Highlights
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For the fourth quarter of 2013, KNOT Offshore Partners LP (“KNOT
Offshore Partners” or the “Partnership”):
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Generated net income of $7.9 million and operating income of $10.0
million;
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Generated Adjusted EBITDA of $16.8 million;(1) and
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Generated distributable cash flow of $9.8 million.(2)
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On February 14, 2014, KNOT Offshore Partners paid a quarterly
distribution of $0.4350 per unit with respect to the quarter ended
December 31, 2013. This corresponds to a distribution of $1.74 per
unit on an annual basis.
ABERDEEN, Scotland--(BUSINESS WIRE)--
Financial Results Overview
KNOT Offshore Partners reports net income of $7.9 million and operating
income of $10.0 million for the fourth quarter of 2013, as compared to
net income of $1.5 million and operating income of $5.7 million for the
same period in the prior year.
All vessels operated well throughout the quarter with 98.5% utilization
(3.5 days offhire). Operating income increased by $4.3 million and
finance expenses decreased by $1.5 million in the fourth quarter of 2013
compared to the fourth quarter of 2012. The increase in operating income
is due to the Carmen Knutsen being included in the Partnership’s
operating results for the full fourth quarter of 2013. The reduction in
finance expense was primarily related to the repayment of debt in
connection with the Partnership’s initial public offering in April 2013
(the “IPO”) and transfer of mark to market costs related to interest
rate swaps entered into prior to the IPO to the Partnership’s sponsor,
Knutsen NYK Offshore Tankers AS (“KNOT”).
(1)
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Adjusted EBITDA is a non-GAAP financial measure used by investors to
measure the performance of master limited partnerships. Please see
Appendix A for a reconciliation to the most directly comparable GAAP
financial measure.
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(2)
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Distributable cash flow is a non-GAAP financial measure used by
investors to measure the performance of master limited partnerships.
Please see Appendix A for a reconciliation to the most directly
comparable GAAP financial measure.
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In accordance with generally accepted accounting principles in the
United States (“GAAP”), prior to April 16, 2013, the results of
operations, cash flows and balance sheet of the Partnership have been
carved out of the consolidated financial statements of KNOT.
Accordingly, the Partnership’s financial statements prior to April 16,
2013 reflect allocation of certain expenses, including the
mark-to-market value of interest rate swap derivatives. The realized and
unrealized gain on derivatives, in the amounts of $0.1 million for the
fourth quarter 2012 do not affect cash flow or the calculation of
distributable cash flow whilst the realized and unrealized gain for
fourth quarter 2013 of $0.9 million decrease the distributable cash
flow. The amount for the fourth quarter of 2012 has been eliminated from
the Partnership’s opening equity as of April 16, 2013, as none of KNOT’s
interest rate swap agreements were transferred to the Partnership on
completion of the IPO. The Partnership has no further obligations
related to these contracts.
Financing and Liquidity
On April 15, 2013, the Partnership completed its IPO of 8,567,500 common
units (including 1,117,500 common units sold pursuant to the exercise in
full of the underwriters’ option to purchase additional common units).
The Partnership’s common units are listed on the New York Stock Exchange
under the symbol “KNOP.” KNOT owns a 49.0% limited partner interest in
the Partnership and, through its ownership of the Partnership’s general
partner, a 2.0% general partner interest in the Partnership.
In November 2013, the Partnership entered into foreign exchange forward
contracts, selling a total notional amount of $20.0 million against
Norwegian Kroner (“NOK”) at an average exchange rate of 6.22 NOK/$,
which are economic hedges for certain vessel operating expenses and
general and administrative expenses in NOK.
As of December 31, 2013, the Partnership had cash and cash equivalents
of $28.8 million. Total interest bearing debt outstanding was $350.0
million, as of December 31, 2013. The average margin paid on the
Partnership’s outstanding debt during the quarter ended December 31,
2013 was approximately 2.7% over LIBOR.
As of December 31, 2013, the Partnership has entered into various
interest rate swap agreements effective until March, April and May,
2018, for a total notional amount of $200 million to hedge against the
interest rate risks of its variable-rate borrowings. Under the terms of
the interest rate swap agreements, the Partnership will receive from the
counterparty interest on the notional amount based on three-month LIBOR
and will pay to the counterparty a fixed rate. For the interest rate
swap agreements above, the Partnership will pay to the counterparty a
fixed rate ranging from 1.25% to 1.44%.
In February 2014, the Partnership entered into two interest rate swap
agreements effective in February 2014, and ending in August 2018. The
interest rate swap agreements have a total initial notional amount of
$50.0 million. Under the terms of the interest rate swap agreements, the
Partnership will receive from the counterparty interest on the notional
amount based on three-month LIBOR and will pay to the counterparty a
fixed rate of 1.45%.
Outlook
Under the Omnibus Agreement the Partnership entered into with KNOT in
connection with the IPO ( the “Omnibus Agreement”), there are four
additional identified vessels which the Partnership has the option to
purchase within 24 months of their delivery to charterers.
Pursuant to the Omnibus Agreement, the Partnership also has the option
to acquire from KNOT all offshore shuttle tankers that KNOT acquires or
owns that will be employed under contracts for periods more than five
years.
We have been advised that KNOT has entered into a contract to purchase
three vessels from J. Lauritzen, of which two, the “Dan Sabia” and the
“Dan Cisne”, are on long-term bareboat charters to Transpetro ending in
the third quarter of 2023 and first quarter of 2024, respectively. The
closing of the acquisition is subject to technical inspection and
approval from the charterer. Upon consummation of the acquisition, we
anticipate that the Dan Sabia and the Dan Cisne will be offered to the
Partnership under the terms of the Omnibus Agreement. There can be no
assurance that KNOT’s acquisition of these vessels will be consummated
or that the Partnership will acquire such vessels from KNOT.
BG Group (“BG”) is in the process of considering whether to exercise its
option to extend its charter of the Windsor Knutsen for one year. BG has
the option to extend its charter for the Windsor Knutsen up to April
2016. The initial term of the Windsor Knutsen charter with BG expires in
April 2014. Pursuant to the Omnibus Agreement, in the event that BG does
not extend its charter, KNOT will guarantee the rate of hire for the
Windsor Knutsen until April 2018.
Production delays related to new projects are continuing both in Brazil
and the North Sea, causing a temporary vessel surplus since vessels
targeting said projects are being delivered. The Board of Directors of
the Partnership (the “Board”) believes that through the Partnership’s
relationship with KNOT, there are significant opportunities for growth
for the Partnership. Activity in the offshore oil industry continues to
be relatively high based on identified projects and, accordingly, the
demand for offshore shuttle tankers is expected to continue to grow.
The Board is pleased with the results of operations of the Partnership
for the period ended December 31, 2013, which were consistent with
expectations for the Partnership’s initial operations following the
completion of the IPO, and is confident that the Partnership continues
to be well positioned to grow its earnings and distributions.
About KNOT Offshore Partners LP
KNOT Offshore Partners owns, operates and acquires shuttle tankers under
long-term charters in the offshore oil production regions of the North
Sea and Brazil. KNOT Offshore Partners owns and operates a fleet of five
offshore shuttle tankers operating under long-term charters to oil
majors.
KNOT Offshore Partners is structured as a publicly-traded master limited
partnership. KNOT Offshore Partners’ common units trade on the New York
Stock Exchange under the symbol “KNOP.”
The Partnership plans to host a conference call on Wednesday, February
19, 2014 at noon (ET) to discuss the results for the fourth quarter of
2013. All unitholders and interested parties are invited to listen to
the live conference call by choosing from the following options:
-
By dialing 1-866-270-1533 or 1-412-317-0797, if outside North America.
-
By accessing the webcast, which will be available on the Partnership’s
website: www.knotoffshorepartners.com
February 19, 2014
KNOT Offshore Partners LP
Aberdeen, United Kingdom
Questions should be directed to:
Arild Vik (+44 7581 899 777)
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED CARVE-OUT STATEMENTS OF
OPERATIONS
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Three Months Ended
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Year Ended December 31,
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(USD in thousands)
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December 31,
2013
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September 30,
2013
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December 31,
2012
|
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2013
|
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|
|
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2012
|
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Time charter and bareboat revenues 1)
|
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|
|
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22,216
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|
|
|
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20,454
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|
|
|
|
16,819
|
|
|
|
|
|
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|
73,151
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|
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|
|
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62,078
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Loss of hire insurance recoveries
|
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|
|
|
|
—
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|
|
|
|
|
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—
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|
|
|
|
—
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|
|
|
|
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|
250
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|
|
|
|
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3,575
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Total revenues
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|
|
|
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|
22,216
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|
|
|
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20,454
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16,819
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|
|
|
|
|
|
73,401
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|
|
|
|
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65,653
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Vessel operating expenses
|
|
|
|
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|
4,427
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|
|
|
|
|
|
3,830
|
|
|
|
|
|
3,355
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|
|
|
|
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14,288
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|
|
|
|
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13,000
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Depreciation and amortization
|
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|
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|
6,785
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|
|
|
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|
6,304
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|
|
|
|
5,282
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|
|
|
|
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23,768
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|
|
|
|
|
|
21,181
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General and administrative expenses
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|
1,001
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|
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|
960
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|
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|
2,505
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|
|
|
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5,361
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|
|
|
|
|
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4,834
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Total operating expenses
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|
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12,213
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|
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11,094
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|
|
|
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11,142
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|
|
|
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43,417
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|
|
|
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39,015
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Operating income
|
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|
|
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|
10,003
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|
|
|
|
|
|
9,360
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|
|
|
|
|
5,677
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|
|
|
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29,984
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|
|
|
|
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26,638
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Finance income (expense):
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|
|
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|
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Interest income
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5
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16
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4
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|
|
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30
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19
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Interest expense
|
|
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|
(2,832
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)
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|
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(2,653
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)
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|
(3,126
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)
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|
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|
(10,773
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)
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|
|
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|
(13,471
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)
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Other finance expense
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|
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|
(250
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)
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|
(150
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)
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|
(810
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)
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(2,048
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)
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|
(3,378
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)
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Realized and unrealized gain (loss)
on derivative instruments
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|
845
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(252
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)
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|
|
136
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|
|
|
|
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|
505
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|
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|
(6,031
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)
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Net gain (loss) on foreign currency transactions
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|
20
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31
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|
|
|
|
78
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|
|
|
|
|
|
193
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|
|
|
|
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|
(1,771
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)
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Total finance expense
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|
(2,212
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)
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|
|
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(3,008
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)
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|
|
(3,718
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)
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(12,093
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)
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(24,632
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)
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Income before income taxes
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7,791
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|
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6,352
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|
1,959
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|
|
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|
17,891
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|
|
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2,006
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Income tax benefit (expense) 2)
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111
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5
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(484
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)
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(2,827
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)
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(1,261
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)
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Net income
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7,902
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|
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6,357
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|
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1,475
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15,064
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|
|
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|
745
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Net income attributable to non-controlling interests
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—
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—
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|
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—
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—
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—
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Net income (loss) attributable to
KNOT Offshore Partners LP Owners
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7,902
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6,357
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|
|
|
|
|
1,475
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|
|
|
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15,064
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|
|
|
|
|
|
745
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Weighted average units outstanding
(in thousands of units):
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|
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8,567,500
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|
|
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8,567,500
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8,567,500
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|
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Subordinated units
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8,567,500
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8,567,500
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|
|
|
|
|
|
|
|
|
|
|
8,567,500
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|
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General partner units
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|
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|
349,694
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|
|
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349,694
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|
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|
|
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|
|
|
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|
349,694
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|
|
|
|
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1)
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Time charter revenue for the fourth and for the third quarter of
2013 include a non-cash item of approximately $0.5 million in
reversal of contract liability provision.
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2)
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Tax benefit is currency effect on taxes payable
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UNAUDITED CONDENSED CONSOLIDATED AND COMBINED CARVE-OUT BALANCE SHEET
|
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|
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(USD in thousands)
|
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|
At December 31,
2013
|
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At September 30,
2013
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|
At December 31,
2012
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ASSETS
|
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Current assets:
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
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|
Cash and cash equivalents
|
|
|
|
|
|
28,836
|
|
|
|
|
|
28,483
|
|
|
|
|
|
1,287
|
|
|
|
Restricted cash
|
|
|
|
|
|
458
|
|
|
|
|
|
1,461
|
|
|
|
|
|
830
|
|
|
|
Trade accounts receivable
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
99
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|
|
|
Amounts due from related parties
|
|
|
|
|
|
77
|
|
|
|
|
|
145
|
|
|
|
|
|
—
|
|
|
|
Inventories
|
|
|
|
|
|
578
|
|
|
|
|
|
680
|
|
|
|
|
|
541
|
|
|
|
Deferred tax asset
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
290
|
|
|
|
Derivative assets
|
|
|
|
|
|
248
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Other current assets
|
|
|
|
|
|
1,814
|
|
|
|
|
|
2,335
|
|
|
|
|
|
3,459
|
|
|
|
Total current assets
|
|
|
|
|
|
32,011
|
|
|
|
|
|
33,104
|
|
|
|
|
|
6,506
|
|
|
|
Long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels and equipment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels
|
|
|
|
|
|
692,927
|
|
|
|
|
|
692,911
|
|
|
|
|
|
548,141
|
|
|
|
Less accumulated depreciation and amortization
|
|
|
|
|
|
(75,142
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|
)
|
|
|
|
(68,357
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|
)
|
|
|
|
(51,373
|
|
)
|
|
Net property, plant, and equipment
|
|
|
|
|
|
617,785
|
|
|
|
|
|
624,554
|
|
|
|
|
|
496,768
|
|
|
|
Goodwill
|
|
|
|
|
|
5,750
|
|
|
|
|
|
5,750
|
|
|
|
|
|
5,750
|
|
|
|
Deferred debt issuance cost
|
|
|
|
|
|
2,010
|
|
|
|
|
|
2,233
|
|
|
|
|
|
2,787
|
|
|
|
Derivative assets
|
|
|
|
|
|
2,617
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Total assets
|
|
|
|
|
|
660,173
|
|
|
|
|
|
665,641
|
|
|
|
|
|
511,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND PARTNERS’ EQUITY/OWNER’S CAPITAL
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts payable
|
|
|
|
|
|
1,107
|
|
|
|
|
|
1,337
|
|
|
|
|
|
370
|
|
|
|
Accrued expenses
|
|
|
|
|
|
2,642
|
|
|
|
|
|
4,246
|
|
|
|
|
|
1,803
|
|
|
|
Current installments of long-term debt
|
|
|
|
|
|
29,269
|
|
|
|
|
|
29,044
|
|
|
|
|
|
28,833
|
|
|
|
Derivative liabilities
|
|
|
|
|
|
2,124
|
|
|
|
|
|
252
|
|
|
|
|
|
5,258
|
|
|
|
Income taxes payable
|
|
|
|
|
|
743
|
|
|
|
|
|
746
|
|
|
|
|
|
—
|
|
|
|
Contract liabilities
|
|
|
|
|
|
1,518
|
|
|
|
|
|
1,518
|
|
|
|
|
|
1,518
|
|
|
|
Prepaid charter and deferred revenue
|
|
|
|
|
|
4,471
|
|
|
|
|
|
2,371
|
|
|
|
|
|
4,369
|
|
|
|
Amount due to related parties
|
|
|
|
|
|
163
|
|
|
|
|
|
444
|
|
|
|
|
|
12,423
|
|
|
|
Total current liabilities
|
|
|
|
|
|
42,037
|
|
|
|
|
|
39,958
|
|
|
|
|
|
54,574
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, excluding current installments
|
|
|
|
|
|
310,359
|
|
|
|
|
|
317,596
|
|
|
|
|
|
319,017
|
|
|
|
Derivative liabilities
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
22,622
|
|
|
|
Contract liabilities
|
|
|
|
|
|
12,793
|
|
|
|
|
|
13,173
|
|
|
|
|
|
14,311
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
2,141
|
|
|
|
|
|
2,249
|
|
|
|
|
|
3,097
|
|
|
|
Long-term debt from related parties
|
|
|
|
|
|
10,349
|
|
|
|
|
|
10,349
|
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
|
|
|
567
|
|
|
|
|
|
675
|
|
|
|
|
|
996
|
|
|
|
Total liabilities
|
|
|
|
|
|
378,246
|
|
|
|
|
|
384,000
|
|
|
|
|
|
414,617
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner’s equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97,194
|
|
|
|
Partner’s capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common unitholders
|
|
|
|
|
|
168,773
|
|
|
|
|
|
168,632
|
|
|
|
|
|
—
|
|
|
|
Subordinated unitholders
|
|
|
|
|
|
107,857
|
|
|
|
|
|
107,717
|
|
|
|
|
|
—
|
|
|
|
General partner interest
|
|
|
|
|
|
5,297
|
|
|
|
|
|
5,292
|
|
|
|
|
|
—
|
|
|
|
Total Partners’ capital
|
|
|
|
|
|
281,927
|
|
|
|
|
|
281,641
|
|
|
|
|
|
—
|
|
|
|
Total liabilities and equity
|
|
|
|
|
|
660,173
|
|
|
|
|
|
665,641
|
|
|
|
|
|
511,811
|
|
|
|
As of April 16, 2013, the financial statements of the Partnership as a
separate legal entity are presented on a consolidated basis. Prior to
April 16, 2013, the results of operations, cash flow and balance sheet
have been carved out of the consolidated financial statements of KNOT
and therefore are presented on a combined carve-out basis. The combined
entity’s historical combined financial statements include assets,
liabilities, revenues, expenses and cash flows directly attributable to
the Partnership’s interests in the four vessels in its initial fleet.
Accordingly, the historical combined carve-out interim financial
statements prior to April 16, 2013 reflect allocations of certain
administrative and other expenses, mark-to-market valuations of interest
rate and foreign currency swap derivatives. The basis for the
allocations are described in note 2 of the restated combined financial
statements for the year ended December 31, 2012 filed by KNOT Offshore
Partners with the U.S. Securities and Exchange Commission (the “SEC”) on
September 6, 2013. These allocated costs have been accounted for as an
equity contribution in the combined balance sheets.
APPENDIX A - RECONCILATION OF NON-GAAP FINANCIAL MEASURES
Distributable Cash Flow
Distributable cash flow represents net income adjusted for depreciation
and amortization, unrealized gains and losses from derivatives,
unrealized foreign exchange gains and losses, other non-cash items and
estimated maintenance and replacement capital expenditures. Estimated
maintenance and replacement capital expenditures, including estimated
expenditures for drydocking, represent capital expenditures required to
maintain over the long-term the operating capacity of, or the revenue
generated by our capital assets. Distributable cash flow is a
quantitative standard used by investors in publicly-traded partnerships
to assist in evaluating a partnership’s ability to make quarterly cash
distributions. Distributable cash flow is a non-GAAP financial measure
and should not be considered as an alternative to net income or any
other indicator of KNOT Offshore Partners’ performance calculated in
accordance with GAAP. The table below reconciles distributable cash flow
to net income, the most directly comparable GAAP measure.
|
|
|
|
|
|
|
|
|
|
(USD in thousands)
|
|
|
|
Three Months Ended December 31, 2013 (unaudited)
|
|
|
|
Net income
|
|
|
|
|
|
7,902
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
6,785
|
|
|
|
Other non-cash items; deferred costs amortization debt
|
|
|
|
|
|
287
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Estimated maintenance and replacement capital expenditures
(including drydocking reserve)
|
|
|
|
|
|
(3,738
|
|
)
|
|
Deferred revenue
|
|
|
|
|
|
(486
|
|
)
|
|
Unrealized gain from interest rate derivatives and forward exchange
currency contracts
|
|
|
|
|
|
(994
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Distributable cash flow
|
|
|
|
|
|
9,756
|
|
|
|
Adjusted EBITDA
Adjusted EBITDA refers to earnings before interest, other financial
items, taxes, non-controlling interest, depreciation and amortization.
Adjusted EBITDA is a non-GAAP financial measure used by investors to
measure our performance.
The Partnership believes that Adjusted EBITDA assists its management and
investors by increasing the comparability of its performance from period
to period and against the performance of other companies in its industry
that provide Adjusted EBITDA information. This increased comparability
is achieved by excluding the potentially disparate effects between
periods or companies of interest, other financial items, taxes and
depreciation and amortization, which items are affected by various and
possibly changing financing methods, capital structure and historical
cost basis and which items may significantly affect net income between
periods. The Partnership believes that including Adjusted EBITDA as a
financial measure benefits investors in (a) selecting between investing
in the Partnership and other investment alternatives and (b) monitoring
the Partnership’s ongoing financial and operational strength in
assessing whether to continue to hold common units. Adjusted EBITDA is a
non-GAAP financial measure and should not be considered as an
alternative to net income or any other indicator of Partnership
performance calculated in accordance with GAAP. The table below
reconciles Adjusted EBITDA to net income, the most directly comparable
GAAP measure.
|
|
|
|
|
|
|
|
|
|
(USD in thousands)
|
|
|
|
Three Months Ended December 31, 2013 (unaudited)
|
|
|
|
Net income
|
|
|
|
|
|
7,902
|
|
|
|
Interest income
|
|
|
|
|
|
(5
|
|
)
|
|
Interest expenses
|
|
|
|
|
|
2,832
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
6,785
|
|
|
|
Income tax (benefits) expense
|
|
|
|
|
|
(111
|
|
)
|
|
EBITDA
|
|
|
|
|
|
17,403
|
|
|
|
Other financial items (a)
|
|
|
|
|
|
(615
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
16,788
|
|
|
|
(a)
|
Other financial items consist of other finance expense, realized and
unrealized loss on derivative instruments and net loss on foreign
currency transactions.
|
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements
concerning future events and KNOT Offshore Partners’ operations,
performance and financial condition. Forward-looking statements include,
without limitation, any statement that may predict, forecast, indicate
or imply future results, performance or achievements, and may contain
the words “believe,” “anticipate,” “expect,” “estimate,” “project,”
“will be,” “will continue,” “will likely result,” “plan,” “intend” or
words or phrases of similar meanings. These statements involve known and
unknown risks and are based upon a number of assumptions and estimates
that are inherently subject to significant uncertainties and
contingencies, many of which are beyond KNOT Offshore Partners’ control.
Actual results may differ materially from those expressed or implied by
such forward-looking statements. Important factors that could cause
actual results to differ materially include, but are not limited to:•
statements about market trends in the shuttle tanker or general tanker
industries, including charter rates, factors affecting supply and
demand, and opportunities for the profitable operations of offshore
shuttle tankers;
statements about KNOT’s and KNOT Offshore Partners’ ability to build and
retrofit offshore shuttle tankers and the timing of the delivery and
acceptance of any such retrofitted vessels by their respective
charterers;
• KNOT Offshore Partners’ ability to increase distributions and the
amount of any such increase;
• KNOT Offshore Partners’ ability to integrate and realize the expected
benefits from acquisitions;
• KNOT Offshore Partners’ anticipated growth strategies;
• the effect of the worldwide economic slowdown;
• turmoil in the global financial markets;
• fluctuations in currencies and interest rates;
• general market conditions, including fluctuations in charter hire
rates and vessel values;
• changes in KNOT Offshore Partners’ operating expenses, including
drydocking and insurance costs and bunker prices;
• forecasts of KNOT Offshore Partners’ ability to make cash
distributions on the units or any increases in cash distributions;
• KNOT Offshore Partners’ future financial condition or results of
operations and future revenues and expenses;
• the repayment of debt and settling of any interest rate swaps;
• KNOT Offshore Partners’ ability to make additional borrowings and to
access debt and equity markets;
• planned capital expenditures and availability of capital resources to
fund capital expenditures;
• KNOT Offshore Partners’ ability to maintain long-term relationships
with major users of shuttle tonnage;
• KNOT Offshore Partners’ ability to leverage KNOT’s relationships and
reputation in the shipping industry;
• KNOT Offshore Partners’ ability to purchase vessels from KNOT in the
future;
• KNOT Offshore Partners’ continued ability to enter into long-term time
charters;
• KNOT Offshore Partners’ ability to maximize the use of its vessels,
including the re-deployment or disposition of vessels no longer under
long-term time charter;
• timely purchases and deliveries of newbuilding vessels;
• future purchase prices of newbuildings and secondhand vessels;
• KNOT Offshore Partners’ ability to compete successfully for future
chartering and newbuilding opportunities;
• acceptance of a vessel by its charterer;
• termination dates and extensions of charters;
• the expected cost of, and KNOT Offshore Partners’ ability to, comply
with governmental regulations, maritime self-regulatory organization
standards, as well as standard regulations imposed by its charterers
applicable to KNOT Offshore Partners’ business;
• availability of skilled labor, vessel crews and management;
• KNOT Offshore Partners’ general and administrative expenses and its
fees and expenses payable under the fleet management agreements and the
management and administrative services agreement;
• the anticipated taxation of KNOT Offshore Partners and distributions
to KNOT Offshore Partners’ unitholders;
• estimated future maintenance and replacement capital expenditures;
• KNOT Offshore Partners’ ability to retain key employees;
• customers’ increasing emphasis on environmental and safety concerns;
• potential liability from any pending or future litigation;
• potential disruption of shipping routes due to accidents, political
events, piracy or acts by terrorists;
• future sales of KNOT Offshore Partners’ securities in the public
market;
• KNOT Offshore Partners’ business strategy and other plans and
objectives for future operations; and
• other factors listed from time to time in the reports and other
documents that KNOT Offshore Partners files with the SEC.
All forward-looking statements included in this release are made only as
of the date of this release on. New factors emerge from time to time,
and it is not possible for KNOT Offshore Partners to predict all of
these factors. Further, KNOT Offshore Partners cannot assess the impact
of each such factor on its business or the extent to which any factor,
or combination of factors, may cause actual results to be materially
different from those contained in any forward-looking statement. KNOT
Offshore Partners does not intend to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect
any change in KNOT Offshore Partners expectations with respect thereto
or any change in events, conditions or circumstances on which any such
statement is based.

Source: KNOT Offshore Partners LP