UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission File Number: 001-06479

OVERSEAS SHIPHOLDING GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware

13-2637623

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

302 Knights Run Avenue, Tampa, Florida		33602
(Address of principal executive office)		(Zip Code)

(813) 209-0600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock (par value $0.01 per share)		OSG		New York Stock Exchange NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S–T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒	Non-accelerated filer ☐	Smaller reporting company ☒
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES ☒ NO ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares outstanding of the issuer’s Class A common stock as of August 4, 2021: Class A common stock, par value $0.01 – 87,146,851 shares. Excluded from these amounts are penny warrants, which were outstanding as of August 4, 2021 for the purchase of 3,654,795 shares of Class A common stock without consideration of any withholding pursuant to the cashless exercise procedures.

TABLE OF CONTENTS

		Page #

Part I—FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020	3

	Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2021 and 2020	4

	Condensed Consolidated Statements of Comprehensive (Loss)/Income (Unaudited) for the three and six months ended June 30, 2021 and 2020	5

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2021 and 2020	6

	Condensed Consolidated Statements of Changes in Equity (Unaudited) for the three and six months ended June 30, 2021 and 2020	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23

Item 4.	Controls and Procedures	24

Part II—OTHER INFORMATION

Item 1A	Risk Factors	25

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3	Defaults upon Senior Securities	25

Item 4	Mine Safety Disclosure	26

Item 5	Other Information	26

Item 6.	Exhibits	26

Signatures		27

OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

DOLLARS IN THOUSANDS

	June 30, 2021			December 31, 2020
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	61,735		$	69,697
Restricted cash		37			49
Voyage receivables, including unbilled of $4,954 and $6,740, net of reserve for doubtful accounts		9,234			13,123
Income tax receivable		386			387
Other receivables		3,165			1,817
Inventories, prepaid expenses and other current assets		4,348			3,603
Total Current Assets		78,905			88,676
Vessels and other property, less accumulated depreciation		777,698			832,174
Deferred drydock expenditures, net		46,703			43,134
Total Vessels, Other Property and Deferred Drydock		824,401			875,308
Restricted cash - non current		59			73
Intangible assets, less accumulated amortization		24,917			27,217
Operating lease right-of-use assets, net		177,752			215,817
Other assets		26,096			24,646
Total Assets	$	1,132,130		$	1,231,737
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities	$	42,208		$	48,089
Current portion of operating lease liabilities		90,590			90,613
Current portion of finance lease liabilities		4,001			4,000
Current installments of long-term debt		38,867			38,922
Total Current Liabilities		175,666			181,624
Reserve for uncertain tax positions		185			189
Noncurrent operating lease liabilities		108,396			147,154
Noncurrent finance lease liabilities		20,198			21,360
Long-term debt		369,523			390,198
Deferred income taxes, net		72,317			80,992
Other liabilities		31,932			30,409
Total Liabilities		778,217			851,926
Equity:
Common stock - Class A ($0.01 par value; 166,666,666 shares authorized; 87,146,851 and 86,365,422 shares issued and outstanding)		871			864
Paid-in additional capital		593,424			592,564
Accumulated deficit		(239,902	)		(213,335	)
Stockholder’s Equity Subtotal		354,393			380,093
Accumulated other comprehensive loss		(480	)		(282	)
Total Equity		353,913			379,811
Total Liabilities and Equity	$	1,132,130		$	1,231,737

See notes to condensed consolidated financial statements

OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS

(UNAUDITED)

	2021			2020			2021			2020
	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Shipping Revenues:

Time and bareboat charter revenues	$	62,806		$	96,662		$	126,594		$	174,812
Voyage charter revenues		25,553			17,877			43,039			40,586
Total Shipping revenues		88,359			114,539			169,633			215,398

Operating Expenses:
Voyage expenses		16,668			14,112			32,428			17,897
Vessel expenses		34,002			41,644			65,809			77,413
Charter hire expenses		22,595			22,505			44,913			44,965
Depreciation and amortization		15,068			14,217			30,387			28,236
General and administrative		6,004			7,599			12,370			13,772
(Gain)/loss on disposal of vessels and other property, including impairments, net		(196	)		813			5,298			1,110
Total operating expenses		94,141			100,890			191,205			183,393
(Loss)/income from vessel operations		(5,782	)		13,649			(21,572	)		32,005
Gain on termination of pre-existing arrangement		—			—			—			19,172
Operating (loss)/income		(5,782	)		13,649			(21,572	)		51,177
Other (expense)/income, net		(111	)		(58	)		11			(27	)
(Loss)/income before interest expense and income taxes		(5,893	)		13,591			(21,561	)		51,150
Interest expense		(7,317	)		(6,167	)		(13,687	)		(12,241	)
(Loss)/income before income taxes		(13,210	)		7,424			(35,248	)		38,909
Income tax benefit/(expense)		2,511			(1,044	)		8,681			(7,404	)
Net (loss)/income	$	(10,699	)	$	6,380		$	(26,567	)	$	31,505

Weighted Average Number of Common Shares Outstanding:
Basic - Class A		90,612,019			89,747,630			90,363,243			89,584,969
Diluted - Class A		90,612,019			90,812,332			90,363,243			90,600,658
Per Share Amounts:
Basic and diluted net (loss)/income - Class A	$	(0.12	)	$	0.07		$	(0.29	)	$	0.35

See notes to condensed consolidated financial statements

OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME

DOLLARS IN THOUSANDS

(UNAUDITED)

	2021			2020			2021			2020
	Three Months Ended June 30,						Six Months Ended June 30,
		2021		2020			2021			2020
Net (loss)/income	$	(10,699	)	$	6,380		$	(26,567	)	$	31,505
Other comprehensive (loss)/income, net of tax:
Defined benefit pension and other postretirement benefit plans:
Net change in unrecognized prior service costs		(180	)		(18	)		(360	)		(36	)
Net change in unrecognized actuarial losses		81			77			162			153
Other comprehensive (loss)/income		(99	)		59			(198	)		117
Comprehensive (loss)/income	$	(10,798	)	$	6,439		$	(26,765	)	$	31,622

See notes to condensed consolidated financial statements

OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

DOLLARS IN THOUSANDS

(UNAUDITED)

	2021			2020
	Six Months Ended June 30,
	2021			2020
Cash Flows from Operating Activities:
Net (loss)/income	$	(26,567	)	$	31,505
Items included in net income not affecting cash flows:
Depreciation and amortization		30,387			28,236
Gain on termination of pre-existing arrangement		—			(19,172	)
Loss on disposal of vessels and other property, including impairments, net		5,298			1,110
Amortization of debt discount and other deferred financing costs		1,252			1,124
Compensation relating to restricted stock awards and stock option grants		1,270			1,055
Deferred income tax (benefit)/expense		(8,679	)		7,431
Interest on finance lease liabilities		914			1,001
Non-cash operating lease expense		45,672			45,680
Loss on extinguishment of debt, net		—			14
Distributed earnings of affiliated companies		—			3,562
Payments for drydocking		(14,222	)		(10,078	)
Operating lease liabilities		(45,957	)		(45,998	)
Changes in operating assets and liabilities, net		63			(3,204	)
Net cash (used in)/provided by operating activities		(10,569	)		42,266
Cash Flows from Investing Activities:
Acquisition, net of cash acquired		—			(16,973	)
Proceeds from disposals of vessels and other property		32,128			700
Expenditures for vessels and vessel improvements		(5,101	)		(38,657	)
Expenditures for other property		—			(498	)
Net cash provided by/(used in) investing activities		27,027			(55,428	)
Cash Flows from Financing Activities:
Payments on debt		(19,251	)		(26,669	)
Tax withholding on share-based awards		(402	)		(197	)
Payments on principal portion of finance lease liabilities		(2,063	)		(2,075	)
Extinguishment of debt		(301	)		(673	)
Deferred financing costs paid for debt amendments		(2,429	)		—
Issuance of debt, net of issuance and deferred financing costs		—			95,441
Net cash (used in)/provided by financing activities		(24,446	)		65,827
Net (decrease)/increase in cash, cash equivalents and restricted cash		(7,988	)		52,665
Cash, cash equivalents and restricted cash at beginning of period		69,819			41,677
Cash, cash equivalents and restricted cash at end of period	$	61,831		$	94,342

See notes to condensed consolidated financial statements

OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

DOLLARS IN THOUSANDS

(UNAUDITED)

	Common Stock (1)		Paid-in Additional Capital (2)			Accumulated Deficit			Accumulated Other Comprehensive Loss (3)			Total
Balance at December 31, 2019	$	857	$	590,436		$	(243,339	)	$	(6,409	)	$	341,545
Net income		—		—			25,125			—			25,125
Other comprehensive income		—		—			—			58			58
Forfeitures, cancellations, issuance and vesting of restricted stock awards, net		1		(200	)		—			—			(199	)
Compensation related to Class A options granted and restricted stock awards		—		438			—			—			438
Balance at March 31, 2020		858		590,674			(218,214	)		(6,351	)		366,967
Net income		—		—			6,380			—			6,380
Other comprehensive income		—		—			—			59			59
Forfeitures, cancellations, issuance and vesting of restricted stock awards, net		5		(5	)		—			—			—
Compensation related to Class A options granted and restricted stock awards		—		617			—			—			617
Balance at June 30, 2020	$

SEC Form 10-Q filed by Overseas Shipholding Group, Inc.