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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~

~~For~~⌧ Quarterly Report Pursuant to Section 13 or 15(d) of the ~~quarterly~~Securities ~~period~~Exchange ~~ended~~Act ~~September 30,~~of ~~2020~~1934

For the quarterly period ended March 31, 2021

~~o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~


	☐	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: 1-38771

DIAMOND S SHIPPING INC.

(Exact name of registrant as specified in its charter)



Republic of the Marshall Islands	98-1480128
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

33 Benedict Place
Greenwich, CT	06830
(Address of principal executive offices)	(Zip Code)

(203) 413-2000

(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
Common Stock, par value $0.001 per share	DSSI	New York Stock Exchange

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 x No o

Indicate by check mark whether the registrant: (1) has ~~submitted~~ ~~electronically~~filed ~~every~~all ~~Interactive~~reports ~~Data File~~ required to be ~~submitted~~filed ~~pursuant~~by ~~to Rule~~Section ~~405~~13 or 15(d) of ~~Regulation~~the ~~S-T~~Securities ~~(§232.405 of~~Exchange ~~this~~Act ~~chapter)~~of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to ~~submit~~file such ~~files~~reports)., and (2) ~~Yes~~has xbeen Nosubject oto such filing requirements for the past 90 days. 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 the definitions of “large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

~~Large~~Indicate ~~accelerated~~by ~~filer~~check omark ~~Accelerated~~whether ~~filer~~the oregistrant ~~Non~~has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-~~accelerated~~T ~~filer~~(§232.405 xof ~~Smaller~~this ~~reporting~~chapter) ~~company~~during othe ~~Emerging~~preceding ~~growth~~12 ~~company~~months x(or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ☐

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 provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a ~~shell~~large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company ~~(as~~or ~~defined~~an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act). ~~Yes o No x~~

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the issuer’s common stock as of November 12, 2020: 40,440,593 shares of common stock, par value $0.001 per share.


Large accelerated filer	◻	Accelerated filer	⌧
Non-accelerated filer	◻	Smaller reporting company	◻
		Emerging growth company	⌧

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the issuer’s common stock as of May 7, 2021: 40,594,829 shares of common stock, par value $0.001 per share.

Table of Contents

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION		PAGE
Item 1	Financial Statements
	Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2020 and December 31, 2019	6
	Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2020 and 2019	7
	Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) for the three and nine months ended September 30, 2020 and 2019	8
	Condensed Consolidated Statements of Changes in Equity (Unaudited) for the three and nine months ended September 30, 2020 and 2019	9
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2020 and 2019	10
	Notes to Condensed Consolidated Financial Statements (Unaudited)	11
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4	Controls and Procedures	35

PART II. OTHER INFORMATION			PAGE
PART I. FINANCIAL INFORMATION				PAGE
Item 1	Legal Proceedings		36

Item 1A	Risk Factors		36
Item 1	Financial Statements			6
Item 6	Exhibits		37

		Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2021 and December 31, 2020		7

		Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2021 and 2020		8

		Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) for the three months ended March 31, 2021 and 2020		9

		Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) for the three months ended March 31, 2021 and 2020		10

		Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2021 and 2020		11

		Notes to Condensed Consolidated Financial Statements (Unaudited)		12

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations			27

Item 3	Quantitative and Qualitative Disclosures About Market Risk			37

Item 4	Controls and Procedures			37

PART II. OTHER INFORMATION				PAGE

Item 1	Legal Proceedings			37

Item 1A	Risk Factors			37

Item 6	Exhibits			40

Table of Contents

Special Notice Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include financial projections, statements of plans and objectives for future operations, statements of future economic performance, and statements of assumptions relating thereto. Forward-looking statements may appear throughout this report, including without limitation, Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and are often identified by future or conditional words such as “~~will~~anticipate,” “~~plans~~believe,” “~~expects~~continue,” “~~intends~~could,” “~~believes~~estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “might,” “pending,” “plan,” “possible,” “potential,” “predict,” “project,” “seeks,” “~~estimates~~should,” or“targets,” “~~anticipates~~will,” “would,” or by variations of such words or by similar expressions. There can be no assurance that such forward-looking statements will be achieved. By their very nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause our actual results or conditions to differ materially from those expressed or implied by such forward-looking statements.

The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

The following important factors, and those important factors described elsewhere in this report, could affect (and in some cases have affected) our actual results and could cause such results to differ materially from estimates or expectations reflected in such forward-looking statements:

uncertainties as to the timing of the Announced Merger (as such term defined herein);

the ability of us and International Seaways, Inc. (“INSW”) to receive the required regulatory and shareholder approvals for the Announced Merger (and the risks that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction);

the occurrence of events that may give rise to a right of to terminate the Merger Agreement (as such term defined herein);

the possibility that, following the consummation of the Announced Merger, costs or difficulties related to the integration of DSSI’s and INSW’s operations will be greater than expected;

the risk that stockholder litigation in connection with the Announced Merger may affect the timing or occurrence of the contemplated transaction or result in significant costs of defense, indemnification and liability;

the cyclicality of the tanker industry;

· changes in economic and competitive conditions affecting our business, including market fluctuations in charter rates and charterers’ abilities to perform under existing time charters;

· the length and severity of the ongoing novel coronavirus (“COVID-19”) pandemic, including its impact on the demand for seaborne transportation of petroleum products;

risks related to an oversupply of tanker vessels;

· ~~changes~~the inlength ~~fuel~~and ~~prices~~severity of the ongoing novel coronavirus (“COVID-19”) pandemic, including its impact on the demand for seaborne transportation of petroleum products;

changes in fuel prices, including as a result of the imposition of sulfur oxide emissions limits in 2020 under new regulations adopted by The International Maritime Organization (the “IMO”);

decreases in the market values of tanker vessels;

changes in governmental rules and regulations or actions taken by regulatory authorities;

Table of Contents

risks related to the management of our growth strategy, counterparty risks and customer relations with key customers;

our ability to meet obligations under time charter agreements;

dependence on third-party managers and a limited number of customers;

our liquidity, level of indebtedness, operating expenses, capital expenditures and financing;

· our ~~interest rate swap agreements and~~ credit facilities;

· risk of loss, including potential liability from future litigation and potential costs due to environmental damage, vessel collisions and business ~~interruption~~interruptions; ~~risks related to war, terrorism and piracy;~~

general domestic and international political conditions or events, including “trade wars”;

risks related to war, terrorism and piracy;

risks related to the acquisition, modification and operation of vessels;

future supply of, and demand for, refined products and crude oil, including relating to seasonality;

risks related to our insurance, including adequacy of coverage and increased premium payments;

risks related to tax rules applicable to us;

our ability to clear the oil majors’ risk assessment processes;

future refined product and crude oil prices and production;

the carrying values of our vessels and the potential for any asset impairments;

3· our ability to maximize the use of our vessels, including the redeployment or disposition of vessels no longer under time charter;

· our continued ability to ~~maximize~~successfully ~~the~~employ ~~use of~~ our vessels~~, including the redeployment or disposition of vessels no longer under long-term time charter~~;

· ~~our~~failure ~~continued ability~~ to ~~enter~~close ~~into~~or ~~long-term,~~realize ~~fixed-rate~~the ~~time~~anticipated ~~charters~~benefits ~~with~~of ~~our~~the ~~charterers~~Announced ~~and~~Merger to(as ~~re-charter~~defined ~~our~~herein), ~~vessels~~including as ~~their~~a ~~existing~~result ~~charters~~of ~~expire~~integrating atthe ~~attractive rates~~businesses;

· failure to realize the anticipated benefits of the Merger (as defined herein), including as a result of integrating the businesses;

failure to maintain effective internal control over financial reporting;

our ability to implement our business strategy and manage planned growth;

· ~~changes~~substantial insales ~~laws,~~of ~~treaties~~our orcommon ~~regulations applicable to the Company, including regulations relating to environmental compliance~~shares; ~~and~~

· ~~other~~our ~~risks~~ability ~~and uncertainties disclosed in the Company’s reports filed from time~~ to ~~time~~meet ~~with~~financial ~~the Securities and Exchange Commission (“SEC”) under the Exchange Act.~~projections;

~~Projections,~~· ~~assumptions~~conflicts ~~and estimates~~ of ~~our~~ ~~future~~interest ~~performance~~between ~~and~~our ~~the~~significant ~~future~~shareholders ~~performance of the industry in which we operate are necessarily subject to a high degree of uncertainty~~ and ~~risk. When considering these forward-looking statements, you should keep in mind the cautionary statements in this report and in~~ our other SEC filings. These forward-looking statements speak only as of the date on which such statements were made, and we undertake no obligation to update these statements, except as required by the federal securities laws. These forward-looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.shareholders;

~~Except~~· torisks ~~the~~related ~~extent~~to ~~required~~our bycommon ~~applicable law or regulation~~shares, weincluding ~~undertake~~low noliquidity ~~obligation~~and tohigh ~~release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.~~volatility;

our ability to retain and hire key personnel;

risks related to being an independent public company and an emerging growth company, including with respect to accounting practices and policies;

failure to comply with the U.S. Foreign Corrupt Practices Act of 1977;

~~Part~~Table 1.of ~~Financial Information~~Contents

~~Item~~· 1.risks ~~Financial Statements~~related to our corporate governance, including the difficulty of changing the composition of our board of directors;

~~DIAMOND~~· Sthe ~~SHIPPING~~lack ~~INC.~~of ~~AND~~shareholder ~~SUBSIDIARIES Index~~rights due to ~~Condensed~~being ~~Consolidated~~incorporated ~~Financial~~in ~~Statements~~the ~~(Unaudited)~~Republic of the Marshall Islands;

	Page
Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	6
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019	7
Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2020 and 2019	8
Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2020 and 2019	9
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019	10
Notes to Condensed Consolidated Financial Statements	11

the risk that it may be difficult to serve process or enforce a U.S. judgment against us; and

other risks and uncertainties disclosed in our reports filed from time to time with the Securities and Exchange Commission (“SEC”) under the Exchange Act.

Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations proves to be inaccurate or is not realized. You should thoroughly read this report with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this report include additional factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the forward-looking statements by these cautionary statements.

Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk. When considering these forward-looking statements, you should keep in mind the cautionary statements in this report and in our other SEC filings. These forward-looking statements speak only as of the date on which such statements were made, and we undertake no obligation to update these statements, except as required by applicable law. These forward-looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.

Except to the extent required by applicable law or regulation, we undertake no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

~~DIAMOND S~~Table ~~SHIPPING~~of ~~INC. AND SUBSIDIARIES~~Contents

~~Condensed~~PART ~~Consolidated~~1. ~~Balance~~FINANCIAL ~~Sheets as of September 30, 2020 and December 31, 2019~~INFORMATION

~~(In~~ITEM ~~Thousands,~~1. ~~except~~FINANCIAL ~~for share and per share data)~~STATEMENTS

~~(Unaudited)~~DIAMOND S SHIPPING INC. AND SUBSIDIARIES

	September 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	114,335		$	83,609
Due from charterers – Net of provision for doubtful accounts of $2,037 and $1,415, respectively		56,948			80,691
Inventories		20,518			32,071
Prepaid expenses and other current assets		14,611			13,179
Total current assets		206,412			209,550
Noncurrent assets:
Vessels – Net of accumulated depreciation of $631,438 and $553,483, respectively		1,799,835			1,865,738
Other property – Net of accumulated depreciation of $813 and $584, respectively		433			642
Deferred drydocking costs – Net of accumulated amortization of $24,406 and $17,975, respectively		34,016			37,256
Restricted cash		6,014			5,610
Advances to Norient pool		8,001			—
Time charter contracts acquired – Net of accumulated amortization of $4,290 and $2,296, respectively		2,809			5,004
Other noncurrent assets		2,593			4,582
Total noncurrent assets		1,853,701			1,918,832
Total	$	2,060,113		$	2,128,382
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	134,389		$	134,389
Accounts payable and accrued expenses		35,336			44,062
Deferred charter hire revenue		3,245			1,934
Derivative liability		557			—
Total current liabilities		173,527			180,385
Long-term debt – Net of deferred financing costs of $13,426 and $15,866, respectively		600,703			744,055
Derivative liability		620			—
Total liabilities		774,850			924,440
Commitments and contingencies (Note 16)
Equity:
Common stock, par value $0.001; 100,000,000 shares authorized; issued and outstanding 39,924,892 and 39,890,699 shares at September 30, 2020 and December 31, 2019, respectively		40			40
Treasury stock – at cost; 137,289 shares at September 30, 2020		(1,418	)		—
Additional paid-in capital		1,240,521			1,237,658
Accumulated other comprehensive loss		(1,177	)		—
Retained earnings (accumulated deficit)		12,525			(68,567	)
Total Diamond S Shipping Inc. equity		1,250,491			1,169,131
Noncontrolling interests		34,772			34,811
Total equity		1,285,263			1,203,942
Total	$	2,060,113		$	2,128,382

Index to Condensed Consolidated Financial Statements (Unaudited)

~~See notes to condensed consolidated financial statements.~~

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

		Page

Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020		7
Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020		8
Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2021 and 2020		9
Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2021 and 2020		10
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020		11
Notes to Condensed Consolidated Financial Statements		12

~~Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019~~

~~(In Thousands, except for share and per share data) (Unaudited)~~

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue:
Voyage revenue	$	69,098		$	120,954		$	419,169		$	348,747
Time charter revenue		20,408			20,572			63,296			44,730
Pool revenue		23,091			—			23,410			—
Total revenue		112,597			141,526			505,875			393,477
Operating expenses:
Voyage expenses		32,896			59,968			156,926			167,441
Vessel expenses		44,758			41,799			128,032			108,976
Depreciation and amortization expense		29,067			28,763			86,598			79,962
Loss on sale of vessels		—			18,344			—			18,344
General and administrative expenses		7,685			7,566			23,294			21,174
Total operating expenses		114,406			156,440			394,850			395,897
Operating (loss) income		(1,809	)		(14,914	)		111,025			(2,420	)
Other (expense) income:
Interest expense		(7,019	)		(13,021	)		(28,106	)		(35,813	)
Other income		3			492			339			1,393
Total other expense – Net		(7,016	)		(12,529	)		(27,767	)		(34,420	)
Net (loss) income		(8,825	)		(27,443	)		83,258			(36,840	)
Less: Net income (loss) attributable to noncontrolling interest		839			(1,548	)		2,166			(1,416	)
Net (loss) income attributable to Diamond S Shipping Inc.	$	(9,664	)	$	(25,895	)	$	81,092		$	(35,424	)
Net (loss) earnings per share – basic	$	(0.24	)	$	(0.65	)	$	2.03		$	(0.99	)
Net (loss) earnings per share – diluted	$	(0.24	)	$	(0.65	)	$	2.02		$	(0.99	)
Weighted average common shares outstanding – basic		39,918,427			39,890,698			39,879,976			35,835,477
Weighted average common shares outstanding – diluted		39,918,427			39,890,698			40,106,157			35,835,477

~~DIAMOND S~~Table ~~SHIPPING~~of ~~INC. AND SUBSIDIARIES~~Contents

~~Condensed~~DIAMOND ~~Consolidated~~S ~~Statements~~SHIPPING INC. ~~of Comprehensive~~AND ~~(Loss) Income for the Three and Nine Months Ended September 30, 2020 and 2019 (In Thousands)~~SUBSIDIARIES

~~(Unaudited)~~Condensed Consolidated Balance Sheets

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019
Net (loss) income	$	(8,825	)	$	(27,443	)	$	83,258		$	(36,840	)
Unrealized loss on cash flow hedges		(281	)		(518	)		(1,177	)		(3,496	)
Other comprehensive loss		(281	)		(518	)		(1,177	)		(3,496	)
Comprehensive (loss) income		(9,106	)		(27,961	)		82,081			(40,336	)
Less: comprehensive income (loss) attributable to noncontrolling interest		839			(1,548	)		2,166			(1,416	)
Comprehensive (loss) income attributable to Diamond S Shipping Inc.	$	(9,945	)	$	(26,413	)	$	79,915		$	(38,920	)

as of March 31, 2021 and December 31, 2020

~~See~~(In ~~notes~~Thousands, toexcept ~~condensed~~for ~~consolidated~~share ~~financial~~and ~~statements.~~per share data)

8(Unaudited)

~~DIAMOND S SHIPPING INC. AND SUBSIDIARIES~~

Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2020 and 2019 (In Thousands)


	March 31,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	75,824	$	98,059
Due from charterers - Net of provision for doubtful accounts of $1,766 and $1,577, respectively		41,048		39,141
Inventories		21,124		17,457
Vessels held for sale		—		45,351
Prepaid expenses and other current assets		10,934		7,737
Restricted cash		6,267		6,140
Total current assets		155,197		213,885
Noncurrent assets:
Vessels - Net of accumulated depreciation of $675,199 and $650,259, respectively		1,677,758		1,702,749
Other property - Net of accumulated depreciation of $957 and $886, respectively		288		359
Deferred drydocking costs - Net of accumulated amortization of $30,359 and $27,343, respectively		29,375		32,391
Advances to Norient pool		8,001		8,001
Time charter contracts acquired - Net of accumulated amortization of $5,267 and $4,686, respectively		1,633		2,214
Derivative asset		424		—
Other noncurrent assets		4,216		2,244
Total noncurrent assets		1,721,695		1,747,958
Total assets	$	1,876,892	$	1,961,843
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	169,923	$	196,325
Accounts payable and accrued expenses		29,071		25,817
Deferred charter hire revenue		3,190		3,051
Derivative liability		510		580
Total current liabilities		202,694		225,773
Long-term debt - Net of deferred financing costs of $11,636 and $12,531, respectively		476,060		506,065
Derivative liability		—		569
Total liabilities		678,754		732,407
Commitments and contingencies (Note 15)
Equity:
Common stock, par value $0.001; 100,000,000 shares authorized; issued and outstanding 39,974,360 and 39,968,323 shares at March 31, 2021 and December 31, 2020, respectively		40		40
Treasury stock - at cost; 137,289 shares at March 31, 2021 and December 31, 2020		(1,418)		(1,418)
Additional paid-in capital		1,242,908		1,241,822
Accumulated other comprehensive loss		(86)		(1,149)
Accumulated deficit		(78,892)		(45,250)
Total Diamond S Shipping Inc. equity		1,162,552		1,194,045
Noncontrolling interests		35,586		35,391
Total equity		1,198,138		1,229,436
Total liabilities and equity	$	1,876,892	$	1,961,843

~~(Unaudited)~~

	Common Stock		Treasury Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Loss			(Accumulated Deficit) Retained Earnings			Noncontrolling Interests			Total
Balance – January 1, 2020	$	40	$	—		$	1,237,658		$	—		$	(68,567	)	$	34,811		$	1,203,942
Stock-based compensation		—		—			1,334			—			—			—			1,334
NT Suez Holdco LLC distribution		—		—			—			—			—			(1,568	)		(1,568	)
Shares repurchased		—		(1,418	)		—			—			—			—			(1,418	)
Net income		—		—			—			—			45,044			537			45,581
Balance – March 31, 2020		40		(1,418	)		1,238,992			—			(23,523	)		33,780			1,247,871
Stock-based compensation		—		—			1,109			—			—			—			1,109
NT Suez Holdco LLC distribution		—		—			—			—			—			(343	)		(343	)
Unrealized loss on cash flow hedges		—		—			—			(896	)		—			—			(896	)
Equity awards net settled to cover employee withholding taxes		—		—			(693	)					—			—			(693	)
Net income		—		—			—			—			45,712			790			46,502
Balance – June 30, 2020		40		(1,418	)		1,239,408			(896	)		22,189			34,227			1,293,550
Stock-based compensation		—		—			1,164			—			—			—			1,164
NT Suez Holdco LLC distribution		—		—			—			—			—			(294	)		(294	)
Unrealized loss on cash flow hedges		—		—			—			(281	)		—			—			(281	)
Equity awards net settled to cover employee withholding taxes		—		—			(51	)					—			—			(51	)
Net (loss) income		—		—			—			—			(9,664	)		839			(8,825	)
Balance – September 30, 2020	$	40	$	(1,418	)	$	1,240,521		$	(1,177	)	$	12,525		$	34,772		$	1,285,263

See notes to condensed consolidated financial statements.

	Partners’ Contributions			Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income			Accumulated Deficit			Noncontrolling Interests			Total
Balance – January 1, 2019	$	994,771		$	—	$	2,558	$	4,387		$	(56,477	)	$	34,607		$	979,846
Cumulative effect of accounting change		—			—		—		—			(2,784	)		—			(2,784	)
Merger transaction (Note 3)		(994,771	)		40		1,231,579		—			—			—			236,848
Unrealized loss on cash flow hedges		—			—		—		(1,096	)		—			—			(1,096	)
Net loss (income)		—			—		—		—			(1,026	)		206			(820	)
Balance – March 31, 2019		—			40		1,234,137		3,291			(60,287	)		34,813			1,211,994
Unrealized loss on cash flow hedges		—			—		—		(1,882	)		—			—			(1,882	)
Capital contributions for NT Suez Holdco LLC		—			—		—		—			—			980			980
Stock-based compensation		—			—		861		—			—			—			861
Net loss		—			—		—		—			(8,503	)		(74	)		(8,577	)
Balance – June 30, 2019		—			40		1,234,998		1,409			(68,790	)		35,719			1,203,376
Unrealized loss on cash flow hedges		—			—		—		(518	)		—			—			(518	)
Stock-based compensation		—			—		1,301		—			—			—			1,301
Net loss		—			—		—		—			(25,895	)		(1,548	)		(27,443	)
Balance – September 30, 2019	$	—		$	40	$	1,236,299	$	891		$	(94,685	)	$	34,171		$	1,176,716

~~See notes to condensed consolidated financial statements.~~7

9Table of Contents

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of ~~Cash~~ ~~Flows for the Nine Months Ended September 30, 2020 and 2019 (In Thousands)~~Operations

~~(Unaudited)~~for the Three Months Ended March 31, 2021 and 2020

	For the Nine Months Ended September 30,
	2020			2019
Cash flows from Operating Activities:
Net income (loss)	$	83,258		$	(36,840	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		86,598			79,962
Loss on sale of vessels		—			18,344
Amortization of deferred financing costs		2,663			3,106
Amortization of time charter hire contracts acquired		2,194			1,632
Amortization of the realized gain from recouponing swaps		—			(2,045	)
Stock-based compensation expense		3,607			2,162
Changes in assets and liabilities		20,692			(11,723	)
Payments for drydocking		(5,120	)		(12,685	)
Net cash provided by operating activities		193,892			41,913
Cash flows from Investing Activities:
Acquisition costs, net of cash acquired of $16,568		—			(292,683	)
Transaction costs		—			(18,930	)
Proceeds from sale of vessels		—			31,800
Payments for vessel additions and other property		(11,958	)		(11,238	)
Net cash used in investing activities		(11,958	)		(291,051	)
Cash flows from Financing Activities:
Borrowings on long-term debt		—			300,000
Principal payments on long-term debt		(100,792	)		(86,604	)
Borrowings on revolving credit facilities		—			61,000
Repayments on revolving credit facilities		(45,000	)		(26,323	)
NT Suez Holdco LLC distribution		(2,205	)		—
Shares repurchased		(1,418	)		—
Cash paid to net settle employee withholding taxes on equity awards		(745	)		—
Proceeds from partners’ contributions in subsidiaries		—			980
Payments for deferred financing costs		(644	)		(6,970	)
Net cash (used in) provided by financing activities		(150,804	)		242,083
Net increase (decrease) in cash, cash equivalents and restricted cash		31,130			(7,055	)
Cash, cash equivalents and restricted cash – Beginning of period		89,219			88,158
Cash, cash equivalents and restricted cash – End of period	$	120,349		$	81,103
Supplemental disclosures:
Cash paid for interest	$	26,480		$	35,206
Common stock issued to CPLP (Refer to Note 3 — Merger Transaction)	$	—		$	236,848
Unpaid transaction costs in Accounts payable and accrued expenses at the end of the period	$	—		$	154
Unpaid vessel additions in Accounts payable and accrued expenses at the end of the period	$	1,326		$	4,604

(In Thousands, except for share and per share data)

~~See notes to condensed consolidated financial statements.~~(Unaudited)

DIAMOND S SHIPPING INC. AND SUBSIDIARIES


	For the Three Months Ended
	March 31,
	2021			2020
Revenue:
Voyage revenue	$	48,801	$		187,652
Time charter revenue		14,851			22,073
Pool revenue		24,068			—
Total revenue		87,720			209,725
Operating expenses:
Voyage expenses		33,050			74,681
Vessel expenses		41,962			41,536
Depreciation and amortization expense		28,051			28,760
General and administrative expenses		6,518			8,124
Other corporate expenses		4,780			—
Total operating expenses		114,361			153,101
Operating (loss) income		(26,641)			56,624
Other (expense) income:
Interest expense		(6,171)			(11,376)
Other income		2			333
Total other expense - Net		(6,169)			(11,043)
Net (loss) income		(32,810)			45,581
Less: Net income attributable to noncontrolling interest		832			537
Net (loss) income attributable to Diamond S Shipping Inc.	$	(33,642)		$	45,044
Net (loss) income per share - basic	$	(0.84)		$	1.13
Net (loss) income per share - diluted	$	(0.84)		$	1.12
Weighted average common shares outstanding - basic		39,974,360			39,891,346
Weighted average common shares outstanding - diluted		39,974,360			40,159,966

~~(In Thousands, except for share and per share data)~~

~~Notes~~See notes to ~~Condensed~~condensed ~~Consolidated~~consolidated ~~Financial Statements (Unaudited)~~financial statements.

~~1. BUSINESS AND BASIS OF PRESENTATION~~

Business — Diamond S Shipping Inc. (“DSSI”) was formed on November 14, 2018 under the laws of the Republic of the Marshall Islands for the purpose of receiving, via contribution from Capital Product Partners L.P. (“CPLP”), CPLP’s crude and product tanker business and combining that business with the business and operations of DSS Holdings L.P. (“DSS LP”) pursuant to the Transaction Agreement, dated as of November 27, 2018 (as amended, the “Transaction Agreement”), by and among CPLP, DSS LP, DSSI and the other parties named therein. DSS LP was a Cayman Islands limited partnership formed on October 1, 2007.8

OnTable ~~March 27, 2019, DSSI and DSS LP and all~~ of its directly-owned subsidiaries (the “DSS LP Subsidiaries”) completed a merger pursuant to the Transaction Agreement. Pursuant to the terms of the Transaction Agreement, on March 27, 2019, the DSS LP Subsidiaries merged with and into DSSI, with DSSI being the surviving corporation in the merger (the “Merger”). DSSI and the DSS LP Subsidiaries are hereinafter referred to collectively as the “Company.”Contents

~~The~~DIAMOND ~~Merger~~S was accounted for as a reverse acquisition in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations” as the DSS LP Subsidiaries are the accounting acquirer for financial reporting purposesSHIPPING INC. ~~Accordingly,~~AND the historical consolidated financial statements of the DSS LP Subsidiaries for periods prior to the Merger are considered to be the predecessor financial statements of the Company. Refer to Note 3 — Merger Transaction for further information.SUBSIDIARIES

~~The~~Condensed ~~Company~~Consolidated isStatements ~~a seaborne transporter~~ of ~~crude~~ ~~oil~~Comprehensive and refined petroleum products, operating in the international shipping industry. As of September 30, 2020, through its wholly-owned subsidiaries, the Company owns and operates 64 tanker vessels: 13 Suezmax crude carriers, one Aframax crude carrier and 50 medium range (~~“MR”~~Loss) ~~product carriers. The Company also controls and operates two Suezmax vessels through a joint venture (Refer to Note 5 — Joint Venture Investments).~~Income

2.for ~~Summary~~the ofThree ~~SIGNIFICANT~~Months ~~ACCOUNTING~~Ended ~~POLICIES~~March 31, 2021 and 2020

Principles of Consolidation — The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (~~“U.S.~~In ~~GAAP”~~Thousands) ~~which includes the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.~~

Basis of Presentation — The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (~~the “SEC”~~Unaudited). In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2019 and notes thereto included in the Company’s annual report on Form 10-K (the “2019 Financial Statements”). The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2020.

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, the Company is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company intends to take advantage of the benefits of this extended transition period for as long as it is available. The Company’s condensed consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Section 107 of the JOBS Act provides that the decision not to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.


	For the Three Months Ended
	March 31,
	2021		2020
Net (loss) income	$	(32,810)	$	45,581
Unrealized gain on cash flow hedges		1,063		—
Other comprehensive income		1,063		—
Comprehensive (loss) income		(31,747)		45,581
Less: comprehensive income attributable to noncontrolling interest		832		537
Comprehensive (loss) income attributable to Diamond S Shipping Inc.	$	(32,579)	$	45,044

Cash and Cash Equivalents, and Restricted Cash — The following table provides a reconciliation of Cash and cash equivalents and Restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the condensed consolidated statements of cash flows:

	September 30, 2020		December 31, 2019		September 30, 2019		December 31, 2018
Cash and cash equivalents	$	114,335	$	83,609	$	75,559	$	83,054
Restricted cash		6,014		5,610		5,544		5,104
Total Cash and cash equivalents, and Restricted cash shown in the condensed consolidated statements of cash flows	$	120,349	$	89,219	$	81,103	$	88,158

See notes to condensed consolidated financial statements.

Amounts included in restricted cash represent those required to be set aside by the $66 Million Facility, as defined in Note 9 below. The restriction will lapse when the related long-term debt is retired.

Revenue and Voyage Expense Recognition — Total revenue includes revenue earned on fixed rate time charters, spot market voyage charters, spot market-related time charters and pools. Pursuant to the new revenue recognition guidance, which was adopted as of January 1, 2019, revenue for spot market voyage charters is recognized ratably over the total transit time of each voyage, which commences at the time the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port.9

AsTable ~~a result~~ of the adoption of the new revenue recognition guidance on January 1, 2019, the Company recorded a net increase to the opening accumulated deficit of $2,784 for the cumulative impact of adopting the new guidance. The impact related primarily to the change in accounting for spot market voyage charters. Prior to the adoption of the new guidance, revenue for spot market voyage charters was recognized ratably over the total transit time of the voyage, which previously commenced the later of when the vessel departed from its last discharge port or when an agreement was entered into with the charterer, and ended at the time the discharge of cargo was completed at the discharge port. As a result of the adoption of the new guidance, revenue for spot market voyage charters is now being recognized ratably over the total transit time of the voyage which now begins when the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port. Additionally, the Company has identified that the contract fulfillment costs of spot market voyage charters consist primarily of the fuel consumption that is incurred by the Company from the end of the previous vessel employment until the arrival at the loading port. The fuel consumption during this period is deferred and recorded as deferred voyage costs included in Prepaid expenses and other current assets in the condensed consolidated balance sheet and is amortized ratably over the total transit time of the voyage from arrival at the loading port until the vessel departs from the discharge port and recognized as part of Voyage expenses. Refer also to Note 7 — Prepaid expenses and other current assets.Contents

InDIAMOND ~~time~~S charters, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These voyage expenses are borne by the Company when engaged in spot market voyage charters.SHIPPING ~~As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters~~INC. ~~There~~ ~~are certain~~AND ~~other non-specified voyage expenses, such as commissions, which are typically borne by the Company.~~SUBSIDIARIES

~~The~~Condensed ~~Company~~Consolidated ~~recognizes~~Statements ~~revenue from pool arrangements based on its portion~~ of ~~the~~Changes ~~net~~in ~~distributions reported by the pool, which represents the net voyage revenue of the pool after voyage expenses and certain pool manager fees.~~Equity

~~Recent~~for ~~Accounting~~the ~~Pronouncements~~Three Months Ended March 31, 2021 and 2020

~~New accounting standards to be implemented —~~ (In ~~February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842~~Thousands)” (“ASU 2016-02”), which establishes a comprehensive new lease accounting model. ASU 2016-02 clarifies the definition of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. For the Company, ASU 2016-02 is effective for annual periods beginning after December 15, 2020, and interim reporting periods within annual reporting periods beginning after December 15, 2021, with early adoption permitted. The most significant effects of adoption relate to the recognition of right-of-use assets and lease liabilities on the balance sheet for operating leases and providing new disclosures about the Company’s leasing activities. The Company is currently analyzing its contracts and will then calculate the right-of-use assets and lease liabilities as of January 1, 2021 based on the present value of the Company’s remaining minimum lease payments, primarily due to the recognition of right-of-use assets and lease liabilities with respect to operating leases.

12(Unaudited)

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326)” (“ASU 2016-13”), which amends several aspects of the measurement of credit losses on financial instruments based on an estimate of current expected credit losses. ASU 2016-13 will apply to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. ASU 2016-13 will also apply to debt securities and other financial assets measured at fair value through other comprehensive income. For the Company, ASU 2016-13 is effective for annual periods beginning after December 15, 2020, and interim reporting periods within annual reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the potential impact of this pronouncement on the condensed consolidated financial statements.

3. Merger Transaction


							Accumulated
							Other
	Common		Treasury		Additional Paid-		Comprehensive		Accumulated		Noncontrolling
	Stock		Stock		in Capital		Loss		Deficit		Interests		Total
Balance – January 1, 2021	$	40	$	(1,418)	$	1,241,822	$	(1,149)	$	(45,250)	$	35,391	$	1,229,436
Stock-based compensation		—		—		1,086		—		—		—		1,086
NT Suez Holdco LLC distribution		—		—		—		—		—		(637)		(637)
Unrealized gain on cash flow hedges		—		—		—		1,063		—		—		1,063
Net (loss) income		—		—		—		—		(33,642)		832		(32,810)
Balance – March 31, 2021	$	40	$	(1,418)	$	1,242,908	$	(86)	$	(78,892)	$	35,586	$	1,198,138

~~As discussed in Note 1, the Company completed a Merger on March 27, 2019. Directly prior to the Merger, the following took place:~~

· DSSI formed four wholly-owned subsidiaries organized under the laws of the Republic of the Marshall Islands, referred to as “Products Merger Entity,” “Crude Merger Entity,” “Management Merger Entity” and “Surviving Merger Entity.”


					Additional
	Common		Treasury		Paid- in		Accumulated		Noncontrolling
	Stock		Stock		Capital		Deficit		Interests		Total
Balance – January 1, 2020	$	40	$	—	$	1,237,658	$	(68,567)	$	34,811	$	1,203,942
Stock-based compensation		—		—		1,334		—		—		1,334
NT Suez Holdco LLC distribution		—		—		—		—		(1,568)		(1,568)
Shares repurchased		—		(1,418)		—		—		—		(1,418)
Net income		—		—		—		45,044		537		45,581
Balance – March 31, 2020	$	40	$	(1,418)	$	1,238,992	$	(23,523)	$	33,780	$	1,247,871

~~· CPLP separated its product and crude tanker businesses into separate lines of subsidiaries and contributed them to DSSI (the “Separation”).~~

·See ~~DSSI~~notes ~~issued~~to ~~12,724,500~~condensed ~~additional~~consolidated ~~common~~financial ~~shares in connection with the contribution by CPLP~~statements.

~~· In the Separation, CPLP contributed to DSSI (1) CPLP’s crude and product tanker vessels, (2) an amount in cash equal to $10 million and (3) associated inventories.~~

~~· On March 27, 2019, CPLP distributed on a pro rata basis all 12,725,000 then-outstanding common shares of DSSI to its unitholders of record as of March 19, 2019 (the “Distribution”).~~10

~~Immediately~~Table ~~following~~of ~~the Distribution, the Merger took place, which is detailed as follows:~~Contents

·DIAMOND ~~The~~S ~~Pre-Mergers~~SHIPPING INC. ~~took~~AND ~~place:~~SUBSIDIARIES

oCondensed ~~DSS~~Consolidated ~~Crude~~Statements ~~Transport Inc., a wholly-owned subsidiary~~ of ~~DSS~~Cash ~~LP, merged with Crude Merger Entity, with DSS Crude Transport Inc. surviving the merger,~~Flows

ofor ~~DSS~~the ~~Products~~Three Months ~~Transport~~Ended ~~Inc.~~March 31, a2021 ~~wholly-owned subsidiary of DSS LP, merged with Products Merger Entity, with DSS Products Transport Inc. surviving the merger,~~ and 2021

o(In ~~Diamond S Technical Management LLC, a wholly-owned subsidiary of DSS LP, merged with Management Merger Entity, with Diamond S Technical Management LLC surviving the merger.~~Thousands)

· Following the Pre-Mergers and pursuant to the same plan, each of DSS Crude Transport Inc., DSS Products Transport Inc. and Diamond S Technical Management LLC merged with the Surviving Merger Entity, with the Surviving Merger Entity surviving. The Surviving Merger Entity subsequently merged with DSSI, with DSSI surviving.(Unaudited)

Pursuant to the Transaction agreement, the CPLP unitholders received 12,725,000 common shares in DSSI, and the DSS LP limited partners received common shares of DSSI that were determined by the factor to which DSS LP’s net asset value is to the net asset value of DSSI immediately after the Distribution, multiplied by the number of shares distributed to CPLP unitholders after the March 27, 2019 effective date. This equated to the DSS LP limited partners receiving 27,165,696 common shares.

The Merger completed on March 27, 2019, and the Company’s common shares commenced trading on the New York Stock Exchange on March 28, 2019.


	For the Three Months Ended March 31,
	2021		2020
Cash flows from Operating Activities:
Net (loss) income	$	(32,810)	$	45,581
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization expense		28,051		28,760
Amortization of deferred financing costs		895		884
Amortization of time charter hire contracts acquired		581		740
Stock-based compensation expense		1,086		1,334
Changes in assets and liabilities		(5,160)		(4,827)
Payments for drydocking		(1,330)		(1,533)
Net cash (used in) provided by operating activities		(8,687)		70,939
Cash flows from Investing Activities:
Proceeds from sale of vessels		46,240		—
Payments for vessel additions and other property		(1,722)		(1,513)
Net cash provided by (used in) investing activities		44,518		(1,513)
Cash flows from Financing Activities:
Principal payments on long-term debt		(57,302)		(33,597)
Repayments on revolving credit facilities		—		(5,000)
NT Suez Holdco LLC distribution		(637)		(1,568)
Shares repurchased		—		(1,418)
Cash paid to net settle employee withholding taxes on equity awards		—		(485)
Net cash used in financing activities		(57,939)		(42,068)
Net (decrease) increase in cash, cash equivalents and restricted cash		(22,108)		27,358
Cash, cash equivalents and restricted cash - Beginning of period		104,199		89,219
Cash, cash equivalents and restricted cash - End of period	$	82,091	$	116,577
Supplemental disclosures:
Cash paid for interest	$	5,156	$	11,889
Unpaid vessel additions in Accounts payable and accrued expenses at the end of the period	$	406	$	151

The Merger was accounted for as a reverse acquisition in accordance with ASC 805, “Business Combinations.” Based on the structure of the Merger and other activities contemplated by the Transaction Agreement, relative outstanding share ownership, the composition of the Company's board of directors and the designation of certain senior management positions of the Company, the DSS LP Subsidiaries are the accounting acquirer for financial reporting purposes.

~~Further,~~See innotes ~~accordance with ASU 2017-01, the Merger was determined~~ to becondensed anconsolidated ~~asset~~financial ~~acquisition as substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets~~statements.

~~The consideration transferred, assets acquired, and liabilities assumed are recognized as follows:~~

Consideration paid and transferred
Cash paid — net of cash received of $16,568	$	292,683
Common stock issued to CPLP		236,848
Transaction costs		20,738
Total consideration paid and transferred	$	550,269
Net assets acquired
Due from charterers	$	4,514
Inventories		6,969
Prepaid expenses and other current assets		1,152
Vessels		537,988
Time charter contracts acquired — assets		7,300
Other noncurrent assets		2,191
Accounts payable and accrued expenses		(7,478	)
Deferred charter hire revenue		(2,367	)
Net assets acquired	$	550,269

~~Further,~~Table ~~as the Merger was determined to be an asset acquisition, the Company recorded the acquired assets and liabilities at the cost~~ of the acquisition, including transaction costs, on the basis of relative fair value. The carrying value of the vessels were recorded in accordance with the principles set forth under ASC Topic 820, “Fair Value Measurement” based upon current market values obtained from at least two independent ship brokers. The time charter contract assets acquired represent an estimate of the fair value of the time charters acquired as of the date of the Merger, and considers the differential between the stated time charter rate and the contracts’ fair value at the time of the Merger.Contents

InDIAMOND connection with the Merger, the incentive units granted under the DSS LP unit incentive plan expired with no value. Further, while the Company is now a public company, management believe that, pursuant to Section 883 of the U.S. ~~Internal Revenue Code of 1986, the income related to vessel operations will continue to be exempt from U~~SHIPPING INC.S. ~~federal~~AND ~~income tax, although no assurance can be given that the Company will continue to satisfy this statutory exemption from U.S. federal income taxation.~~SUBSIDIARIES

4.(In ~~Net~~Thousands, ~~(Loss)~~except ~~earnings~~for ~~Per~~share ~~Share~~and per share data)

The computation of basic net (loss) earnings per share is based on the weighted-average number of common shares outstanding during the reporting period. The computation of diluted net earnings (loss) per share assumes the vesting of nonvested stock awards (refer Notes to ~~Note~~Condensed 15Consolidated —Financial Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive. Of the 591,773 and 615,525 nonvested shares and RSUs outstanding as of September 30, 2020 and 2019, 238,421 and 615,525, respectively, were excluded from the computation of diluted net earnings per share because these were anti-dilutive (refer to Note 15 — Stock-Based Compensation).Statements

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2020		2019		2020		2019
Common shares outstanding, basic:
Weighted-average common shares outstanding, basic		39,918,427		39,890,698		39,879,976		35,835,477
Common shares outstanding, diluted:
Weighted-average common shares outstanding, basic		39,918,427		39,890,698		39,879,976		35,835,477
Dilutive effect of restricted stock awards		—		—		226,181		—
Weighted-average common shares outstanding, diluted		39,918,427		39,890,698		40,106,157		35,835,477

(Unaudited)

141. BUSINESS AND BASIS OF PRESENTATION

5Business — Diamond S Shipping Inc. ~~JOINT~~(“DSSI”) ~~VENTURE~~was ~~INVESTMENTS~~formed on November 14, 2018 under the laws of the Republic of the Marshall Islands for the purpose of receiving, via contribution from Capital Product Partners L.P. (“CPLP”), CPLP’s crude and product tanker business and combining that business with the business and operations of DSS Holdings L.P. (“DSS LP”) pursuant to the Transaction Agreement, dated as of November 27, 2018 (as amended, the “Transaction Agreement”), by and among CPLP, DSS LP, DSSI and the other parties named therein. DSS LP was a Cayman Islands limited partnership formed on October 1, 2007.

NTOn ~~Suez~~March 27, ~~Holdco~~2019, ~~LLC~~DSSI ~~— In~~and ~~September~~DSS ~~2014,~~LP and all of its directly owned subsidiaries (the ~~Company~~“DSS ~~formed~~LP Subsidiaries”) completed a ~~joint~~merger ~~venture~~pursuant to the Transaction Agreement. Pursuant to the terms of the Transaction Agreement, NTon ~~Suez~~March 27, ~~Holdco~~2019, ~~LLC~~the DSS LP Subsidiaries merged with and into DSSI, with DSSI being the surviving corporation in the merger (~~“NT~~the ~~Suez~~“Merger”),. toDSSI ~~purchase~~and ~~two~~the ~~Suezmax~~DSS ~~newbuildings. The~~LP ~~two~~Subsidiaries ~~vessels~~are ~~were~~hereinafter ~~delivered~~referred into ~~October~~collectively ~~and~~as ~~November~~the ~~2016~~“Company.”

NTThe ~~Suez~~Merger iswas ~~owned~~accounted ~~51%~~for byas ~~the~~a ~~Company~~reverse ~~and~~acquisition ~~49% by~~in ~~WLR/TRF~~accordance ~~Shipping~~with ~~S.a.r.l~~the Financial Accounting Standards Board (“~~WLR/TRF~~FASB”). ~~WLR/TRF~~Accounting isStandards ~~indirectly~~Codification ~~owned~~(“ASC”) by805, ~~funds~~“Business ~~managed~~Combinations” oras ~~jointly~~the ~~managed~~DSS byLP WLSubsidiaries ~~Ross~~ are &the ~~Co,~~accounting ~~LLC~~acquirer ~~(“WLR”),~~for ~~including~~financial ~~WLR~~reporting ~~Recovery~~purposes. ~~Fund V~~Accordingly, ~~DSS~~the ~~AIV,~~historical ~~L.P.~~consolidated ~~and~~financial ~~WLR~~statements Vof ~~Parallel~~the ~~ESC,~~DSS ~~L.P.,~~LP ~~which~~Subsidiaries ~~are~~for ~~also shareholders~~periods ofprior to the ~~Company.~~Merger ~~WLR~~are isconsidered ato ~~fund~~be ~~manager~~the ~~that~~predecessor ~~manages~~financial ~~the~~statements ~~Company’s~~of ~~largest~~the ~~shareholders~~Company.

AsThe ofCompany ~~September~~is ~~30,~~a ~~2020~~seaborne ~~and~~transporter ~~December~~of ~~31, 2019,~~crude ~~the~~oil ~~investments~~and NTrefined ~~Suez~~petroleum ~~received~~products, ~~from~~operating in the ~~Company~~international ~~and~~shipping ~~WLR/TRF~~industry. ~~aggregated~~As ~~$74~~of March 31,~~104~~ 2021, ~~which~~through ~~was~~its ~~used~~wholly ~~for~~owned ~~shipyard~~subsidiaries, ~~installment payments~~the Company owns and ~~working~~operates ~~capital.~~62 tanker Invessels: ~~February~~11 ~~2020~~Suezmax crude carriers, NTone ~~Suez~~Aframax ~~distributed~~crude ~~$1,632~~carrier and ~~$1,568~~50 tomedium ~~the~~range (“MR”) product carriers. The Company ~~and~~also ~~WLR/TRF,~~controls ~~respectively. In~~and ~~June~~operates ~~2020,~~two NTSuezmax ~~Suez~~vessels ~~distributed~~through ~~$357~~a ~~and~~joint ~~$343~~venture (Refer to ~~the~~Note 4 ~~Company~~— ~~and~~Joint ~~WLR/TRF,~~Venture ~~respectively~~Investments).

Management has determined that NT Suez qualifies as a variable interest entity, and, when aggregating the variable interests held by the related parties (i.e. the Company and WLR/TRF), the Company is the primary beneficiary as the Company has the ability to direct the activities that most significantly impact NT Suez’s economic performance. Accordingly, the Company consolidates NT Suez.

~~Diamond~~Announced ~~Anglo~~Merger ~~Ship Management Pte. Ltd.~~ — InOn ~~January~~March ~~2018~~30, ~~the~~2021, ~~Company~~DSSI, ~~and~~International ~~Anglo~~Seaways, ~~Eastern Investment Holdings Ltd~~Inc. (“~~AE Holdings~~INSW”), aand ~~third party~~Dispatch Transaction Sub, ~~formed~~Inc., a ~~joint~~wholly ~~venture,~~owned ~~Diamond~~subsidiary ~~Anglo~~of ~~Ship~~INSW ~~Management~~(“Merger ~~Pte.~~Sub”) ~~Ltd.~~entered into an Agreement and Plan of Merger (the “~~DASM~~Merger Agreement”)., ~~DASM~~pursuant isto ~~owned~~which ~~51%~~Merger bySub will, upon the ~~Company~~terms and ~~49%~~ bysubject AEto ~~Holdings~~the asconditions ofset ~~September~~for 30in the Merger Agreement, ~~2020~~merge with and ~~December~~into ~~31,~~DSSI ~~2019,~~in ~~and~~a ~~was~~stock-for-stock ~~formed~~transaction to(the ~~provide~~“Announced ~~ship~~Merger”). ~~management~~After ~~services~~the toMerger, DSSI will continue as the ~~Company’s vessels~~surviving corporation that will be a wholly owned subsidiary of INSW.

AsSubject to the terms and conditions set forth in the Merger Agreement, at the effective time of ~~September~~the 30Announced Merger (the “Effective Time”), ~~2020~~each common share of DSSI (the “Diamond S Common Shares”) issued and ~~December~~outstanding ~~31, 2019,~~immediately prior to the ~~investments~~Effective ~~DASM~~Time ~~received~~will ~~from~~be converted into the ~~Company~~right ~~and~~to AEreceive ~~Holdings~~0.55375 ~~totaled~~of ~~$51~~a ~~and~~share ~~$49,~~of ~~respectively,~~common ~~which~~stock ~~were~~of ~~used~~INSW ~~for~~(“INSW ~~general~~ Common Stock”). The aforementioned 0.55375 exchange ratio set forth in the Merger Agreement will result in INSW shareholders owning approximately 55.75% of the outstanding shares of INSW Common Stock following the Effective Time and ~~administrative~~DSSI ~~expenses~~shareholders owning approximately 44.25% of the outstanding shares of INSW Common Stock following the Effective Time.

Management has determined that DASM qualifies as a variable interest entity, and, when aggregating the variable interests held by the Company and AE Holdings, the Company is the primary beneficiary as the Company has the ability to direct the activities that most significantly impacts DASM’s economic performance. Accordingly, the Company consolidates DASM.12

6.Table ~~Vessel~~of ~~Dispositions~~Contents

InThe ~~August~~Announced ~~2019,~~Merger is expected to close in the ~~Board~~third quarter of ~~Directors approved~~2021, ~~selling~~subject to the ~~Atlantic~~satisfaction ~~Aquarius~~or ~~and~~waiver ~~Atlantic~~of ~~Leo~~certain conditions, ~~both~~including ~~2009-built~~(i) MRthe ~~vessels.~~authorization ~~The~~of ~~Company~~the ~~reached~~Merger anAgreement ~~agreement~~by the affirmative vote of the holders of a majority of all outstanding shares of Diamond S Common Shares entitled to ~~sell~~vote thereon; (ii) the ~~Atlantic~~ ~~Aquarius~~authorization of the INSW shares to be issued as merger consideration in the Announced Merger by the affirmative vote of the holders of a majority of the shares of INSW Common Stock present and ~~Atlantic~~entitled ~~Leo~~to ~~for~~vote ~~$32~~thereon; ~~million~~(iii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act; (iv) the absence of any law or order preventing the consummation of the Announced Merger; (v) the effectiveness of a registration statement on Form S-4 in ~~aggregate~~connection ~~gross~~with ~~proceeds.~~the Inissuance ~~September~~of ~~2019~~INSW Common Stock as merger consideration, which will include a prospectus and a joint proxy statement relating to the ~~Company~~INSW ~~delivered~~special shareholder meeting to approve the ~~vessels~~ issuance of INSW Common Stock as merger consideration and the DSSI special shareholder meeting to approve the ~~buyer~~Announced Merger and ~~repaid~~absence ~~debt~~of onany stop order or proceedings by the ~~$460~~SEC; ~~Million~~(vi) ~~Facility,~~the approval of the shares of INSW Common Stock to be issued as ~~defined~~merger consideration in ~~Note~~the 9Announced ~~below~~Merger for listing on the NYSE; and (vii) execution, delivery and effectiveness of ~~$20.4~~amended ~~million.~~and ~~The~~restated ~~loss~~loan onagreements ~~sale~~for two of DSSI’s existing credit facilities entered into in 2019 (the ~~vessels~~ ~~was~~“A&R ~~$18.3~~Debt ~~million,~~Agreements”) ~~which~~to ~~was~~amend ~~recorded~~the terms of such credit facilities to more closely mirror the ~~condensed~~terms ~~consolidated~~of ~~statement~~INSW’s credit facilities and the continued effectiveness of ~~operations~~each ~~for~~A&R Debt Agreement and the ~~three~~consents of DSSI’s lenders under its existing credit facilities to the Announced Merger and ~~nine~~waiver ~~months ended~~of ~~September~~any 30event of default that would arise as a result of the Announced Merger. The obligation of each of DSSI and INSW to consummate the Announced Merger is also conditioned on, ~~2019~~among other things, the truth and correctness of the representations and warranties made by the other party as of the closing date (subject to certain “materiality” and “material adverse effect” qualifiers) and material compliance by the other party with pre-closing covenants.

7In connection with the Announced Merger, lenders under DSSI’s existing credit facilities agreed, among other things, to consent to the Announced Merger and waive any event of default that would arise as a result of the Announced Merger. ~~Prepaid~~Lenders ~~Expenses~~under DSSI’s two existing credit facilities entered into in 2019 have also agreed to enter into the A&R Debt Agreements. In addition, INSW has agreed to become a credit party to the A&R Debt Agreements and ~~Other~~will ~~Current~~guaranty ~~Assets~~DSSI’s obligations under the A&R Debt Agreements upon their effectiveness.

~~Prepaid expenses and other current assets consist of the following as of September 30, 2020 and December 31, 2019:~~

	September 30, 2020		December 31, 2019
Advances to Capital Ship Management Corp. (“CSM”) (Refer to Note 14 — Related Party Transactions)	$	6,288	$	5,757
Advances to technical managers		23		26
Insurance claims receivable		1,066		511
Prepaid insurance		1,527		1,093
Advances to agents		2,199		1,421
Deferred voyage costs		2,003		3,132
Other		1,505		1,239
Total prepaid expenses and other current assets	$	14,611	$	13,179

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

15Principles of Consolidation — The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which includes the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

8Basis of Presentation — The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. ~~ACCOUNTS~~GAAP ~~PAYABLE~~for ~~AND~~interim ~~ACCRUED~~financial ~~EXPENSES~~information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2020 and notes thereto included in the Company’s annual report on Form 10-K. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2021.

~~Accounts~~The ~~payable~~Company ~~and~~is ~~accrued~~an ~~expenses~~“emerging ~~consist~~ growth company,” as defined in Section 2(a) of the ~~following~~Securities Act, as modified by the Jumpstart Our Business Startups Act of ~~September~~2012 30(the “JOBS Act”). As such, ~~2020~~the ~~and~~Company ~~December~~is 31eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, ~~2019:~~an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company intends to take advantage of the benefits of this extended transition period for as long as it is available. The Company’s condensed consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Section 107 of the JOBS Act provides that the decision not to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

	September 30, 2020		December 31, 2019
Trade accounts payable and accrued expenses	$	8,306	$	9,716
Accrued vessel and voyage expenses		23,903		32,201
Accrued interest		35		1,090
Accrued vessel and voyage expenses and Other current liabilities (Refer to Note 14 — Related Party Transactions)		3,092		1,055
Total accounts payable and accrued expenses	$	35,336	$	44,062

9.Table ~~LONG-TERM~~of ~~DEBT~~Contents

~~Long-term~~Cash ~~debt~~and atCash ~~September 30~~Equivalents, ~~2020~~and Restricted Cash — The following table provides a reconciliation of Cash and ~~December~~ ~~31,~~cash ~~2019~~equivalents ~~was~~and ~~comprised~~Restricted cash reported within the consolidated balance sheets that sum to the total of the ~~following~~amounts shown in the condensed consolidated statements of cash flows:

	September 30, 2020			December 31, 2019
$360 Million Facility	$	241,250		$	327,500
$525 Million Facility		458,750			515,000
$66 Million Facility		48,518			51,810
Total		748,518			894,310
Less: Unamortized deferred financing costs		(13,426	)		(15,866	)
Less: Current portion		(134,389	)		(134,389	)
Long-term debt, net of deferred financing costs	$	600,703		$	744,055

$360 Million Facility — On March 27, 2019, in connection with the Merger, the Company entered into a $360,000 five-year Credit Agreement, as amended (the “$360 Million Facility”), for the purposes of financing the Merger and refinancing the $30 Million Line of Credit (defined below). The $360 Million Facility consists of a term loan of $300,000 and a revolving loan of $60,000, and is collateralized by the 25 vessels acquired in the Merger and the three vessels that collateralized the $30 Million Line of Credit, with reductions based on a 17 year age-adjusted amortization schedule, payable on a quarterly basis. The term loan component of the $360 Million Facility bears interest at the Eurodollar Rate for a three-month interest period, plus a 2.65% interest rate margin, and the interest is paid quarterly. Commitment fees on undrawn amounts related to the revolving loan component of the $360 Million Facility are 1.06%. As of September 30, 2020, $10,000 of the revolving loan was drawn, while $50,000 was available and undrawn.


	March 31, 2021		December 31, 2020		March 31, 2020		December 31, 2019
Cash and cash equivalents	$	75,824	$	98,059	$	110,903	$	83,609
Restricted cash		6,267		6,140		5,674		5,610
Total Cash and cash equivalents, and Restricted cash shown in the condensed consolidated statements of cash flows	$	82,091	$	104,199	$	116,577	$	89,219

The $360 Million Facility contains certain restrictions on the payments of dividends. The $360 Million Facility permits the Company to pay dividends so long as the payment of dividends does not cause an event of default, and limits dividends payable so that they do not exceed in any fiscal quarter an amount that is equal to 50% of the adjusted consolidated net income of the Company in such fiscal quarter.

~~$525~~Amounts ~~Million~~included ~~Facility~~in ~~— On~~restricted ~~December~~cash ~~23,~~represent ~~2019,~~those ~~the~~required ~~Company~~to ~~entered~~be ~~into~~set aaside ~~$525,000~~by ~~five-year Credit Agreement (~~the “$~~525~~66 Million Facility”), ~~for~~ ~~the~~as ~~purposes~~defined ofin ~~refinancing~~Note 8 ~~the $460 Million Facility, the $235 Million Facility and the $75 Million Facility (defined~~ below). The ~~$525~~restriction ~~Million~~will ~~Facility~~lapse ~~consists~~when ~~of a term loan of $375,000 and a revolving loan of $150,000, and is collateralized by~~ the ~~36 vessels~~related ~~that collateralized the $460 Million Facility, the $235 Million Facility and the $75 Million Facility, with reductions based on a 17 year age~~long-~~adjusted amortization schedule, payable on a quarterly basis. The~~ term ~~loan~~debt ~~component of the $525 Million Facility bears interest at the Eurodollar Rate for a three-month interest period, plus a 2.50% interest rate margin, and the interest~~ is ~~paid quarterly~~retired. Commitment fees on undrawn amounts related to the revolving loan component of the $525 Million Facility are 0.875%. As of September 30, 2020, $140,000 of the revolving loan was drawn, while $10,000 was available and undrawn.

~~The~~Revenue ~~$525~~and ~~Million~~Voyage ~~Facility~~Expense ~~contains~~Recognition — Total ~~certain restrictions~~revenue onincludes ~~the~~revenue ~~payments~~earned ofon ~~dividends.~~fixed ~~The~~rate ~~$525~~time ~~Million~~charters, ~~Facility~~spot ~~permits~~market ~~the~~voyage ~~Company~~charters, tospot ~~pay~~market-related ~~dividends~~time socharters ~~long~~and aspools. Pursuant to the ~~payment of~~new ~~dividends~~revenue ~~does~~recognition ~~not~~guidance, ~~cause~~which anwas ~~event~~adopted as of ~~default~~January 1, ~~and~~2019, ~~limits~~revenue ~~dividends~~for ~~payable~~spot somarket ~~that~~voyage ~~they~~charters dois ~~not~~recognized ~~exceed~~ratably inover ~~any~~the ~~fiscal~~total ~~quarter an~~transit ~~amount~~time ~~that~~of iseach ~~equal~~voyage, towhich ~~50%~~commences ofat the ~~adjusted~~time ~~consolidated~~the ~~net~~vessel ~~income~~arrives ofat the ~~Company~~loading inport and ends at the ~~preceding~~time ~~fiscal~~the ~~quarter~~discharge of cargo is completed at the discharge port.

~~Prior~~As toa result of the ~~December~~adoption of the new revenue recognition guidance on January 1, 2019 ~~refinancing~~, the Company ~~financed~~recorded 26a MRnet ~~vessels~~increase to the opening accumulated deficit of $2,784 ~~which~~for ~~were~~the ~~acquired~~cumulative impact of adopting the new guidance. The impact related primarily to the change in ~~September~~accounting ~~2011,~~for ~~with~~spot amarket ~~$460~~voyage charters. Prior to the adoption of the new guidance,~~000~~ ~~five-year~~revenue ~~senior secured~~for ~~term~~spot ~~loan~~market ~~facility~~voyage charters was recognized ratably over the total transit time of the voyage, aswhich ~~amended~~previously (commenced the ~~“$460~~later ~~Million~~of ~~Facility”).~~when ~~Interest~~the vessel departed from its last discharge port or when an agreement was ~~paid~~entered ~~monthly~~into with the charterer, and ended at the ~~$460 Million~~time ~~Facility~~the ~~bore~~discharge ~~interest~~of cargo was completed at the ~~Eurodollar~~discharge ~~Rate~~port. ~~for~~As a ~~one-month~~result ~~interest~~of ~~period~~the adoption of the new guidance, ~~plus~~revenue afor 2spot market voyage charters is now being recognized ratably over the total transit time of the voyage which now begins when the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port.~~80%~~ ~~interest~~Additionally, ~~rate~~the ~~margin~~Company has identified that the contract fulfillment costs of spot market voyage charters consist primarily of the fuel consumption that is incurred by the Company from the end of the previous vessel employment until the arrival at the loading port. The fuel consumption during this period is deferred and recorded as deferred voyage costs included in Prepaid expenses and other current assets in the condensed consolidated balance sheet and is amortized ratably over the total transit time of the voyage from arrival at the loading port until the vessel departs from the discharge port and recognized as part of Voyage expenses. Refer also to Note 6 — Prepaid expenses and other current assets.

16In time charters, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These voyage expenses are borne by the Company when engaged in spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company.

~~Also,~~The ~~prior to the December 2019 refinancing, the~~ Company ~~financed~~recognizes ~~eight~~revenue ~~2012-built~~from ~~Suezmaxes~~pool ~~with~~arrangements abased ~~$235,000~~on ~~five-year~~its ~~senior~~portion ~~secured~~of ~~financing~~the ~~facility,~~net asdistributions ~~amended~~reported (by the ~~“$235 Million Facility”)~~pool, which ~~consisted~~represents ofthe anet ~~term~~voyage ~~loan~~revenue of ~~$220 million and a revolving loan of $15,000. Interest on~~ the ~~term loan~~pool ~~component~~after ~~was~~voyage ~~paid~~expenses ~~quarterly~~ and ~~the~~certain ~~$235~~pool ~~Million~~manager ~~Facility bore interest at the Eurodollar Rate for a three-month interest period, plus a 2.75% interest rate margin. Commitment~~ fees ~~on undrawn amounts related to the revolving loan component of the $235 Million Facility were 1~~.~~10%.~~

Lastly, prior to the December 2019 refinancing, the Company financed two 2016-built Suezmaxes vessels with a $75,000 seven-year senior secured term loan facility, as amended (the “$75 Million Facility”). Interest was paid quarterly, and the $75 Million Facility bore interest at the Eurodollar Rate for a three-month interest period, plus a 2.20% interest rate margin.

$66 Million Facility — On August 9, 2016, the Company entered into a $66,000 five-year senior secured term loan facility (the “$66 Million Facility”) for the purpose of financing two vessels controlled through the joint venture NT Suez (refer to Note 5 — Joint Venture Investments). The $66 Million Facility, which is collateralized by the two vessels controlled through NT Suez, is a nonrecourse term loan with reductions that are based on a 15-year amortization schedule, and are payable on a quarterly basis. Interest is paid quarterly, and the $66 Million Facility bears interest at the Eurodollar Rate for a three-month interest period, plus a 3.25% interest rate margin.14

~~The~~Table ~~$66 Million Facility contains certain restrictions on the payments~~ of dividends by the NT Suez joint venture. The $66 Million Facility permits the NT Suez joint venture to pay dividends so long as the payment of dividends does not cause an event of default, and does not exceed an amount equal to 75% of the consolidated net income, as determined in accordance with GAAP, of the borrower, which is the consolidated accounts of NT Suez.Contents

~~Interest~~Recent ~~Rates~~Accounting – The following table sets forth the effective interest rate associated with the interest costs for the Company’s debt facilities, including the rate differential between the fixed pay rate and the variable receive rate on the interest rate swap agreements that were in effect (refer to Note 10 — Interest Rate Swaps), combined, as well as the cost associated with the commitment fees. Additionally, the table includes the range of interest rates on the debt, excluding the impact of swaps and commitment fees:Pronouncements

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019
Effective interest rate		3.05	%		4.87	%		3.95	%		4.94	%
Range of interest rates (excluding impact of swaps and unused commitment fees)		2.81% to 4.04	%		4.53% to 5.58	%		2.81% to 5.32	%		4.53% to 6.06	%

New accounting standards to be implemented — In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which establishes a comprehensive new lease accounting model. ASU 2016-02 clarifies the definition of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. For the Company, ASU 2016-02 is effective for annual periods beginning after December 15, 2021, and interim reporting periods within annual reporting periods beginning after December 15, 2022, with early adoption permitted. The most significant effects of adoption relate to the recognition of right-of-use assets and lease liabilities on the balance sheet for operating leases and providing new disclosures about the Company's leasing activities. The Company is currently analyzing its contracts and will then calculate the right-of-use assets and lease liabilities as of January 1, 2022 based on the present value of the Company’s remaining minimum lease payments, primarily due to the recognition of right-of-use assets and lease liabilities with respect to operating leases.

~~Restrictive~~In ~~Covenants~~June 2016, ~~— The~~the ~~Company’s~~FASB ~~credit~~issued ~~facilities~~ASU ~~credit~~No. ~~contain~~2016-13, ~~restrictive~~“Financial ~~covenants~~Instruments—Credit ~~and~~Losses ~~other~~(Topic ~~non~~326)” (“ASU 2016-~~financial~~13”), ~~restrictions.~~which ~~The~~amends ~~$360~~several ~~Million Facility~~aspects ~~and~~of ~~$525~~the ~~Million~~measurement ~~Facility~~of ~~include,~~credit ~~among~~losses ~~other~~on ~~things,~~financial ~~restrictions~~instruments based on ~~the~~an ~~Company’s~~estimate ~~ability~~of tocurrent ~~incur~~expected ~~indebtedness, limitations~~credit onlosses. ~~dividends,~~ASU ~~minimum~~2016-13 ~~cash~~will ~~balance,~~apply ~~collateral~~to ~~maintenance~~loans, ~~leverage~~accounts ~~ratio~~receivable, ~~requirements~~trade receivables, ~~minimum~~other ~~working~~financial ~~capital~~assets ~~requirements~~measured at amortized cost, loan commitments and other ~~customary~~off-balance ~~restrictions~~sheet credit exposures. ~~The~~ASU ~~$66~~2016-13 ~~Million~~will ~~Facility~~also ~~includes~~apply ~~restrictions~~to debt securities and other financial ~~covenants~~assets ~~including,~~measured ~~among~~at fair value through other ~~things,~~ comprehensive income. For the Company’s, ~~ability~~ASU to2016-13 ~~incur~~is ~~indebtedness,~~effective ~~limitations~~for onfiscal ~~dividends,~~years ~~minimum~~beginning ~~cash~~after ~~balance~~December 15, ~~collateral maintenance~~2022, ~~and~~ ~~other~~with ~~customary~~early ~~restrictions~~adoption permitted. The ~~Company~~adoption ~~was~~of inTopic ~~compliance~~326 ~~with~~is ~~its~~not ~~financial~~expected ~~covenants~~to ashave ofa ~~September~~material ~~30,~~impact ~~2020~~on the condensed consolidated financial statements.

~~Maturities – The aggregate maturities of debt during the remaining three months of the year ending December 31, 2020, and annually for the years ending December 31 are as follows:~~

2020 (for the remaining three months of the year)	$	33,597
2021		177,421
2022		130,000
2023		130,000
2024		277,500
Total	$	748,518

173. NET (LOSS) EARNINGS PER SHARE

10The computation of basic net (loss) earnings per share is based on the weighted-average number of common shares outstanding during the reporting period. ~~INTEREST~~The ~~RATE~~computation ~~SWAPS~~of diluted net (loss) earnings per share assumes the vesting of nonvested stock awards (refer to Note 14 — Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive. Of the 881,118 and 637,254 nonvested shares and RSUs outstanding as of March 31, 2021 and 2020, 881,118 and 26,126, respectively, were excluded from the computation of diluted net earnings per share because these were anti-dilutive (refer to Note 14 — Stock-Based Compensation).

The Company uses interest rate swaps for the management of interest rate risk exposure, as the interest rate swaps effectively convert a portion of the Company’s debt from a floating to a fixed rate. The interest rate swaps are agreements between the Company and counterparties to pay, in the future, a fixed-rate payment in exchange for the counterparties paying the Company a variable payment. The amount of the net payment obligation is based on the notional amount of the swap contract and the prevailing market interest rates. The Company may terminate the swap contracts prior to their expiration dates, at which point a realized gain or loss would be recognized. The value of the Company’s commitment would increase or decrease based primarily on the extent to which interest rates move against the rate fixed for each swap. All derivatives are recognized on the Company’s Consolidated Balance Sheets at their fair values. For accounting hedges, on the date the derivative contract is entered into, the Company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value” hedge) or (2) a hedge of a forecasted transaction (“cash flow” hedge).

The Company previously entered into interest rate swap transactions, with multiple counterparties, which were designated as cash flow hedges. In September 2018, the Company re-couponed its swaps, receiving cash of $6,813, with the corresponding gain recognized ratably over the original term of the hedged instruments. The re-couponed swaps were terminated in December 2019 when the related $460 Million Facility was extinguished. Upon the swaps’ termination, the Company made a payment of $2,486 and recognized the remaining gain that resulted from the re-couponing in September 2018, which are recognized in Interest expense in the condensed consolidated statements of operations.


	For the Three Months Ended
	March 31,
	2021	2020
Common shares outstanding, basic:
Weighted-average common shares outstanding, basic	39,974,360	39,891,346
Common shares outstanding, diluted:
Weighted-average common shares outstanding, basic	39,974,360	39,891,346
Dilutive effect of restricted stock awards	—	268,620
Weighted-average common shares outstanding, diluted	39,974,360	40,159,966

On April 29, 2020, the Company entered into interest rate swap transactions, with multiple counterparties, which were designated as cash flow hedges. In accordance with these transactions, the Company will pay an average fixed-rate interest amount of 0.54% and will receive floating rate interest amounts based on three-month LIBOR settings. These interest rate swaps are designated as cash flow hedges with a start date of June 30, 2020 and an end date of December 23, 2024, with an aggregate notional amount outstanding of $197,129 at September 30, 2020.

~~The derivative asset and liability balances at September 30, 2020 and December 31, 2019 are as follows:~~

	Asset Derivatives					Liability Derivatives
	Balance	Fair Value				Balance	Fair Value
	Sheet Location	September 30, 2020		December 31, 2019		Sheet Location	September 30, 2020		December 31, 2019
Derivatives designated as hedging instruments
Interest rate contracts	Derivative asset (Current assets)	$	—	$	—	Derivative liability (Current liabilities)	$	557	$	—
Interest rate contracts	Derivative asset (Noncurrent assets)		—		—	Derivative liability (Noncurrent liabilities)		620		—
Total derivatives designated as hedging instruments			—		—			1,177		—
Total Derivatives		$	—	$	—		$	1,177	$	—

4. JOINT VENTURE INVESTMENTS

~~The~~NT ~~components~~Suez ofHoldco ~~Accumulated~~LLC ~~other~~- ~~comprehensive loss~~In ~~included~~September 2014, in the ~~Condensed~~Company ~~Consolidated~~formed ~~Balance~~a ~~Sheets~~joint ~~consist~~venture, ofNT ~~net~~Suez ~~unrealized~~Holdco ~~loss~~LLC on(“NT ~~cash~~Suez”), ~~flow~~to ~~hedges~~purchase astwo ofSuezmax ~~September~~newbuildings. ~~30, 2020~~The ~~and~~two ~~December~~vessels ~~31,~~were ~~2019~~delivered in October and November 2016.

18NT Suez is owned 51% by the Company and 49% by WLR/TRF Shipping S.a.r.l (“WLR/TRF”). WLR/TRF is indirectly owned by funds managed or jointly managed by WL Ross & Co, LLC (“WLR”), including WLR Recovery Fund V DSS AIV, L.P. and WLR V Parallel ESC, L.P., which are also shareholders of the Company. WLR is a fund manager that manages the Company’s largest shareholders.

The following table presents the gross amounts of these liabilities with any offsets to arrive at the net amounts recognized in the Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019:15

	Gross		Gross Amounts Offset in the Condensed		Net Amounts of Liabilities Presented in the Condensed		Gross Amounts not Offset in the Condensed Consolidated Balance Sheets
	Amounts of Recognized Liabilities		Consolidated Balance Sheets		Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2020 Derivatives	$	1,177	$	—	$	1,177	$	—	$	—	$	1,177
December 31, 2019 Derivatives		—		—		—		—		—		—

Table of Contents

11As of March 31, 2021 and December 31, 2020, the investments NT Suez received from the Company and WLR/TRF aggregated $74,104, which was used for shipyard installment payments and working capital. ~~ACCUMULATED~~During ~~OTHER~~the ~~COMPREHENSIVE~~three ~~(Loss)~~months ~~Income~~ended March 31, 2021, NT Suez distributed $663 and $637 to the Company and WLR/TRF, respectively. During three months ended March 31, 2020, NT Suez distributed $1,632 and $1,568 to the Company and WLR/TRF, respectively.

~~The~~Management ~~components~~has ofdetermined ~~Accumulated~~that ~~other~~NT ~~comprehensive~~ Suez qualifies as a variable interest entity, and, when aggregating the variable interests held by the related parties (~~loss~~i.e. the Company and WLR/TRF), ~~income~~the ~~included~~Company inis the ~~Condensed~~primary ~~Consolidated~~beneficiary ~~Balance~~as ~~Sheets~~the ~~consist~~Company ofhas ~~net~~the ~~unrealized~~ability ~~loss~~to ondirect ~~cash~~the ~~flow~~activities ~~hedges~~that asmost ofsignificantly ~~September 30,~~impact ~~2020~~NT ~~and~~Suez’s ~~December~~economic 31performance. Accordingly, ~~2019~~the Company consolidates NT Suez.

~~The~~Diamond ~~changes~~Anglo inShip ~~Accumulated~~Management ~~other~~Pte. Ltd. — In ~~comprehensive~~ January 2018, the Company and Anglo Eastern Investment Holdings Ltd. (~~loss~~“AE Holdings”), ~~income~~a third party, formed a joint venture, Diamond Anglo Ship Management Pte. Ltd. (“DASM”). DASM is owned 51% by ~~component~~the ~~are~~Company and 49% by AE Holdings as ~~follows:~~of March 31, 2021 and December 31, 2020, and was formed to provide ship management services to the Company’s vessels.

	For the Nine Months Ended September 30,
	2020			2019
Accumulated other comprehensive income – January 1,	$	—		$	4,387
Other comprehensive loss before reclassifications		(1,053	)		(4,931	)
Amounts reclassified from Accumulated other comprehensive (loss) income		(124	)		1,435
Other comprehensive loss for the period		(1,177	)		(3,496	)
Accumulated other comprehensive (loss) income – September 30,	$	(1,177	)	$	891

As of March 31, 2021 and December 31, 2020, the investments DASM received from the Company and AE Holdings totaled $51 and $49, respectively, which were used for general and administrative expenses.

~~The~~Management ~~realized~~has ~~loss~~determined ~~for~~that ~~the~~DASM ~~nine~~qualifies ~~months ended~~as ~~September 30, 2020 reclassified from Accumulated other comprehensive loss consists of~~ a ~~realized~~variable ~~loss of $124 related to~~ interest ~~rate~~entity, ~~swap~~and, ~~contracts.~~when ~~The~~aggregating ~~realized gain for~~ the ~~nine months~~variable ~~ended~~interests ~~September~~held ~~30,~~by ~~2019~~the ~~reclassified~~Company ~~from Accumulated other comprehensive income consists of a realized loss of ($610) related to interest rate swap contracts~~ and $2AE Holdings,~~045~~ ~~related to~~ the ~~amortization~~Company ofis the ~~gain~~primary onbeneficiary ~~re-couponed swaps,~~ as ~~discussed~~the inCompany ~~Note~~has ~~10.~~the ~~The~~ability ~~realized~~to ~~gain~~direct ~~reclassified~~the ~~from~~activities ~~Accumulated~~that ~~other comprehensive~~most ~~loss~~significantly ~~are~~impacts ~~presented~~DASM’s ineconomic ~~Interest~~performance. ~~expense~~Accordingly, in the ~~Condensed~~Company ~~Consolidated~~consolidates ~~Statements of Operations~~DASM.

~~12. FAIR VALUE OF FINANCIAL INSTRUMENTS~~

~~The~~5. VESSEL fair values and carrying amounts of the Company’s financial instruments at September 30, 2020 and December 31, 2019 that are required to be disclosed at fair value, but not recorded at fair value, are as follows:DISPOSITIONS

	September 30, 2020				December 31, 2019
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Cash and cash equivalents	$	114,335	$	114,335	$	83,609	$	83,609
Restricted cash		6,014		6,014		5,610		5,610
Variable rate debt		748,518		748,518		894,310		894,310

In December 2020, the Board of Directors approved selling the Aias and Amoureux, both 2008-built MR vessels. The Company reached an agreement to sell the Aias for $22.6 million in aggregate gross proceeds, and the Amoureux for $22.5 million in aggregate gross proceeds. The delivery of the Aias and Amoureux occurred in January and February 2021, respectively. The total loss of $26.3 million on the sale of the vessels was recorded to the condensed consolidated statement of operations in the year ended December 31, 2020. In connection with the sale of these two vessels, the Company repaid debt on the $360 Million Facility, as defined in Note 8 below, of $25.3 million and the revolving loan capacity was reduced by $6,980 during the three months ended March 31, 2021 in conjunction with the delivery of the Aias and Amoureux.

~~The following methods and assumptions are used in estimating the fair value of disclosures for financial instruments:~~

~~Cash and cash equivalents, and Restricted cash: The carrying amounts reported in the condensed consolidated balance sheets for Cash and cash equivalents, and Restricted cash approximate fair value~~6. PREPAID ~~Cash~~EXPENSES ~~and~~AND ~~cash~~OTHER ~~equivalents,~~CURRENT ~~and Restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities.~~ASSETS

19Prepaid expenses and other current assets consist of the following as of March 31, 2021 and December 31,2020:

Variable Rate Debt: The fair value of variable rate debt is based on management’s estimate of rates the Company could obtain for similar debt of the same remaining maturities. Additionally, the Company considers its creditworthiness in determining the fair value of variable rate debt under the credit facilities. The carrying amounts in the above table, which exclude the impact of deferred financing costs, approximate the fair market value for the variable rate debt. Variable rate debt is considered to be a Level 2 item as the Company considers the estimate of rates it could obtain for similar debt.

The fair value of an asset or liability is based on assumptions that market participants would use in pricing the asset or liability. The hierarchies of inputs used when determining fair value are described below:


	March 31,		December 31,
	2021		2020
Advances to Capital Ship Management Corp. (“CSM”) (Refer to Note 13 — Related Party Transactions)	$	5,253	$	1,453
Advances to technical managers		28		164
Insurance claims receivable		1,328		1,636
Prepaid insurance		344		1,234
Advances to agents		1,019		1,091
Deferred voyage costs		1,767		915
Other		1,195		1,244
Total prepaid expenses and other current assets	$	10,934	$	7,737

Level 1: Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

Level 2: Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

~~Level 3: Valuations based on inputs that are unobservable and significant to the overall fair value measurement.~~16

~~The~~Table ~~assessment~~ of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial instruments and the placement of financial instruments within the fair value hierarchy.Contents

~~The~~7. ACCOUNTS ~~table~~PAYABLE ~~below~~AND ~~provides~~ACCRUED ~~the financial instruments carried at fair value based on the levels of hierarchy as of the valuation date listed:~~EXPENSES

	Level 1		Level 2		Level 3		Total
September 30, 2020
Derivative liabilities	$	—	$	1,177	$	—	$	1,177

Accounts payable and accrued expenses consist of the following as of March 31, 2021 and December 31, 2020:

Derivative Liabilities: The fair value of the derivative liabilities, which relate to the interest rate swaps used for hedging purposes, is the estimated amount the Company would pay for the liability to terminate the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the swap counterparties. Interest rate swaps are considered to be a Level 2 item as the Company, using the income approach to value the derivatives, uses observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact. Level 2 inputs for the valuations are limited to quoted prices for similar assets in active markets (specifically, futures contracts on LIBOR for the first two years) and inputs other than quoted prices that are observable for the asset (specifically, LIBOR, cash and swap rates and credit risk at commonly quoted intervals). Mid-market pricing is used as a practical expedient for fair value measurements. Refer to Note 10 — Interest Rate Swaps for further information regarding the Company’s interest rate swap agreements.

The Company does not currently have any Level 3 financial assets or liabilities and there have been no transfers in and/or out of Level 3 during the nine months ended September 30, 2020 and 2019.


	March 31,		December 31,
	2021		2020
Trade accounts payable and accrued expenses	$	10,771	$	6,609
Accrued vessel and voyage expenses		17,680		17,232
Accrued interest		33		86
Accrued vessel and voyage expenses and Other current liabilities (Refer to Note 13 — Related Party Transactions)		587		1,890
Total accounts payable and accrued expenses	$	29,071	$	25,817

~~13. REVENUE FROM TIME CHARTERS~~

The future minimum revenues, before inclusion of profit-sharing revenue, if any, expected to be received on irrevocable time charters for which revenues can be reasonably estimated and the related revenue days that the vessels are available for employment, and not including charterers’ renewal options for the remaining three months of the year ending December 31, 2020, and annually for the years ending December 31 are as follows:

2020 (for the remaining three months of the year)	$	15,885
2021		40,558
2022		13,511
Total future committed revenue	$	69,954

8.LONG-TERM DEBT

20Long-term debt at March 31, 2021 and December 31, 2020 was comprised of the following:

~~14. Related Party Transactions~~

During the three and nine months ended September 30, 2020 and 2019, the Company had the following related party transactions.


	March 31,		December 31,
	2021		2020
$360 Million Facility	$	190,046	$	227,500
$525 Million Facility		421,250		440,000
$66 Million Facility		46,323		47,421
Total		657,619		714,921
Less: Unamortized deferred financing costs		(11,636)		(12,531)
Less: Current portion		(169,923)		(196,325)
Long-term debt, net of deferred financing costs	$	476,060	$	506,065

Capital Ship Management Corp. (“CSM”) — Pursuant to the Transaction Agreement, for a period of five years, CSM will provide commercial and technical management services for the 25 vessels acquired in the Merger. For the three and nine months ended September 30, 2020 and 2019, the following transactions were recorded for these services:

·$360 ~~For~~Million Facility — On March 27, 2019, in connection with the ~~three~~Merger, ~~and~~the ~~nine~~Company ~~months~~entered ~~ended~~into ~~September~~a 30$360,000 ~~2020~~five-year Credit Agreement, as amended (the “$1360 Million Facility”),~~955~~ for the purposes of financing the Merger and refinancing the $530 Million Line of Credit (defined below). The $360 Million Facility consists of a term loan of $300,~~823,~~000 ~~respectively~~and a revolving loan of $60,000, and ~~for~~is collateralized by the ~~three~~25 vessels acquired in the Merger and ~~nine~~the ~~months~~three ~~ended~~vessels ~~September~~that collateralized the $30, ~~2019~~Million Line of Credit, $1with reductions based on a 17 year age-adjusted amortization schedule,~~955~~ ~~and~~payable on a quarterly basis. The term loan component of the $~~3,794,~~360 ~~respectively,~~Million ~~was~~Facility ~~incurred~~bears interest at the Eurodollar Rate for ~~technical~~a ~~management~~three-month ~~services~~interest period, ~~which~~plus a 2.65% interest rate margin, and the interest is ~~included~~paid inquarterly. ~~Vessel~~Commitment ~~expenses~~fees inon undrawn amounts related to the ~~condensed~~revolving ~~consolidated~~loan ~~statements~~component of ~~operations~~the ~~and~~$360 ~~have~~Million ~~been~~Facility ~~paid~~are as1.06%. As of ~~September~~March 3031, ~~2020~~2021, $10,000 of the revolving loan was drawn, while $43,020 was available and undrawn.

·The ~~For~~$360 ~~the~~Million ~~three~~Facility ~~and~~contains ~~nine~~certain ~~months~~restrictions ~~ended~~on ~~September~~the ~~30,~~payments ~~2020,~~of ~~$499~~dividends. ~~and~~The $~~1,866,~~360 ~~respectively,~~Million ~~and~~Facility ~~for~~permits the ~~three~~Company ~~and~~to ~~nine~~pay ~~months~~dividends ~~ended~~so ~~September~~long ~~30,~~as ~~2019,~~the ~~$548~~payment ~~and~~of ~~$1,130,~~dividends ~~respectively,~~does ~~was~~not ~~incurred~~cause ~~for~~an ~~commercial~~event ~~management~~of ~~services~~default, ~~which~~and islimits ~~included~~dividends inpayable ~~Voyage~~so ~~expenses~~that inthey ~~the~~do ~~condensed~~not ~~consolidated~~exceed ~~statements~~in ofany ~~operations.~~fiscal Asquarter ofan ~~September~~amount ~~30,~~that ~~2020,~~is ~~$714~~equal ~~remains~~to ~~unpaid,~~50% ~~and~~of isthe ~~included~~adjusted inconsolidated ~~Accounts~~net ~~payable~~income ~~and~~of ~~accrued~~the ~~expenses~~Company in ~~the~~such ~~condensed~~fiscal ~~consolidated balance sheet~~quarter.

·In ~~For~~connection with the ~~three~~Merger ~~and~~Agreement ~~nine~~signing, ~~months~~the ~~ended~~Company, ~~September~~Nordea 30Bank Abp, ~~2020~~New York Branch (“Nordea”), ~~$504~~as administrative agent and ~~$1,500,~~collateral ~~respectively~~agent, and ~~for~~the lenders under the ~~three~~$360 Million ~~and~~Facility ~~nine~~entered ~~months~~into ~~ended~~a ~~September~~consent letter dated March 30, ~~2019,~~2021 (the “$~~503~~360M Consent Letter”), pursuant to which the lenders party thereto consented to the Announced Merger and waived any existing default or event of default and any default or event of default that would arise as a result of the Announced Merger. Pursuant to the terms of the $~~1,022,~~360M ~~respectively~~Consent Letter, ~~was~~in ~~incurred~~connection ~~for~~with ~~general~~the ~~management~~consummation ~~services~~of the Announced Merger, ~~which~~the is$360 ~~included~~Million inFacility ~~General~~is being amended and ~~administrative~~restated ~~expenses~~(the in“$360 Million A&R Facility”) to more closely mirror the ~~condensed~~representations, ~~consolidated~~warranties ~~statements~~and covenants of ~~operations~~INSW’s credit facilities and to include INSW as a credit party. AsIn addition, INSW will provide a guaranty of ~~September~~the 30Company’s obligations under the $360 Million A&R Facility. It is expected that the $360 Million A&R Facility will include covenants relating to, ~~2020~~among other things, ~~$165~~the ~~remains~~ability ~~unpaid~~to incur indebtedness, the ability to pay dividends, maintaining a minimum cash balance, collateral maintenance, maintaining a net debt to capitalization ratio and other customary restrictions. It is ~~included~~expected inthat ~~Accounts~~the ~~payable~~$360 Million A&R Facility will provide for customary events of default. Execution, delivery and ~~accrued~~effectiveness ~~expenses~~of inthe $360 Million A&R Facility is a condition to the ~~condensed~~consummation ~~consolidated~~of ~~balance~~the ~~sheet~~Announced Merger.

Working capital is advanced to CSM to procure both voyage and vessel costs. At September 30, 2020, the net funds advanced totaled $3,196, of which $6,288 is included in Prepaid Expense and Other Current Assets in the condensed consolidated balance sheet (refer to Note 7 — Prepaid Expenses and Other Current Assets), and the $3,092 liability is included in Accounts payable and accrued expenses in the condensed consolidated balance sheet (refer to Note 8 — Accounts Payable and Accrued Expenses). At December 31, 2019, the net funds advanced totaled $4,748, of which $5,757 is included in Prepaid Expense and Other Current Assets in the condensed consolidated balance sheet and the $1,009 liability is included in Accounts payable and accrued expenses in the condensed consolidated balance sheet.17

AtTable ~~December~~of 31, 2019, amounts received for activity that occurred prior to the Merger that are due to CSM total $46 and are included in Accounts payable and accrued expenses in the condensed consolidated balance sheet. These amounts were settled during the nine months ended September 30, 2020.Contents

~~15.~~Each ~~Stock~~lender under the $360 Million Facility which provides its consent to the Announced Merger and executes and delivers the $360 A&R Facility will receive a non-~~Based~~refundable ~~Compensation~~consent fee equal to 0.20% of the aggregate principal amount of loans made available by such lender (including any undrawn commitment) which fee will be due and payable on the completion of the Announced Merger and paid by the Company.

~~2019~~$525 ~~Equity~~Million ~~Incentive~~Facility ~~Plan~~ — ~~Under~~ ~~the~~On December 23, 2019, ~~Equity~~the ~~Incentive~~Company ~~Plan~~entered into a $525,000 five-year Credit Agreement (the “~~2019~~$525 ~~Plan~~Million Facility”), for the ~~Company’s~~purposes ~~Board~~of refinancing three separate debt facilities that were in place at that time. The $525 Million Facility consists of ~~Directors~~a term loan of $375,000 ~~the~~and ~~Compensation~~a ~~Committee~~revolving loan of $150, or000, ~~their~~and ~~designees~~is ~~may~~collateralized ~~grant~~by athe ~~variety~~36 ofvessels ~~stock-based~~that ~~incentive~~collateralized ~~awards~~the ~~representing~~three anprevious ~~aggregate~~separate ofdebt 3facilities that the $525 Million Facility refinanced,~~989~~ with reductions based on a 17 year age-adjusted amortization schedule,~~000~~ ~~shares~~payable on a quarterly basis. The term loan component of ~~common stock~~the to$525 Million Facility bears interest at the ~~Company’s~~Eurodollar ~~officers,~~Rate ~~directors~~for a three-month interest period, ~~employees~~plus a 2.50% interest rate margin, and ~~consultants~~the interest is paid quarterly. ~~Such~~Commitment ~~awards~~fees ~~include~~on ~~stock~~undrawn ~~options~~amounts related to the revolving loan component of the $525 Million Facility are 0.875%. As of March 31, ~~stock~~2021, ~~appreciation rights~~$140,000 ~~restricted~~of ~~(nonvested)~~the ~~stock,~~revolving ~~restricted~~loan ~~stock~~was ~~units~~drawn, ~~and~~while ~~unrestricted~~$10,000 ~~stock~~was available and undrawn.

~~Restricted Stock Units —~~ The ~~Company~~$525 ~~has~~Million ~~issued~~Facility ~~restricted~~contains ~~stock~~certain ~~units~~restrictions ~~(“RSUs”)~~on ~~under~~ the ~~2019~~payments ~~Plan to certain members~~ of ~~the~~ ~~Board~~dividends. ofThe ~~Directors,~~$525 anMillion ~~executive~~Facility ~~and~~permits ~~certain employees of~~ the Company, ~~which represent the right~~ to ~~receive~~pay adividends ~~share~~so oflong ~~common stock,~~as ~~or in~~ the ~~sole~~payment ~~discretion~~ of ~~the~~dividends ~~Company’s~~does ~~Compensation~~not ~~Committee,~~cause ~~the~~an ~~value~~event of adefault, ~~share~~and oflimits ~~common~~dividends ~~stock~~payable onso ~~the date~~ that ~~the~~they ~~RSU~~do ~~vests.~~not ~~Such~~exceed ~~shares~~in ofany ~~common~~fiscal ~~stock~~quarter ~~will~~an ~~only~~amount bethat ~~issued~~is equal to ~~certain~~50% ~~directors,~~of anthe ~~executive~~adjusted ~~and~~consolidated ~~employees~~net ~~when~~income ~~their RSUs~~of ~~vest under~~ the ~~terms~~Company ofin ~~their~~the ~~grant~~preceding ~~agreements~~fiscal ~~and 2019 Plan described above~~quarter.

~~The~~In ~~RSUs~~connection ~~that~~with ~~have been~~the ~~issued~~Merger Agreement signing, the Company, Nordea, as administrative agent and collateral agent, and the lenders under the $525 Million Facility entered into a consent letter dated March 30, 2021 (the “$525M Consent Letter”), pursuant to ~~certain~~which ~~members~~the lenders party thereto consented to the Announced Merger and waived any existing default or event of default and any default or event of default that would arise as a result of the ~~Board~~Announced Merger. Pursuant to the terms of ~~Directors~~the ~~vest~~$525M ~~one~~Consent ~~year~~Letter, ~~from~~in connection with the ~~date~~consummation of ~~grant. The~~the ~~RSUs~~Announced ~~that~~Merger, ~~have~~the ~~been~~$525 ~~issued~~ Million Facility is expected to ~~other~~be ~~individuals~~amended ~~vest~~and ~~ratably~~restated on(the ~~each~~“$525 ofMillion A&R Facility”) to more closely mirror the ~~three~~representations, ~~anniversaries~~warranties and covenants of ~~the~~INSW’s ~~determined~~credit ~~vesting~~facilities ~~date~~and to include INSW as a credit party. ~~The~~ ~~table~~In ~~below~~addition, ~~summarizes~~ INSW will provide a guaranty of the Company’s ~~unvested~~obligations ~~RSUs~~under ~~for~~the $525 Million A&R Facility. It is expected that the ~~nine~~$525 ~~months~~Million ~~ended~~A&R ~~September~~Facility 30will include covenants relating to, ~~2020:~~among other things, the ability to incur indebtedness, the ability to pay dividends, maintaining a minimum cash balance, collateral maintenance, maintaining a net debt to capitalization ratio and other customary restrictions. It is expected that the $525 Million A&R Facility will provide for customary events of default. Execution, delivery and effectiveness of the $525 Million A&R Facility is a condition to the consummation of the Announced Merger.

				Weighted
	Number of			Average Grant
	RSUs			Date Price
Outstanding at January 1, 2020		74,716		$	14.03
Granted		47,156			12.08
Vested		(46,525	)		13.58
Forfeited		(1,887	)		13.70
Outstanding at September 30, 2020		73,460		$	13.07

Each lender under the $525 Million Facility which provides its consent to the Announced Merger and executes and delivers the $525 Million A&R Facility will receive a non-refundable consent fee equal to 0.20% of the aggregate principal amount of loans made available by such lender (including any undrawn commitment) which fee will be due and payable on the completion of the Announced Merger and paid by the Company.

21$66 Million Facility — On August 9, 2016, the Company entered into a $66,000 five-year senior secured term loan facility (the “$66 Million Facility”) for the purpose of financing two vessels controlled through the joint venture NT Suez (refer to Note 4 — Joint Venture Investments). The $66 Million Facility, which is collateralized by the two vessels controlled through NT Suez, is a nonrecourse term loan with reductions that are based on a 15-year amortization schedule, and are payable on a quarterly basis. Interest is paid quarterly, and the $66 Million Facility bears interest at the Eurodollar Rate for a three-month interest period, plus a 3.25% interest rate margin.

The ~~following~~$66 ~~table~~Million ~~summarizes~~Facility contains certain ~~information~~ restrictions on the payments of dividends by the ~~RSUs~~NT ~~unvested~~Suez joint venture. The $66 Million Facility permits the NT Suez joint venture to pay dividends so long as the payment of dividends does not cause an event of default, and ~~vested~~does not exceed an amount equal to 75% of the consolidated net income, as determined in accordance with GAAP, of ~~September~~the 30borrower, ~~2020:~~which is the consolidated accounts of NT Suez.

Unvested RSUs

Vested RSUs

September 30, 2020

Weighted

Average

Weighted

Average

Remaining

Average

Number of

Grant Date

Contractual

Number of

Grant Date

RSUs

Price

Life

RSUs

Price

73,460

13.07

1.6

46,525

13.58

~~The~~Table ~~Company is amortizing these grants over the applicable graded vesting periods. Forfeitures are taken into account when they occur. As~~ of September 30, 2020, unrecognized compensation cost of $591 related to RSUs will be recognized over a weighted-average period of 1.6 years. For the three and nine months ended September 30, 2020, the Company recognized $186 and $556, respectively, of nonvested stock amortization expense for the RSUs, which is included in General and administrative expenses.Contents

~~Restricted~~In ~~Stock~~ connection —with ~~Under~~ the ~~2019~~Announced ~~Plan~~Merger, ~~grants~~lenders ofunder ~~restricted~~the ~~common~~NT ~~stock~~Suez ~~were~~Facility ~~issued~~have agreed pursuant to ~~certain~~a ~~members~~consent ofand ~~the~~amendment ~~Board~~letter ofdated ~~Directors~~March 30, ~~executives and~~2021 ~~employees.~~(the ~~The~~“NT ~~restricted~~Suez ~~common~~Debt ~~stock~~Consent”), ~~issued~~among toother ~~certain~~things, ~~members~~to ofconsent to the ~~Board~~Announced ofMerger ~~Directors~~(including ~~vest~~waiving ~~one~~a ~~year~~mandatory ~~from~~prepayment that would otherwise be triggered by the ~~date~~Announced ofMerger) ~~grant. The restricted~~and ~~common~~waive ~~stock~~any ~~issued~~existing toevent ~~certain~~of ~~executives~~default and ~~employees~~any ~~ordinarily~~event ~~vest~~of ~~ratably~~default onthat ~~each~~would ofarise ~~the~~as ~~three~~a ~~anniversaries~~result of the ~~determined~~Announced ~~vesting date~~Merger. ~~The~~ ~~table~~In ~~below~~addition, ~~summarizes~~lenders under the ~~Company’s~~NT ~~nonvested~~Suez ~~stock~~Facility ~~awards~~have ~~for~~agreed to amend the ~~nine~~definition ~~months~~of ~~ended September~~“change ~~30,~~of ~~2020~~control” ~~which~~upon ~~were~~the ~~issued~~closing ~~under~~of the ~~2019~~Announced ~~Plan:~~Merger to reflect the ownership structure of INSW and its subsidiaries.

				Weighted
	Number of			Average Grant
	Shares			Date Price
Outstanding at January 1, 2020		562,790		$	13.44
Granted		175,151			12.41
Vested		(198,116	)		13.51
Forfeited		(21,512	)		13.70
Outstanding at September 30, 2020		518,313		$	13.05

Each lender under the NT Suez Facility which provides its consent under the NT Suez Debt Consent will receive a non-refundable consent fee equal to 0.20% of the aggregate principal amount of loans of such lender which fee will be due and payable on the completion of the Announced Merger and paid by NT Suez.

~~For~~Interest Rates – The following table sets forth the ~~nine~~effective ~~months~~interest ~~ended~~rate ~~September~~associated ~~30, 2020,~~with ~~198,116~~the ~~shares~~interest ~~vested~~costs ~~under~~for the ~~2019~~Company’s ~~Plan.~~debt ~~There~~facilities, ~~were~~including nothe ~~shares~~rate ~~that~~differential ~~vested~~between ~~under~~the fixed pay rate and the ~~2019~~variable ~~Plan~~receive ~~during~~rate on the ~~year~~interest ~~ended~~rate ~~December 31,~~swap ~~2019.~~agreements ~~For~~that ~~the~~were ~~three~~in ~~and~~effect ~~nine~~(refer ~~months~~to ~~ended~~Note ~~September~~9 30— Interest Rate Swaps), ~~2020~~combined, as well as the ~~Company~~cost ~~recognized~~associated ~~$838~~with ~~and~~the ~~$2,818,~~commitment ~~respectively~~fees. Additionally, inthe ~~nonvested stock~~table ~~amortization~~includes ~~expense~~the ~~for~~range ~~the~~of ~~2019~~interest ~~Plan~~rates ~~restricted~~on ~~stock~~the debt, ~~which~~excluding isthe ~~included~~impact inof ~~General~~swaps and ~~administrative~~commitment ~~expenses.~~fees:

The Company is amortizing these grants over the applicable graded vesting periods. Forfeitures are taken into account when they occur. As of September 30, 2020, unrecognized compensation cost of $3,525 related to nonvested stock will be recognized over a weighted-average period of 2.0 years.

Performance Awards — The Company granted performance awards that contain service, performance-based and/or market-based vesting criteria. Vesting occurs if the recipient remains employed and depends on the degree to which performance goals are achieved during the three-year performance period (as defined in the award agreements). The table below summarizes the Company’s nonvested performance awards for the nine months ended September 30, 2020 which were issued under the 2019 Plan:


	For the Three Months Ended
	March 31,
	2021	2020
Effective interest rate	3.01%	4.62%
Range of interest rates (excluding impact of swaps and unused commitment fees)	2.75% to 3.51%	4.45% to 5.32%

			Weighted
	Number of		Average Grant
	Shares		Date Price
Outstanding at January 1, 2020		—	$	—
Granted		133,305		12.60
Vested		—		—
Forfeited		—		—
Outstanding at September 30, 2020		133,305	$	12.60

~~For~~Restrictive ~~the~~Covenants ~~three~~— The Company’s credit facilities credit contain restrictive covenants and ~~nine~~other ~~months~~non-financial ~~ended~~restrictions. ~~September 30~~The $360 Million Facility and $525 Million Facility include, ~~2020~~among other things, restrictions on the Company’s ~~recognized~~ability ~~$140~~to ~~and~~incur ~~$233~~indebtedness, ~~respectively~~limitations on dividends, inminimum ~~nonvested~~cash ~~stock~~balance, ~~amortization~~collateral ~~expense~~maintenance, ~~for~~leverage ~~the~~ratio ~~2019~~requirements, ~~Plan~~minimum ~~performance awards~~working capital requirements, ~~which~~and isother ~~included~~customary inrestrictions. ~~General~~The $66 Million Facility includes restrictions and ~~administrative~~financial ~~expenses.~~covenants Asincluding, ofamong ~~September~~other 30things, ~~2020~~the Company’s ability to incur indebtedness, ~~unrecognized~~limitations ~~compensation~~on ~~cost~~dividends, ofminimum $1cash balance,~~446 related~~ tocollateral ~~nonvested~~maintenance, ~~stock~~and ~~will~~other becustomary ~~recognized~~restrictions. ~~over~~The aCompany ~~weighted-average~~was ~~period~~in compliance with its financial covenants as of ~~2.6~~March ~~years~~31, 2021.

22Maturities – The aggregate maturities of debt during the remaining nine months of the year ending December 31, 2021, and annually for the years ending December 31 are as follows:

~~The future compensation to be recognized for the aforementioned RSUs, restricted stock and performance awards as of September 30, 2020 is as follows:~~

2020 (for the remaining three months of the year)		$	1,128

2021			2,939
2021 (for the remaining nine months of the year)	$	139,023
2022		123,600	~~1,240~~
2023		123,600	~~255~~
Total		$	5,562
2024		271,396
Total	$	657,619

~~16. COMMITMENTS AND CONTINGENCIES~~

Commitments — In August and September 2020, the Company entered into contracts to install ballast water treatment systems on seven vessels with installation scheduled to occur in 2021. These contracts have a total estimated cost of $6,575, of which $6,097 remains unpaid as of September 30, 2020, with payments due as follows as:

2020 (for the remaining three months of the year)	$	990
2021		5,107
Total	$	6,097

9. INTEREST RATE SWAPS

~~Contingencies~~The —Company ~~From time~~uses tointerest ~~time~~rate swaps for the management of interest rate risk exposure, as the interest rate swaps effectively convert a portion of the Company’s ~~may~~debt befrom ~~subject~~a floating to ~~legal~~a ~~proceedings~~fixed rate. The interest rate swaps are agreements between the Company and ~~claims~~counterparties to pay, in the ~~ordinary~~future, ~~course~~a offixed-rate ~~its~~payment ~~business~~in exchange for the counterparties paying the Company a variable payment. ~~Such~~The ~~claims,~~amount ~~even if~~of ~~lacking~~the ~~merit,~~net ~~could~~payment ~~result~~obligation inis based on the ~~expenditure~~notional amount of ~~significant~~the ~~financial~~swap contract and ~~managerial~~the ~~resources~~prevailing market interest rates. The Company ismay ~~not~~terminate ~~aware~~the ~~of any~~swap ~~legal~~contracts ~~proceedings~~prior to their expiration dates, at which point a realized gain or ~~claims~~loss ~~that~~would itbe ~~believes~~recognized. ~~will~~The ~~have,~~value ~~individually~~of the Company’s commitment would increase or indecrease based primarily on the ~~aggregate,~~extent ato ~~material~~which ~~effect~~interest rates move against the rate fixed for each swap. All derivatives are recognized on the Company’s Consolidated Balance Sheets at their fair values. For accounting hedges, ~~its~~ ~~financial~~on ~~condition~~the date the derivative contract is entered into, ~~results~~the Company designates the derivative as (1) a hedge of ~~operations~~the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value” hedge) or (2) a hedge of a forecasted transaction (“cash ~~flows~~flow” hedge).

~~17. SEGMENT REPORTING~~19

~~The~~Table ~~Company is engaged primarily in the ocean transportation~~ of crude oil and petroleum products in the international market through the ownership and operation of a diversified fleet of vessels. The international shipping industry has many distinct market segments based, in large part, on the size and design configuration of vessels required. Rates in each market segment are determined by a variety of factors affecting the supply and demand for vessels to move cargoes in the trades for which they are suited. Tankers are not bound to specific ports or schedules and therefore can respond to market opportunities by moving between trades and geographical areas. The Company’s vessels regularly navigate in international waters, over hundreds of trade routes, to hundreds of ports and, as a result, the disclosure of geographic information is impracticable. The Company charters its vessels primarily on voyage charters and on time charters.Contents

~~The~~On April 29, 2020, the Company ~~has~~entered ~~two~~into ~~reportable~~interest ~~segments~~rate swap transactions, ~~Crude~~ ~~Tankers~~with ~~and~~multiple ~~Product~~counterparties, ~~Carriers~~which were designated as cash flow hedges. ~~Segment~~In ~~results~~accordance ~~are~~with ~~evaluated~~these transactions, the Company will pay an average fixed-rate interest amount of 0.54% and will receive floating rate interest amounts based on ~~income~~three-month ~~from~~LIBOR ~~operations~~settings. ~~The~~These ~~accounting~~interest ~~policies~~rate ~~applied to~~swaps ~~the~~are ~~reportable~~designated ~~segments~~as ~~are~~cash ~~the~~flow ~~same~~hedges aswith ~~those~~a ~~used~~start indate ~~the~~of ~~preparation~~June 30, 2020 and an end date of ~~the~~December ~~Company’s~~23, ~~consolidated~~2024, ~~financial~~with ~~statements~~an aggregate notional amount outstanding of $180,331 at March 31, 2021.

~~Results~~The ~~for~~derivative ~~the~~asset ~~Company’s revenue~~ and ~~loss~~liability ~~from~~balances ~~operations~~at byMarch ~~segment~~31, ~~for~~2021 ~~the three~~ and ~~nine~~December ~~months ended September 30~~31, 2020 ~~and 2019~~ are as follows:

	Crude Tankers			Product Carriers			Total
Three Months Ended September 30, 2020
Total revenue	$	42,293		$	70,304		$	112,597
Voyage expenses		(12,891	)		(20,005	)		(32,896	)
Vessel expenses		(11,606	)		(33,152	)		(44,758	)
Depreciation and amortization		(10,121	)		(18,946	)		(29,067	)
General, administrative and management fees(1)		(1,873	)		(5,812	)		(7,685	)
Income (loss) from operations	$	5,802		$	(7,611	)	$	(1,809	)
Three Months Ended September 30, 2019
Voyage revenue	$	46,222		$	95,304		$	141,526
Voyage expenses		(22,919	)		(37,049	)		(59,968	)
Vessel expenses		(10,554	)		(31,245	)		(41,799	)
Depreciation and amortization		(9,898	)		(18,865	)		(28,763	)
Loss on sale of vessels		—			(18,344	)		(18,344	)
General and administrative expenses		(1,781	)		(5,785	)		(7,566	)
Income (loss) from operations	$	1,070		$	(15,984	)	$	(14,914	)

		Crude Tankers				Product Carriers			Total

Nine Months Ended September 30, 2020
	Asset Derivatives							Liability Derivatives
Total revenue	$	202,795			$	303,080		$	505,875
			Fair Value							Fair Value
Voyage expenses		(55,900	)			(101,026	)		(156,926	)
	Balance Sheet		March 31,			December 31,		Balance Sheet		March 31,		December 31,
Vessel expenses		(35,490	)			(92,542	)		(128,032	)
	Location		2021			2020		Location		2021		2020
Depreciation and amortization		(30,041	)			(56,557	)		(86,598	)
Derivatives designated as hedging instruments
General, administrative and management fees(1)		(5,679	)			(17,615	)		(23,294	)
Interest rate contracts	Derivative asset(Current assets)		$	—		$	—	Derivative liability(Current liabilities)		$	510	$	580
Income from operations	$	75,685			$	35,340		$	111,025
Interest rate contracts	Derivative asset(Noncurrent assets)			424			—	Derivative liability(Noncurrent liabilities)			—		569
Nine Months Ended September 30, 2019
Total derivatives designated as hedging instruments				424			—				510		1,149
Voyage revenue	$	133,105			$	260,372		$	393,477
Total Derivatives			$	424		$	—			$	510	$	1,149
Voyage expenses		(64,383	)			(103,058	)		(167,441	)
Vessel expenses		(27,729	)			(81,247	)		(108,976	)
Depreciation and amortization		(27,806	)			(52,156	)		(79,962	)
Loss on sale of vessels		—				(18,344	)		(18,344	)
General and administrative expenses		(4,982	)			(16,192	)		(21,174	)
Income (loss) from operations	$	8,205			$	(10,625	)	$	(2,420	)

~~(1) Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on a formula).~~

23The components of Accumulated other comprehensive loss included in the Condensed Consolidated Balance Sheets consist of net unrealized loss on cash flow hedges as of March 31, 2021 and December 31, 2020.

The ~~reconciliations~~following oftable ~~total~~presents ~~assets~~the gross amounts of ~~the~~ ~~segments~~these liabilities with any offsets to arrive at the net amounts ~~included~~recognized in the ~~condensed~~Condensed ~~consolidated~~Consolidated ~~balance~~Balance ~~sheets~~Sheets ~~are~~at asMarch ~~follows~~31, 2021 and December 31, 2020:

	September 30, 2020		December 31, 2019
Crude Tankers	$	868,142	$	896,897
Product Carriers		1,187,453		1,225,235
Corporate unrestricted cash and cash equivalents		2,789		2,609
Other unallocated amounts		1,729		3,641
Consolidated total assets	$	2,060,113	$	2,128,382

18. SUBSEQUENT EVENTS


							Gross Amounts not Offset
							in the Condensed
			Gross Amounts		Net Amounts of		Consolidated
	Gross		Offset in the		Liabilities Presented		Balance Sheets
	Amounts of		Condensed		in the Condensed
	Recognized		Consolidated		Consolidated		Financial		Cash Collateral		Net
	Liabilities		Balance Sheets		Balance Sheets		Instruments		Received		Amount

March 31, 2021 Derivatives	$	510	$	—	$	510	$	—	$	—	$	510
December 31, 2020 Derivatives		1,149		—		1,149		—		—		1,149

The Company has evaluated all subsequent events to ensure that these condensed consolidated financial statements include appropriate recognition and disclosure of recognized events as of September 30, 2020.

~~In October 2020, the Board of Directors approved selling the Atlantic Mirage, a 2009-built MR vessel.~~ The ~~Company~~following ~~reached~~table anpresents ~~agreement to sell~~ the ~~Atlantic Mirage for $16.4 million in aggregate~~ gross ~~proceeds.~~amounts ~~Delivery~~ of ~~the~~these ~~Atlantic~~assets ~~Mirage~~with isany ~~expected~~offsets to ~~take~~arrive ~~place~~at in the ~~latter~~net ~~half~~amounts ofrecognized ~~the fourth~~in ~~quarter of 2020, and~~ the ~~Company~~Condensed ~~expects~~Consolidated toBalance ~~record~~Sheets aat ~~loss~~March of31, ~~approximately~~2021 ~~$9.7~~and ~~million~~December on31, ~~the sale of this vessel.~~2020:

~~Other than as disclosed in this note and elsewhere in these condensed consolidated financial statements, there were no subsequent events that the Company believes require recognition or disclosure.~~

Net Amounts

Gross Amounts not Offset

Gross

of Assets

in the Condensed

Amounts

Presented in

Consolidated

Offset in the

the

Balance Sheets

Gross

Condensed

Amounts of

Consolidated

Cash

Recognized

Balance

Financial

Collateral

Net

Assets

Sheets

Instruments

Received

Amount

March 31, 2021 Derivatives

424

—

424

—

424

December 31, 2020 Derivatives

—

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

The following discussion and analysis is designed to provide a better understanding of various factors related to the results of operations and financial condition of Diamond S Shipping Inc. (“we,” “us,” “our” or the “Company”). This discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K (the “2019 Annual Report”) for the year ended December 31, 2019, filed with the SEC on March 27, 2020, and our unaudited condensed consolidated financial statements and notes thereto contained in this report. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and all of which could be affected by uncertainties and risks. Our actual results may differ materially from the results contemplated in these forward-looking statements as a result of many factors including, but not limited to, those described under “Cautionary Note on Forward-Looking Statements”.

~~Business Overview~~

Diamond S Shipping Inc. (“DSSI”) was formed on November 14, 2018 under the laws of the Republic of the Marshall Islands for the purpose of receiving, via contribution from CPLP, CPLP’s crude and product tanker business and combining that business with the business and operations of DSS LP pursuant to the Transaction Agreement. For a description of the Transaction Agreement and related Merger, please see Note 1 — Business and Basis of Presentation and Note 3 — Merger Transaction in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

~~We provide seaborne transportation of crude oil, refined petroleum, and other products in the international shipping industry~~10.ACCUMULATED AsOTHER ofCOMPREHENSIVE September 30, 2020, through our wholly owned subsidiaries, we owned and operated 64 tanker vessels: 13 Suezmax crude carriers, one Aframax crude carrier and 50 MR product carriers. As of the same date, we also controlled and operated two Suezmax vessels through a joint venture.LOSS

~~Factors~~The tocomponents ~~Consider~~of ~~When~~Accumulated ~~Evaluating~~other comprehensive loss income included in the ~~Company’s~~Condensed ~~Results~~Consolidated Balance Sheets consist of net unrealized loss on cash flow hedges as of March 31, 2021 and December 31, 2020.

~~The COVID-19 Pandemic~~20

OnTable March 11, 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) outbreak a pandemic. In response to the ongoing outbreak, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have, and will likely continue to, negatively affect the global economy. In addition, the COVID-19 pandemic has resulted in increased vessel expenses, primarily due to crewing related matters and logistical challenges for delivery of services and materials to vessels. The extent to which COVID-19 will materially impact the Company’s results of operations and financial condition, including possible impairments, will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the virus and the actions to contain or treat its impact, among others. Accordingly, an estimate of the impact of COVID-19 on the Company and its operations cannot be made at this time. However, if the pandemic worsens, additional restrictions are imposed or current restrictions are imposed for a longer period of time in response to the outbreak, it may have a material adverse effect on the Company’s future results of operation and financial condition.Contents

~~Strategic~~The ~~Product~~changes ~~Tanker~~in ~~Partnership~~Accumulated other comprehensive loss by component are as follows:

On June 15, 2020, the Company entered into an agreement with Dampskibsselskabet Norden A/S (“Norden”). During the term of this agreement, the Company and Norden have agreed to use commercially reasonable efforts to identify new projects in the product tanker industry that they may jointly pursue and develop. Pursuant to this agreement, Company has agreed to initially contribute 28 of its MR vessels to the Norient Product Pool (the “Pool”). This agreement will terminate upon the occurrence of certain events, including when the Company no longer has vessels operating in the Pool. As of September 30, 2020, 28 of the Company’s vessels are operating in the Pool.

The Merger


	For the Three Months Ended
	March 31,
	2021		2020
Accumulated other comprehensive loss - January 1,	$	(1,149)	$	—
Other comprehensive income before reclassifications		1,203		—
Amounts reclassified from Accumulated other comprehensive loss		(140)		—
Other comprehensive income for the period		1,063		—
Accumulated other comprehensive loss - March 31,	$	(86)	$	—

The Merger, as described in Note 3 — Merger Transaction in the unaudited condensed consolidated financial statements included herein, closed on March 27, 2019. Our condensed consolidated financial statements include operating results for the 25 vessels acquired for 187 days and 274 days during the nine months ended September 30, 2019 and 2020, respectively, in addition to the 41 vessels historically owned by us for the full period and the two vessels sold in September 2019.

25The realized loss for the three months ended March 31, 2021 reclassified from Accumulated other comprehensive loss consists of a realized loss of $140 related to interest rate swap contracts. The realized gain reclassified from Accumulated other comprehensive loss are presented in Interest expense in the Condensed Consolidated Statements of Operations.

~~New Credit Facilities and Refinancings~~

~~For~~11. FAIR aVALUE ~~description of~~OF ~~the~~FINANCIAL ~~Company’s credit agreements and refinancings, please see Note 9 — Long-Term Debt in the unaudited condensed consolidated financial statements included herein.~~INSTRUMENTS

~~Vessel~~The ~~Dispositions~~fair values and carrying amounts of the Company’s financial instruments at March 31, 2021 and December 31, 2020 that are required to be disclosed at fair value, but not recorded at fair value, are as follows:

In August 2019, our Board of Directors approved selling the Atlantic Aquarius and Atlantic Leo, both 2009-built MR vessels. We reached an agreement to sell the Atlantic Aquarius and Atlantic Leo, each for $16.0 million less a 1% broker commission payable to a third party. In September 2019, we completed the sale of the Atlantic Aquarius and Atlantic Leo.

Share Repurchase Program


	March 31, 2021				December 31, 2020
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Cash and cash equivalents	$	75,824	$	75,824	$	98,059	$	98,059
Restricted cash		6,267		6,267		6,140		6,140
Variable rate debt		657,619		657,619		714,921		714,921

On March 4, 2020, our Board of Directors approved a share repurchase program, providing authorization to repurchase up to $50 million of our common shares, effective for a period of one year. We may repurchase these shares in the open market or in privately negotiated transactions, at times and prices that we consider to be appropriate. As of September 30, 2020, we repurchased 137,289 shares for a total of $1.4 million under the share repurchase program, with all repurchases having been effected in the three months ended March 31, 2020.

~~Other~~The ~~Trends~~following methods and ~~Factors~~assumptions ~~Affecting~~are used in estimating the ~~Company’s~~fair ~~Future Results~~value of ~~Operations~~disclosures for financial instruments:

~~The~~Cash ~~principal~~and ~~factors~~cash ~~that~~equivalents, ~~have~~and ~~affected our~~Restricted ~~results~~cash: ofThe ~~operations,~~carrying ~~and~~amounts ~~may~~reported in the ~~future~~condensed ~~affect~~consolidated ~~results~~balance ofsheets ~~operations,~~for ~~are~~Cash ~~the~~and ~~economic,~~cash ~~regulatory~~equivalents, ~~financial,~~and ~~credit, political~~Restricted ~~and~~cash ~~governmental~~approximate ~~conditions~~fair ~~prevailing~~value. inCash ~~the~~and ~~tanker~~cash ~~market~~equivalents, and ~~shipping~~Restricted ~~industry~~cash ~~generally~~are ~~and~~considered inLevel ~~the~~1 ~~countries~~items ~~and markets~~as inthey ~~which~~represent ~~our~~liquid ~~vessels~~assets ~~are~~with ~~chartered~~short-term maturities.

Variable Rate Debt: The ~~world~~fair ~~economy~~value ~~has~~of ~~experienced~~variable ~~significant economic~~rate ~~and~~debt ~~political~~is ~~upheavals~~based inon ~~recent~~management’s ~~history.~~estimate Inof ~~addition,~~rates ~~credit~~the ~~supply~~Company ~~has~~could ~~been~~obtain ~~constrained~~for ~~and~~similar ~~financial~~debt ~~markets~~of ~~have been~~the ~~particularly~~same ~~turbulent~~remaining maturities. ~~Protectionist trends~~Additionally, ~~global~~the ~~growth~~Company ~~and~~considers ~~demand~~its ~~for~~creditworthiness in determining the ~~seaborne~~fair ~~transportation~~value of ~~goods,~~variable ~~including oil~~rate ~~and~~debt ~~oil~~under ~~products~~the ~~and~~credit ~~overcapacity~~facilities. ~~and~~The ~~deliveries~~carrying ofamounts ~~newly-built~~in ~~vessels~~the ~~have~~above ~~affected~~table, ~~and~~which ~~may~~exclude ~~further~~the ~~affect~~impact of deferred financing costs, approximate the ~~tanker~~fair market ~~and~~ ~~shipping~~value ~~industry~~for inthe ~~general~~variable ~~and~~rate ~~the~~debt. ~~business,~~Variable ~~financial~~rate ~~condition,~~debt ~~results~~is ofconsidered ~~operations~~to ~~and~~be ~~cash~~a ~~flows~~Level 2 ofitem as the Company considers the estimate of rates it could obtain for similar debt.

~~Some~~The offair ~~the~~value ~~key~~of ~~factors~~an ~~that~~asset ~~have~~or ~~affected our~~liability ~~business,~~is ~~financial~~based ~~condition,~~on ~~results~~assumptions ofthat ~~operations~~market ~~and~~participants ~~cash~~would ~~flows,~~use ~~and may~~ in pricing the ~~future~~asset ~~affect~~or ~~our~~liability. ~~business,~~The ~~financial~~hierarchies ~~condition, results~~ of ~~operations~~inputs ~~and~~used ~~cash~~when ~~flows,~~determining ~~include~~fair ~~the~~value ~~following~~are described below:

·Level 1: Valuations ~~levels~~based ofon ~~oil~~quoted ~~product~~prices ~~demand~~in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and ~~inventories;~~regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

·Level 2: Valuations ~~supply~~based ~~and~~on ~~demand~~quoted prices in active markets for ~~crude~~instruments ~~oil~~that are similar, or quoted prices in markets that are not active for identical or similar instruments, and ~~oil~~model-derived ~~products;~~valuations in which all significant inputs and significant value drivers are observable in active markets.

·Level 3: Valuations ~~charter~~based ~~hire~~on ~~levels~~inputs ~~(under~~that ~~time~~are ~~and~~unobservable ~~bareboat charters)~~ and ~~the~~significant ~~ability~~ to ~~re-charter~~the ~~vessels~~overall atfair ~~competitive~~value ~~rates as their current charters expire;~~measurement.

·The ~~developments~~assessment inof ~~vessel~~the ~~values,~~significance ~~which~~of a particular input to the fair value measurement requires judgment and may affect ~~compliance~~the ~~with~~valuation ~~covenants~~of ~~under~~financial ~~credit~~instruments ~~facilities~~ and~~/or~~ ~~debt~~the ~~refinancing;~~placement of financial instruments within the fair value hierarchy.

~~· compliance with covenants in credit facilities, including covenants relating to the maintenance of vessel value ratios;~~21

·Table ~~the level~~ of ~~debt and the related interest expense and amortization of principal;~~Contents

·The ~~access~~table tobelow ~~debt~~provides ~~and~~the ~~equity~~financial ~~and~~instruments carried at fair value based on the ~~cost~~levels of ~~capital~~hierarchy ~~required~~as toof ~~acquire~~the ~~additional~~valuation ~~vessels;~~date listed:

· ~~supply and order-book of tanker vessels;~~

· the ability to increase the size of the fleet and make additional acquisitions that are accretive to earnings;


	Level 1		Level 2		Level 3		Total
March 31, 2021
Derivative assets	$	—	$	424	$	—	$	424
Derivative liabilities		—		510		—		510
December 31, 2020
Derivative liabilities		—		1,149		—		1,149

· ~~the ability of the commercial and chartering operations to successfully employ vessels at economically attractive rates, particularly as charters expire and the fleet expands;~~

26Derivative Assets and Liabilities: The fair value of the derivative assets and liabilities, which relate to the interest rate swaps used for hedging purposes, is the estimated amount the Company would receive or pay for the asset or liability to terminate the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the swap counterparties. Interest rate swaps are considered to be a Level 2 item as the Company, using the income approach to value the derivatives, uses observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact. Level 2 inputs for the valuations are limited to quoted prices for similar assets in active markets (specifically, futures contracts on LIBOR for the first two years) and inputs other than quoted prices that are observable for the asset (specifically, LIBOR, cash and swap rates and credit risk at commonly quoted intervals). Mid-market pricing is used as a practical expedient for fair value measurements. Refer to Note 9 — Interest Rate Swaps for further information regarding the Company’s interest rate swap agreements.

·The ~~the~~Company ~~continuing~~does ~~demand~~not ~~for~~currently ~~crude~~have ~~oil~~any Level 3 financial assets and ~~oil~~there ~~products~~have ~~from~~been ~~China,~~no ~~India,~~transfers ~~Brazil~~in and/or ~~Russia~~out ~~and~~of ~~other~~Level ~~emerging~~3 ~~markets;~~during the three months ended March 31, 2021 and 2020.

· ~~the ability to comply with new maritime regulations, the more restrictive regulations for the transport of certain products and cargoes and the increased costs associated therewith;~~

·12. REVENUE ~~changes~~FROM inTIME ~~fuel prices, including as a result of the imposition of sulfur oxide emissions limits in 2020 under new regulations adopted by the IMO (for those vessels that are not retrofitted with scrubbers);~~CHARTERS

·The future minimum revenues, before inclusion of profit-sharing revenue, if any, expected to be received on irrevocable time charters for which revenues can be reasonably estimated and the ~~effective~~related revenue days that the vessels are available for employment, and ~~efficient~~not ~~technical~~including ~~management~~charterers’ renewal options for the remaining three months of the ~~vessels;~~year ending December 31, 2021, and annually for the year ending December 31, 2022 are as follows:

~~· the costs associated with upcoming drydocking of vessels;~~

· the ability to obtain and maintain major international oil company approvals and to satisfy technical, health, safety and compliance standards;


2021 (for the remaining nine months of the year)	$	28,303
2022		13,511
Total future committed revenue	$	41,814

· ~~the strength of and growth in the number of the customer relationships, especially with major international oil companies and major commodity traders;~~

· ~~the prevailing spot market rates and the number of vessels operating in the spot market;~~

·13. RELATED ~~changes~~PARTY ~~in laws, treaties or regulations applicable to the Company, including regulations relating to environmental compliance; and~~TRANSACTIONS

·During the ~~ability~~three tomonths ~~acquire~~ended March 31, 2021 and ~~sell~~2020, ~~vessels~~the atCompany ~~satisfactory~~had ~~prices~~the following related party transactions.

~~Operating~~Capital ~~Data~~Ship Management Corp. (“CSM”) — Pursuant to the Transaction Agreement, for a period of five years, CSM will provide commercial and technical management services for the vessels acquired in the Merger.

~~The~~Concurrently ~~following~~with ~~tables~~the ~~represent~~execution and delivery of the ~~operating data~~Merger ~~for~~Agreement, the ~~three~~Company ~~and~~entered ~~nine~~into ~~months~~a ~~ended~~termination ~~September~~agreement with CSM (the “Capital Termination Agreement”), dated as of March 30, ~~2020~~2021, whereby, upon the completion of certain events and obligations, including consummation of the Announced Merger, the following managerial agreements will be terminated: (i) the commercial management agreement, dated as of March 27, 2019, onby aand ~~consolidated~~between ~~basis.~~the Company and CSM; (ii) the management and services agreement, dated as of March 27, 2019, by and between the Company and CSM; and (iii) each technical management agreement,

	For the Three Months Ended September 30,
	2020			2019			Change			% Change
	(In Thousands, Except Per Share and Share Data)
Revenue:
Voyage revenue	$	69,098		$	120,954		$	(51,856	)		(42.9	)%
Time charter revenue		20,408			20,572			(164	)		(0.8	)%
Pool revenue		23,091			—			23,091			—
Total revenue		112,597			141,526			(28,929	)		(20.4	)%
Operating expenses:
Voyage expenses		32,896			59,968			(27,072	)		(45.1	)%
Vessel expenses		44,758			41,799			2,959			7.1	%
Depreciation and amortization expense		29,067			28,763			304			1.1	%
Loss on sale of vessels		—			18,344			(18,344	)		(100.0	)%
General and administrative expenses		7,685			7,566			119			1.6	%
Total operating expenses		114,406			156,440			(42,034	)		(26.9	)%
Operating income		(1,809	)		(14,914	)		13,105			(87.9	)%
Other (expense) income:
Total other expense — Net		(7,016	)		(12,529	)		5,513			(44.0	)%
Net loss		(8,825	)		(27,443	)		18,618			(67.8	)%
Less: Net income (loss) attributable to noncontrolling interest		839			(1,548	)		2,387			(154.2	)%
Net loss attributable to Diamond S Shipping Inc.	$	(9,664	)	$	(25,895	)	$	16,231			(62.7	)%
Net loss per share – basic	$	(0.24	)	$	(0.65	)	$	0.41			(63.1	)%
Net loss per share – diluted	$	(0.24	)	$	(0.65	)	$	0.41			(63.1	)%
Weighted average common shares outstanding – basic		39,918,427			39,890,698			27,729			0.1	%
Weighted average common shares outstanding – diluted		39,918,427			39,890,698			27,729			0.1	%

27Table of Contents

	For the Nine Months Ended September 30,
	2020			2019			Change			% Change
	(In Thousands, Except Per Share and Share Data)
Revenue:
Voyage revenue	$	419,169		$	348,747		$	70,422			20.2	%
Time charter revenue		63,296			44,730			18,566			41.5	%
Pool revenue		23,410			—			23,410			—
Total revenue		505,875			393,477			112,398			28.6	%
Operating expenses:
Voyage expenses		156,926			167,441			(10,515	)		(6.3	)%
Vessel expenses		128,032			108,976			19,056			17.5	%
Depreciation and amortization expense		86,598			79,962			6,636			8.3	%
Loss on sale of vessels		—			18,344			(18,344	)		(100.0	)%
General and administrative expenses		23,294			21,174			2,120			10.0	%
Total operating expenses		394,850			395,897			(1,047	)		(0.3	)%
Operating income		111,025			(2,420	)		113,445			(4,687.8	)%
Other (expense) income:
Total other expense — Net		(27,767	)		(34,420	)		6,653			(19.3	)%
Net income (loss)		83,258			(36,840	)		120,098			(326.0	)%
Less: Net income attributable to noncontrolling interest		2,166			(1,416	)		3,582			(253.0	)%
Net income (loss) attributable to Diamond S Shipping Inc.	$	81,092		$	(35,424	)	$	116,516			(328.9	)%
Net earnings (loss) per share – basic	$	2.03		$	(0.99	)	$	3.02			(305.1	)%
Net earnings (loss) per share – diluted	$	2.02		$	(0.99	)	$	3.01			(304.0	)%
Weighted average common shares outstanding – basic		39,879,976			35,835,477			4,044,499			11.3	%
Weighted average common shares outstanding – diluted		40,106,157			35,835,477			4,270,680			11.9	%

dated as of March 27, 2019, by and between certain of the Company’s vessel-owning subsidiaries and CSM (also referred to as part II shipman 2009 standard ship management agreement).

~~Results~~Pursuant ofto ~~Operations~~the Capital Termination Agreement, at the Effective Time, the Company will (i) pay, or cause to be paid to CSM, an amount equal to $30 million minus a certain specified termination fee adjustment amount and (ii) deliver, or cause to be delivered, an amount equal to $4 million minus a certain specified adjustment amount, to be held in escrow and distributed to CSM on the first day on which certain vessels currently managed by CSM have been transitioned.

~~Three~~The ~~months~~Capital ~~ended~~Termination ~~September~~Agreement 30provides that, ~~2020~~with ~~compared~~respect to each vessel managed by CSM that is on a time charter, the ~~three~~ ~~months~~parties ~~ended~~will ~~September~~jointly 30approach the time charterers to agree to a change in technical management as soon as reasonably practicable following the Effective Time. However, ~~2019~~if an earlier transition cannot be agreed upon, then CSM will provide technical management services to such vessel through the end of the time charter and, if necessary, for a period of time until a transition is reasonably practicable. In addition, CSM has agreed to provide (i) commercial management services until each such vessel is transitioned and (ii) the certain additional services outlined in the Capital Termination Agreement. With respect to vessels not on a time charter, the parties to the Capital Termination Agreement have agreed to use their reasonable best efforts to (A) commence planning and coordination for the transition of commercial and technical management of such vessels that are not on a time charter from CSM and/or its affiliates and (B) facilitate such transition on the earliest practical date after the Effective Time.

~~Total~~For ~~revenue~~more information please see the Capital Termination Agreement filed as an exhibit to the 8-K/A dated April 7, 2021.

~~Total~~As ~~revenue~~of ~~decreased~~March by31, ~~$28.9~~2021, ~~million to~~and ~~$112.6~~following ~~million during~~ the ~~three~~sales ~~months~~of ~~ended September 30, 2020 as compared to $141.5 million for~~ the ~~three~~M/T ~~months~~Aias ~~ended~~and ~~September 30,~~M/T ~~2019.~~Amoureux ~~The $28.9 million decrease was principally due to weaker market conditions~~ in ~~the~~January ~~product~~2021 ~~tanker~~and ~~segment.~~February ~~The~~2021, ~~global consumption~~respectively, ofCSM ~~petroleum~~managed ~~products~~23 ~~has experienced considerable demand destruction as a result of the global pandemic~~vessels. InFor ~~addition,~~ the ~~unwinding~~three ofmonths ~~the~~ended ~~floating~~March ~~storage~~31, ~~cycle~~2021 ~~effectively~~and ~~increased~~2020, the ~~supply~~following oftransactions ~~available ships. These negative trends~~ were ~~partially offset~~recorded byfor athese ~~solid start to the quarter in the crude carrier segment as a result of a carryover of strong rates from the first half of 2020.~~services:

~~Voyage~~● ~~Expenses~~$1,805 and $1,934, respectively, was incurred for technical management services, which is included in Vessel expenses in the condensed consolidated statements of operations and have been paid as of March 31, 2020.

~~Voyage~~● ~~expenses~~$482 ~~primarily~~and ~~consist of bunkers~~$745, ~~port expenses~~respectively, ~~canal~~was ~~dues~~incurred ~~and commissions. Commissions were paid to shipbrokers~~ for ~~negotiating~~commercial ~~and~~management ~~arranging charter~~services, ~~party~~which ~~agreements~~is onincluded ~~the~~in ~~Company’s behalf.~~ Voyage expenses ~~incurred during time charters and while vessels are operating~~ in ~~pools~~the ~~are~~condensed ~~paid~~consolidated ~~for~~statements byof ~~the~~operations. ~~charterer~~As ~~and~~of ~~pool~~March 31, ~~respectively~~2021, ~~except~~$481 ~~for~~remains ~~commissions to the initial brokers~~unpaid, ~~which were~~and ~~paid~~is ~~for~~included byin ~~the~~Accounts ~~Company.~~payable ~~Voyage~~and accrued expenses ~~incurred~~in ~~during~~the ~~voyage~~condensed ~~charters~~consolidated ~~were~~balance ~~paid for by the Company~~sheet.

28● $493 and $497, respectively, was incurred for general management services, which is included in General and administrative expenses in the condensed consolidated statements of operations. As of March 31, 2021, $170 remains unpaid, and is included in Accounts payable and accrued expenses in the condensed consolidated balance sheet.

~~Voyage~~Working ~~expenses~~capital ~~decreased~~is byadvanced ~~$27.1~~to ~~million~~ CSM to ~~$32~~procure both voyage and vessel costs.9 ~~million~~At ~~during~~March 31, 2021, the ~~three~~net ~~months~~funds ~~ended~~advanced ~~September~~totaled 30$4,666 ~~2020~~of aswhich ~~compared~~$5,253 tois ~~$60.0~~included ~~million~~in ~~for~~Prepaid Expense and Other Current Assets in the ~~three~~condensed ~~months~~consolidated ~~ended~~balance ~~September 30~~sheet (refer to Note 6 — Prepaid Expenses and Other Current Assets), ~~2019.~~and ~~The~~the $~~27.1~~587 ~~million~~liability ~~decrease~~is included in ~~voyage~~Accounts payable and accrued expenses ~~was~~in ~~driven~~the bycondensed aconsolidated ~~reduction~~balance insheet ~~bunker~~(refer to Note 7 — Accounts Payable and ~~port~~Accrued ~~costs~~Expenses). ~~incurred~~At asDecember 31, a2020, ~~result~~ the net funds owed totaled $437, of ~~entering~~which 28$1,453 ~~vessels~~is included in ~~the~~Prepaid ~~Pool~~Expense asand ofOther ~~September~~Current 30Assets in the condensed consolidated balance sheet, ~~2020~~and the $1,890 ~~with~~liability 23is ofincluded ~~the~~in ~~vessels~~Accounts ~~having~~payable ~~entered~~and ~~the~~accrued ~~Pool~~expenses ~~during~~in the ~~three~~condensed ~~months ended~~consolidated ~~September~~balance ~~30, 2020~~sheet.

~~Vessel Expenses~~

Vessel expenses include crew wages and associated costs, the cost of insurance premiums, expenses relating to repairs and maintenance, lubricants and spare parts, technical management fees and other miscellaneous expenses14. STOCK-BASED COMPENSATION

~~Vessel~~2019 ~~expenses~~Equity ~~increased~~Incentive byPlan ~~$3.0~~— ~~million to~~Under ~~$44.8 million during~~ the ~~three~~2019 ~~months~~Equity ~~ended~~Incentive ~~September~~Plan 30(“2019 Plan”), ~~2020~~the asCompany’s ~~compared~~Board toof ~~$41.8~~Directors, ~~million for~~ the ~~three~~Compensation ~~months~~Committee, ~~ended~~or ~~September 30,~~their ~~2019.~~designees ~~The~~may ~~$3.0~~grant ~~million~~a ~~increase~~variety inof ~~vessel~~stock-based ~~expenses~~incentive isawards ~~primarily~~representing ~~due~~an toaggregate ~~additional~~of ~~expenses~~3,989,000 ~~incurred~~shares ~~for~~of ~~crew~~common ~~bonuses,~~stock ~~increased costs~~to ofthe ~~crew~~Company’s ~~reliefs~~officers, ~~testing~~directors, ~~quarantine~~employees, and ~~logistics~~consultants. ~~for~~Such ~~delivery~~awards ofinclude ~~services~~stock ~~and~~options, ~~materials~~stock toappreciation ~~the~~rights, ~~vessels~~restricted as(nonvested) astock, ~~result~~restricted ofstock ~~the global~~units, ~~pandemic~~and unrestricted stock.

~~Loss on Sale of Vessels~~23

~~The~~Table ~~$18.3 million loss on sale~~ of ~~vessels during the three months ended September 30, 2019 is due to selling the Atlantic Aquarius and Atlantic Leo in September 2019.~~Contents

~~Vessel~~Restricted ~~Depreciation~~Stock Units — The Company has issued restricted stock units (“RSUs”) under the 2019 Plan to certain members of the Board of Directors, an executive and ~~Amortization~~certain ~~Expense~~employees of the Company, which represent the right to receive a share of common stock, or in the sole discretion of the Company’s Compensation Committee, the value of a share of common stock on the date that the RSU vests. Such shares of common stock will only be issued to certain directors, an executive and employees when their RSUs vest under the terms of their grant agreements and 2019 Plan described above.

WeThe ~~depreciate~~RSUs ~~the~~that ~~cost~~have ofbeen ~~our~~issued ~~vessels~~to ~~on a~~certain ~~straight-line~~members ~~basis~~of ~~over~~ the ~~expected~~Board ~~useful life~~ of ~~each~~Directors ~~vessel.~~vest ~~Depreciation~~one isyear ~~based~~from on the ~~cost~~date of ~~the vessel less its estimated residual value~~grant. The WeRSUs ~~estimate~~that ~~the~~have ~~useful~~been ~~life~~issued ~~of our vessels~~ to beother 25individuals ~~years,~~vest ~~and~~ratably weon ~~estimate~~each ~~the~~of ~~residual value by taking~~ the ~~estimated scrap~~three ~~value~~anniversaries of ~~$300 per lightweight ton times~~ the ~~weight~~determined ofvesting ~~the ship in lightweight tons~~date. The Wetable ~~continue~~below tosummarizes ~~monitor changes in~~ the ~~oil~~ ~~and~~Company’s ~~petroleum~~unvested ~~product~~RSUs ~~supply~~for ~~chain that might have an impact on~~ the ~~useful~~three ~~operating~~months ~~life~~ended ofMarch ~~our~~31, ~~assets.~~2021:

Depreciation and amortization expense increased by $0.3 million to $29.1 million during the nine months ended September 30, 2020 as compared to $28.8 million during the three months ended September 30, 2019. This increase is due to vessel additions primarily related the scrubber and ballast water treatment projects, offset by the sale of the Atlantic Aquarius and Atlantic Leo in September 2019.

General and Administrative Expenses


	Number of	Weighted Average
	RSUs	Grant Date Price
Outstanding at January 1, 2021	63,270	$	12.97
Granted	19,252		9.25
Vested	—		—
Forfeited	—		—
Outstanding at March 31, 2021	82,522	$	12.10

For the three months ended September 30, 2020 and 2019, general and administrative expenses were $7.7 million and $7.6 million, respectively. The general and administrative expenses remained relatively flat as the Company has had similar onshore infrastructure in place during both quarters.

~~Total~~The ~~Other~~following ~~Expense~~table summarizes certain information of the RSUs unvested and vested as of March 31, ~~net~~2021:

Total other expense, net, which includes term loan interest, amortization of deferred financing charges and commitment fees and net of interest income, was $7.0 million for the three months ended September 30, 2020 compared to $12.5 million for the three months ended September 30, 2019. The decrease of $5.5 million was primarily driven by a $160 million decrease in the average debt balance in the two comparative periods, coupled with a decrease in the effective interest rate.

Net Income (Loss) Attributable to Noncontrolling Interest


Unvested RSUs March 31, 2021				Vested RSUs March 31, 2021
			Weighted Average
	Weighted Average		Remaining Contractual	Number of	Weighted Average
Number of RSUs	Grant Date Price		Life	RSUs	Grant Date Price
82,522	$	12.10	2.0	52,562	$	13.59

The net income (loss) attributable to noncontrolling interest was net income of $0.8 million for the three months ended September 30, 2020 compared to a net loss of $1.5 million for the three months ended September 30, 2019. The net income attributable to noncontrolling interest primarily represents a 49% interest in NT Suez Holdco LLC, which owns and operates two Suezmax vessels and is 51% owned by the Company. The increase in the net income of $2.3 million was mainly attributable to fixing these two Suezmax vessels on three-year time charter contracts, which began in the latter half of 2019, coupled with these two vessels having 132 off-hire days during the three months ended September 30, 2019 for the installation of their scrubbers.

29The Company is amortizing these grants over the applicable graded vesting periods. Forfeitures are taken into account when they occur. As of March 31, 2021, unrecognized compensation cost of $422 related to RSUs will be recognized over a weighted-average period of 2.0 years. For the three months ended March 31, 2021 and 2020, the Company recognized $153 and $261, respectively, of nonvested stock amortization expense for the RSUs, which is included in General and administrative expenses.

~~Nine~~Restricted ~~months~~Stock ~~ended~~— ~~September~~Under 30the 2019 Plan, ~~2020~~grants ~~compared~~of restricted common stock were issued to certain members of the ~~nine~~ Board of Directors, executives and employees. The restricted common stock issued to certain members of the Board of Directors vest one year from the date of grant. The restricted common stock issued to certain executives and employees ordinarily vest ratably on each of the three anniversaries of the determined vesting date. The table below summarizes the Company’s nonvested stock awards for the three months ended ~~September~~March 3031, 2021 which were issued under the 2019 Plan:

~~Total revenue~~

Total revenue increased by $112.4 million to $505.9 million during the nine months ended September 30, 2020 as compared to $393.5 million for the nine months ended September 30, 2019. The $112.4 million increase was principally driven by a 13.4% increase in total revenue days due to an additional 2,092 revenue days during the nine months ended September 30, 2020, primarily due to the Merger coupled with stronger prevailing market conditions in both the crude tanker and product carrier segments during that period, when compared with the market conditions during the nine months ended September 30, 2019.


	Number of	Weighted Average
	Shares	Grant Date Price
Outstanding at January 1, 2021	465,314	$	12.96
Granted	156,508		9.25
Vested	—		—
Forfeited	—		—
Outstanding at March 31, 2021	621,822	$	12.05

~~Voyage Expenses~~

~~Voyage~~The ~~expenses~~Company ~~decreased~~is byamortizing ~~$10.5~~these ~~million to~~grants ~~$156.9~~over ~~million~~the ~~during~~applicable ~~the~~graded ~~nine~~vesting ~~months~~periods. ~~ended~~Forfeitures ~~September~~are ~~30,~~taken ~~2020~~into asaccount ~~compared~~when tothey ~~$167~~occur.4 ~~million~~As ~~for~~of ~~the~~March ~~nine~~31, ~~months~~2021, ~~ended~~unrecognized ~~September 30,~~compensation ~~2019.~~cost ~~The~~of $~~10.5~~3,069 ~~million~~related ~~decrease~~to innonvested ~~voyage~~stock ~~expenses~~will ~~was~~be ~~predominantly~~recognized ~~driven~~over by a ~~reduction~~weighted-average inperiod ~~bunker~~of ~~and~~2.2 ~~port~~years. ~~costs~~For ~~incurred as~~the athree ~~result~~months ofended ~~operating~~March 2831, ~~vessels~~2021 inand 2020, the ~~Pool~~Company asrecognized of$775 ~~September~~and 30$1,073, ~~2020~~respectively, ~~with~~in 23nonvested ofstock amortization expense for the ~~vessels~~2019 ~~entered~~Plan ~~into~~restricted ~~the~~stock, ~~Pool~~which ~~during~~is ~~the three~~included ~~months~~in ~~ended~~General ~~September~~and ~~30,~~administrative ~~2020~~expenses.

~~Vessel Expenses~~24

~~Vessel~~Table expenses increased by $19.0 million to $128.0 million during the nine months ended September 30, 2020 as compared to $108.0 million for the nine months ended September 30, 2019. The $19.0 million increase in vessel expenses was driven by a 10.4% increase in vessel operating days, which consists of an increase in 2,175 vessel operating days due to the Merger and a decrease in 513 days as a result of the sale of the Atlantic Aquarius and Atlantic Leo, and additional expenses incurred for crew bonuses, increased costs of crew reliefs, testing, quarantine and logistics for delivery of services and materials to the vessels as a result of the global pandemic.Contents

~~Vessel~~Performance ~~Depreciation~~Awards – The Company granted performance awards that contain service, performance-based and/or ~~Amortization~~market-based ~~Expense~~vesting criteria. Vesting occurs if the recipient remains employed and depends on the degree to which performance goals are achieved during the three-year performance period (as defined in the award agreements). The table below summarizes the Company’s nonvested performance awards for the three months ended March 31, 2021 which were issued under the 2019 Plan:

Depreciation and amortization expense increased by $6.6 million to $86.6 million during the nine months ended September 30, 2020 as compared to $80.0 million during the nine months ended September 30, 2019. The increase in depreciation and amortization expense is due to the added depreciation expense for the 25 vessels acquired in the Merger for 2,175 vessel operating days in the nine months ended September 30, 2020 coupled with vessel additions primarily related to the scrubber and ballast water treatment projects, and offset by the decrease in the depreciation and amortization expense related to the sale of the Atlantic Aquarius and Atlantic Leo in September 2019.

Loss on Sale of Vessels


		Weighted
	Number of	Average Grant
	Shares	Date Price
Outstanding at January 1, 2021	133,305	$	12.60
Granted	141,419		9.19
Vested	—		—
Forfeited	—		—
Outstanding at March 31, 2021	274,724	$	10.84

~~The $18.3 million loss on sale of vessels during the nine months ended September 30, 2019 is due to selling the Atlantic Aquarius and Atlantic Leo in September 2019.~~

For the three months ended March 31, 2021, the Company recognized $158 in nonvested stock amortization expense for the 2019 Plan performance awards, which is included in General and ~~Administrative~~administrative ~~Expenses~~expenses. There were no costs of this nature incurred during the three months ended March 31, 2020. As of March 31, 2021, unrecognized compensation cost of $2,448 related to nonvested stock will be recognized over a weighted-average period of 2.5 years.

~~For the nine months ended September 30, 2020 and 2019, general and administrative expenses were $23.3 million and $21.2 million, respectively.~~ The ~~$2.1~~future ~~million~~compensation ~~increase was primarily due~~ to ~~costs~~be ~~incurred~~recognized infor the ~~first~~aforementioned ~~quarter~~RSUs, ofrestricted ~~2020 when compared to the first quarter of 2019 that were attributable to~~ stock~~-based~~ ~~compensation costs, legal fees in connection with the annual filings~~ and anperformance ~~increase~~awards inas ~~headcount to maintain the infrastructure~~ of aMarch ~~public~~31, ~~company~~2021 ~~and~~is toas ~~manage a larger fleet employed in the spot market.~~follows:

~~Total Other Expense, net~~

Total other expense, net, which includes term loan interest, amortization of deferred financing charges and commitment fees and net of interest income, was $27.8 million for the nine months ended September 30, 2020 compared to $34.4 million for the nine months ended September 30, 2019. The decrease of $6.6 million was primarily driven by a $28 million decrease in the average debt balance in the two comparative periods, coupled with a decrease in the effective interest rate.


2021 (for the remaining nine months of the year)	$	2,735
2022		2,160
2023		915
2024		129
Total	$	5,939

~~Net Income Attributable to Noncontrolling Interest~~

The net income attributable to noncontrolling interest was net income of $2.2 million for the nine months ended September 30, 2020 compared to a net loss of $1.4 million for the nine months ended September 30, 2019. The net income attributable to noncontrolling interest primarily represents a 49% interest in NT Suez Holdco LLC, which owns and operates two Suezmax vessels and is 51% owned by the Company. The increase in the net income of $3.6 million was mainly attributable to fixing these two Suezmax vessels on three-year time charter contracts, which began in the latter half of 2019, coupled with these two vessels having 132 off-hire days during the three months ended September 30, 2019 for the installation of their scrubbers.

~~Liquidity~~15. COMMITMENTS ~~and~~AND ~~Capital Resources~~CONTINGENCIES

AsCommitments of— ~~September~~In ~~30,~~March ~~2020 and December 31~~2021, ~~2019,~~ ~~total~~the ~~cash,~~Company ~~cash~~entered ~~equivalents~~into ~~and~~contracts ~~restricted~~to ~~cash~~install ~~were~~ballast ~~$120.3 million~~water ~~and~~treatment ~~$89.2 million,~~systems ~~including~~on ~~restricted~~three ~~cash of $6.0 million~~vessels ~~and~~with ~~$5.6 million,~~installation ~~respectively.~~scheduled Asto ofoccur ~~September~~in ~~30,~~2022. ~~2020~~These ~~and~~contracts ~~December 31,~~have ~~2019,~~a ~~the~~total ~~Company had~~estimated ~~$60.0~~cost ~~million~~of ~~and~~ $~~15.0~~2,810, ~~million~~with ~~available~~payments ~~and~~due ~~undrawn~~as ~~under~~follows ~~its credit facilities, respectively.~~as:

~~Generally, the primary sources of funds have been cash from operations and undrawn amounts under credit facilities.~~

On December 27, 2019, we refinanced (i) the $460 Million Facility, (ii) the $235 Million Facility, and (iii) the $75 Million Facility with the proceeds of the $525 Million Facility.


2021 (for the remaining nine months of the year)	$	1,160
2022		1,650
Total	$	2,810

~~At September 30, 2020, the Company was in compliance with all financial covenants under each of its credit facilities.~~

~~Passage~~Contingencies of— ~~environmental~~From ~~legislation~~time orto ~~other regulatory~~time, ~~initiatives~~the ~~have~~Company inmay ~~the~~be ~~past~~subject ~~had,~~to legal proceedings and ~~may~~claims in the ~~future~~ordinary ~~may~~course ~~have~~of its business. Such claims, aeven if lacking merit, could result in the expenditure of significant ~~impact~~financial onand ~~our~~managerial ~~operations~~resources. ~~Regulatory measures~~The ~~can~~Company ~~increase~~is ~~required~~not ~~costs~~aware ~~related~~of toany ~~operating~~legal ~~and~~proceedings ~~maintaining~~or ~~our~~claims ~~vessels~~that ~~and~~it ~~may~~believes ~~require~~will ushave, toindividually ~~retrofit~~or ~~our~~in ~~vessels with~~the ~~new~~aggregate, ~~equipment~~a tomaterial ~~comply~~effect ~~with~~on ~~new~~the Company, its financial condition, results of operations or ~~existing~~cash ~~regulations~~flows.

Among other capital expenditures, in connection with the International Maritime Organization’s new limits for sulfur oxide emissions effective January 1, 2020, we contracted for the purchase and installation of scrubbers on five of our Suezmax vessels. As of September 30, 2020, four of these scrubbers have been installed, with one remaining to be installed. The total aggregate capital expenditures for these five scrubbers is approximately $16.8 million, of which $14.9 million has been paid as of September 30, 2020. We may, in the future, determine to purchase additional scrubbers for installation on other vessels that we own or operate. In addition, with respect to vessels that are not retrofitted with scrubbers, we expect to incur expenditures to ensure those vessels are capable of efficiently using low-sulfur fuel, which expenditures are not expected to be significant or which have not yet been determined.

~~We entered into contracts to install ballast water treatment systems on 22 of our vessels for a total estimated cost of $23~~16.5 SEGMENT ~~million, of which 12 systems have been installed and $14.0 million has been paid as of September 30, 2020. Seven of these contracts were signed during the third quarter of 2020.~~REPORTING

WeThe ~~believe~~Company ~~that~~is ~~we have~~engaged ~~sufficient~~primarily ~~capital~~in ~~resources~~the toocean ~~fund~~transportation ~~our~~of ~~operations~~crude oil and ~~anticipated~~petroleum ~~capital~~products ~~requirements~~in ~~for~~the international market through the ~~next~~ownership ~~twelve~~and ~~months~~operation of a diversified fleet of vessels. ~~However, should~~The international shipping industry has many distinct market ~~conditions~~segments ~~deteriorate~~based, ~~beyond~~in ~~third-party~~large ~~forecasts~~part, weon ~~would~~the ~~consider~~size aand ~~number~~design configuration of ~~liquidity~~vessels ~~enhancing~~required. ~~measures, which~~Rates ~~could~~in ~~include~~each ~~refinancing~~market segment are determined by a ~~portion~~variety of ~~our~~factors ~~senior~~affecting ~~debt~~the supply and demand for vessels to move cargoes in the trades for which they are suited. Tankers are not bound to specific ports or schedules and therefore can respond to market opportunities by moving between trades and geographical areas. The Company’s vessels regularly navigate in international waters, ~~exploring~~over ~~unsecured~~hundreds ~~debt~~of ~~instruments~~trade routes, ~~asset~~to ~~sales~~hundreds of ports and, ~~sale-leaseback transactions~~as ona ~~certain~~result, the disclosure of ~~our~~geographic ~~assets~~information is impracticable. The Company charters its vessels primarily on voyage charters and on time charters.

3125

~~Cash~~Table ~~Flows~~of Contents

The ~~following~~Company ~~table~~has ~~summarizes~~two ~~the~~reportable ~~Company’s cash~~segments, Crude Tankers and ~~cash~~Product ~~equivalents~~Carriers. ~~provided~~Segment byresults orare ~~used~~evaluated inbased ~~operating,~~on ~~financing~~income ~~and~~from ~~investing~~operations. ~~activities~~The ~~for~~accounting policies applied to the ~~periods~~reportable ~~presented~~segments ~~below (presented~~are the same as those used in ~~millions):~~the preparation of the Company’s consolidated financial statements.

	For the Nine Months Ended September 30,
	2020			2019
Net Cash Provided by Operating Activities	$	193.9		$	41.9
Net Cash Used in Investing Activities		(12.0	)		(291.1	)
Net Cash (Used in) Provided by Financing Activities		(150.8	)		242.1

Results for the Company’s revenue and loss from operations by segment for the three months ended March 31, 2021 and 2020 are as follows:

~~Net Cash Provided by Operating Activities~~

Net cash provided by operating activities during the nine months ended September 30, 2020 and 2019 was $193.9 million and $41.9 million, respectively. The increase of $152.0 million was mainly attributable to more revenue days and higher charter rates that increased our revenues and overall net income by $120.1 million for the nine months ended September 30, 2020, when compared to the nine months ended September 30, 2019, and an increase of $40.0 million in cash provided by the changes in assets and liabilities for the comparative periods.


	Crude		Product
	Tankers		Carriers		Total
Three Months Ended March 31, 2021
Total revenue	$	29,938	$	57,782	$	87,720
Voyage expenses		(14,259)		(18,791)		(33,050)
Vessel expenses		(9,793)		(32,169)		(41,962)
Depreciation and amortization		(8,974)		(19,077)		(28,051)
General, administrative and management fees⁽¹⁾		(1,331)		(5,187)		(6,518)
Other corporate expenses		(997)		(3,783)		(4,780)
Loss from operations	$	(5,416)	$	(21,225)	$	(26,641)
Three Months Ended March 31, 2020
Total revenue	$	90,628	$	119,097	$	209,725
Voyage expenses		(28,349)		(46,332)		(74,681)
Vessel expenses		(11,221)		(30,315)		(41,536)
Depreciation and amortization		(9,946)		(18,814)		(28,760)
General, administrative and management fees⁽¹⁾		(1,977)		(6,147)		(8,124)
Income from operations	$	39,135	$	17,489	$	56,624

~~Net~~(1) ~~Cash~~Includes ~~Used~~direct ingeneral ~~Investing~~and ~~Activities~~administrative expenses and indirect general and administrative expenses (allocated to each segment based on a formula).

Net cash used in investing activities refers primarily to cash used for vessel acquisitions and improvements, and the Merger. Net cash used by investing activities during the nine months ended September 30, 2020 and 2019 was $12.0 million and $291.1 million, respectively. The $12.0 million net cash used by investing activities during the nine months ended September 30, 2020 was for additions to vessels and other property, while the $291.1 million net cash used by investing activities during the nine months ended September 30, 2019 included the consideration paid in connection with the Merger, with $292.7 million paid to CPLP to acquire the vessels, $18.9 million paid in transaction costs, and $11.2 million paid for additions to vessels and other property, offset by cash proceeds of $31.8 million provided by the sale of the Atlantic Aquarius and Atlantic Leo in September 2019.

~~Net~~The ~~Cash~~reconciliations ~~(Used~~of total assets of the segments to amounts included in) ~~Provided~~the bycondensed ~~Financing~~consolidated ~~Activities~~balance sheets are as follows:

Net cash (used in) provided by financing activities during the nine months ended September 30, 2020 and 2019 was ($150.8) million and $242.1 million, respectively. The change in cash (used in) provided by financing activities was due to the financing activities that we engaged in during the two comparable periods. During the nine months ended September 30, 2020, the main outflows of cash for financing activities consisted of debt payments of $145.8 million, a $2.2 million distribution to the noncontrolling interest in the NT Suez Holdco LLC entity, and paying $1.4 million to repurchase shares under the share repurchase program. During the nine months ended September 30, 2019 we had borrowings under the $360 Million Facility, consisting of $300 million of the term loan and $55 million of the revolver drawn, which were offset by $26.4 million repaid on lines of credit that were cancelled in connection with the Merger, $86.6 million in term loan repayments and $7.1 million in deferred financing costs paid in connection with the $360 Million Facility.

Off-Balance Sheet Arrangements


	March 31, 2021		December 31, 2020
Crude Tankers	$	749,956	$	812,261
Product Carriers		1,121,509		1,144,562
Corporate unrestricted cash and cash equivalents		3,642		3,357
Other unallocated amounts		1,785		1,663
Consolidated total assets	$	1,876,892	$	1,961,843

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

~~Contractual Obligations and Contingencies~~

~~The following table summarizes the Company’s long-term contractual obligations as of September 30, 2020 (in thousands of U.S. dollars).~~

	Payment due by period
	Total		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
Long-term Debt Obligations	$	748,518	$	33,597	$	307,421	$	407,500	$	—
Interest Obligations(1)		53,059		5,290		32,136		15,633		—
Capital Obligations (scrubbers and ballast water treatment systems)		13,559		1,740		11,819		—		—
Lease Obligations		6,387		137		1,909		2,401		1,940
Total:	$	821,523	$	40,764	$	353,285	$	425,534	$	1,940

3217. SUBSEQUENT EVENTS

~~(1)~~The ~~Interest~~Company has ~~been~~evaluated ~~estimated based~~all onsubsequent ~~the~~events ~~LIBOR~~to ~~forward~~ensure ~~rates~~that ~~and~~these ~~the~~condensed ~~prescribed~~consolidated ~~margin~~financial ~~for~~statements ~~each~~include appropriate recognition and disclosure of ~~our~~recognized ~~facilities.~~events ~~Refer~~as toof ~~Note~~March 931, —2021.Other ~~Long-Term~~than ~~Debt of~~as ~~our~~disclosed ~~unaudited~~elsewhere in these condensed consolidated financial statements, ~~contained~~there ~~herein~~were no subsequent events that the Company believes require recognition or disclosure.

~~Critical Accounting Policies~~

Critical accounting policies are those that reflect significant judgments or uncertainties, and which could potentially result in materially different results under different assumptions and conditions. The Company has described below what its management believes are its most critical accounting policies. For a description of all of the Company’s significant accounting policies, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — B. Liquidity and Capital Resources — Critical Accounting Policies and Note 2 — Summary of Significant Accounting Policies, each contained in our 2019 Annual Report, and in Note 2 — Summary of Significant Accounting Policies in our unaudited condensed consolidated financial statements included herein, for further information.26

~~Revenue~~Table ~~Recognition~~of Contents

~~During~~ITEM ~~the~~2. ~~three~~MANAGEMENT'S ~~and~~DISCUSSION ~~nine~~AND ~~months~~ANALYSIS ~~ended~~OF ~~September 30,~~FINANCIAL ~~2020~~CONDITION ~~and~~AND ~~2019,~~RESULTS ~~revenues~~OF ~~were generated from fixed rate time charters, spot market voyage charters, spot market-related time charters and pools.~~OPERATIONS

WeThe ~~recognize~~following ~~revenues~~discussion ~~over~~and ~~the~~analysis ~~term~~is designed to provide a better understanding of various factors related to the ~~time~~ ~~charter~~results ~~when~~of ~~there~~operations isand afinancial ~~time~~condition ~~charter~~of ~~agreement~~Diamond S Shipping Inc. (“we,” ~~where~~“us,” “our,” “DSSI” or the ~~rate~~“Company”). isThis ~~fixed~~discussion orshould ~~determinable,~~be ~~service~~read isin ~~provided~~conjunction ~~and~~with ~~collection of~~our audited consolidated financial statements and the ~~related~~notes ~~revenue~~thereto isincluded ~~reasonably~~in ~~assured.~~our WeAnnual doReport ~~not~~on ~~recognize~~Form ~~revenue~~10-K ~~during~~(the ~~days~~“2020 Annual Report”) for the ~~vessel~~year isended ~~off-hire.~~December ~~Where~~31, 2020, filed with the ~~time~~SEC ~~charter contains~~on aMarch ~~profit~~16, or2021 ~~loss~~and ~~sharing~~as ~~arrangement~~thereafter amended on April 30, ~~the~~2021, ~~profit~~and orour ~~loss~~unaudited iscondensed ~~recognized~~consolidated financial statements and notes thereto contained in this report. This discussion contains a number of forward-looking statements, all of which are based on ~~amounts~~our ~~earned~~current orexpectations ~~incurred~~and asall of which could be affected by uncertainties and risks. Our actual results may differ materially from the ~~reporting date~~results contemplated in these forward-looking statements as a result of many factors including, but not limited to, those described under “Cautionary Note on Forward-Looking Statements”.

~~For~~Business the three and nine months ended September 30, 2020 and 2019, pursuant to the new revenue recognition guidance, which was adopted as of January 1, 2019, revenue for spot market voyage charters is recognized ratably over the total transit time of each voyage, which commences at the time the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port. Previously, revenue was recognized on the later of when the vessel departed from its last discharge port or when an agreement was entered into with the charterer, and ended at the time the discharge of cargo was completed at the discharge port. In time charters, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These voyage expenses are borne by us when the vessels are engaged in spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters.Overview

~~Vessel~~Diamond ~~Lives~~S Shipping Inc. was formed on November 14, 2018 under the laws of the Republic of the Marshall Islands for the purpose of receiving, via contribution from CPLP, CPLP’s crude and ~~Impairment~~product tanker business and combining that business with the business and operations of DSS LP pursuant to the Transaction Agreement. For a description of the Transaction Agreement and related Merger, please see Note 1 — Business and Basis of Presentation in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

~~The~~We ~~carrying~~provide ~~value~~seaborne oftransportation ~~each~~ of ~~the~~crude ~~Company’s vessels~~oil, ~~represents~~refined ~~its~~petroleum, ~~original~~and ~~cost~~other ~~(contract~~products ~~price~~in ~~plus initial expenditures) at~~ the ~~time~~international ofshipping ~~delivery or purchase less accumulated depreciation or impairment charges~~industry. ~~The~~As ~~carrying values~~ of ~~vessels~~December ~~may~~31, ~~not~~2021, ~~represent~~through ~~their~~our ~~fair~~wholly ~~market~~owned ~~value~~subsidiaries, atwe ~~any~~owned ~~point~~and inoperated ~~time since~~62 ~~the~~tanker ~~market prices of secondhand~~ vessels: ~~tend~~11 toSuezmax ~~fluctuate~~crude ~~with~~carriers, ~~changes~~one inAframax ~~charter~~crude ~~rates~~carrier and ~~the~~50 ~~cost~~MR ofproduct ~~newbuildings~~carriers. ~~In recent years~~As ~~changing~~of ~~market~~the ~~conditions~~same ~~resulted~~date, inwe aalso ~~decrease~~controlled ~~in charter rates~~ and ~~values~~operated oftwo ~~assets.~~Suezmax Wevessels ~~consider~~through ~~these~~a ~~market developments~~joint ~~as indicators of potential impairment of the carrying amount of its assets~~venture.

InFactors ~~developing estimates of future undiscounted cash flows, we make assumptions and estimates about the vessels’ future performance, with the significant assumptions being related~~ to ~~charter~~Consider ~~rates,~~When ~~fleet~~Evaluating ~~utilization, vessels’ operating expenses, vessels’ capital expenditures and drydocking requirements, vessels’ residual value and~~ the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends. Specifically, we utilize the rates currently in effect for the duration of their current time charters, without assuming additional profit-sharing. For periods of time where the vessels are not fixed on time charters, we utilize an estimated daily time charter equivalent for its vesselsCompany’s ~~unfixed days based on the most recent ten year historical one-year time charter average.~~Results

33Announced Merger

~~Although~~On weMarch ~~believe~~31, ~~that~~2021, ~~the~~DSSI ~~assumptions used to evaluate potential impairment are reasonable~~ and ~~appropriate~~International ~~at the time they were made~~Seaways, ~~such~~Inc. ~~assumptions~~(“INSW”) ~~are~~issued ~~highly~~a ~~subjective and~~joint ~~likely~~press torelease ~~change,~~announcing ~~possibly materially, in~~ the ~~future.~~execution ~~In recent years, the market values~~ of ~~vessels~~an ~~have~~Agreement ~~experienced~~and ~~particular volatility,~~Plan ~~with substantial declines in many~~ of ~~the charter-free market value~~Merger, ordated ~~basic~~March ~~market value~~30, of2021 ~~various~~(the ~~vessel~~“Merger ~~classes. As a result~~Agreement”), ~~the~~pursuant ~~market~~to ~~value~~which ofINSW ~~our vessels may have declined below their carrying values~~will, ~~even~~upon ~~though~~the weterms ~~did~~and ~~not~~subject ~~impair their carrying values under our impairment accounting policy. This is due~~ to ~~management’s~~the ~~projection~~conditions ~~that~~set ~~future~~for ~~undiscounted~~in ~~cash flows~~the ~~expected~~Merger toAgreement, bemerge ~~earned~~with byDSSI ~~such~~in ~~vessels~~a ~~over~~stock-for-stock ~~their~~transaction ~~operating~~(the ~~lives~~“Announced ~~will exceed such vessels’ carrying amounts~~Merger”).

~~Deferred~~Subject ~~Drydocking~~to ~~Costs~~the terms and ~~Amortization~~conditions set forth in the Merger Agreement, at the effective time of the Announced Merger (the “Effective Time”), each common share of DSSI (the “Diamond S Common Shares”) issued and outstanding immediately prior to the Effective Time will be converted into the right to receive 0.55375 of a share of common stock of INSW (“INSW Common Stock”). The aforementioned 0.55375 exchange ratio set forth in the Merger Agreement will result in INSW shareholders owning approximately 55.75% of the outstanding shares of INSW Common Stock following the Effective Time and DSSI shareholders owning approximately 44.25% of the outstanding shares of INSW Common Stock following the Effective Time.

We use the deferral method of accounting for drydocking costs. Under the deferral method, drydocking costs are deferred and amortized on a straight-line basis over the useful life of the drydock, which is estimated to be approximately 30 to 60 months. Management uses judgment when estimating the period between drydocks performed, which can result in adjustments to the estimated amortization of drydock expense if drydocks occur earlier or later than originally estimated. We update our estimate of a vessel’s next scheduled drydock as necessary. If the vessel is disposed of before the next drydock, the remaining balance in deferred drydock is written-off as a component of the gain or loss upon disposal of vessels. We defer the costs associated with drydocking as they occur and amortize these costs on a straight-line basis over the period between drydocking. Deferred drydocking costs include actual costs incurred at the drydock yard, cost of travel, lodging and subsistence of our personnel sent to the drydocking site to supervise, and the cost of hiring a third party to oversee the drydocking. Expenditures for normal maintenance and repairs, whether incurred as part of the drydock or not, are expensed as incurred. If the vessel is drydocked earlier than originally anticipated, any remaining deferred drydock costs that have not been amortized are expensed at the beginning of the next drydock.27

~~Recent~~Table ~~Accounting~~of ~~Pronouncements~~Contents

~~New~~The ~~Accounting~~Announced ~~Standards~~Merger is expected to close in the third quarter of 2021, subject to the satisfaction or waiver of certain conditions, including (i) the authorization of the Merger Agreement by the affirmative vote of the holders of a majority of all outstanding shares of Diamond S Common Shares entitled to vote thereon; (ii) the authorization of the INSW shares to be ~~Implemented~~issued as merger consideration in the Announced Merger by the affirmative vote of the holders of a majority of the shares of INSW Common Stock present and entitled to vote thereon; (iii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act; (iv) the absence of any law or order preventing the consummation of the Announced Merger; (v) the effectiveness of a registration statement on Form S-4 in connection with the issuance of INSW Common Stock as merger consideration, which will include a prospectus and a joint proxy statement relating to the INSW special shareholder meeting to approve the issuance of INSW Common Stock as merger consideration and the DSSI special shareholder meeting to approve the Announced Merger and absence of any stop order or proceedings by the SEC; (vi) the approval of the shares of INSW Common Stock to be issued as merger consideration in the Announced Merger for listing on the NYSE; and (vii) execution, delivery and effectiveness of amended and restated loan agreements for two of DSSI’s existing credit facilities entered into in 2019 (the “A&R Debt Agreements”) to amend the terms of such credit facilities to more closely mirror the terms of INSW’s credit facilities and the continued effectiveness of each A&R Debt Agreement and the consents of DSSI’s lenders under its existing credit facilities to the Announced Merger and waiver of any event of default that would arise as a result of the Announced Merger. The obligation of each of DSSI and INSW to consummate the Announced Merger is also conditioned on, among other things, the truth and correctness of the representations and warranties made by the other party as of the closing date (subject to certain “materiality” and “material adverse effect” qualifiers) and material compliance by the other party with pre-closing covenants.

InThe ~~February~~foregoing ~~2016,~~description ~~the~~of ~~FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which establishes a comprehensive new lease accounting model. ASU 2016-02 clarifies~~ the ~~definition~~Merger ofAgreement ais ~~lease,~~qualified ~~requires~~in aits ~~dual~~entirety ~~approach~~by ~~to lease classification similar to current lease classifications, and causes lessees to recognize leases on~~ the ~~balance~~full ~~sheet~~text ~~as a lease liability with a corresponding right-~~of~~-use~~ ~~asset for leases with a lease term of more than twelve months. For~~ the ~~Company~~Merger Agreement, ~~ASU~~which ~~2016-02~~ is ~~effective~~attached ~~for~~hereto ~~annual~~as ~~periods~~Exhibit ~~beginning~~2.3 ~~after December 15, 2020, and interim reporting periods within annual reporting periods beginning after December 15, 2021, with early adoption permitted~~hereto. ~~The~~For ~~most~~more ~~significant~~information ~~effects of adoption relate to the recognition of right-of-use assets and lease liabilities~~ on the ~~balance~~ ~~sheet~~Announced ~~for~~Merger, ~~operating~~please ~~leases~~see ~~and providing new disclosures about~~ our ~~leasing~~Form ~~activities.~~8-K/A Wefiled ~~are~~with ~~currently analyzing our contracts and will then calculate~~ the ~~right-of-use~~SEC ~~assets and lease liabilities as of January 1, 2021 based~~ on ~~the~~April ~~present value of our remaining minimum lease payments~~7, ~~primarily due to the recognition of right-of-use assets and lease liabilities with respect to operating leases~~2021.

InThe ~~June 2016, the FASB issued ASU No. 2016~~COVID-~~13,~~ 19 “Financial Instruments—Credit Losses (Topic 326)” (“ASU 2016-13”), which amends several aspects of the measurement of credit losses on financial instruments based on an estimate of current expected credit losses. ASU 2016-13 will apply to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. ASU 2016-13 will also apply to debt securities and other financial assets measured at fair value through other comprehensive income. For the Company, ASU 2016-13 is effective for annual periods beginning after December 15, 2020, and interim reporting periods within annual reporting periods beginning after December 15, 2021, with early adoption permitted. We are currently evaluating the potential impact of this pronouncement on the condensed consolidated financial statements.Pandemic

~~Quantitative~~On March 11, 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) outbreak a pandemic. In response to the ongoing outbreak, many countries, ports and ~~Qualitative~~organizations, ~~Disclosures~~including ~~About~~those ~~Market~~where ~~Risk~~the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have, and will likely continue to, negatively affect the global economy. In addition, the COVID-19 pandemic has resulted in increased vessel expenses, primarily due to crewing related matters and logistical challenges for delivery of services and materials to vessels. The extent to which COVID-19 will materially impact the Company’s results of operations and financial condition, including possible impairments, will depend on future developments, which are highly uncertain and cannot be predicted, including, among others, new information which may emerge concerning the severity of the virus and the actions to contain or treat its impact, or any resurgence or mutation of the virus, the availability of vaccines and their global deployment, the development of effective treatments, the imposition of effective public safety and other protective measures and the public’s response to such measures. There continues to be a high level of uncertainty relating to how the pandemic will evolve, how governments and consumers will react and progress the approval and distribution of vaccines. Accordingly, an estimate of the impact of COVID-19 on the Company and its operations cannot be made at this time. However, if the pandemic worsens, additional restrictions are imposed or current restrictions are imposed for a longer period of time in response to the outbreak, it may have a material adverse effect on the Company’s future results of operation and financial condition.

~~Interest~~Strategic ~~Rate~~Product ~~Risk~~Tanker Partnership

~~The~~On June 15, 2020, the Company isentered ~~exposed~~into toan agreement with Dampskibsselskabet Norden A/S (“Norden”). During the ~~impact~~term of ~~interest rate~~this ~~changes~~agreement, ~~primarily~~the ~~through~~Company ~~floating-rate~~and ~~borrowings~~Norden ~~that~~have ~~require~~agreed it to ~~make~~use ~~interest~~commercially ~~payments~~reasonable ~~based~~efforts onto ~~the~~identify ~~Eurodollar~~new ~~Rate. Significant~~projects ~~increases~~ in ~~interest~~the ~~rates~~product ~~could~~tanker ~~adversely~~industry ~~affect~~that ~~operating~~they ~~margins,~~may ~~results~~jointly ofpursue ~~operations~~ and ~~our~~develop. ~~ability~~Pursuant to ~~service debt.~~this ~~The~~agreement, the Company ~~uses,~~agreed ~~interest~~to ~~rate~~initially ~~swaps~~contribute to28 ~~reduce~~of its ~~exposure~~MR vessels to ~~market~~the ~~risk~~Norient ~~from~~Product ~~changes~~Pool in(the ~~interest rates~~“Pool”). ~~The~~This ~~principal objective~~agreement will terminate upon the occurrence of ~~these~~certain ~~contracts~~events, isincluding towhen ~~minimize~~the Company no longer has vessels operating in the ~~risks~~Pool. ~~and~~As ~~costs~~of ~~associated~~March 31, ~~with~~2021, ~~floating-rate~~28 ~~debt~~of the Company’s vessels are operating in the Pool.

34Credit Facilities

~~The~~For ~~Company~~a isdescription ~~exposed to the risk~~ of ~~credit loss in~~ the ~~event of non-performance by the counterparties to the interest rate swap agreements. In order to minimize counterparty risk, the~~ Company ~~only entered into derivative transactions with counterparties that are rated A- or better by Standard & Poor~~’s ~~Financial~~credit ~~Services LLC or A3 or better by Moody’s Investors Service~~agreements, ~~Inc.~~please atsee ~~the~~Note ~~time~~8 of— ~~the~~Long-Term ~~transactions. In~~Debt ~~addition,~~in to the ~~extent~~unaudited ~~possible~~condensed ~~and~~consolidated ~~practical,~~financial ~~interest~~statements ~~rate~~included ~~swaps are entered into with different counterparties to reduce concentration risk~~herein.

From time to time, the Company enters into interest rate swap agreements to modify its exposure to interest rate movements and to manage its interest expense. As of September 30, 2020, 26.3% of the debt was fixed due to the interest rate swap agreements, and 73.7% was variable. Based on the Company’s September 30, 2020 outstanding variable rate debt balance, a one percentage point increase in annual Eurodollar Rates would increase its annual interest expense by approximately $5.2 million.28

~~Inflation~~Table of Contents

~~Inflation~~Vessel has only a moderate effect on the Company’s expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase the Company’s operating, voyage, general and administrative and financing costs.Dispositions

~~Foreign~~In ~~Exchange~~December ~~Risk~~2020, our Board of Directors approved selling the Aias and Amoureux, both 2008-built Suezmax vessels. We reached an agreement to sell the Aias and Amoureux for $22.6 million and $22.5 million, respectively, less a 1% broker commission payable to a third party. In January and February 2021, we completed the sale of the Aias and Amoureux, respectively.

~~The~~Share ~~shipping~~Repurchase industry’s functional currency is the U.S. dollar. All of the Company’s revenues and most of its operating costs are in U.S. dollars. The Company incurred certain operating expenses, such as vessel and general and administrative expenses, in currencies other than the U.S. dollar, and the foreign exchange risk associated with these operating expenses has historically been immaterial. If foreign exchange risk becomes material in the future, the Company may seek to reduce its exposure to fluctuations in foreign exchange rates through the use of short-term currency forward contracts and through the purchase of bulk quantities of currencies at rates that management considers favorable. For contracts which qualify as cash flow hedges for accounting purposes, hedge effectiveness would be assessed based on changes in foreign exchange spot rates with the change in fair value of the effective portions being recorded in accumulated other comprehensive loss.Program

~~ITEM~~On 3March 4, 2020, our Board of Directors approved a share repurchase program, providing authorization to repurchase up to $50 million of our common shares, effective for a period of one year, which has now expired. ~~QUANTITATIVE AND~~Shares ~~QUALITATIVE~~we ~~DISCLOSURES~~repurchased ~~ABOUT~~under ~~MARKET~~this ~~RISK~~program could have been purchased in the open market or in privately negotiated transactions, at times and prices that we considered to be appropriate. Under the share repurchase program, we repurchased 137,289 shares for a total of $1.4 million.

~~The~~Other ~~information~~Trends ~~called~~and ~~for~~Factors byAffecting ~~Item 3 is set forth in Item 2 under~~ the ~~caption~~Company’s ~~“Quantitative~~Future ~~and~~Results ~~Qualitative~~of ~~Disclosures About Market Risk” and is incorporated herein by reference.~~Operations

~~ITEM~~The 4.principal ~~CONTROLS AND~~factors ~~PROCEDURES~~that have affected our results of operations, and may in the future affect results of operations, are the economic, regulatory, financial, credit, political and governmental conditions prevailing in the tanker market and shipping industry generally and in the countries and markets in which our vessels are chartered.

~~Evaluation~~The world economy has experienced significant economic and political upheavals in recent history. In addition, credit supply has been constrained and financial markets have been particularly turbulent. Protectionist trends, global growth and demand for the seaborne transportation of ~~Disclosure~~goods, ~~Controls~~including oil and ~~Procedures~~oil products and overcapacity and deliveries of newly-built vessels have affected, and may further affect, the tanker market and shipping industry in general and the business, financial condition, results of operations and cash flows of the Company.

~~Management~~Some ~~conducted~~of ~~an evaluation under~~ the ~~supervision~~key ~~and~~factors ~~with~~that ~~the~~have ~~participation~~affected of our ~~Chief~~business, ~~Executive~~financial ~~Officer and Chief Financial Officer~~condition, ofresults ~~the effectiveness~~ of ~~our~~ ~~disclosure~~operations ~~controls~~ and ~~procedures,~~cash ~~as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act~~flows, ~~as of September 30, 2020. Disclosure controls~~ and ~~procedures~~may ~~are those controls and other procedures that are designed to ensure that information required to be disclosed~~ in ~~reports filed or submitted under~~ the ~~Exchange~~future ~~Act~~affect is recorded, processed, summarized, and reported, within the time periods specified by the rules and forms promulgated by the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to management, including our ~~Chief Executive Officer and Chief Financial Officer~~business, asfinancial ~~appropriate~~condition, toresults ~~allow timely decisions regarding required disclosure. As a result~~ of ~~this~~operations ~~evaluation, our Chief Executive Officer~~ and ~~Chief~~cash ~~Financial~~flows, ~~Officer~~include ~~concluded~~the ~~that our disclosure controls and procedures were effective as of September 30, 2020.~~following:

~~Changes~~● inuncertainties ~~Internal~~as ~~Control~~to ~~Over~~the ~~Financial~~timing ~~Reporting~~of the Announced Merger;

~~There~~● ~~were~~the noability ~~changes~~of DSSI and INSW to ~~our~~receive ~~internal~~the ~~control over~~required ~~financial~~regulatory ~~reporting~~and ~~(as~~shareholder ~~defined~~approvals infor ~~Rules~~the ~~13a-15(f)~~Announced ~~and~~Merger ~~15d-15~~(f)and ~~under~~ the ~~Exchange~~risks ~~Act)~~ that ~~occurred~~such ~~during~~approvals ~~the~~may ~~nine~~result ~~months ended~~in ~~September~~the ~~30,~~imposition ~~2020,~~of conditions that ~~materially~~could ~~affected,~~adversely oraffect ~~are~~the ~~reasonably~~combined ~~likely~~company toor ~~materially~~the ~~affect,~~expected ~~our~~benefits ~~internal~~of ~~control~~the ~~over financial reporting.~~transaction);

35● the occurrence of events that may give rise to a right of to terminate the Merger Agreement;

~~PART~~● ~~II.~~the ~~OTHER INFORMATION~~possibility that, following the consummation of the Announced Merger, costs or difficulties related to the integration of DSSI’s and INSW’s operations will be greater than expected;

~~ITEM~~● 1.the ~~LEGAL PROCEEDINGS~~risk that stockholder litigation in connection with the Announced Merger may affect the timing or occurrence of the contemplated transaction or result in significant costs of defense, indemnification and liability;

~~From~~● ~~time~~levels ~~to time we are involved in litigation with respect to matters arising from the ordinary conduct~~ of ~~our~~oil ~~business,~~product demand and currently certain claims are pending against us. In the opinion of management, based upon presently available information, either adequate provision for anticipated costs have been accrued or the ultimate anticipated costs will not materially affect our consolidated financial position, results of operations, or cash flows.inventories;

~~ITEM~~● ~~1A.~~supply ~~RISK FACTORS~~and demand for crude oil and oil products;

In● ~~addition~~charter tohire ~~the~~levels ~~other~~(under ~~information~~time ~~set forth~~and inbareboat ~~this~~charters) ~~report,~~and ~~you should carefully consider~~ the ~~factors~~ability discussed in “Item 1A. Risk Factors” in the Company’s 2019 Annual Report, which could materially affect our business, financial condition or future results. The risks described in our 2019 Annual Report are not the only the risks facing our Company. Additional risks and uncertainties not currently known to ~~us or~~re-charter ~~that~~vessels weat ~~currently~~competitive ~~deem~~rates toas betheir ~~immaterial~~current ~~also~~charters ~~may materially adversely affect our business, financial condition, and/or operating results in the future.~~expire;

~~The~~● ~~ongoing~~developments ~~COVID-19~~in ~~pandemic~~vessel ~~and governmental~~values, ~~responses~~which ~~thereto~~may ~~could~~affect ~~adversely~~compliance ~~affect~~with ~~the~~covenants ~~Company’s~~under ~~business.~~credit facilities and/or debt refinancing;

As● ~~previously~~compliance ~~disclosed~~with bycovenants the Company, the ongoing outbreak of the novel coronavirus (“COVID-19”) has caused severe global disruptions and has and may continue to negatively affect economic conditions regionally as well as globally and otherwise impact the Company’s operations and the operations of the Company’s customers and suppliers. Governments in ~~affected~~credit ~~countries have imposed travel bans~~facilities, ~~quarantines and~~including ~~other~~covenants ~~emergency~~relating ~~public health measures in an effort~~ to ~~contain~~ the ~~outbreak.~~maintenance These measures have resulted in a significant reduction in global economic activity and extreme volatility in the global financial markets which has reduced the global demand for oil and refined petroleum products. Additionally, as a result of ~~restrictive~~vessel ~~measures,~~value the Company’s vessels may not be able to call on ports, or may be restricted from disembarking from ports, located in regions affected by the outbreak. The Company may also experience operational disruptions and delays, unavailability of normal port infrastructure and services including limited access to equipment, critical goods and personnel, disruptions to crew change, quarantine of ships and/or crew, counterparty solidity, closure of ports and custom offices, as well as disruptions in the supply chain and industrial production, which may lead to reduced cargo demand, amongst other potential consequences attendant to pandemic diseases.ratios;

To● ~~date,~~ the ~~COVID-19~~level ~~pandemic~~of ~~has~~debt ~~primarily affected~~and the ~~Company’s~~related ~~operations~~interest inexpense ~~the~~and ~~following~~amortization ~~ways, which may result in loss~~ of ~~revenue days and/or increase in vessel operating expenses:~~principal;

· the Company’s ability to arrange, in a timely manner, crew reliefs, Flag and Class Surveys, delivery of spares and stores, and requested inspections of vessels, has been made more difficult by the effects of COVID-19;29

·Table itof ~~has become more difficult for the Company to obtain the services required by our vessels;~~Contents

·● ~~the~~access ~~Company~~to isdebt ~~now~~and ~~required~~equity toand ~~comply with~~ the ~~requirements~~cost of ~~port~~capital ~~states~~required ~~with respect~~ to ~~procedures~~acquire ~~for~~additional ~~the prevention of community spread of COVID-19~~vessels; ~~and~~

·● ~~the~~supply ~~Company~~and ~~has~~order-book ~~needed to implement precautions to prevent any exposure~~ of ~~our~~tanker ~~ships’ crews to COVID-19 when calling at ports and/or places affected by the virus.~~vessels;

If● the ~~COVID-19~~ability ~~pandemic~~to ~~continues~~increase ~~on a prolonged basis or becomes more severe,~~ the ~~rate~~size ~~environment~~of in the ~~crude~~fleet and ~~product~~make ~~markets~~additional ~~may~~acquisitions ~~deteriorate~~that ~~and~~are ~~our~~accretive ~~operations and cash flows may be negatively impacted. A prolonged negative rate environment could result in the value of our vessels being impaired which could in turn impair our ability~~ to ~~borrow amounts under our revolving credit facilities or to access to credit and capital markets in the future on favorable terms or at all.~~earnings;

~~The~~● ~~extent to which COVID-19 will materially impact~~ the ~~Company’s results~~ability of operations and financial condition, including possible impairments, will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the ~~severity of~~commercial ~~the virus~~ and ~~the~~chartering ~~actions~~operations to ~~contain~~successfully oremploy ~~treat~~vessels ~~its~~at ~~impact,~~economically ~~among~~attractive ~~others. Accordingly~~rates, anparticularly ~~estimate~~as ofcharters ~~the~~expire ~~impact of COVID-19 on the Company~~ and ~~its operations cannot be made at this time. However, if~~ the ~~pandemic~~fleet worsens, additional restrictions are imposed or current restrictions are imposed for a longer period of time in response to the outbreak, it may have a material adverse effect on the Company’s future results of operation and financial condition.expands;

36● the continuing demand for crude oil and oil products from China, India, Brazil and Russia and other emerging markets;

~~ITEM~~● 6.the ~~EXHIBITS~~ability to comply with new maritime regulations, the more restrictive regulations for the transport of certain products and cargoes and the increased costs associated therewith;

Exhibit No.		Description
2.1		Transaction Agreement, dated as of November 27, 2018 (the “Transaction Agreement”), by and among DSS Holdings L.P., DSS Crude Transport Inc., DSS Products Transport Inc., Diamond S Technical Management LLC, Capital Product Partners L.P., Athena SpinCo Inc., Athena Mergerco 1 Inc., Athena Mergerco 2 Inc., Athena Mergerco 3 LLC, and Athena Mergerco 4 LLC (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form 10, initially filed on December 21, 2018 (the “Form 10”))†
2.2		Amendment No. 1, dated March 7, 2019, to the Transaction Agreement (incorporated by reference to Exhibit 2.2 to the Form 10)
3.1		Articles of Amendment of the Articles of Incorporation of Athena SpinCo Inc. (now known as Diamond S Shipping Inc.) (incorporated by reference to Exhibit 3.2 to the Form 10)
3.2		Amended and Restated Articles of Incorporation of Diamond S Shipping Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 21, 2019)
3.3		Amended and Restated Bylaws of Diamond S Shipping Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 21, 2019)
4.1		Registration Rights Agreement, dated March 27, 2019 (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K, filed on March 29, 2019 (the “March 29 Form 8-K”))
4.2		Director Designation Agreement, dated March 27, 2019, with certain former CPLP investors (incorporated by reference to Exhibit 10.2 to the March 29 Form 8-K)
4.3		Director Designation Agreement, dated March 27, 2019, with certain WLR investors (incorporated by reference to Exhibit 10.3 to the March 29 Form 8-K)
4.4		Director Designation Agreement, dated March 27, 2019, with First Reserve Investors (incorporated by reference to Exhibit 10.4 to the March 29 Form 8-K)
31.1		Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002, by Craig H. Stevenson, Jr., Chief Executive Officer.
31.2		Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002, by Kevin M. Kilcullen, Chief Financial Officer.
32.1		Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002, by Craig H. Stevenson, Jr., Chief Executive Officer.*
32.2		Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002, by Kevin M. Kilcullen.*
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

●

changes in fuel prices, including as a result of the imposition of sulfur oxide emissions limits in 2020 under new regulations adopted by the IMO (for those vessels that are not retrofitted with scrubbers);

†	Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish a copy of any such omitted schedule or similar attachment to the SEC upon request.
*	The certifications attached as exhibits 32.1 and 32.2 to this quarterly report on Form 10-Q are “furnished” to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

●

the effective and efficient technical management of the vessels;

37● the costs associated with upcoming drydocking of vessels;

~~SIGNATURES~~● the ability to obtain and maintain major international oil company approvals and to satisfy technical, health, safety and compliance standards;

~~Pursuant~~● to the ~~requirements~~ strength of ~~the~~and ~~Securities~~growth ~~Exchange~~in ~~Act~~the number of ~~1934,~~ the ~~registrant~~customer ~~has~~relationships, ~~duly~~especially ~~caused~~with ~~this~~major ~~report~~international tooil becompanies ~~signed~~and onmajor ~~its~~commodity ~~behalf by the undersigned thereunto duly authorized.~~traders;

		DIAMOND S SHIPPING INC.
Date:	November 16, 2020	By:	/s/ Craig H. Stevenson, Jr.
			Craig H. Stevenson, Jr.
			Chief Executive Officer and President
			(Principal Executive Officer)
Date:	November 16, 2020	By:	/s/ Kevin M. Kilcullen
			Kevin M. Kilcullen
			Chief Financial Officer
			(Principal Financial Officer)

●

the prevailing spot market rates and the number of vessels operating in the spot market;

●

changes in laws, treaties or regulations applicable to the Company, including regulations relating to environmental compliance; and

●

the ability to acquire and sell vessels at satisfactory prices.

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Operating Data

The following table represents the operating data for the three months ended March 31, 2021 and 2020 on a consolidated basis.


	For the Three Months Ended
	March 31,
	2021		2020		Change		% Change

	(In Thousands, Except Per Share and Share Data)
Revenue:
Voyage revenue	$	48,801	$	187,652	$	(138,851)	(74.0)	%
Time charter revenue		14,851		22,073		(7,222)	(32.7)	%
Pool revenue		24,068		—		24,068	—
Total revenue		87,720		209,725		(122,005)	(58.2)	%

Operating expenses:
Voyage expenses		33,050		74,681		(41,631)	(55.7)	%
Vessel expenses		41,962		41,536		426	1.0	%
Depreciation and amortization expense		28,051		28,760		(709)	(2.5)	%
General and administrative expenses		6,518		8,124		(1,606)	(19.8)	%
Other corporate expenses		4,780		—		4,780	—
Total operating expenses		114,361		153,101		(38,740)	(25.3)	%
Operating (loss) income		(26,641)		56,624		(83,265)	(147.0)	%
Other (expense) income:
Total other expense — Net		(6,169)		(11,043)		4,874	44.1	%
Net (loss) income		(32,810)		45,581		(78,391)	(172.0)	%
Less: Net income attributable to noncontrolling interest		832		537		295	54.9	%
Net (loss) income attributable to Diamond S Shipping Inc.	$	(33,642)	$	45,044	$	(78,686)	(174.7)	%

Net (loss) earnings per share – basic	$	(0.84)	$	1.13	$	(1.97)	(174.3)	%
Net (loss) earnings per share –diluted	$	(0.84)	$	1.12	$	(1.96)	(175.0)	%

Weighted average common shares outstanding – basic		39,974,360		39,891,346		83,014	0.2	%
Weighted average common shares outstanding – diluted		39,974,360		40,159,966		(185,606)	(0.5)	%

Results of Operations

Three months ended March 31, 2021 compared to the three months ended March 31, 2020

Total revenue

Total revenue decreased by $122.0 million to $87.7 million during the three months ended March 31, 2021 as compared to $209.7 million for the three months ended March 31, 2020. The $122.0 million decrease was principally due to weaker market conditions in the product tanker segment. The global consumption of petroleum products has experienced considerable demand destruction as a result of the global pandemic. In addition, the unwinding of the floating storage cycle effectively increased the supply of available ships.

Voyage Expenses

Voyage expenses primarily consist of bunkers, port expenses, canal dues and commissions. Commissions were paid to shipbrokers for negotiating and arranging charter party agreements on the Company’s behalf. Voyage expenses incurred during time charters and while vessels are operating in and pools are paid for by the charterer or pool manager, except for commissions, which were paid for by the Company. Voyage expenses incurred during voyage charters were paid for by the Company.

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Voyage expenses decreased by $41.6 million to $33.1 million during the three months ended March 31, 2021 as compared to $74.7 million for the three months ended March 31, 2020. The $41.6 million decrease in voyage expenses was driven by a reduction in bunker and port costs incurred as a result of entering 28 vessels in the Pool the latter half of 2020.

Vessel Expenses

Vessel expenses increased by $0.4 million to $41.9 million during the three months ended March 31, 2021 as compared to $41.5 million for the three months ended March 31, 2020. The slight increase of $0.4 million is in line with the vessel operating days for the two quarters which decreased slightly.

Vessel Depreciation and Amortization Expense

We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years, and we estimate the residual value by taking the estimated scrap value of $300 per lightweight ton times the weight of the ship in lightweight tons. We continue to monitor changes in the oil and petroleum product supply chain that might have an impact on the useful operating life of our assets.

Depreciation and amortization expense decreased by $0.7 million to $28.1 million during the three months ended March 31, 2021 as compared to $28.8 million during the three months ended March 31, 2020. This slight decrease is due to the decrease in the depreciation and amortization expense related to the sale of the Aias and Amoureux in January and February 2021, respectively, as the vessels were classified as held for sale as of December 31, 2020, offset by ballast water treatment systems and scrubbers capitalized between the two comparative periods.

General and Administrative Expenses

For the three months ended March 31, 2021 and 2020, general and administrative expenses were $6.5 million and $8.1 million, respectively. The $1.6 million decrease was primarily due to a decrease in salary and benefit costs as a result of a reduction in headcount, a decrease in professional fees and a reduction in travel-related costs.

Other Corporate Expenses

Other corporate expenses was $4.8 million for the three months ended March 31, 2021, which primarily consist of legal invoices and investment bank opinion fees related to the Announced Merger.

Total Other Expense, net

Total other expense, net, which includes term loan interest, amortization of deferred financing charges and commitment fees and net of interest income, was $6.2 million for the three months ended March 31, 2021 compared to $11.0 million for the three months ended March 31, 2020. The decrease of $4.8 million was primarily driven by a $194.2 million decrease in the average debt balance in the two comparative periods, coupled with a decrease in the effective interest rate.

Net Income Attributable to Noncontrolling Interest

The net income attributable to noncontrolling interest was net income of $0.8 million for the three months ended March 31, 2021 compared to net income of $0.5 million for the three months ended March 31, 2020. The net income attributable to noncontrolling interest primarily represents a 49% interest in NT Suez Holdco LLC, which owns and operates two Suezmax vessels and is 51% owned by the Company.

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Liquidity and Capital Resources

As of March 31, 2021 and December 31, 2020, total cash, cash equivalents and restricted cash were $75.8 million and $104.2 million, including restricted cash of $6.3 million and $6.1 million, respectively. As of March 31, 2021 and December 31, 2020, the Company had $53.0 million and $60.0 million available and undrawn under its credit facilities, respectively.

Generally, the primary sources of funds have been cash from operations and undrawn amounts under credit facilities.

On December 27, 2019, we refinanced (i) the $460 Million Facility, (ii) the $235 Million Facility, and (iii) the $75 Million Facility with the proceeds of the $525 Million Facility.

At March 31, 2021, the Company was in compliance with all financial covenants under each of its credit facilities.

The passage of environmental legislation or other regulatory initiatives have in the past had, and may in the future may have, a significant impact on our operations. Regulatory measures can increase required costs related to operating and maintaining our vessels and may require us to retrofit our vessels with new equipment to comply with new or existing regulations.

Among other capital expenditures, in connection with the International Maritime Organization’s new limits for sulfur oxide emissions effective January 1, 2020, we contracted for the purchase and installation of scrubbers on five of our Suezmax vessels. As of March 31, 2021, four of these scrubbers have been installed and fully paid, with two of these scrubbers having been installed on the Aias and Amoureux, which were sold and delivered to the buyer in January and February 2021, respectively. The installation of the fifth scrubber has been cancelled, effectuating a $3.3 million loss due to the cancelled project, which was recorded during the year ended December 31, 2020. We may, in the future, determine to purchase additional scrubbers for installation on other vessels that we own or operate. In addition, with respect to vessels that are not retrofitted with scrubbers, we expect to incur expenditures to ensure those vessels are capable of efficiently using low-sulfur fuel, which expenditures are not expected to be significant or which have not yet been determined.

We have installed ballast water treatment systems on 22 of our 62 vessels. We expect to install 16 ballast water treatment systems in 2021, of which we have 16 contracts currently in place with a total contract value of $14.2 million, where $3.4 million has been paid as of March 31, 2021.

In December 2020, we contracted to sell two of our 2008-built Suezmax vessels, the Aias and Amoureux, and delivered the two vessels to the purchaser in January and February 2021, respectively. The sale of these two vessels generated gross cash proceeds to us of $46.2 million before our repayment of the related debt of $25.3 million on the two vessels.

We believe that we have sufficient capital resources to fund our operations and anticipated capital requirements for the next twelve months. However, should market conditions deteriorate beyond third-party forecasts, we would consider a number of liquidity enhancing measures, which could include refinancing a portion of our senior debt, exploring unsecured debt instruments, asset sales and sale-leaseback transactions on certain of our assets.

Cash Flows

The following table summarizes the Company’s cash and cash equivalents provided by or used in operating, financing and investing activities for the periods presented below (presented in millions):


	For the Three Months Ended
	March 31,
		2021		2020
Net Cash (Used in) Provided by Operating Activities	$	(8.7)	$	70.9
Net Cash Provided by (Used in) Investing Activities		44.5		(1.5)
Net Cash Used in Financing Activities		(57.9)		(42.1)

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Net Cash (Used in) Provided by Operating Activities

Net cash (used in) provided by operating activities during the three months ended March 31, 2021 and 2020 was $(8.7) million and $70.9 million, respectively. The decrease of $79.6 million was mainly attributable to the reduction in total revenue for the three months ended March 31, 2021 compared to the three months ended March 31, 2020, due to the global consumption of petroleum products experiencing considerable demand destruction as a result of the global pandemic, coupled with unwinding of the floating storage cycle effectively increasing the supply of available ships.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by (used in) investing activities during the three months ended March 31, 2021 and 2020 was $44.5 million and $(1.5) million respectively. The change in cash provided by (used in) investing activities was primarily due to the $46.2 million in cash proceeds received in conjunction with the sale and delivery of the Aias and Amoureux.

Net Cash Used in Financing Activities

Net cash used in financing activities during the three months ended March 31, 2021 and 2020 was $57.9 million and $42.1 million, respectively. The change in cash used in financing activities was primarily due to the $25.3 million of debt repaid during the three months ended March 31, 2021 in conjunction with the sale and delivery of the Aias and Amoureux, offset by repaying $5.0 million revolver, and paying $1.4 million to repurchase shares under the share repurchase program.

Off-Balance Sheet Arrangements

Contractual Obligations and Contingencies

There have been no significant changes to the contractual obligations reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, other than entering into contracts to install ballast water treatment systems on three vessels with installation scheduled to occur in 2022. These contracts have a total estimated cost of $2,810, with payments due throughout 2021 and 2022, as described in Note 15 — Commitments and Contingencies in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Critical Accounting Policies

The Company’s condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and which could potentially result in materially different results under different assumptions and conditions. The Company has described below what its management believes are its most critical accounting policies. For a description of all of the Company’s significant accounting policies, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — B. Liquidity and Capital Resources — Critical Accounting Policies and Note 2 — Summary of Significant Accounting Policies, each contained in our 2020 Annual Report, and in Note 2 — Summary of Significant Accounting Policies in our unaudited condensed consolidated financial statements included herein, for further information.

Revenue Recognition

During the three months ended March 31, 2021 and 2020, revenues were generated from fixed rate time charters, spot market voyage charters, spot market-related time charters and pools.

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We recognize revenues over the term of the time charter when there is a time charter agreement, where the rate is fixed or determinable, service is provided and collection of the related revenue is reasonably assured. We do not recognize revenue during days the vessel is off-hire. Where the time charter contains a profit or loss sharing arrangement, the profit or loss is recognized based on amounts earned or incurred as of the reporting date.

For the three months ended March 31, 2021 and 2020, pursuant to the new revenue recognition guidance, which was adopted as of January 1, 2019, revenue for spot market voyage charters is recognized ratably over the total transit time of each voyage, which commences at the time the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port. Previously, revenue was recognized on the later of when the vessel departed from its last discharge port or when an agreement was entered into with the charterer, and ended at the time the discharge of cargo was completed at the discharge port. In time charters, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These voyage expenses are borne by us when the vessels are engaged in spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters.

Vessel Lives and Impairment

The carrying value of each of the Company’s vessels represents its original cost (contract price plus initial expenditures) at the time of delivery or purchase less accumulated depreciation or impairment charges. The carrying values of vessels may not represent their fair market value at any point in time since the market prices of secondhand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. In recent years changing market conditions resulted in a decrease in charter rates and values of assets. We consider these market developments as indicators of potential impairment of the carrying amount of its assets.

In developing estimates of future undiscounted cash flows, we make assumptions and estimates about the vessels’ future performance, with the significant assumptions being related to charter rates, fleet utilization, vessels’ operating expenses, vessels’ capital expenditures and drydocking requirements, vessels’ residual value and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends. Specifically, we utilize the rates currently in effect for the duration of their current time charters, without assuming additional profit-sharing. For periods of time where the vessels are not fixed on time charters, we utilize an estimated daily time charter equivalent for its vessels’ unfixed days based on the most recent ten year historical one-year time charter average.

Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially, in the future. In recent years, the market values of vessels have experienced particular volatility, with substantial declines in many of the charter-free market value, or basic market value, of various vessel classes. As a result, the market value of our vessels may have declined below their carrying values, even though we did not impair their carrying values under our impairment accounting policy. This is due to management’s projection that future undiscounted cash flows expected to be earned by such vessels over their operating lives will exceed such vessels’ carrying amounts.

Deferred Drydocking Costs and Amortization

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Recent Accounting Pronouncements

New Accounting Standards to be Implemented

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which establishes a comprehensive new lease accounting model. ASU 2016-02 clarifies the definition of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. For the Company, ASU 2016-02 is effective for annual periods beginning after December 15, 2021, and interim reporting periods within annual reporting periods beginning after December 15, 2022, with early adoption permitted. The most significant effects of adoption relate to the recognition of right-of-use assets and lease liabilities on the balance sheet for operating leases and providing new disclosures about our leasing activities. We are currently analyzing our contracts and will then calculate the right-of-use assets and lease liabilities as of January 1, 2022 based on the present value of our remaining minimum lease payments, primarily due to the recognition of right-of-use assets and lease liabilities with respect to operating leases.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326)” (“ASU 2016-13”), which amends several aspects of the measurement of credit losses on financial instruments based on an estimate of current expected credit losses. ASU 2016-13 will apply to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. ASU 2016-13 will also apply to debt securities and other financial assets measured at fair value through other comprehensive income. For the Company, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of Topic 326 is not expected to have a material impact on the condensed consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The Company is exposed to the impact of interest rate changes primarily through floating-rate borrowings that require it to make interest payments based on the Eurodollar Rate. Significant increases in interest rates could adversely affect operating margins, results of operations and our ability to service debt. The Company uses, interest rate swaps to reduce its exposure to market risk from changes in interest rates. The principal objective of these contracts is to minimize the risks and costs associated with floating-rate debt.

The Company is exposed to the risk of credit loss in the event of non-performance by the counterparties to the interest rate swap agreements. In order to minimize counterparty risk, the Company only entered into derivative transactions with counterparties that are rated A- or better by Standard & Poor’s Financial Services LLC or A3 or better by Moody’s Investors Service, Inc. at the time of the transactions. In addition, to the extent possible and practical, interest rate swaps are entered into with different counterparties to reduce concentration risk.

From time to time, the Company enters into interest rate swap agreements to modify its exposure to interest rate movements and to manage its interest expense. As of March 31, 2021, 27.4% of the debt was fixed due to the interest rate swap agreements, and 72.6% was variable. Based on the Company’s March 31, 2021 outstanding variable rate debt balance, a one percentage point increase in annual Eurodollar Rates would increase its annual interest expense by approximately $4.2 million.

Inflation

Inflation has only a moderate effect on the Company’s expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase the Company’s operating, voyage, general and administrative and financing costs.

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Foreign Exchange Risk

The shipping industry’s functional currency is the U.S. dollar. All of the Company’s revenues and most of its operating costs are in U.S. dollars. The Company incurred certain operating expenses, such as vessel and general and administrative expenses, in currencies other than the U.S. dollar, and the foreign exchange risk associated with these operating expenses has historically been immaterial. If foreign exchange risk becomes material in the future, the Company may seek to reduce its exposure to fluctuations in foreign exchange rates through the use of short-term currency forward contracts and through the purchase of bulk quantities of currencies at rates that management considers favorable. For contracts which qualify as cash flow hedges for accounting purposes, hedge effectiveness would be assessed based on changes in foreign exchange spot rates with the change in fair value of the effective portions being recorded in accumulated other comprehensive loss.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for by Item 3 is set forth in Item 2 under the caption “Quantitative and Qualitative Disclosures About Market Risk” and is incorporated herein by reference.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management conducted an evaluation under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2021. Disclosure controls and procedures are those controls and other procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified by the rules and forms promulgated by the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As a result of this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2021.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time we are involved in litigation with respect to matters arising from the ordinary conduct of our business, and currently certain claims are pending against us. In the opinion of management, based upon presently available information, either adequate provision for anticipated costs have been accrued or the ultimate anticipated costs will not materially affect our consolidated financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed below, the factors discussed in “Item 1A. Risk Factors” in the Company’s 2020 Annual Report, and the factors under the headings “Risk Factors - Risks Related to the Merger” and “Risk Factors - Risks Related to the Combined Company” in the joint proxy statement/prospectus included in INSW’s registration statement on Form S-4 (File No. 333-255774) that was filed with the SEC on May 5, 2021 (as may be amended thereafter) which could materially affect our business, financial condition or future results. The risks described in those documents are not the only the risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results in the future.

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Certain Risks Related to the Announced Merger

The completion of the Announced Merger is subject to a number of conditions and the Merger Agreement may be terminated in accordance with its terms. As a result, there is no assurance when or if the Announced Merger will be completed.

The completion of the Announced Merger is subject to the satisfaction or waiver of a number of conditions as set forth in the Merger Agreement, including, among others, those described herein under “Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Business Overview – Factors to Consider When Evaluating the Company’s Results – Announced Merger.” There can be no assurance as to when these conditions will be satisfied or waived, if at all, or that other events will not intervene to delay or result in the failure to close the Announced Merger.

In addition, if the Announced Merger is not completed by the outside date of November 1, 2021, either DSSI or INSW may choose to terminate the Merger Agreement. However, this right to terminate the Merger Agreement will not be available to DSSI or INSW if such party has materially breached the Merger Agreement and the breach is the cause of or resulted in the failure of the Announced Merger to be completed prior to the outside date. DSSI or INSW may elect to terminate the Merger Agreement in certain other circumstances, and DSSI and INSW can mutually decide to terminate the Merger Agreement at any time prior to the Effective Time, before or after the required approval by the DSSI shareholders or the INSW shareholders. If the Merger Agreement is terminated, DSSI and INSW may incur substantial fees in connection with the termination of the Merger Agreement and will not recognize the anticipated benefits of the Announced Merger.

The termination of the Merger Agreement could negatively impact DSSI and could result in payment of a termination fee.

If the Merger Agreement is terminated in accordance with its terms and the Announced Merger is not consummated, the ongoing businesses of DSSI may be adversely affected by a variety of factors. DSSI’s business may be adversely impacted by the failure to pursue other beneficial opportunities during the pendency of the Announced Merger, by the failure to obtain the anticipated benefits of completing the Announced Merger, by payment of certain costs relating to the Announced Merger, and by the focus of its management on the Announced Merger for an extended period of time rather than on management opportunities or other issues. The market price of shares of DSSI’s common stock may decline as a result of any such failures to the extent that the current market prices reflect a market assumption that the Announced Merger will be completed.

DSSI may be required to pay INSW a termination fee of $17 million if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement relating to third party offers to acquire DSSI or a third party acquisition of DSSI or a breach of DSSI’s obligation not to solicit third party offers or its obligations with respect to holding a meeting of its shareholders in connection with the Announced Merger. If the Merger Agreement is terminated and DSSI determines to seek another business combination or strategic opportunity, DSSI may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Announced Merger.

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The pendency of the Announced Merger could adversely affect DSSI’s and INSW’s respective businesses, results of operations and financial condition.

Beginning at the time of the execution of the Merger Agreement and continuing until the Announced Merger closes or the Merger Agreement is terminated in accordance with its terms, the pendency of the Announced Merger could cause disruptions in and create uncertainty surrounding DSSI’s and INSW’s businesses, including affecting DSSI’s and INSW’s relationships with their existing and future customers, suppliers, partners in the business community and employees. This could have an adverse effect on DSSI’s and INSW’s respective businesses, results of operations and financial condition, as well as the market prices of their shares, regardless of whether the Announced Merger is completed. In particular, DSSI and INSW could potentially lose important personnel who decide to pursue other opportunities as a result of the Announced Merger. Any adverse effect could be exacerbated by a prolonged delay in closing the Announced Merger or if DSSI and INSW are unable to decide quickly on the business direction or strategy of the combined company. DSSI and INSW could also potentially lose customers or suppliers, existing customers or suppliers may seek to change their existing business relationships or renegotiate their contracts with DSSI or INSW or defer decisions concerning DSSI or INSW, and potential customers or suppliers could defer entering into contracts with DSSI or INSW, each as a result of uncertainty relating to the Announced Merger. In addition, in an effort to complete the Announced Merger, DSSI and INSW have expended, and will continue to expend, significant management resources, which are being diverted from DSSI’s and INSW’s day-to-day operations, and significant demands are being, and will continue to be, placed on the managerial, operational and financial personnel and systems of DSSI and INSW in connection with efforts to complete the Announced Merger.

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ITEM 6. EXHIBITS

Exhibit No.		Description
2.1		Transaction Agreement, dated as of November 27, 2018 (the “Transaction Agreement”), by and among DSS Holdings L.P., DSS Crude Transport Inc., DSS Products Transport Inc., Diamond S Technical Management LLC, Capita

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