Tsakos Energy Navigation (TNP) - 2023 Q4 - Annual Report

Financial Performance and Dividends - During 2023, the company paid dividends on common shares totaling $1.00 per share, amounting to$29.5 million, and redeemed all Series D Preferred Shares for $87.9 million[132]. - The company intends to continue paying cash dividends, but this is subject to various factors including cash availability and loan agreement restrictions[132]. - The company’s ability to pay dividends is dependent on the earnings and cash flow of its subsidiaries, which may be restricted by financing arrangements[134]. - The company has outstanding indebtedness of approximately$1.6 billion as of December 31, 2023, which may restrict its ability to pay dividends to preferred stockholders[138]. Operating Expenses and Inflation - In 2023, Euro expenses accounted for approximately 36% of the total operating expenses, which includes dry-docking costs[114]. - Inflation has moderately impacted operating expenses, particularly in dry-docking and maintenance costs, which have increased due to higher routine repair costs in 2023[111]. Management and Operational Risks - The management agreement with Tsakos Energy Management can be terminated with one year's notice, which could result in a payment of approximately $175.8 million if terminated[122]. - The company relies on Tsakos Energy Management and Tsakos Shipping for management services, and any inability of these entities to provide services could materially affect the company[119]. - The company has no key man life insurance for its executive officers, which could pose a risk if key personnel are lost[115]. Market and Shareholder Considerations - The market price of the company's common and preferred shares may be volatile due to various factors, including fluctuations in quarterly results and market conditions[131]. - The company’s preferred shares are subordinated to all existing and future indebtedness, which could dilute the interests of current preferred shareholders[138]. - The company’s preferred shares have extremely limited voting rights, primarily allowing holders to elect one director under specific conditions[139]. - The company’s Bye-laws include anti-takeover provisions that may deter third-party acquisition attempts[140]. Taxation and Regulatory Environment - The company is subject to the Corporate Income Tax Act 2023, which may impose a tax rate of 15% on net taxable income starting from tax years beginning on or after January 1, 2025[149]. - The company expects its income from international shipping to be exempt from the tax imposed under the CIT Act, but will continue to evaluate its impact[150]. - If the company is treated as a passive foreign investment company (PFIC), U.S. shareholders could face unfavorable tax treatment[154]. - The company’s financial results could be adversely affected by changes in tax laws or interpretations in jurisdictions where it operates[147]. Currency and Exchange Rate Risks - The company is exposed to exchange rate risks, particularly with expenses incurred in foreign currencies, which could adversely affect operational results[114].