 years (secured employment fleet: 2.8years)

Consistently achieved near 100% fleet utilization rates over the last five years

Profit share agreements enable us to share upside with our customers and cap our downside

Dynamic management of fleet mix optimizes financial results

(1)

12

$50 million $190 million

(1)


Febru

ary-

13

Mar

ch-1

3

Apr

il-13

May

-13

June

-13

July-1

3

Aug

ust-1

3

Sep

tem

ber-13

Octob

er-1

3

Nov

embe

r-13

Dec

embe

r-13

Janu

ary-

14

Febru

ary-

14

Mar

ch-1

4

Apr

il-14

May

-14

June

-14

July-1

4

Aug

ust-1

4

Sep

tem

ber-14

Octob

er-1

4

Octob

er-1

4

Nov

embe

r-14

Dec

embe

r-14

Andromeda (HSZ)

Byzantion (HSZ)

Bosporos (HSZ)

Amphitrite (HSZ)

Arion (HSZ)

Ariadne (HMX)

Maria Princess (AFR)

Sapporo Princess (AFR)

Izumo Princess (AFR)

Asahi Princess (AFR)

Uraga Princess (AFR)

Ise Princess (AFR)

Eurochampion (SZX)

Salamina (PNX)

Sakura Princess (AFR)

Selini (PNX)

Proteas (AFR)

Apollon (HMX)

Afrodite (HMX)

Triathlon (SZX)

Euronike (SZX)

Arctic (SZX)

Spyros K (SZX)

Dimitris P (SZX)

Antarctic (SZX)

Promitheas (AFR)

Millennium (VLCC)

Aegeas (HSZ)

Delphi (HSZ)

Didimon (HSZ)

Archangel (SZX)

Nippon Princess (AFR)

Socrates (PNX)

Selecao (PNX)

Alaska (SZX)

Artemis (HMX)

Silia T (SZX)

Propontis (AFR)

Ajax (HMX)

World Harmony (PNX)

Chantal (PNX)

Andes (PNX)

Inca (PNX)

Maya (PNX)

Neo Energy (LNG)

Aris (HMX)

Rio 2016

Brasil 2014

TIME CHARTER

TIME CHARTER W/PROFIT SHARE

POOL

SPOT

j

Secure

d

Em

plo

ym

ent

Earnings Visibility

Varia

ble

rate

s

Innovative use of profit sharing arrangements allow for semi-variable rates and risk-sharing with customers 13


Positioned for Growth

Own one, 2007-built (Neo Energy)

Ordered one state-of-the-art vessel plus one option for delivery in 2015

Signed in March 2012 a 4-year time charter on existing vessel

Developing relationships with leading LNG charterers worldwide

Corporate goal to strengthen presence in LNG sector

Accretive Growth Initiatives

LNG

Vessels

Crude and

Product

Tankers

Two product tankers Suezmax off-shore shuttle tanker newbuilds

15-year time charters with Petrobras

30+ years of continuous relationships with Petrobras

Exploring additional opportunities in this sector

11- and 12-year time charters on two conventional Suezmax tankers

Exploring opportunities from bank distress situations

Off-shore Shuttle

Tankers

15


Tremendous potential of China and India with a combined

population of 2.5 billion in a world of 7.0 billion. Their per capita oil

consumption is at extremely low levels and have already

embarked on an aggressive industrialization program

If China reaches the same levels of consumption per capita

as Thailand, Chinese oil demand (based on existing

population) would rise to 18 mbpd, an increase of 10 mbpd

from current levels

China and India remain the main drivers behind worldwide oil

demand growth. China expected growth in 2013 +4% to 10mbpd.

India expected growth for 2013 +2.7% to 3.7mbpd

Oil demand to remain positive in the non-OECD (forecasted up

3.0% from 2012) and may become positive in the OECD when the

economy recovers

IEA expects demand for oil to continue growing in 2013 =>

90.7mbpd +0.9 mbpd over 2012 or 1.0% increase.

Product tanker demand will grow faster than crude oil demand in

2013

IMF expects the world GDP growth in 2013 to continue (3.5%) and

in 2014 (4.1%) from the 2012 GDP levels (3.2%)

85

87

86

85

88

89

90

91

82

83

84

85

86

87

88

89

90

91

92

2006 2007 2008 2009 2010 2011 2012 2013E

16

Demand – Positive Long-Term Outlook

Source: International Energy Agency, Oil Market Report, January 2013

Positive Long-Term Outlook

BARRELS OF OIL PER CAPITA PER ANNUM(Source: BP Statistical Review of World Energy June 2012

22

13

10

6

31

0

5

10

15

20

25

2011

United States Japan EU

Thailand China (incl. HK) India

Global Oil Demand (in mbpd)


0

100

200

300

400

500

600

700

Handy Panamax Aframax Suezmax VLCC

2008 2009 2010 2011 2012 2013 (Feb)

Newbuilding Orderbook on a Downward Trend

Nu

mb

er

of

Sh

ips

Source: Clarkson Research Studies, Oil & Tanker Trades Outlook - February 2013

In 2010 the Orderbook stood at 22% of the fleet

At end of 2012 it stood at 11%...

17


Financial Strength

Healthy Profitability

19

(1) TCE = Revenues less voyage expenses (bunkers, port expenses, canal dues) (2) EBITDA = Net Income + Interest and Finance Cost + Depreciation + Amortization. 2011 adjusted EBITDA adds back impairment charges

$104

n/a

46.1

$(1.94)

$5.0

$(89.5)

$268

$395

47.8

2011

$88

n/a

52.3

$(0.48)

$-

$(24.9)

$211

$294

48.0

2012 (9mo)

$179

2.2%

39.6

$0.50

$19.7

$19.8

$322

$408

46.1

2010

$176

3.2%

37.2

$0.77

$5.1

$28.7

$368

$445

46.6

2009

38.038.238.139.638.2W/Av. Shares Out. diluted

$377

23.7%

$5.33

$35

$202.9

$540

$623

44.1

2008

$345

24.8%

$4.79

$69

$183.2

$429

$501

41.7

2007

$303$215$198EBITDA (2)

32.3%31.1%45.5%ROE

$5.15$4.09$3.76EPS, diluted (split adjusted)

$63$45$21Capital Gains

$196.4$161.8$143.3Net Income

$359$260$276TCE Revenues, net (1)

$428$296$318Total Revenues

33.826.127.3Av. Number of Vessels

200620052004Expressed in million US dollars

$104

n/a

46.1

$(1.94)

$5.0

$(89.5)

$268

$395

47.8

2011

$88

n/a

52.3

$(0.48)

$-

$(24.9)

$211

$294

48.0

2012 (9mo)

$179

2.2%

39.6

$0.50

$19.7

$19.8

$322

$408

46.1

2010

$176

3.2%

37.2

$0.77

$5.1

$28.7

$368

$445

46.6

2009

38.038.238.139.638.2W/Av. Shares Out. diluted

$377

23.7%

$5.33

$35

$202.9

$540

$623

44.1

2008

$345

24.8%

$4.79

$69

$183.2

$429

$501

41.7

2007

$303$215$198EBITDA (2)

32.3%31.1%45.5%ROE

$5.15$4.09$3.76EPS, diluted (split adjusted)

$63$45$21Capital Gains

$196.4$161.8$143.3Net Income

$359$260$276TCE Revenues, net (1)

$428$296$318Total Revenues

33.826.127.3Av. Number of Vessels



Strong Balance Sheet

20

(1) TCE = Revenues less voyage expenses (bunkers, port expenses, canal dues) (2) EBITDA = Net Income + Interest and Finance Cost + Depreciation + Amortization. 2011 adjusted EBITDA adds back impairment charges

59%

$1,515

$922

$1,327

$271

$188

$2,538

$2,302

$38

$288

$176

2011

58%

$1,472

$961

$1,230

$316.6

$242

$2,504

$2,124

$89

$270

$164

2012 (9mo)

56%

$1,562

$1,013

$1,429

$223

$134

$2,702

$2,235

$82

$367

$277

2010

57%

$1,503

$914

$1,330

$264

$173

$2,550

$2,009

$49

$472

$296

2009

57%

$1,514

$915

$1,423

$190

$92

$2,602

$2,155

$54

$371

$312

2008

59%

$1,390

$858

$1,346

$132

$44

$2,363

$1,900

$170

$276

$181

2007

$1,134$434Total Debt


$755$607Total Stockholders’ equity

56%32%Net Debt/Cap

$1,111$382Long term debt, net of current portion

$101$92Total Current Liabilities

$23$51Current portion of long term debt

$1,970$1,090Total Assets

$1,458$711Vessels’ net book value

$261$150Advances for vessels under

construction

$223$192Total Current Assets (incl. cash)

$175$146Cash & Cash equivalents

59%

$1,515

$922

$1,327

$271

$188

$2,538

$2,302

$38

$288

$176

2011

58%

$1,472

$961

$1,230

$316.6

$242

$2,504

$2,124

$89

$270

$164

2012 (9mo)

56%

$1,562

$1,013

$1,429

$223

$134

$2,702

$2,235

$82

$367

$277

2010

57%

$1,503

$914

$1,330

$264

$173

$2,550

$2,009

$49

$472

$296

2009

57%

$1,514

$915

$1,423

$190

$92

$2,602

$2,155

$54

$371

$312

2008

59%

$1,390

$858

$1,346

$132

$44

$2,363

$1,900

$170

$276

$181

2007

$1,134$434Total Debt


$755$607Total Stockholders’ equity

56%32%Net Debt/Cap

$1,111$382Long term debt, net of current portion

$101$92Total Current Liabilities

$23$51Current portion of long term debt

$1,970$1,090Total Assets

$1,458$711Vessels’ net book value

$261$150Advances for vessels under

construction

$223$192Total Current Assets (incl. cash)

$175$146Cash & Cash equivalents


Consistent Dividend Payments

Semi-annual dividends until 2009 Quarterly dividends thereafter….

21

Since initiation of dividend payments and including the recently announced quarterly payment, TEN has distributed a total of $9.575 per share to its shareholders (IPO price, split adjusted: $7.50)

$0.25 $0.25$0.35

$0.50

$0.63

$0.83$0.90

$0.30

$0.15 $0.15 $0.15

$0.10

$0.25

$0.48

$0.55

$0.75

$0.90$0.85

$0.30

$0.15 $0.15$0.05

$0.15$0.15

$0.15$0.15

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1st 2nd 3rd 4th


Strategy Going Forward

Maintain adequate liquidity to fund operations

Support strategic objectives

− Expand operations in LNG sector

− Growing fleet opportunistically

− Broaden and diversify customer base

Maintain historic dividend policy

Proactively manage vessel lending relationships

Generate net long-term capital gains through fleet management

− Minimize our capital base to maximize returns on capital

22


23

World-Class, Experienced and Efficient Operator


Diversified, Modern Fleet

Well-Positioned for Recovery in the Tanker Markets

Growing LNG and Offshore Shuttle Tankers

Consistent Practice of Low-Cycle Investing

Successful Time-Charter Management Strategy

Strong Capital Structure and Dividend Policy

World Fleet Breakdown (By Vessel Type)

1,863

413

913

476612

36

49

75

82

217

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

Handies Panamax Aframax Suezmax VLCC

Existing Orderbook


12% 9% 5% 16% 13%

24


0

50

100

150

200

250

300

350

Handysize Panamax Aframax Suezmax VLCC

VLCC 53 25 4

Suezmax 48 12 10 5

Aframax 23 19 7

Panamax 23 9 4

Handysize 112 72 24 7 2

2013 2014 2015 2016 2017

25

Nu

mb

er

of

Sh

ips


Newbuilding Orderbook (Delivery Schedule)

56% of Orderbook 30% of Orderbook 3% of Orderbook 10% of Orderbook 0.4% of Orderbook


26

$12,714

$25,473

$47,250

$9,388

$17,890

$35,500

$26,670

$15,873

$10,134

$0

$10,000

$20,000

$30,000

$40,000

$50,000

1980-89 1990-99 2000-2009

VLCC Suezmax Aframax

Structural changes and improved ship designs have led to higher base rates over the

last three decades

Flight to quality has raised the floor for double hull tankers

TEN’s modern double-hull fleet on the forefront of reaping the rewards

Source: Clarkson Research Studies

Market Upside Potential

Growing LNG

0

50

100

150

200

250

300

2000A 2005A 2010A 2015E

Asia Pacific Europe Middle East North America South America

(units in mmtpa)

Global LNG Supply & Demand Global LNG trade routes

Global outlook for LNG demand is favorable, requiring trans-ocean transport between regions

Source: Wood Mackenzie, Fearnley LNG.

0

50

100

150

200

250

300

350

400

2005 2007 2009 2011 2013 2015 2017 2019

Operational Under Construction Demand

1.2 vessels required to carry 1 mpta on average

Global LNG Demand by Region

(units in mmtpa)

Henry Hub: ~1.88

Europe: ~12.50

Middle East: ~14.00

($/btu)

Japan: ~17.00

27


Growing in LNG

0

30

60

90

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Existing Fleet (Year End) Renewal DemandNew Deliveries Additional Requirement

(units in million m3)

Worldwide LNG Fleet Capacity Favorable Rate Environment for LNG Charters

Source: Clarksons, Wood Mackenzie. Note: LNG charter rates are based on 138 – 155k cbm modern vessels.

Fleet capacity is inadequate to meet demand, resulting in rising LNG charter rates

2009 2010 2011

$20

$0

$60

$40

$80

$120

(units in 000s US$/day)

Spot Charter Rate

1 Year+ Time Charter Rate

# Available Vessels

$100

Vessel shortfall

28


Growing in Offshore Shuttle Tankers

Global demand and resulting high oil prices are the backdrop for growing, diverse exploration and drilling projects

Consequently, global energy companies are investing in Deep Water and Ultra-deepwater projects

This gives us an opportunity to leverage our preferred position with our customers to grow in this profitable segment

Vessel demand exceeds supply over the next few years, driving charter rates higher

We see many ways to build in this sector, partnering with our customers

Another attractive dimension to our global growth strategy

29


30 Tsakos Energy Navigation, Ltd – 367 Syngrou Av. , Athens 175 64, Greece Tel: +30210 940 7710, Fax: +30210 940 7716

email: [email protected]

TEN Ltd

Company Contact:

Paul Durham, Chief Financial Officer [email protected]

George Saroglou, Chief Operating Officer [email protected]

Harrys Kosmatos, Corporate Development Officer [email protected]

mailto:[email protected]



Documents

TEN Ltd Tsakos Energy Navigation - Capital Linkforums.capitallink.com/shipping/2013newyork/pres/saroglou.pdfTEN Ltd Tsakos Energy Navigation ... − 2 Liquefied Natural Gas (“LNG”)