TSAKOS ENERGY NAVIGATION LTD (Form: 6-K, Received: 09/20/2019 16:33:20)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of September, 2019

Commission File Number 001-31236

TSAKOS ENERGY NAVIGATION LIMITED

(Translation of registrant’s name into English)

367 Syngrou Avenue, 175 64 P.

Faliro, Athens, Greece

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

TSAKOS ENERGY NAVIGATION LIMITED

FORM 6-K

This report on Form 6-K is hereby incorporated by reference into the following Registration Statements of the Company:

•

Registration Statement on Form F-3 (No. 333-219569) filed with the SEC on July 28, 2017;

•

Registration Statement on Form F-3 (No. 333-206852) filed with the SEC on September 9, 2015;

•

Registration Statement on Form F-3 (No. 333-159218) initially filed with the SEC on May 13, 2009, as amended;

•

Registration Statement on Form F-3 (No. 333-111615) filed with the SEC on December 30, 2003;

•

Registration Statement on Form S-8 (No. 333-183007) initially filed with the SEC on August 2, 2012, as amended;

•

Registration Statement on Form S-8 (No. 333-134306) initially filed with the SEC on May 19, 2006, as amended;

•

Registration Statement on Form S-8 (No. 333-104062) filed with the SEC on March 27, 2003; and

•

Registration Statement on Form S-8 (No. 333-102860) filed with the SEC on January 31, 2003.

EXHIBIT INDEX


99.1		Consolidated Financial Statements (Unaudited), June 30, 2019

99.2		Management’s Discussion and Analysis of Financial Condition and Results of Operations

99.3		Capitalization at June 30, 2019

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: September 20, 2019


TSAKOS ENERGY NAVIGATION LIMITED

By:		/s/ Paul Durham
		Paul Durham
		Chief Financial Officer

EXHIBIT 99.1

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2019 AND DECEMBER 31, 2018

(Expressed in thousands of U.S. Dollars - except share and per share data)


	June 30, 2019			December 31, 2018
	(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	182,929		$	204,763
Restricted cash		9,657			15,763
Accounts receivable, net		32,688			35,351
Capitalized voyage expenses		722			617
Due from related companies (Note 2)		19,566			20,923
Advances and other		18,872			18,407
Vessels held for sale (Note 4)		94,522			—
Inventories		17,461			20,388
Prepaid insurance and other		1,636			1,073
Current portion of financial instruments-Fair value (Note 7,12)		176			217

Total current assets		378,229			317,502

INVESTMENTS		1,000			1,000
FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion (Note 7,12)		145			133
RIGHT OF USE ASSET UNDER OPERATING LEASES (Note 4)		25,351			—
LONG TERM RECEIVABLE (Note 4)		13,000			13,000
FIXED ASSETS (Note 4)
Advances for vessels under construction		48,075			16,161
Vessels		3,650,172			3,813,987
Accumulated depreciation		(977,129	)		(984,540	)

Vessels’ Net Book Value		2,673,043			2,829,447

Total fixed assets		2,721,118			2,845,608

DEFERRED CHARGES, net (Note 5)		25,921			27,815

Total assets	$	3,164,764		$	3,205,058

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (Note 6)	$	192,765		$	160,584
Payables		35,645			37,532
Due to related companies (Note 2)		3,452			4,366
Dividends payable		1,000			—
Series B Redeemable Preferred Shares		50,000			—
Accrued liabilities		45,652			45,765
Unearned revenue (Note 3)		10,988			6,007
Current portion of obligations under operating lease (Note 4)		7,741			—
Current portion of financial instruments - Fair value (Note 7,12)		2,262			48

Total current liabilities		349,505			254,302

LONG-TERM DEBT, net of current portion (Note 6)		1,339,205			1,435,017
LONG-TERM OBLIGATIONS UNDER OPERATING LEASE (Note 4)		17,610			—
FINANCIAL INSTRUMENTS - FAIR VALUE, net of current portion (Note 7,12)		15,655			8,962


	June 30, 2019			December 31, 2018
	(UNAUDITED)
STOCKHOLDERS’ EQUITY (Note 8):
Preferred shares, $ 1.00 par value; 25,000,000 shares authorized and 2,000,000 Series C Preferred Shares, 3,424,803 Series D Preferred Shares, 4,600,000 Series E Preferred Shares and 6,000,000 Series F Preferred Shares issued and outstanding at June 30, 2019 and 25,000,000 shares authorized and 2,000,000 Series B Preferred Shares, 2,000,000 Series C Preferred Shares, 3,424,803 Series D Preferred Shares, 4,600,000 Series E Preferred Shares issued and 6,000,000 Series F Preferred Shares issued and outstanding at December 31, 2018		16,025			18,025
Common shares, $ 1.00 par value; 175,000,000 shares authorized at June 30, 2019 and December 31, 2018; 87,872,522 and 87,604,645 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		87,873			87,605
Additional paid-in capital		952,186			996,833
Accumulated other comprehensive loss		(18,150	)		(8,660	)
Retained earnings		383,920			400,933

Total Tsakos Energy Navigation Limited stockholders’ equity		1,421,854			1,494,736
Non-controlling Interest		20,935			12,041

Total stockholders’ equity		1,442,789			1,506,777

Total liabilities and stockholders’ equity	$	3,164,764		$	3,205,058

The accompanying notes are an integral part of these consolidated financial statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

FOR THE THREE MONTHS ENDED JUNE 30, 2019 AND 2018

(Expressed in thousands of U.S. Dollars - except share and per share data)


	Three months ended June 30
	2019			2018
VOYAGE REVENUES (Note 3):	$	144,020		$	123,927
EXPENSES:
Voyage expenses		35,191			29,407
Charter hire expense		2,698			2,698
Vessel operating expenses		46,072			44,169
Depreciation and amortization		34,260			36,621
General and administrative expenses		6,797			6,812
Loss on sale of vessel		—			364

Total expenses		125,018			120,071

Operating income		19,002			3,856

OTHER INCOME (EXPENSES):
Interest and finance costs, net (Note 7)		(21,262	)		(14,783	)
Interest income		1,773			389
Other, net		(2	)		2

Total other expenses, net		(19,491	)		(14,392	)

Net loss		(489	)		(10,536	)
Less: Net loss attributable to the non-controlling interest		794			983

Net income (loss) attributable to Tsakos Energy Navigation Limited	$	305		$	(9,553	)

Effect of preferred dividends		(10,204	)		(6,713	)
Deemed dividend on Series B preferred shares		(2,750	)		—
Net loss attributable to common stockholders of Tsakos Energy Navigation Limited		(12,649	)		(16,266	)
Loss per share, basic and diluted attributable to Tsakos Energy Navigation Limited common shareholders	$	(0.14	)	$	(0.19	)

Weighted average number of shares, basic and diluted		87,751,969			86,942,159

The accompanying notes are an integral part of these consolidated financial statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(Expressed in thousands of U.S. Dollars - except share and per share data)


	Six months ended June 30
	2019			2018
VOYAGE REVENUES (Note 3):	$	291,064		$	249,651
EXPENSES:
Voyage expenses		66,755			56,683
Charter hire expense		5,367			5,376
Vessel operating expenses		89,396			91,704
Depreciation and amortization		69,543			72,432
General and administrative expenses		13,233			13,643
Loss on sale of vessel		—			364

Total expenses		244,294			240,202

Operating income		46,770			9,449

OTHER INCOME (EXPENSES):
Interest and finance costs, net (Note 7)		(38,855	)		(32,728	)
Interest income		2,547			711
Other, net		(31	)		(333	)

Total other expenses, net		(36,339	)		(32,350	)

Net income (loss)		10,431			(22,901	)
Less: Net loss attributable to the non-controlling interest		1,106			1,433

Net income (loss) attributable to Tsakos Energy Navigation Limited	$	11,537		$	(21,468	)

Effect of preferred dividends		(20,408	)		(13,355	)
Deemed dividend on Series B Preferred Shares		(2,750	)		—
Net loss attributable to common stockholders of Tsakos Energy Navigation Limited		(11,621	)		(34,823	)
Loss per share, basic and diluted attributable to Tsakos Energy Navigation Limited common shareholders	$	(0.13	)	$	(0.40	)

Weighted average number of shares, basic and diluted		87,678,714			86,634,907

The accompanying notes are an integral part of these consolidated financial statements

STATEMENT OF CONSOLIDATED OTHER COMPREHENSIVE LOSS (UNAUDITED)

FOR THE THREE MONTHS ENDED JUNE 30, 2019, AND 2018

(Expressed in thousands of U.S. Dollars)


	Three months ended June 30
	2019			2018
Net loss	$	(489	)	$	(10,536	)
Other comprehensive loss
Unrealized gain (loss) from hedging financial instruments
Unrealized loss on interest rate swaps, net (Note 9)		(5,839	)		1,808

Comprehensive loss		(6,328	)		(8,728	)

Less: comprehensive loss attributable to the non-controlling interest		794			983

Comprehensive loss attributable to Tsakos Energy Navigation Limited	$	(5,534	)	$	(7,745	)

The accompanying notes are an integral part of these consolidated financial statements

STATEMENT OF CONSOLIDATED OTHER COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019, AND 2018

(Expressed in thousands of U.S. Dollars)


	Six months ended June 30
	2019			2018
Net income (loss)	$	10,431		$	(22,901	)
Other comprehensive income (loss)
Unrealized gain (loss) from hedging financial instruments
Unrealized (loss) income on interest rate swaps, net (Note 9)		(9,490	)		786

Comprehensive income (loss)		941			(22,115	)

Less: comprehensive loss attributable to the non-controlling interest		1,106			1,433

Comprehensive income (loss) attributable to Tsakos Energy Navigation Limited	$	2,047		$	(20,682	)

The accompanying notes are an integral part of these consolidated financial statements

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019, AND 2018

(Expressed in thousands of U.S. Dollars - except share and per share data)


	Preferred Shares		Common Shares		Additional Paid-in Capital			Treasury stock						Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Tsakos Energy Navigation Limited			Non- controlling Interest			Total Stockholders’ Equity
	Preferred Shares		Common Shares		Additional Paid-in Capital			Shares			Amount			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Tsakos Energy Navigation Limited			Non- controlling Interest			Total Stockholders’ Equity
BALANCE, January 1, 2018	$	12,025	$	87,339	$	857,998			1,019,069		$	(5,736	)	$	547,937		$	(5,305	)	$	1,494,258		$	13,880		$	1,508,138
Adoption of new accounting standard															(1,311	)					(1,311	)					(1,311	)
Net (loss)															(21,468	)					(21,468	)		(1,433	)		(22,901	)
Issuance of 9.50% Series F Preferred Shares		5,400				125,153															130,553						130,553
Sale of Common Shares						(44	)		(1,016,870	)		5,660			(2,045	)					3,571						3,571
Common dividends declared ($0.05 per share)															(4,379	)					(4,379	)					(4,379	)
Common dividends paid ($0.05 per share)															(4,337	)					(4,337	)					(4,337	)
Dividends paid on Series B Preferred shares															(2,000	)					(2,000	)					(2,000	)
Dividends paid on Series C Preferred shares															(2,219	)					(2,219	)					(2,219	)
Dividends paid on Series D Preferred shares															(3,746	)					(3,746	)					(3,746	)
Dividends paid on Series E Preferred shares															(5,319	)					(5,319	)					(5,319	)
Other comprehensive income																		786			786						786

BALANCE June 30, 2018	$	17,425	$	87,339	$	983,107			2,199		$	(76	)	$	501,113		$	(4,519	)	$	1,584,389		$	12,447		$	1,596,836


	Preferred Shares			Common Shares		Additional Paid-in Capital			Treasury stock				Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Tsakos Energy Navigation Limited			Non- controlling Interest			Total Stockholders’ Equity
	Preferred Shares			Common Shares		Additional Paid-in Capital			Shares		Amount		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Tsakos Energy Navigation Limited			Non- controlling Interest			Total Stockholders’ Equity
BALANCE, January 1, 2019	$	18,025		$	87,605	$	996,833			—		—	$	400,933		$	(8,660	)	$	1,494,736		$	12,041		$	1,506,777
Net income														11,537						11,537			(1,106	)		10,431
Capital contribution from noncontrolling interest owners to subsidiary																							10,000			10,000
Sale of Common Shares					268		603													871						871
Cash dividends paid ($0.05 per common share)														(4,392	)					(4,392	)					(4,392	)
Cash dividends declared ($0.50 per Series B preferred shares)														(1,000	)					(1,000	)					(1,000	)
Series B Redeemable preferred shares		(2,000	)				(45,250	)						(2,750	)					(50,000	)					(50,000	)
Dividends paid on Series B preferred shares														(2,000	)					(2,000	)					(2,000	)
Dividends paid on Series C preferred shares														(2,218	)					(2,218	)					(2,218	)
Dividends paid on Series D preferred shares														(3,746	)					(3,746	)					(3,746	)
Dividends paid on Series E preferred shares														(5,319	)					(5,319	)					(5,319	)
Dividends paid on Series F preferred shares														(7,125	)					(7,125	)					(7,125	)
Other comprehensive loss																	(9,490	)		(9,490	)					(9,490	)

BALANCE June 30, 2019	$	16,025		$	87,873	$	952,186			—	$	—	$	383,920		$	(18,150	)	$	1,421,854		$	20,935		$	1,442,789

The accompanying notes are an integral part of these consolidated financial statements

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(Expressed in thousands of U.S. Dollars)


	Six months ended June 30
	2019			2018
Cash Flows from Operating Activities:
Net income (loss)	$	10,431		$	(22,901	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		64,337			67,940
Amortization of deferred dry-docking costs		5,206			4,492
Amortization of loan fees		2,140			2,074
Change in fair value of derivative instruments		(649	)		(1,483	)
Loss on sale of vessel		—			364
Payments for dry-docking		(4,742	)		(11,114	)
(Increase) Decrease in:
Accounts receivables		3,555			(8,666	)
Inventories		2,927			(1,972	)
Prepaid insurance and other		(563	)		(1,369	)
Capitalized voyage expenses		(105	)		(525	)
Increase (Decrease) in:
Payables		(2,801	)		869
Accrued liabilities		(113	)		11,095
Unearned revenue		4,981			(113	)

Net Cash provided by Operating Activities		84,604			38,691

Cash Flows from Investing Activities:
Advances for vessels under construction and acquisitions		(31,914	)		(10,473	)
Vessel acquisitions and/or improvements		(930	)		(629	)
Proceeds from sale of vessel		—			17,520

Net Cash (used in) provided by Investing Activities		(32,844	)		6,418

Cash Flows from Financing Activities:
Proceeds from long-term debt		204,416			255,050
Financing costs		(1,309	)		(3,044	)
Payments of long-term debt		(268,878	)		(333,866	)
Sale of treasury stock, net		—			3,571
Proceeds from stock issuance program, net		871			—
Proceeds from preferred stock issuance, net		—			130,553
Cash dividends		(24,800	)		(17,621	)
Capital contribution from subsidiary to noncontrolling interest owners		10,000			—

Net Cash (used in) provided by Financing Activities		(79,700	)		34,643

Net (decrease) increase in cash and cash equivalents and restricted cash		(27,940	)		79,752
Cash and cash equivalents and restricted cash at beginning of period		220,526			202,673

Cash and cash equivalents and restricted cash at end of period	$	192,586		$	282,425

Reconciliation of cash, cash equivalents and restricted cash:
Current Assets:
Cash and cash equivalents		182,929			272,501
Restricted cash		9,657			9,924
Total Cash and cash equivalents and restricted cash		192,586			282,425

The accompanying notes are an integral part of these consolidated financial statements

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2019 AND 2018

(Expressed in thousands of U.S. Dollars, except for share and per share data, unless otherwise stated)

1.	Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of Tsakos Energy Navigation Limited (the “Holding Company”) and subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 6-K and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.

The consolidated balance sheet as of December 31, 2018, has been derived from the audited consolidated financial statements included in the Company’s annual report on Form 20-F filed with the SEC on April 12, 2019 (“Annual Report”), but does not include all of the footnotes required by U.S. GAAP for complete financial statements.

A discussion of the Company’s significant accounting policies can be found in Note 1 of the Company’s consolidated financial statements included in the Annual Report. There have been no material changes to these policies in the six-month period ended June 30, 2019, except as discussed below:

Leases: The Company adopted Accounting Standards Update 2016-02, Leases (or ASU 2016-02) and ASU No. 2018-11, Leases (ASC 842)—Targeted Improvements, on January 1, 2019. The Company has elected to use the optional transition approach to determine the cumulative effect adjustment on January 1, 2019. In connection with its adoption of ASC 842, the Company elected the package of practical expedients that allows companies not to reassess whether any expired or expiring contracts are or contain leases, lease classification for any expired or expiring leases and initial direct costs for any expired or expiring leases. Additionally, after assessing that the respective criteria are met, the Company elected the practical expedient allowed under the transition guidance of ASC 842 to not separate the lease and non-lease components related to a lease contract and to account for them as a single lease component for the purposes of the recognition and measurement requirements of ASC 842.

Following adoption, the Company is allowed to recognize cumulative effect adjustment to the opening balance of retained earnings in the period, rather than restate comparative prior year periods. Based on the Company’s analysis, there was no cumulative effect adjustment to the opening balance of retained earnings.

Also, the Company made an accounting policy election to keep leases with a term of 12 months or less off the balance sheet. Based on the elections performed, the adoption of ASC 842 – Leases, did not materially impact the Company’s consolidated financial statements, for arrangements where the Company acts as a lessor.

The Company recognized on its interim consolidated balance sheet on January 1, 2019, a right-of-use asset and a lease liability of $29.3 million, based on the present value of the remaining minimum lease payments and the discount rate used for calculating the cost of the operating leases is the incremental borrowing rate. Lease payments under operating leases are accounted as an expense on a straight-line basis over the term of the lease arrangement.

Time Charters and Bareboat Revenues

For time charters and bareboat arrangements, a contract exists, and the vessel is delivered (commencement date) to the charterer, for a fixed period of time, at rates that are determined in the charter agreement and the relevant voyage expenses burden the charterer (i.e. port dues, canal tolls, pilotages and fuel consumption). The charterer has the right, upon delivery of the vessel, to control the use of the vessel as it has the enforceable right to: (i) decide the (re)delivery time of the vessel; (ii) arrange the ports from which the vessel shall pass; (iii) give directions to the master of the vessel regarding the vessel’s operations (i.e. speed, route, bunkers purchases, etc.); (iv) sub-charter the vessel and (v) consume any income deriving from the vessel’s charter. Thus, time and bareboat charter agreements are accounted for as operating leases, ratably on a straight line over the duration of the charter agreement and therefore fall under the scope of ASC 842. In addition, and upon adoption of ASC 842, the Company made an accounting policy election to not recognize contract fulfillment costs for time charters under ASC 340-40.

The charterer may charter the vessel with or without the owner’s crew and other operating services (time and bareboat charter, respectively). Thus, the agreed day rates (hire rates) in the case of time charter agreements also include compensation for part of the agreed crew and other operating services provided by the owner (non-lease components). The Company has elected to account for the lease and non-lease components of time charter agreements as a combined component in its financial statements, having taken into account that the non-lease component would be accounted for ratably on a straight-line basis over the duration of the time charter in accordance with ASC 606 and that the lease component is considered as the predominant component. In this respect, the Company qualitatively assessed that more value is ascribed to the vessel rather than to the services provided under the time charter agreements.

Profit sharing contracts are accounted for as variable consideration and included in the transaction price to the extent that variable amounts earned beyond an agreed fixed minimum hire are determinable at the reporting date and when there is no uncertainty associated with the variable consideration. Profit-sharing revenues are calculated at an agreed percentage of the excess of the charter’s average daily income over an agreed amount.

Revenue from time charter hire arrangements with an escalation clause is recognized on a straight-line basis over the charter term unless another systematic and rational basis is more representative of the time pattern in which the vessel is employed.

Sale and Leaseback Transactions

The adoption of ASC 842 resulted in a change in the accounting method for the lease portion of the daily charter hire for the Company’s chartered-in vessels accounted for as operating leases with firm periods of greater than one year. According to the provisions of ASC 842-20-30-1, at the commencement date, a lessee shall measure both of the following:

a) The lease liability at the present value of the lease payments not yet paid, discounted using the discount rate for the lease at lease commencement.

b) The right-of-use asset, which shall consist all of the following:

i) The amount of the initial measurement of the lease liability.

ii) Any lease payments made to the lessor at or before the commencement date, minus any lease incentives received.

iii) Any initial direct costs incurred by the lessee.

On December 21, 2017, the Company completed a sale-leaseback transaction relating to two of its suezmax tankers, Eurochampion 2004 and Euronike. Under this arrangement, the Company has transferred the underlying assets and leased back the vessels on a bareboat basis. Following adoption of ASC 842 and the package of practical expedients, the Company continues to account for the transaction as an operating lease (Note 4).

Accounting for transactions under common control: Common control transaction is any transfer of net assets or exchange of equity interests between entities or businesses that are under common control by an ultimate parent or controlling shareholder before and after the transaction. Common control transactions may have characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations because, from the perspective of the ultimate parent or controlling shareholder, there has not been a change in control over the acquiree. Due to the fact common control transactions do not result in a change in control at the ultimate parent or controlling shareholder level, the Company does not account for that at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred.

Derivative Financial Instruments: On January 1, 2019, the Company adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815). Targeted Improvements to Accounting for Hedging Activities (ASU No. 2017-12), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements, and ASU 2018-16, “Derivatives and Hedging (Topic 815)—Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes”, which permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge

accounting purposes under Topic 815 in addition to the U.S. Treasury (UST) rate, the London interbank offered rate (“LIBOR”) swap rate, the OIS rate based on the Fed Funds Effective Rate and the SIFMA Municipal Swap Rate. The amendments have been adopted on a prospective basis for qualifying new or redesignated hedging relationships entered into on or after the date of adoption. The adoption of this new accounting guidance had no effect on the Company’s consolidated financial statements.

2.	Transactions with Related Parties

(a)

Tsakos Energy Management Limited (the “Management Company”): The Holding Company has a Management Agreement (“Management Agreement”) with the Management Company, a Liberian corporation, to provide overall executive and commercial management of its affairs for a monthly fee, which may be adjusted per the Management Agreement of March 8, 2007, effective from January 1, 2008, at the beginning of each year, in accordance with the terms of the Management Agreement, if both parties agree. The monthly fees include fees which are paid to the technical managers on a monthly basis, including third-party managers for the LNG carriers Maria Energy, Neo Energy, the VLCCs Ulysses, Hercules I, the aframax tankers Sapporo Princess and Maria Princess and the suezmax tanker Eurochampion 2004. The Management Company, for services rendered, charged $5,025 for the second quarter of 2019 and $5,055 for the prior year second quarter. Charges for the first half of 2019 and 2018 amounted to $10,050 and $10,119, respectively.

In addition to the management fee, the Management Agreement provides for an incentive award to the Management Company, which is at the absolute discretion of the Holding Company’s Board of Directors. No such award was granted in the first six months of 2019 and the respective prior year first half.

The Holding Company and the Management Company have certain officers and directors in common. The President, who is also the Chief Executive Officer and a Director of the Holding Company, is also the sole stockholder of the Management Company. The Management Company may unilaterally terminate its Management Agreement with the Holding Company at any time upon one year’s notice. In addition, if even one director is elected to the Holding Company without the recommendation of the existing Board of Directors, the Holding Company would be obligated to pay the Management Company an amount calculated in accordance with the terms of the Management Agreement. Under the terms of the Management Agreement between the Holding Company and the Management Company, the Holding Company may terminate the Management Agreement only under specific circumstances, without the prior approval of the Holding Company’s Board of Directors.

Estimated future management fees payable over the next ten years under the Management Agreement, exclusive of any incentive awards and based on existing vessels and known vessels scheduled for future delivery, as at June 30, 2019, are $10,554 for the remainder of 2019, $21,278 for 2020, $21,420 for each of the years 2021, 2022 and 2023, and $113,339 from 2024 to 2029.

Management fees for vessels are included in General and administrative expenses in the accompanying interim Consolidated Statements of Comprehensive Income (Loss). Also, under the terms of the Management Agreement, the Management Company provides supervisory services for the construction of new vessels for a monthly fee of $20.4. There were no such fees during the six months ended June 30, 2018, while fees amounting to $367 were charged during the six months ended June 30, 2019 and accounted for as part of construction costs for delivered vessels or included in Advances for vessels under construction. For the second quarter of 2019, the amount of $245 was charged, while no such fees were charged in the second quarter of 2018.

At June 30, 2019, the amount due to the Management Company was $220 ($114 at December 31, 2018).

(b)

Tsakos Columbia Shipmanagement S.A. (“TCM”): The Management Company appointed TCM to provide technical management to the Company’s vessels from July 1, 2010. TCM is owned jointly and in equal part by related party interests and by a private German group. TCM, with the consent of the Holding Company, may subcontract all or part of the technical management of any vessel to an alternative unrelated technical manager.

Effective July 1, 2010, the Management Company, at its own expense, pays technical management fees to TCM and the Company bears and pays directly to TCM most of its operating expenses, including repairs and maintenance, provisioning and crewing of the Company’s vessels, as well as certain charges which are capitalized or deferred, including reimbursement of the costs of TCM personnel sent overseas to supervise repairs and perform inspections on Company vessels. TCM for services rendered charged $445 for the second quarter of 2019 and $571 for the prior year second quarter. For the first half of 2019, charges amounted to $928 compared to $1,010 for the prior year first half.

At June 30, 2019, the amount due from TCM was $19,566 ($20,923 at December 31, 2018).

TCM has a 25% share in a manning agency, located in the Philippines, named TCM Tsakos Maritime Philippines, which provides crew to certain of the Company’s vessels. The Company has no control or ownership directly in TCM Tsakos Maritime Philippines, nor had any direct transactions to date with the agency.

(c)

Tsakos Shipping and Trading S.A. (“Tsakos Shipping”): Tsakos Shipping provides chartering services for the Company’s vessels by communicating with third party brokers to solicit research and propose charters. For this service, the Company pays to Tsakos Shipping a chartering commission of approximately 1.25% on all freights, hires and demurrages. Such commissions are included in Voyage expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss). Tsakos Shipping also provides sale and purchase of vessels brokerage service. For this service, Tsakos Shipping may charge brokerage commissions. In the first half of 2019 and 2018, there were no such charges. Tsakos Shipping may also charge a fee of $200 (or such other sum as may be agreed) on delivery of each new-building vessel in payment for the cost of design and supervision of the new-building by Tsakos Shipping. In the first half of 2019 and 2018, there were no such charges.

Certain members of the Tsakos family are involved in the decision-making processes of Tsakos Shipping and of the Management Company and are also shareholders and directors of the Holding Company.

Tsakos Shipping for services rendered charged $1,711 for the second quarter of 2019 compared to $1,549 for the prior year second quarter. For the first half of 2019, the charge amounted to $3,545 compared to $3,092 for the prior year first half. The amount due to Tsakos Shipping as at June 30, 2019, was $897 ($520 at December 31, 2018). There is also at June 30, 2019, an amount of $341 ($327 at December 31, 2018) due to Tsakos Shipping, included in accrued liabilities, which relates to services rendered but not yet invoiced.

(d)

Argosy Insurance Company Limited (“Argosy”): The Company places its hull and machinery insurance, increased value insurance and war risk and certain other insurances through Argosy, a captive insurance company affiliated with Tsakos Shipping. For the second quarter of 2019, Argosy, for services rendered, charged $2,459 compared to $2,350 for the prior year quarter. For the first half of 2019, charges amounted to $4,751 compared to $4,934 for the prior year first half. The amount due to Argosy as at June 30, 2019, was $1,880 ($3,387 at December 31, 2018). There is also an amount of $29 ($nil at December 31, 2018) due to Argosy, included in accrued liabilities, which relates to services rendered but not yet invoiced.

(e)

AirMania Travel S.A. (“AirMania”): Apart from third-party agents, the Company also uses an affiliated company, AirMania, for travel services. For the second quarter of 2019, AirMania, for services rendered, charged $1,438 compared to $1,235 in the prior year quarter. For the first half of 2019, charges amounted to $2,901 compared to $2,815 for the prior year first half.

The amount due to AirMania as at June 30, 2019, was $455 ($345 at December 31, 2018).

3.	Revenue from Contracts with Customers

Voyage charters and contracts of affreightment: Revenues from voyage charters and contracts of affreightment amounted to $54,563 and $40,434 for the second quarter of 2019 and 2018, respectively, and for the first half of 2019, amounted to $114,408 compared to $80,383 for the prior year first half.

Time and bareboat charters: Revenues from time charter hire arrangements amounted to $89,457 and $83,493 for the second quarter of 2019 and 2018, respectively, and for the first half of 2019, amounted to $176,656 compared to $169,268 for the prior year first half.

Unearned revenue: Unearned revenue represents cash received within the reporting period, for which related service has not been provided, primary relating to time charter agreements. As of June 30, 2019, deferred revenue amounted to $10,988 ($6,007 as December 31, 2018).

4.	Vessels

Sale and Leaseback

On December 21, 2017, the Company entered into a five-year sale and leaseback agreement for each of the two suezmaxes, Eurochampion 2004 and Euronike. The agreed net sale price was $32,600 each. Under these leaseback agreements, there is a seller’s credit of $6,500 each on the sales price that becomes immediately payable to the Company by the owners at the end of the five-year charter or upon sale of the vessels during the charter period. Following adoption of ASC 842 and the package of practical expedients, the Company continues to account for the transaction as an operating lease.

Upon adoption of ASC 842, the Company as at January 1, 2019 recognized on the interim consolidated balance sheet a right-of-use asset of $29.3 million based on the present value of the future minimum lease payments and an obligation under operating lease of $29.3 million. The Company has not incurred any initial direct costs for the sale and leaseback transaction and has not performed any payments prior to the commencement date of the contract. The leaseback agreements include three one-year option periods, following completion of the initial five-year charters, which are not recognized as part of the right-of-use asset and the obligation under operating lease.

The incremental borrowing rate used to determine the right-of-use asset and the obligations under operating lease was 5.45% and the weighted average remaining lease term was 3.48 years as at June 30, 2019. Amortization of the right-of-use asset is recognized on a straight-line basis from the commencement date of the contract to the end of the sale and leaseback, provided that no impairment will be recognized over the lease term. As at June 30, 2019, both the right-of use asset and the corresponding obligation under operating lease were $25.4 million (current portion $7.7 million and non-current portion $17.7 million).


Year	Lease Commitment
July 1 to December 31, 2019		4,097
2020		8,191
2021		8,191
2022		8,191

Minimum net lease payments		28,670
Less: present value discount		(3,319	)

Total Obligations under operating lease (current and non-current portion)		25,351

The Company has subleased the vessels and has recognized sublease income of $2.3 million for the second quarter of 2019 compared to $2.2 million in the prior year second quarter. The amount of $5.4 million was recognized for the first half of 2019 compared to $4.3 million in the prior year first half.

Held for sale

During the second quarter of 2019, the Company assessed that the suezmax tankers Archangel and Alaska and the aframax Izumo Princess met the held for sale criteria. The Company measured the held for sale vessels at the lower of carrying value and fair value less costs to sell ($94,560). The fair value was determined through Level 2 inputs.

Sales

There were no vessel sales during the first half of 2019. On April 11, 2018, the Company sold the VLCC Millennium, realizing a net loss of $364, which is separately reflected in the accompanying Consolidated Statement of Comprehensive Income (Loss).

5.	Deferred Charges

Deferred charges consisting of dry-docking and special survey costs, net of accumulated amortization, amounted to $25,921 and $27,815, at June 30, 2019 and December 31, 2018, respectively. Amortization of deferred dry-docking costs was $5,206 during the first six months of 2019 and $4,492 during the first six months of 2018 and is included in Depreciation and amortization in the accompanying interim Consolidated Statements of Comprehensive Income (Loss).

6.	Long-Term Debt


Facility	June 30, 2019			December 31, 2018
(a) Credit Facilities		—			62,500
(b) Term Bank Loans		1,542,660			1,544,622

Total		1,542,660			1,607,122
Less deferred finance costs, net		(10,690	)		(11,521	)


Facility	June 30, 2019			December 31, 2018
Total long-term debt		1,531,970			1,595,601
Less current portion of debt		(196,644	)		(163,870	)
Add deferred finance costs, current portion		3,879			3,286

Total long-term portion, net of current portion and deferred finance costs		1,339,205			1,435,017

(a)

Credit facilities

As at December 31, 2018, the Company had one open revolving credit facility which matured in February 2019.

(b)

Term bank loans

Term loan balances outstanding at June 30, 2019, amounted to $1,542,660. These bank loans are payable in U.S. Dollars in quarterly or semi-annual installments, with balloon payments due at maturity between July 2020 and January 2028. Interest rates on the outstanding loans as at June 30, 2019 are based on LIBOR plus a spread. At June 30, 2019, interest rates on these term bank loans ranged from 4.09% to 5.03%.

On January 10, 2019, the Company drew down $62,500 to refinance an existing loan with the same amount. The new loan is repayable in ten semi-annual installments of $3,000, commencing six months after the drawdown date, plus a balloon of $32,500 payable with the last installment.

On January 28, 2019, the Company signed a new six-year term bank loan for $88,150 relating to the refinancing of the debt approaching maturity on the suezmax tankers, Spyros K and Dimitris P, the aframax tanker Uraga Princess and the panamax tanker Salamina. The loan was drawn on January 30, 2019 and is repayable in twelve semi-annual installments of $5,200, commencing six months after the drawdown date, plus a balloon of $25,750 payable together with the last installment. Part of the loan, for the vessel Salamina, amounting to $14,272 was prepaid on June 17, 2019.

On May 31, 2019, the Company signed a new loan agreement amounting to $38,250 to refinance the existing loans of four vessels, the panamax tankers, Maya, Inca, Selini and Salamina. On May 31, 2019 and June 13, 2019, the Company drew down the amount of $25,500 and $12,750, respectively. On May 31, 2019 and June 3, 2019, the Company repaid the old loan amounts of $9,062 for Maya and Inca and $16,575 for Selini. The loan is repayable in ten semi-annual installments of $3,187, commencing six months after the drawdown date, plus a balloon of $6,375 payable together with the last installment.

On July 12, 2019, the Company signed a new loan agreement amounting to $26,000 for the refinancing of three handysize vessels, Amphitrite, Arion and Andromeda. On July 17, 2019, the Company drew down $26,000 and on the same date, repaid the old loan amounting to $19,448. The new loan is repayable in ten semi-annual installments of $2,600.

On August 5, 2019, the Company signed a new loan agreement amounting to $72,000 for the refinancing of two aframax tankers, Thomas Zafiras and Leontios H. The loan was drawn on August 8, 2019 and is repayable in fourteen semi-annual installments of $2,400 plus a balloon payment of $38,400 payable together with the last installment. On August 9, 2019, the Company prepaid the old loan amounting to $64,825.

On August 21, 2019, the Company signed a new loan agreement amounting to $71,036 for the refinancing of two aframax tankers, Elias Tsakos and Oslo TS. The loan was drawn in two tranches on August 27, 2019 and August 28, 2019, repayable in fourteen semi-annual installments of $1,200 plus a balloon of $19,200 and ten semi-annual installments of $1,341 plus a balloon of $21,626 payable with last installment, respectively. On August 27, 2019 and August 28, 2019, the Company prepaid the old loans amounting to $31,212 and $35,036, respectively.

The weighted-average interest rates on the above executed loans for the applicable periods were:


Three months ended June 30, 2019	4.61	%
Three months ended June 30, 2018	4.25	%
Six months ended June 30, 2019	4.68	%
Six months ended June 30, 2018	4.00	%

The above term bank loans are secured by first priority mortgages on all vessels, by assignments of earnings and insurances of the respectively mortgaged vessels, and by corporate guarantees of the relevant vessel-owning subsidiaries.

The loan agreements include, among other covenants, covenants requiring the Company to obtain the lenders’ prior consent in order to incur or issue any financial indebtedness, additional borrowings, pay dividends if an event of default has occurred, sell vessels and assets, and change the beneficial ownership or management of the vessels. Also, the covenants require the Company to maintain a minimum liquidity, not legally restricted, of $144,475 at June 30, 2019 and $99,154 at December 31, 2018, a minimum consolidated leverage ratio, a minimum hull value in connection with the vessels’ outstanding loans and insurance coverage of the vessels against all customary risks. Two loan agreements require the Company to maintain throughout the security period, an aggregate credit balance in a deposit account of $3,700. Two loan agreements require a monthly pro rata transfer to a retention account of any principal due, but unpaid.

As at June 30, 2019, the Company and its wholly and majority owned subsidiaries had twenty-five loan agreements, with an aggregate principal amount outstanding thereunder totaling $1,542,660. The Company fulfilled its requirements in respect of the financial covenants of all the agreements in relation to the leverage ratio and all other terms and covenants, apart from the value-to-loan requirement in one of its loan agreements, which did not require an amount to be reclassified within current liabilities at June 30, 2019.

The Company’s liquidity requirements relate primarily to servicing its debt, funding the equity portion of investments in vessels and funding expected capital expenditure on dry-dockings and working capital.

The annual principal payments required to be made after June 30, 2019, are as follows:


Period/Year	Amount
July to December 2019		115,358
2020		197,915
2021		241,013
2022		180,146
2023		337,143
2024 and thereafter		471,085

		1,542,660

7.	Interest and Finance Costs, net


	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Interest expense		18,135			18,295			36,998			35,016
Less: Interest capitalized		(300	)		(21	)		(468	)		(21	)

Interest expense, net		17,835			18,274			36,530			34,995
Bunkers swap cash settlements		401			(2,149	)		668			(3,560	)
Amortization of loan fees		1,070			1,262			2,140			2,074
Bank charges		62			377			149			379
Change in fair value of non-hedging financial instruments		1,894			(2,981	)		(632	)		(1,160	)

Net total		21,262			14,783			38,855			32,728

At June 30, 2019, the Company was committed to five floating-to-fixed interest rate swaps with major financial institutions covering notional amounts aggregating to $282,113, maturing from July 2020 through October 2027, on which it pays fixed rates averaging 3.08% and receives floating rates based on the six-month LIBOR (Note 12).

At June 30, 2019 and December 31, 2018, four interest rate swap agreements were designated and qualified as cash flow hedges, in order to hedge the Company’s exposure to interest rate fluctuations. The fair value of such financial instruments as of June 30, 2019 and December 31, 2018, in aggregate amounted to $14,566 (negative) and $5,000 (negative), respectively. The net amount of cash flow hedge losses at June 30, 2019, that is estimated to be reclassified into earnings within the next twelve months to June 30, 2019 is $1,350.

At June 30, 2019 and December 31, 2018, the Company held one interest rate swap that did not meet hedge accounting criteria. The fair value of the financial instrument as of June 30, 2019 and December 31, 2018, amounted to $182 (negative) and $39 (negative), respectively. As such, the change in its fair value during the first half of 2019 has been included in Change in fair value of non-hedging financial instruments and amounted to a loss of $143.

At June 30, 2019 and December 31, 2018, the Company held three call option agreements to hedge its exposure to bunker price fluctuations associated with the consumption of bunkers by its vessels. The value of the call options at June 30, 2019 and December 31, 2018, was $251 (positive) and $350 (positive), respectively. During the first half of 2019, the payments amounted to $668. The changes in fair values during the first half of 2019 and 2018 amounting to $99 (negative) and $106 (positive), respectively, have been included in Change in fair value of non-hedging financial instruments in the table above, as such agreements do not meet the hedging criteria.

At June 30, 2019 and December 31, 2018, the Company held twenty-five and nineteen bunker swap agreements, respectively, to hedge its exposure to bunker price fluctuations associated with the consumptions of bunkers by its vessels. The fair value of these instruments at June 30, 2019 and December 31, 2018, was $3,099 (negative) and $3,972 (negative), respectively. The change in the fair value in the first half of 2019 and 2018 was $874 (positive) and $358 (positive), respectively, have been included in Change in fair value of non-hedging financial instruments in the table above.

During the first half of 2018, the Company held three bunker swap agreements in order to hedge its exposure to bunker price fluctuations associated with the consumption of bunkers by the vessel Ulysses. The fair values of these financial instruments as of June 30, 2018 were $3,960 (positive). The change in the fair value in the first half of 2018 was $696 (positive) and has been included in Change in fair value of non-hedging financial instruments in the table above. In November 2018, the Company entered into early termination of the three bunker swap agreements.

8.	Stockholders’ Equity

During the first half of 2019, the Company sold 267,877 common shares for net proceeds of $871. During the first half of 2018, the Company sold 1,016,870 common shares from its treasury stock for net proceeds of $3,571.

On January 30, 2019 and April 30, 2019, the Company paid dividends of $0.50 per share, $2,000 in total, on its 8.00% Series B Preferred Shares, $0.55469 per share, $2,218 in total, on its 8.875% Series C Preferred Shares and $0.59375 per share, $7,125 in total, on its 9.50% Series F Preferred Shares. On January 30, 2018 and April 30, 2018, the Company paid dividends of $0.50 per share, $2,000 in total, on its 8.00% Series B Preferred Shares and $0.55469 per share, $2,219 in total, on its 8.875% Series C Preferred Shares.

On February 28, 2019, and May 29, 2019, the Company paid dividends of $0.54687 per share, $3,746 in total, on its 8.75% Series D Preferred Shares and $0.57812 per share $5,319 in total, on its Series E Preferred Shares. On February 28, 2018 and May 29, 2018, the Company paid dividends of $0.54687 per share, $3,746 in total, on its Series D Preferred Shares.

On June 28, 2018, the Company completed an offering of 5,400,000 of its Series F Cumulative Redeemable Perpetual Preferred Shares, par value $1.00 per share, liquidation preference $25.00 per share, raising $130,553, net of underwriter’s discount and other expenses. Dividends on the Series F Preferred Shares are cumulative from the date of original issue and are payable quarterly in arrears on the 30^th day of January, April, July and October of each year, commencing October 30, 2018, when, as and if declared by the board of directors. Dividends will be payable from cash available for dividends at a rate equal to 9.50% per annum of the stated liquidation preference prior to July 30, 2028 and from and including July 30, 2028, at a floating rate equal to three-month LIBOR plus spread of 6.54% per annum of the stated liquidation preference.

On May 30, 2019, the Company paid a dividend of $0.05 per common share, outstanding which was declared on March 29, 2019. On May 10, 2018, the Company paid a dividend of $0.05 per common share outstanding which was declared on March 12, 2018. On August 8, 2018, the Company paid a dividend of $0.05 per common share outstanding which was declared on June 15, 2018.

In the second quarter of 2019, Mare Success S.A, owned 51% by the Company, increased its paid-in capital by $20,408, of which $10,408 constituted the 51% portion contributed by the Company and the $10,000 constituted the 49% portion contributed by Polaris Oil Shipping Inc., an affiliate of Flopec Petrolera Ecuatoriana (“Flopec”). After the recapitalization, the shareholding of Mare Success S.A. remained at 51% owned by the Company and 49% owned by Polaris. The additional paid-in capital was made to finance part of the intragroup sale of vessels, in particular, the panamax tankers, Selini and Salamina. During the second quarter of 2019, the Company transferred the net assets of Selini and Salamina to Mare Success. S.A. The Company accounted the transaction at the carrying amounts of the net assets.

On June 28, 2019, the Company declared the redemption of all of its 2,000,000 Series B Preferred Shares, $25.00 per share and the payment of the final dividend of $0.50 per share, on the same date, July 30, 2019. Upon declaration, the Company re-classified an amount equal to the fair value of the Series B Preferred Shares from equity to current liabilities. The difference between the carrying value and the fair value of the Series B Preferred Shares, amounting to $2,750, was recognized as a reduction of retained earnings as a deemed dividend, and has been considered in the calculations of Loss per Common Share in 2019 (Note 10).

9.	Accumulated other comprehensive income (loss)

In the first half of 2019, accumulated other comprehensive loss increased with unrealized losses of $9,490 which resulted from changes in fair value of financial instruments.

In the first half of 2018, accumulated other comprehensive loss decreased with unrealized gains of $786 which resulted from changes in fair value of financial instruments.

10.

Loss per Common Share

The computation of basic loss per share is based on the weighted average number of common shares outstanding during the period.


	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Numerator
Net income (loss) attributable to Tsakos Energy Navigation Limited		305			(9,553	)		11,537			(21,468	)
Preferred share dividends Series B		(1,000	)		(1,000	)		(2,000	)		(2,000	)
Preferred share dividends Series C		(1,109	)		(1,109	)		(2,218	)		(2,219	)
Preferred share dividends Series D		(1,874	)		(1,874	)		(3,746	)		(3,746	)
Preferred share dividends Series E		(2,659	)		(2,659	)		(5,319	)		(5,319	)
Preferred share dividends Series F		(3,562	)		(71	)		(7,125	)		(71	)
Deemed dividend on Series B preferred shares		(2,750	)		—			(2,750	)		—

Net loss attributable to common stockholders		(12,649	)		(16,266	)		(11,621	)		(34,823	)

Denominator
Weighted average common shares outstanding		87,751,969			86,942,159			87,678,714			86,634,907
Basic and diluted loss per common share	$	(0.14	)	$	(0.19	)	$	(0.13	)	$	(0.40	)

11.

Commitments and Contingencies

At June 30, 2019, the Company had four vessels under construction, two aframax tankers and two suezmax tankers.

The total contracted amount plus extras costs agreed for the four vessels under construction as of June 30, 2019, was $242,136. As of June 30, 2019, the outstanding amount was $196,089. The amount of $55,224 is payable within the second half of 2019 and the amount of $140,865 is payable within 2020.

In the ordinary course of the shipping business, various claims and losses may arise from disputes with charterers, agents and other suppliers relating to the operations of the Company’s vessels. Management believes that all such matters are either adequately covered by insurance or are not expected to have a material adverse effect on the Company’s results from operations or financial condition.

Charters-out

The future minimum revenues of vessels in operation at June 30, 2019, before reduction for brokerage commissions, expected to be recognized on non-cancelable time charters are as follows:


Period/Year	Amount
July 1 to December 31, 2019		166,420
2020		265,153
2021		202,036
2022		133,119
2023 to 2028		307,009

Minimum charter payments		1,073,737

These amounts do not assume any off-hire.

12.

Financial Instruments

(a)

Interest rate risk: The Company is subject to interest rate risk associated with changing interest rates with respect to its variable interest rate term loans and credit facilities as described in Notes 6 and 7.

(b)

Concentration of credit risk: Financial instruments that are subject to credit risks consist principally of cash, trade accounts receivable, investments, and derivatives. The Company places its temporary cash investments, consisting mostly of deposits, primarily with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk. The Company limits the exposure of non-performance by counterparties to derivative instruments by diversifying among counterparties with high credit ratings and performing periodic evaluations of the relative credit standing of the counterparties.

(c)

Fair value: The carrying amounts reflected in the accompanying Consolidated Balance Sheet of cash and cash equivalents, restricted cash, trade receivables, accounts payable and due from/to related parties, approximate their respective fair values due to the short maturity of these instruments, as at June 30, 2019 and December 31, 2018. The fair value of long-term bank loans with variable interest rates approximate the recorded values, generally due to their variable interest rates. The Company performs relevant enquiries on a periodic basis to assess the recoverability of the long-term investment and estimates that the amount presented on the accompanying Consolidated Balance Sheet approximates the amount that is expected to be received by the Company in the event of sale of that investment.

The fair values of the interest rate swap agreements, bunker swap agreements and call option agreements discussed in Note 7 above, are determined through Level 2 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements and are derived principally from or corroborated by observable market data, interest rates, yield curves and other items that allow value to be determined.

The estimated fair values of the Company’s financial instruments, other than derivatives at June 30, 2019 and December 31, 2018, are as follows:


	Carrying Amount June 30, 2019			Fair Value June 30, 2019			Carrying Amount December 31, 2018			Fair Value December 31, 2018
Financial assets/(liabilities)
Cash and cash equivalents		182,929			182,929			204,763			204,763
Restricted cash		9,657			9,657			15,763			15,763
Investments		1,000			1,000			1,000			1,000
Series B Redeemable Preferred Shares		(50,000	)		(50,000	)		—			—
Debt		(1,542,660	)		(1,542,660	)		(1,607,122	)		(1,607,122	)

Tabular Disclosure of Derivatives Location

Derivatives are recorded in the consolidated balance sheet on a net basis by counterparty when a legal right of set-off exists. The following tables present information with respect to the fair values of derivatives reflected in the consolidated balance sheet on a gross basis by transaction. The tables also present information with respect to gains and losses on derivative positions reflected in the Statement of comprehensive income (loss) or in the Balance sheet, as a component of Accumulated other comprehensive income (loss).

Fair Value of Derivative Instruments


		Asset Derivatives				Liability Derivatives
Derivative	Balance Sheet Location	June 30, 2019 Fair Value		December 31, 2018 Fair Value		June 30, 2019 Fair Value		December 31, 2018 Fair Value
Derivatives designated as hedging instruments
Interest rate swaps	Current portion of financial instruments - Fair value		—		—		1,367		30
	Financial instruments - Fair value, net of current portion		—		—		13,199		4,970

	Subtotal		—		—		14,566		5,000


		Asset Derivatives				Liability Derivatives
Derivative	Balance Sheet Location	June 30, 2019 Fair Value		December 31, 2018 Fair Value		June 30, 2019 Fair Value		December 31, 2018 Fair Value
Derivatives not designated as hedging instruments
Interest rate swaps	Current portion of financial instruments - Fair value		—		—		203		18
Interest rate swaps	Financial instruments - Fair value, net of current portion		21		—		—		20
Bunker swaps	Current portion of financial instruments - Fair value		—		—		692		—
Bunker swaps	Financial instruments - Fair value, net of current portion		49		—		2,456		3,972
Bunker call options	Current portion of financial instruments-Fair value		176		217		—		—
Bunker call options	Financial instruments-Fair value, net of current portion		75		133		—		—

	Subtotal		321		350		3,351		4,010

Total derivatives			321		350		17,917		9,010

Derivatives designated as Hedging Instruments-Net effect on the Statement of Comprehensive Income (Loss)


	Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)
Derivative	Amount Three months ended June 30,					Amount Six months ended June 30,
	2019			2018		2019			2018
Interest rate swaps		(5,886	)		1,604		(9,623	)		83

Total		(5,886	)		1,604		(9,623	)		83


	Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Derivative	Location	Amount Three months ended June 30,						Amount Six months ended June 30,
		2019			2018			2019			2018
Interest rate swaps	Depreciation expense		(47	)		(47	)		(94	)		(94	)
Interest rate swaps	Interest and finance costs, net		—			(157	)		(39	)		(609	)

Total			(47	)		(204	)		(133	)		(703	)

Derivatives not designated as Hedging Instruments–Net effect on the Statement of Comprehensive Income (Loss)


	Gain (Loss) Recognized on Derivative
Derivative	Location	Amount Three months ended June 30,					Amount Six months ended June 30,
		2019			2018		2019			2018
Interest rate swaps	Interest and finance costs, net		(123	)		—		(143	)		—
Bunker swaps	Interest and finance costs, net		(1,626	)		5,056		874			4,614
Bunker call options	Interest and finance costs, net		(545	)		75		(765	)		106

Total			(2,294	)		5,131		(34	)		4,720

The accumulated loss from Derivatives designated as Hedging instruments recognized in Accumulated Other Comprehensive Loss as of June 30, 2019 and December 31, 2018 was $18,150 and $8,660 respectively.

The following tables summarize the fair values for assets and liabilities measured on a recurring basis as of June 30, 2019 and December 31, 2018 using level 2 inputs (significant other observable inputs):


Recurring measurements:	June 30, 2019			December 31, 2018
Interest rate swaps		(14,748	)		(5,038	)
Bunker swaps		(3,099	)		(3,972	)
Bunker call options		251			350

		(17,596	)		(8,660	)

13.

Subsequent Events

(a)	On July 12, 2019, the Company signed a loan agreement amounting to $56,352 for the pre and post-delivery financing of the suezmax tanker Hull 8041 under construction. On July 31, 2019, the Company drew down the amount of $6,979.

(b)	On July 15, 2019, the Company drew down an amount of $5,172 for the fourth instalment of the aframax tanker Hull 5033 under construction.

(c)	On July 30, 2019, the Company paid dividends of $0.50, $0.55469 and $0.59375 per share on its 8.00% Series B, its 8.875% Series C and its 9.50% Series F Preferred Shares, respectively, and paid $50,000 on the redemption of its Series B Preferred Shares.

(d)	On July 31, 2019, the Company signed a shipbuilding contract for the construction of one 174,000 cbm LNG carrier from Hyundai Heavy Industries.

(e)	On August 7, 2019, the Company signed a new loan agreement of $54,387 for the pre and post-delivery financing of the suezmax tanker Hull 8042. On August 9, 2019, the Company drew down the amount of $6,733.

(f)	On August 30, 2019, the Company drew down an amount of $5,172 for the fourth installment of the aframax tanker Hull 5036 under construction.

(g)	On August 28, 2019, the Company paid dividends of $0.54687 per share on its 8.75% Series D Preferred Shares and $0.57812 per share on its 9.25% Series E Preferred Shares, respectively.

(h)	Subsequent to June 30, 2019, the Company sold 1,640,179 common shares for net proceeds of $5,356.

EXHIBIT 99.2

TSAKOS ENERGY NAVIGATION LIMITED

THREE AND SIX MONTHS ENDED JUNE 30, 2019

Results of operations – management’s discussion & analysis

(Percentage calculations are based on the actual amounts shown in the accompanying financial statements)

Voyage revenues

Voyage revenue earned for the three months ended June 30, 2019 and 2018:


	2019					2018
	$ million		% of total			$ million		% of total
Time charter-fixed rate		65.6		45	%		59.6		48	%
Time charter-variable rate (profit-share)		23.8		17	%		23.9		19	%
Voyage charter-spot market		46.1		32	%		31.6		26	%
Voyage charter-contract of affreightment		8.5		6	%		8.8		7	%

Total voyage revenue		144.0		100	%		123.9		100	%

Voyage revenue earned for the six months ended June 30, 2019 and 2018:


	2019					2018
	$ million		% of total			$ million		% of total
Time charter-fixed rate		127.0		44	%		119.4		48	%
Time charter-variable rate (profit-share)		49.7		17	%		49.9		20	%
Voyage charter-spot market		97.4		33	%		60.0		24	%
Voyage charter-contract of affreightment		17.0		6	%		20.4		8	%

Total voyage revenue		291.1		100	%		249.7		100	%

Voyage revenue earned during the three months ended June 30, 2019 totaled $144.0 million, a 16.2% increase, compared to $123.9 million earned in the three months ended June 30, 2018, despite the expected seasonal oil demand factors, the extension of OPEC production cuts, refinery maintenance and global fleet overcapacity.

Total utilization (total days that the vessels were actually employed as a percentage of total days in the period that the Company owned or controlled the vessels) achieved by the fleet was 96.6% in the second quarter of 2019 compared to 96.2% in the second quarter of 2018. The lost days were mainly due to the dry-docking of the panamax tanker Salamina and to repositioning of certain vessels to capture more lucrative rates. In the previous second quarter, lost days relating to the delivery, preparation and sale of vessel Millennium and the dry-dockings of the panamax vessel Inca and the DP shuttle tanker Brasil 2014.

Operating days utilized on time-charter with profit-share arrangements decreased by 1.3%, to 1,554 days from 1,575 days during the second quarter of 2019 compared to the second quarter of 2018 and the amount of revenue earned remained relatively stable at $23.8 million in the second quarter of 2019 compared to $23.9 million in the second quarter of 2018, respectively. Operating days on pure time-charter without profit-share arrangements decreased to 2,272 days in the second quarter of 2019 from 2,546 in the second quarter of 2018. Despite the decrease in operating days by 10.8%, revenue earned by vessels on time-charter increased by $6.0 million, mainly due to the renewal of time-charter agreements with increased rates, including renewal of both the LNG charters with significantly higher rates. Profit-share from vessels with profit-share arrangements provided a further $2.5 million. In addition, in the second quarter of 2019, revenue amounting to $3.7 million was determined by a tribunal as being due to the Company, which related to late redelivery by the charterer of the VLCC Millennium in previous periods.

Employment days on spot and contract of affreightment increased to 1,799 for the second quarter of 2019 from 1,493 for the equivalent period of 2018. Although revenue days on this type of employment increased by 20.5%, the contribution of additional revenue earned reached $14.2 million, a 34.9% increase over the previous quarter, with spot rates generated by suezmax, aframax and handysize vessels during the second quarter of 2019 generating considerably higher freight per vessel than in the prior second quarter.

During the six months ended June 30, 2019, voyage revenue increased to $291.1 million from $249.7 million earned in the first half of 2018, an increase of $41.4 million, or 16.6%, compared to revenue achieved in the six months ended June 30, 2019. For the first six months of 2019, the utilization achieved was 96.7%, compared to 96.2% in the first six months of 2018. Apart from the lost days of the second quarter, the six-month period of 2019 also includes lost days from the dry-docking of the panamax tanker Selini and various repositioning voyages.

The Company was able to benefit from the higher rates achieved in the spot market during the six-month period ended June 30, 2019 due to vessels being well positioned in the market, evident by their TCE performance. For the six-month period of 2019, the average daily TCE was $20,418 compared to $17,463 for the equivalent period of 2018, a 16.9% increase. For the second quarter of 2019, the time charter equivalent was $19,783 per day compared to $17,154 per day for the previous year’s second quarter, a 15.3% increase. Average daily TCE rate earned for the three- and six-month periods ended June 30, 2019 and 2018, per vessel category were:


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
	$		$		$		$
LNG carrier		52,732		29,920		45,937		26,786
VLCC		48,335		24,857		38,073		23,991
Suezmax		15,947		15,079		17,664		14,716
DP2 Suezmax		50,310		49,115		50,310		49,339
Aframax		18,451		17,650		20,813		18,104
Panamax		14,194		12,946		13,662		14,005
Handymax		13,026		11,848		13,315		11,960
Handysize		12,359		9,928		13,998		11,462

(i) TCE which represents voyage revenues less voyage expenses is divided by the number of operating days less 124 days lost for the second quarter of 2019 and 214 for the first half of 2019 as a result of calculating revenue on a loading to discharge basis compared to 104 for the second quarter and 188 for the first half of 2018.

Time charter equivalent revenue and TCE rate are not measures of financial performance under U.S. GAAP and may not be comparable to similarly titled measures of other companies. However, TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in shipping performance despite changes in the mix of charter types (i.e. spot voyage charters, time charters and bareboat charters) under which the vessels may be employed between the periods. The following table reflects the calculation of our TCE rate for the period presented (amount in thousands of U.S. dollars, except for TCE rate, which is expressed in U.S. dollars and available days):


	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Voyage revenues	$	144,020		$	123,927		$	291,064		$	249,651
Less: Voyage Expenses		(35,191	)		(29,407	)		(66,755	)		(56,683	)

Time charter equivalent revenues	$	108,829		$	94,520		$	224,309		$	192,968

Divided by: net earnings (operating) days		5,501			5,510			10,986			11,050
Average TCE per vessel per day	$	19,783		$	17,154		$	20,418		$	17,463

Voyage expenses

Voyage expenses include costs that are directly related to a voyage, such as port charges, agency fees, canal dues and bunker (fuel) costs. These voyage expenses are borne by the Company unless the vessel is on time-charter, in which case they are borne by the charterer. Commissions on revenue are included in voyage expenses and they are borne by the Company for all types of charter.

Voyage expenses for the three months ended June 30, 2019 and 2018:


	Voyage expenses							Average daily voyage expenses per relevant vessel
	2019		2018					2019		2018
	$ million		$ million		increase/ (decrease)			$		$		increase/ (decrease)
Bunker expenses		18.4		16.1		14.2	%		10,237		10,798		(5.2	)%
Port and other expenses		11.8		8.8		34.1	%		6,546		5,881		11.3	%
Commissions		5.0		4.5		10.9	%		2,778		3,017		(7.9	)%

Total		35.2		29.4		*19.7*	%		19,561		19,696		(*0.7*	)%

Days on Spot and COA									1,799		1,493

Voyage expenses for the six months ended June 30, 2019 and 2018:


	Voyage expenses							Average daily voyage expenses per relevant vessel
	2019		2018					2019		2018
	$ million		$ million		increase/ (decrease)			$		$		increase/ (decrease)
Bunker expenses		35.6		30.6		16.2	%		10,760		10,287		4.6	%
Port and other expenses		20.9		17.2		21.7	%		6,324		5,771		9.6	%
Commissions		10.3		8.9		15.7	%		3,102		2,977		4.2	%

Total		66.8		56.7		*17.8*	%		20,186		19,035		*6.1*	%

Days on Spot and COA									3,307		2,978

Voyage expenses were $35.2 million during the quarter ended June 30, 2019, compared to $29.4 million during the prior year’s second quarter, a 19.7% increase. The increase in voyage expenses for the second quarter of 2019 compared to the second quarter of 2018 is mainly attributable to the increase in the number of days that the vessels were employed on types of employment bearing voyage expenses (spot and contract of affreightment). An increase in bunker expenses was driven mainly by the volume of bunkers consumed, which was approximately 22.2% higher in the second quarter of 2019 compared to the second quarter of 2018. Total port expenses increased by $3.0 million for the second quarter of 2019 compared to the equivalent period of 2018 and the average port expenses per vessel per day were 11.3% higher as a result of a high number of port calls during the second quarter of 2019 compared to the second quarter of 2018.

Voyage expenses were $66.8 million in the first six months of 2019, compared to $56.7 million in the first six months of 2018, a 17.8% increase. The increase in voyage expenses over the six-month periods is attributable to the days the vessels were operating in types of employment bearing voyage expenses, which increased by 11.0%. Bunker expenses in the first half of 2019 compared to the first half of 2018 increased by $5.0 million, mainly due to the volume of bunkers consumed on long-haul voyages, which increased by 12.5%, partially counterbalanced by the decrease in the average bunker prices by 2.8%. Port and other expenses increased by $3.7 million between the six-month periods and increased by 9.6% on a daily basis.

Commissions amounted to $5.0 million, or 3.5% of voyage revenue, during the second quarter of 2019 compared to $4.5 million, or 3.6% of voyage revenue, during the second quarter of 2018. The increase was due to higher voyage charter revenues, with commission rates remaining at similar levels on average as the prior equivalent period. For the six-month period ended June 30, 2019, commissions amounted to $10.3 million, or 3.5% of voyage revenue, compared to $8.9 million, or 3.6% of voyage revenue, in the corresponding period of 2018. The overall increase between the respective six-month periods was mainly due to achieving higher revenue.

Vessel operating expenses

Operating expenses for the three months ended June 30, 2019 and 2018:


	Operating expenses									Average daily operating expenses per vessel
	2019			2018						2019			2018
	$ million			$ million			increase/ (decrease)			$			$			increase/ (decrease)
Crew expenses		26.8			26.7			0.3	%		4,599			4,576			0.5	%
Insurances		3.8			3.9			(1.2	)%		657			664			(1.1	)%
Repairs and maintenance, and spares		7.5			5.6			31.3	%		1,270			966			31.5	%
Stores		3.2			2.6			19.8	%		538			449			20.0	%
Lubricants		1.7			1.8			(3.5	)%		301			311			(3.4	)%
Other (quality and safety, taxes, registration fees, communications)		3.2			4.0			(19.2	)%		557			689			(19.1	)%
Foreign currency (gains) losses		(0.1	)		(0.4	)		(86.2	)%		(11	)		(84	)		(86.2	)%

Total		46.1			44.2			*4.3*	%		7,911			7,571			*4.5*	%

Earnings capacity days											5,824			5,834

Operating expenses for the six months ended June 30, 2019 and 2018:


	Operating expenses								Average daily operating expenses per vessel
	2019			2018					2019			2018
	$ million			$ million		increase/ (decrease)			$			$		increase/ (decrease)
Crew expenses		53.7			54.6		(1.6	)%		4,635			4,670		(0.8	)%
Insurances		7.6			8.0		(4.5	)%		660			685		(3.7	)%
Repairs and maintenance, and spares		12.4			12.2		2.0	%		1,074			1,044		2.8	%
Stores		5.7			6.0		(4.5	)%		496			515		(3.7	)%
Lubricants		3.6			3.7		(6.1	)%		301			318		(5.3	)%
Other (quality and safety, taxes, registration fees, communications)		6.5			7.0		(7.0	)%		564			601		(6.2	)%
Foreign currency (gains) losses		(0.1	)		0.2		(179.9	)%		(13	)		16		(180.6	)%

Total operating expenses		89.4			91.7		*(2.5*	)%		7,717			7,849		*(1.7*	)%

Earnings capacity days										11,584			11,684

Vessel operating expenses include crew expenses, insurances, repairs and maintenance, spares, stores, lubricants, and other expenses relating to quality and safety, tonnage tax, registration fees, communications and foreign currency gains or losses.

Total operating costs were $46.1 million during the quarter ended June 30, 2019 compared to $44.2 million during the second quarter of 2018, an increase of 4.3%. The increase is mainly attributable to significant re-stocking of spares and stores and supplies and the timing of deliveries of these items to the vessels. Also, high non-deferrable dry-docking costs were incurred in the second quarter of 2019. Operating expenses were $89.4 million in the first six months of 2019, compared to $91.7 million in the first six months of 2018, a 2.5% decrease. The operating fleet remained relatively the same for the second quarter and the six-month period of 2019, compared to the equivalent periods of 2018, while a minor decrease of 0.2% and 0.9% in the earning capacity days is attributed to the sale of vessel Millennium during early April 2018.

Average operating expenses per ship per day increased by $340 to $7,911 for the second quarter of 2019 from $7,571 in the second quarter of 2018, a 4.5% increase, mainly attributable to major re-stocking of spares and stores for the upcoming periods. For the six-month periods, there was a decrease in average daily operating expenses per vessel to $7,717 in the first half of 2019 from $7,849 in the first half of 2018, a decrease of $132 daily, or 1.7% due to a low first quarter expenditure.

Depreciation and amortization of deferred charges

Depreciation and amortization charges totaled $34.3 million in the second quarter of 2019 compared to $36.6 million in the second quarter of 2018, a 6.4% decrease. For the first half of 2019 depreciation and amortization decreased to $69.5 million from $72.4 million for the first half of 2018.

Depreciation amounted to $31.7 million in the second quarter of 2019 and $34.2 million in the second quarter of 2018, the decrease being mainly due to the aframax vessel Izumo Princess and suezmax vessels Alaska and Archangel, which were classified as held for sale for the quarter ended June 30, 2019 and did not incur depreciation expense during the second quarter of 2019. In addition, the decrease is also attributed to the impairment charge taken on five vessels of the fleet during the fourth quarter of 2018. The decrease was partially offset by vessel Millennium, which was classified as Held for Sale since December 31, 2017 and did not incur depreciation expense in the first two quarters of 2018. For the first six months of 2019, depreciation was $64.3 million compared to $67.9 million in the first six months of 2018, a 5.3% decrease, primarily due to the three vessels being accounted for as held for sale, in addition to the aforementioned impairment charge taken during the fourth quarter of 2018.

Amortization of deferred dry-docking charges was $2.6 million during the second quarter of 2019, compared to $2.5 million during the second quarter of 2018. For the six-month periods ended June 30, 2019 and 2018, amortization of deferred dry-docking charges was $5.2 million and $4.5 million, respectively. The increase in both the three and six-month periods of 2019 relates primarily to the amortization of deferred charges arising from the increased number of vessels that underwent dry-docking in recent years.

Impairment

In the first half of 2019, vessel values did not improve over values determined in prior periods, resulting in a large part of the fleet having carrying values in excess of market values. However, the fleet is relatively young, with an average age of 8.7 years as of June 30, 2019 and every vessel in the fleet is expected to generate considerably more cash during their remaining expected lives than their carrying values as at June 30, 2019. The Company’s cash flow tests per vessel did not indicate that such an impairment charge was required for any vessel of the fleet at June 30, 2019 and 2018.

General and administrative expenses

General and administrative expenses include management fees, administrative expenses, management incentive awards and stock compensation expense.

General and administrative expenses (G&A expenses) remained on the same levels for both the second quarter and the six-month period of 2019 compared to the equivalent periods of 2018, as a result of maintaining similar fleet size. For each of the second quarter of 2019 and 2018, general and administrative expenses totaled $6.8 million. For the six months ended June 30, 2019 and 2018, G&A expenses amounted to $13.2 million and $13.6 million, respectively, representing a 3.0% decrease.

The Company pays to Tsakos Energy Management fixed fees per vessel under a management agreement. The fee includes compensation for services that cover both the management of the individual vessels, as described below, and of the enterprise as a whole. Management fees, including those paid to third-party ship management companies, totaled $5.4 million during the quarter ended June 30, 2019, a 1.4% decrease over the quarter ended June 30, 2018. For the six months ended June 30, 2019 management fees were $10.8 million compared to $11.0 million for the first six months of 2018, a 1.5% decrease. The management fee per vessel may be increased annually if certain criteria defined in the management agreement are met. The management fee to Tsakos Energy Management has not been increased since the beginning of 2012.

In the first half of 2019, all the vessels in the fleet were technically managed by Tsakos Columbia Shipmanagement, S.A., apart from the LNG carriers Neo Energy and Maria Energy, the VLCCs Ulysses and Hercules I, the suezmax Eurochampion 2004 and the aframaxes Maria Princess and Sapporo Princess, which have been managed by a third-party manager. Monthly management fees for operating conventional vessels are $27,500 per month. The monthly fee relating to vessels chartered-in or chartered-out on a bare-boat basis or for vessels under construction is $20,400. Management fees for the LNG carriers are $36,877, of which $10,000 are payable to the management company and $26,877 to the third-party manager. Management fees for Eurochampion 2004, Maria Princess, Sapporo Princess, Millennium (until its sale), Hercules I and Ulysses are $27,500 per month, of which $14,503 are payable to a third-party manager. Management fees for the DP2 shuttle tankers are $35,000 per month.

Office administrative expenses consist primarily of professional fees, office supplies, investor relations, advertising costs, directors’ liability insurance, directors’ fees and travel-related expenses. Administrative expenses totaled $1.4 million during the second quarter ended June 30, 2019 compared to $1.3 million during the previous year’s second quarter.

General and administrative expenses, including the management fee, plus any incentive or stock compensation award, represent the overhead of the Company. On a per vessel basis, the daily overhead was $1,167 and $1,168 for the second quarter of 2019 and 2018, respectively. For the six-month period ended June 30, 2019, the daily overhead per vessel was $1,142 compared to $1,168 for the six-month period ended June 30, 2018.

Operating income

Income from vessel operations was $19.0 million during the second quarter of 2019, compared to $3.9 million during the second quarter of 2018, the increase being attributed to additional revenue earned and operating expenses maintained at similar levels for the second quarter of 2019 compared to the equivalent period of 2018. During the first half of 2019, income from vessel operations was $46.8 million, compared to $9.5 million during the first half of 2018, the significant increase being mainly due to vessels benefiting from a strong first quarter, with freight rates recovering from the low levels of 2018 and operating expenses maintained at equivalent levels for the six-month period ended June 30, 2019 compared to the six-month ended June 30, 2018.

Interest and finance costs

Interest and finance cost analysis in the table below is not presented according to U.S. GAAP guidelines. However, management believes that this analysis may provide its users a better understanding of the Company’s finance cost. Management also uses this analysis in making financial and planning decisions.


	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
	$ million			$ million			$ million			$ million
Interest on loans		18.1			18.1			36.9			34.4
Interest rate swaps cash settlements		—			0.5			0.1			0.9

Total interest		18.1			18.6			37.0			35.3
Less: Interest capitalized		(0.3	)		—			(0.5	)		—

Interest expense, net		17.8			18.6			36.5			35.3
Bunker hedging instruments cash settlements		0.4			(2.1	)		0.7			(3.6	)
Change in fair value of non-hedging bunker instruments		1.9			(3.0	)		(0.6	)		(1.2	)
Change in fair value of hedging interest rate swaps		0.1			(0.3	)		0.1			(0.3	)
Other finance costs		1.1			1.6			2.2			2.5

Net total		21.3			14.8			38.9			32.7

Interest and finance costs, net, were $21.3 million for the second quarter of 2019, compared to $14.8 million for the second quarter of 2018, a 43.8% increase, mainly attributed to the negative change in fair value of non-hedging bunker swaps.

Despite the increase in the average loan interest rate to 4.6% for the second quarter of 2019 from 4.3% in the second quarter of 2018, loan interest for both the second quarter of 2019 and 2018 (excluding the impact of interest rate swaps) was $18.1 million, mainly due to the decrease of loan balances by $141.6 million between the respective periods.

The Company did not pay any interest on swaps for the second quarter of 2019 compared to $0.5 million paid in the second quarter of 2018, the difference being due to the expiration of two hedging interest rate swaps during the second quarter of 2018. For the six-month period ended June 30, 2019 interest paid on swaps amounted to $0.1 million compared to $0.9 million for the six-month period of 2018.

For the six months ended June 30, 2019, interest and finance costs, net, were $38.9 million compared to $32.7 million for the six months ended June 30, 2018, a 18.7% increase. Loan interest (excluding the impact of interest rate swaps) increased to $36.9 million in the six months ended June 30, 2019 from $34.4 million in the six months ended June 30, 2018 due to the increase in the average loan interest rate to 4.7% from 4.0%, a 16.9% increase.

Capitalized interest is based on expenditure incurred to date on vessels under construction. As at June 30, 2019 the Company had four vessels under construction, which contributed to the increase of capitalized interest for the three and six-month periods ended June 30, 2019 compared to the equivalent periods of 2018. For the second quarter of 2019 capitalized interest amounted to $0.3 million and for the six-month period amounted to $0.5 million. For the equivalent periods of 2018 capitalized interest was an insignificant amount due to the initiation of the newbuilding program for the two aframax vessels in early May of 2018.

During the first half of 2019, the Company held three bunker-related call option agreements and paid a premium of $0.7 million compared to holding one call option agreement during the prior year six-month period. The changes in fair value of the bunker call options for the first half of 2019 amounted to $0.1 million negative compared to $0.1 million positive for the six-month period of 2018.

As at June 30, 2019, the Company had twenty-five bunker swap agreements, compared to thirteen in the prior year first half. The change in their fair values amounted to $0.8 million positive compared to $0.4 million positive in the prior year first half. Bunker derivative instruments had a negative movement in the fair market value of $1.6 million in the second quarter of 2019 and $1.5 million positive movement in the prior year second quarter.

During 2016, the Company entered into three bunker swap agreements in order to hedge its exposure to bunker price fluctuations associated with the consumption of bunkers by the vessel Ulysses. The Company entered into early termination agreements of the three bunker swap agreements with expiring dates in September 2019 and October 2019 during the fourth quarter of 2018. The change in their fair values amounted to $0.7 million positive in the first half of 2018.

Other finance costs amounted to $1.1 million in the second quarter of 2019 and $1.6 million in the second quarter of 2018. In the first half of 2019, other finance costs amounted to $2.2 million compared to $2.5 million in the first half of 2018.

Interest income

During the second quarter of 2019, interest income was $1.8 million compared to $0.4 million during the second quarter of 2018. For the six-month periods ended June 30, 2019 and 2018, interest income was $2.5 million and $0.7 million, respectively, mostly due to higher interest rates on bank deposits.

Non-controlling interest

There is a non-controlling interest of 49% in the subsidiary Mare Success S.A., which owns 100% of each of the companies that own the panamax vessels Maya and Inca. In the second quarter of 2019, Mare Success increased its paid-in capital by $20.4 million, of which $10.4 million constitutes the 51% contributed by the Company and $10,000 constitutes the 49% contributed by Polaris Oil Shipping Inc, an affiliate of Flopec Petrolera Ecuatoriana (“Flopec”). After the recapitalization, the shareholding of Mare Success S.A. remained at 51% owned by the Company and 49% owned by Polaris. The additional paid-in capital was made to finance part of the intragroup sale of vessels, in particular, the panamax tankers, Selini and Salamina. During the second quarter of 2019, the Company transferred the net assets of Selini and Salamina to Mare Success. S.A. The Company accounted the transaction at the carrying amounts of the net assets. There was loss attributable to the non-controlling interest in the second quarter of 2019 amounting to $0.8 million, compared to of $1.0 million in the prior year second quarter. For the six months ended June 30, 2019 the net loss attributable to the non-controlling interest was $1.1 million and for the equivalent period of 2018 the net loss attributable to the non-controlling interest was $1.4 million.

Net income (loss)

As a result of the foregoing, the net loss attributable to Tsakos Energy Navigation Limited for the second quarter of 2019, was $12.6 million, or $0.14 loss per share basic and diluted, taking into account the impact of preferred stock dividends of $10.2 million on our Series B, Series C, Series D, Series E and Series F Preferred Shares, compared to net loss of $16.3 million, or $0.19 loss per share basic and diluted, after preferred share dividends of $6.7 million for the second quarter of 2018. The net loss attributable to Tsakos Energy Navigation Limited for the six months ended June 30, 2019, was $11.6 million, or $0.13 loss per share including the effect of cumulative dividends of $20.4 million on our preferred shares, versus $34.8 million net loss, or $0.40 loss per share, including the effect of preferred share dividends of $13.4 million for the six months ended June 30, 2018.

Liquidity and capital resources

Liquidity requirements relate to servicing debt, funding the equity portion of investments in vessels, funding working capital and controlling fluctuations in cash flow. In addition, our new building commitments, other expected capital expenditure on dry-dockings and vessel acquisitions will require us to expend cash in the remainder of 2019 and in future years. Net cash flow generated by operations is the main source of liquidity. Apart from the possibility of issuing further equity, additional sources of cash include proceeds from asset sales and borrowings, although all borrowing arrangements to date have specifically related to the acquisition of specific vessels.

We believe, given our current cash holdings and the number of vessels we have on time charter, that if market conditions remain relatively stable throughout the remainder of 2019 and through 2020, our financial resources, including the cash expected to be generated within the year, will be sufficient to meet our liquidity and working capital needs for the next twelve months, taking into account our existing capital commitments and debt service requirements. If market conditions worsen significantly, then our cash resources may decline to a level that may put at risk our ability to service timely our debt and capital expenditure commitments. In order to avoid such an eventuality, management would expect to be able to raise extra capital through the alternative sources described above.

Working capital (non-restricted net current assets) amounted to a positive $15.2 million at June 30, 2019 compared to a positive $44.2 million at December 31, 2018, respectively. The decrease is mainly attributed to lower cash balances, the declaration for the redemption of Series B Preferred Shares and the increased current portion of loan facilities as at June 30, 2019. Also contributing to the decrease of the working capital is the accounting standard ASC 842 “Leases” added by ASU 2016-02 effective for public business entities for annual periods beginning on January 1, 2019, which requires the determination and inclusion under current liabilities, of the current portion of obligations under operating leases. The decrease is partially offset by the increase in current assets due to vessels Izumo Princess, Alaska and Archangel which were held for sale as at June 30, 2019.

Current assets increased to $378.2 million at June 30, 2019 from $317.5 million at December 31, 2018, mainly due to three vessels accounted for as held for sale, partially offset by a decrease in cash and cash equivalents during the six-month period. Current liabilities increased to $349.5 million at June 30, 2019 from $254.3 million at December 31, 2018, mainly due to the called redemption of all outstanding Series B Preferred Shares, the increased current portion of debt and the current portion of obligations under operating leases.

Net cash from operating activities was $84.6 million in the six-month period ended June 30, 2019, compared to $38.7 million in the first six months of 2018. The $45.9 million increase is primarily attributable to a stronger tanker market with higher TCE rates which contributed to an increase in voyage revenues by $41.4 million. The additional revenue earned during the six-month period, is partially offset by an increase in voyage expenses by $10.1 million due to vessels increased operating days under spot and CoA; Receivables provided an additional $12.2 million increase, mainly due the tanker market rates spike in the fourth quarter of 2018 resulting in an increased collectability during the first half of 2019. A $5.1 million increase is also attributable to unearned revenue. Payments to yards decreased by $6.4 million due to two panamax vessels undergoing their scheduled drydock compared to five dry dockings performed for the first half of 2018. The overall increase is partially counterbalanced by a decrease in accrued liabilities and payables by $14.8 million mainly due to payments made to suppliers of fuel to the spot vessels, with such suppliers requiring payment in advance of delivery.

Net cash provided by operating activities increased to $45.4 million in the second quarter of 2019, compared to $14.1 million in the previous year’s second quarter. The $31.3 million increase is primarily attributable to the increase in voyage revenues by $20.1 million, or 16.2% due to a stronger tanker marker with higher charter rates partially offset by an increase in voyage expenses by $5.8 million.

Net cash used in investing activities was $12.0 million for the second quarter of 2019, compared to $6.9 million provided by investing activities for the equivalent period of 2018. Net cash used in investing activities was $32.8 million for the six months ended June 30, 2019, compared to $6.4 million provided by investing activities during the six months ended June 30, 2018. The cash outflow from investing activities is mainly due to payments for vessels under construction, which amounted to $31.9 million for the first half of 2019 and $11.3 million for the second quarter of 2019, compared to $10.5 million during the second quarter and first half of 2018. Cash outflow from investing activities during the second quarter and first half of 2018 was offset by cash generated by the sale of VLCC Millennium for net proceeds of $17.5 million. As at June 30, 2019, there were two aframaxes and two suezmax new-buildings on order and the remaining yard installments to be paid for those vessels as at June 30, 2019 amounted to $196.1 million ($55.2 million in the second half of 2019 and $140.9 million in 2020), the majority of which will be covered through secured debt. The aframax carriers are expected to be delivered between the fourth quarter of 2019 and the first quarter of 2020 and the two suezmaxes tankers are expected to be delivered in the third and fourth quarter of 2020, respectively. On July 31, 2019, the Company signed a shipbuilding contract for the construction of one 174,000 cbm LNG carrier from Hyundai Heavy Industries.

Net cash used by financing activities was $32.5 million for the second quarter of 2019, compared to $83.2 million provided during the second quarter of 2018. In the second quarter of 2019, the Company drew down $10.3 million for the financing of two under construction aframax vessels and $38.3 million for the refinancing of certain loans. In addition, the amount of $37.1 million was paid in scheduled installments and the amount of $39.9 million was prepaid for the refinancing of loans. Cash outflow from financing activities was partially offset by the capital contribution of $10.0 million relating to the increase of paid in capital of Mare Success S.A as also discussed above. In the second quarter of 2018, the Company drew down $255.1 million for the refinancing of certain loans and prepaid the amount of $254.5 million for the same vessels. A further $37.5 million was paid in scheduled installments during the second quarter of 2018. Cash inflow from financing activities during the second quarter of 2018 was achieved through the issuance of preferred stock which raised a net amount of $130.6 million. Net cash used by financing activities was $79.7 million in the six months ended June 30, 2019, compared to $34.6 million provided during the six months ended June 30, 2018. In addition to the second-quarter transactions of 2019 mentioned above, we drew down $150.7 million for the refinancing of five vessels and repayment of the same amount of debt and $5.2 million for the financing of one under construction aframax vessel during the first quarter of 2019. The Company also proceeded with scheduled loan repayments of $41.2 million for the first quarter of 2019. During the first half of 2018, and in addition to the second-quarter transactions mentioned above, there were scheduled loan repayments amounting to $41.9 million.

Total debt outstanding decreased from $1.61 billion at December 31, 2018, to $1.54 billion at June 30, 2019. The debt to capital (equity plus debt) ratio was 51.7% at June 30, 2019 (or 48.3% on a net of cash basis).

During the first half of 2019, the Company sold 267,877 common shares under its ATM program for net proceeds of $870 thousand. During the first half of 2018, the Company sold 1,016,870 common shares from its treasury stock for net proceeds of $3,571 thousand.

On January 30, 2019 and April 30, 2019, the Company paid dividends of $0.50 per share, $2.0 million in total, on its 8.00% Series B Preferred Shares, $0.55469 per share, $2.2 million in total, on its 8.875% Series C Preferred Shares and $0.59375 per share, $7.1 million in total, on its 9.50% Series F Preferred Shares. On January 30, 2018 and April 30, 2018, the Company paid dividends of $0.50 per share, $2.0 million in total, on its 8.00% Series B Preferred Shares and $0.55469 per share, $2.2 million in total, on its 8.875% Series C Preferred Shares. On February 28, 2019, and May 29, 2019, the Company paid dividends of $0.54687 per share, $3.7 million in total, on its 8.75% Series D Preferred Shares, and $0.57812 per share $5.3 million in total, on its Series E Preferred Shares. On February 28, 2018 and May 29, 2018, the Company paid dividends of $0.54687 per share, $3.7 million in total, on its Series D Preferred Shares.

On June 28, 2018, the Company completed an offering of 5,400,000 of its Series F Cumulative Redeemable Perpetual Preferred Shares, par value $1.00 per share, liquidation preference $25.00 per share, raising $130.6 million, net of underwriter’s discount and other expenses. Dividends on the Series F Preferred Shares are cumulative from the date of original issue and are payable quarterly in arrears on the 30th day of January, April, July and October of each year, commencing October 30, 2018, when, as and if declared by our board of directors. Dividends will be payable from cash available for dividends at a rate equal to 9.50% per annum of the stated liquidation preference prior to July 30, 2028 and from and including July 30, 2028, at a floating rate equal to three-month LIBOR plus spread of 6.54% per annum of the stated liquidation preference.

In the second quarter of 2019, Mare Success increased its paid-in capital by $20,408, of which $10,408 constituted the 51% contributed by the Company and the $10,000 constituted the 49% contributed by Polaris. After the recapitalization, the shareholding of Mare Success S.A. remained at 51% owned by the Company and 49% owned by Polaris.

On June 28, 2019, the Company declared the redemption of all of its 2,000,000 Series B Preferred Shares, $25.00 per share and the payment of the final dividend of $0.50 per share, on the same date, July 30, 2019. Upon declaration, the Company re-classified an amount equal to the fair value of the Series B Preferred Shares from equity to current liabilities. The difference between the carrying value and the fair value of the Series B Preferred Shares, amounting to $2.8 million, was recognized as a reduction of retained earnings as a deemed dividend, and has been considered for the calculations of Loss per common share in 2019.

The Company continues to be fully compliant with its scheduled debt service requirements, repaying capital and paying interest promptly in accordance with respective bank agreements without fail. As a percentage of total liabilities against total assets at fair value, our consolidated leverage (a non-GAAP measure) as computed in accordance with our loan agreements at June 30, 2019 was below the loan covenant maximum of 70%, which is applicable to all the above loans on a fleet and total liabilities basis. As at June 30, 2019, the Company and its wholly and majority owned subsidiaries were compliant with the financial covenants in its twenty-five loan agreements totaling $1.54 billion, apart from the value-to-loan requirement in one of its loan agreements, which was rendered compliant by a scheduled repayment in the first week of the third quarter.

EXHIBIT 99.3

CAPITALIZATION

The following table sets forth our (i) cash and cash equivalents, (ii) restricted cash and (iii) consolidated capitalization as of June 30, 2019 on:

•

an actual basis; and

•

an as adjusted basis giving effect to (i) scheduled debt repayments of $41 million, (ii) the $50 million redemption of Series B Preferred Shares, (iii) the payment of $10.2 million of preferred share dividends, (iv) the sale of 1,640,179 common shares for an aggregate sum of $5.4 million, (v) debt prepayments of $150.5 million for four aframax tankers, Elias Tsakos, Thomas Z, Oslo TS and Leontios H, and three handysize tankers, Amphitrite, Arion, Andromeda, and $169 million debt drawdowns for the same vessels and (vi) debt drawdowns of $24.1 million and an equivalent amount of respective shipyard payments for Hull 8041, Hull 8042, Hull 5033 and Hull 5036.

Other than these adjustments, there has been no material change in our capitalization from debt or equity issuances, re-capitalization or special dividends between June 30, 2019 and September 18, 2019.

This table should be read in conjunction with our consolidated financial statements and the notes thereto, “Results of operations-Management’s Discussion and Analysis” attached as Exhibits 99.1 and 99.2, respectively, to the Report on Form 6-K to which this capitalization table is an exhibit, and “Item 5. Operating and Financial Review and Prospects,” included in our Annual Report on Form 20-F for the year ended December 31, 2018.


	As of June 30, 2019
In thousands of U.S. Dollars	Actual			Adjusted
Cash
Cash and cash equivalents		182,929			105,578
Restricted cash		9,657			9,657

Total cash		192,586			115,235

Capitalization
Debt:
Long-term secured debt obligations (including current portion)		1,542,660			1,544,214

Stockholders’ equity:
Preferred shares, $1.00 par value; 25,000,000 shares authorized on an actual and as adjusted basis and 2,000,000 Series C Preferred Shares, 3,424,803 Series D Preferred Shares, 4,600,000 Series E Preferred Shares and 6,000,000 Series F Preferred Shares issued and outstanding on an actual and on an adjusted basis		16,025			16,025
Common shares, $1.00 par value; 175,000,000 shares authorized on an actual and as an adjusted basis; 87,872,522 shares issued and outstanding on an actual basis and 89,512,701 shares issued and outstanding on an as adjusted basis		87,873			89,513
Additional paid-in capital		952,186			955,902
Accumulated other comprehensive loss		(18,150	)		(18,150	)
Retained earnings		383,920			374,715
Non-controlling interest		20,935			20,935

Total stockholders’ equity		1,442,789			1,438,940

Total capitalization		2,985,449			2,983,154