During the years ended December 31, 2023 and 2022, we had 15 and 14 vessels that earned revenue through long-term time-charter contracts (with initial terms of one year or greater), respectively. There were no vessels that earned revenue through long-term time-charter contracts during the year ended December 31, 2021. The remaining vessels earned revenue from the Scorpio Pools or in the spot market. The following table sets forth our revenue, by employment type, for these periods:


	For the year ended December 31,
In thousands of U.S. dollars	2023		2022		2021
Pool revenue	$	1,155,244	$	1,186,577	$	534,982
Voyage revenue (spot market)	32,718		328,087		5,804
Time charter revenue	153,260		48,209		—
	$	1,341,222	$	1,562,873	$	540,786

In accordance with IFRS 16 - Leases, we are required to identify the lease and non-lease components of revenue and account for each component in accordance with the applicable accounting standard. In time charter-out or pool arrangements, we have determined that the lease component is the vessel and the non-lease component is the technical management services provided to operate the vessel. Each component is quantified on the basis of the relative stand-alone price of each lease component and on the aggregate stand-alone price of the non-lease components.

•The non-lease component is accounted for as services revenue under IFRS 15. This revenue is recognized “over time” as the customer (i.e. the pool or the charterer) is simultaneously receiving and consuming the benefits of the service.

The following table summarizes the lease and non-lease components of revenue from time charter-out and pool revenue during the years ended December 31, 2023, 2022 and 2021. These figures are not readily quantifiable as the Company's contracts (with the Scorpio pools or under time charter-out arrangements) do not separate these components. We do not view pool and time charter-out revenue as two separate streams of revenue. Nevertheless, we have estimated these amounts by reference to (i) third party, published time charter rates for the lease component, and (ii) an approximation of the fair market value of vessel operating expenses for the non-lease component.


	For the year ended December 31,
In thousands of U.S. dollars	2023		2022		2021
Lease component of revenue from time charter-out and pool revenue	$	999,273	$	879,168	$	280,633
Non-lease component of revenue from time charter-out and pool revenue	309,231		355,618		254,349
	$	1,308,504	$	1,234,786	$	534,982

During the year ended December 31, 2023, we entered into a time charter-out agreement on an LR2 product tanker, which commenced in April 2023. During the year ended December 31, 2022, we entered into time charter-out agreements on 14 vessels. The terms of the agreements, including the dates of commencement are summarized as follows:

Vessel

Vessel class

Term

Rate ($/day)

Commencement date

STI Gratitude

LR2

Three years

$28,000

(1)

May-22

STI Guard

LR2

Five years

$28,000

(2)

July-22

STI Gladiator

LR2

Three years

$28,000

(3)

July-22

STI Guide

LR2

Three years

$28,000

(3)

July-22

STI Marshall

Three years

$23,000

(4)

July-22

STI Magnetic

Three years

$23,000

(5)

July-22

STI Miracle

Three years

$21,000

(6)

August-22

STI Memphis

Three years

$21,000

(7)

June-22

STI Connaught

LR2

Three years

$30,000

(8)

August-22

STI Lombard

LR2

Three years

$32,750

(9)

September-22

STI Gauntlet

LR2

Three years

$32,750

November-22

STI Duchessa

Three years

$25,000

October-22

STI Lavender

LR2

Three years

$35,000

December-22

STI Grace

LR2

Three years

$37,500

(10)

December-22

STI Jermyn

LR2

Three years

$40,000

(11)

April-23

(1) This vessel commenced a time charter in May 2022 for three years at an average rate of $28,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $31,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $33,000 per day.

(2) This vessel commenced a time charter in July 2022 for five years at a rate of $28,000 per day. The charterers have the option to convert the term of this agreement to three years at $30,000 per day, which must be declared within 30 months after the delivery date.

(3) This vessel commenced a time charter in July 2022 for three years at an average rate of $28,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $31,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $33,000 per day.

(4) This vessel commenced a time charter in July 2022 for three years at a rate of $23,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $24,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $25,000 per day. If this second option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $26,000 per day.

(5) This vessel commenced a time charter in July 2022 for three years at an average rate of $23,000 per day. The daily rate is the average rate over the three years period, which is payable in years one, two, and three at $30,000 per day, $20,000 per day, and $19,000 per day, respectively. The charterers have the option to extend the term of this agreement for an additional year at $24,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $26,000 per day.

(6) This vessel commenced a time charter in August 2022 for three years at an average rate of $21,000 per day. The daily rate is the average rate over the three years period, which is payable during the first six months at $30,000 per day, the next six months are payable at $20,000 per day, and years two and three are payable at $19,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $22,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $24,000 per day.

(7) This vessel commenced a time charter in June 2022 for three years at an average rate of $21,000 per day. The daily rate is the average rate over the three years period, which is payable during the first six months at $30,000 per day, the next 6 months are payable at $20,000 per day, and years two and three are payable at $19,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $22,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $24,000 per day.

(8) In April 2023, STI Connaught replaced STI Goal on a time charter which initially commenced in August 2022 for three years at a rate of $30,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $32,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $34,000 per day.

(9) This vessel commenced a time charter in September 2022 for three years at an average rate of $32,750 per day. The charterer has the option to extend the term of this agreement for an additional year at $34,750 per day. If this option is declared, the charterer has the option to further extend the term of this agreement for an additional year at $36,750 per day.

(10) This vessel commenced a time charter in December 2022 for three years at an average rate of $37,500 per day. The daily rate is the average rate over the three years period, which is payable during the first six months at $47,000 per day, the next 6 months are payable at $28,000 per day, and years two and three are payable at $37,500 per day.

(11) This vessel commenced a time charter in April 2023 for three years at an average rate of $40,000 per day. The charterer has the option to extend the term of this agreement for an additional year at $42,500 per day.

For our vessels operating in the spot market, we recognize revenue ‘over time’ as the customer (i.e. the charterer) is simultaneously receiving and consuming the benefits of the vessel. Under IFRS 15, the performance obligation has been identified as the transportation of cargo from one point to another. Therefore, in a spot market voyage under IFRS 15, revenue is recognized on a pro-rata basis commencing on the date that the cargo is loaded and concluding on the date of discharge. We also consider short-term time charters (with initial terms of less than one year) as spot market voyages. These voyages are accounted for under IFRS 16 – Leases (given the contractual nature of the agreements), but are disclosed as spot market voyages in the table above given their short-term nature, and greater exposure to spot market volatility.

We had a decreased number of vessels trading in the spot market during the year ended December 31, 2023 as compared to the year ended December 31, 2022. The number of vessels operating in the spot market during the year ended December 31, 2022 was a result of changes in trading patterns brought on by the conflict in Ukraine starting in March 2022. Under spot market voyage charters, we pay voyage expenses, and therefore this decrease in spot market revenue during the year ended December 31, 2023 also resulted in a decrease in voyage expenses.