KNOT Offshore Partners LP Earnings Release—Interim Results for the Period Ended June 30, 2025

ABERDEEN, Scotland--( BUSINESS WIRE)--KNOT Offshore Partners LP (NYSE:KNOP):

Financial Highlights

For the three months ended June 30, 2025 (“Q2 2025”), KNOT Offshore Partners LP (“KNOT Offshore Partners” or the “Partnership”; NYSE:KNOP):

Other Partnership Highlights and Events

1 EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management and external users of the Partnership’s financial statements. Please see Appendix A for definitions of EBITDA and Adjusted EBITDA and a reconciliation to net income, the most directly comparable GAAP financial measure.

Derek Lowe, Chief Executive Officer and Chief Financial Officer of KNOT Offshore Partners LP, stated, “We are pleased to report another strong performance in Q2 2025, marked by safe operation at full utilization from scheduled operations, close to 97% utilization when including drydockings, consistent revenue and operating income generation, and material progress in securing additional charter coverage for our fleet.

As of the date of this release and including contractual updates since June 30, 2025, we have now secured 100% of charter coverage for the second half of 2025 after allowing for scheduled dry dockings, and approximately 89% for 2026. We remain focused on further strengthening our fleetwide charter coverage and seizing those periodic opportunities that exist to re-charter vessels in the current tight market environment.

In Brazil, the main offshore oil market where we operate, new production start-ups in shuttle tanker-serviced pre-salt fields have continued to outpace Petrobras’s already-aggressive baseline schedule. As a result, the world’s biggest shuttle tanker market is both growing and materially tightening. The North Sea, our secondary geography, has also established some positive momentum as projects ramp up production in both the UK North Sea and, most significantly, the Barents Sea. While less dynamic than is the case in Brazil, these positive developments in the wider North Sea region are a welcome and notable change after a protracted period of relatively slack shuttle tanker demand.

Driven by these dynamics, we continue to believe that growth of offshore oil production in shuttle tanker-serviced fields across both Brazil and the North Sea is on track to outpace shuttle tanker supply growth throughout the coming years. We are aware of newbuild shuttle tanker orders, including seven for Knutsen NYK, all of which are scheduled for delivery over 2025‑2028. We anticipate that all these new orders are backed by charters to clients in Brazil, and see this as a sign of confidence in the medium-to-long term demand for the global shuttle tanker fleet. Particularly when considered in the context of the increasing numbers of shuttle tankers reaching or exceeding typical retirement age, as well as yard capacity constraints limiting material new orders into at least 2028, we anticipate that these newbuild deliveries will be readily absorbed by the expanding market for shuttle tankers.

As the largest owner and operator of shuttle tankers (together with our sponsor, Knutsen NYK), we believe we are well positioned to benefit from such an improving charter market. We remain focused on generating certainty and stability of cash flows from long-term employment with high-quality counterparties, both through continued chartering and through the consummation of accretive dropdown transactions. We are also pleased to have reached an important milestone early in the third quarter, with our cashflow, financial strength, and overall outlook having improved to the extent that we felt it prudent to initiate a common unit buyback program, which is enabling us to take advantage of what we believe to be a pronounced value opportunity. We are confident that continued operational performance and the successful execution of our strategy in an improving market environment can increase our cash flow generation, strengthen our forward visibility, and create sustainable unitholder value in the quarters and years ahead.

Financial Results Overview

Results for Q2 2025 (compared to those for the three months ended March 31, 2025 (“Q1 2025”)) included:

By comparison with the three months ended June 30, 2024 (“Q2 2024”), results for Q2 2025 included:

Financing and Liquidity

As of June 30, 2025, the Partnership had $104.8 million in available liquidity, which was comprised of cash and cash equivalents of $66.3 million and $38.5 million of capacity under its revolving credit facilities. The Partnership’s revolving credit facilities mature in November 2025 and August 2027 respectively.

The Partnership’s total interest-bearing obligations outstanding as of June 30, 2025 were $918.6 million ($914.5 million net of debt issuance costs). These did not include the Daqing Facility described below, which was assumed on July 2, 2025. The average margin paid on the Partnership’s outstanding debt during Q2 2025 was approximately 2.23% over SOFR. These obligations are repayable as follows:

(U.S. Dollars in thousands)

Sale &

Leaseback

Period

repayment

Balloon repayment

Total

Remainder of 2025

7,357

44,660

81,077

133,094

2026

15,060

74,461

284,203

373,724

2027

15,751

37,034

95,098

147,883

2028

16,520

19,080

78,824

114,424

2029

17,232

6,154

—

23,386

2030 and thereafter

85,370

40,704

—

126,074

Total

157,290

222,093

539,202

918,585

As of June 30, 2025, the Partnership had entered into various interest rate swap agreements for a total notional amount outstanding of $421.2 million, to hedge against the interest rate risks of its variable rate borrowings. As of June 30, 2025, the Partnership receives interest based on SOFR and pays a weighted average interest rate of 2.54% under its interest rate swap agreements, which have an average maturity of approximately 1.58 years. The Partnership does not apply hedge accounting for derivative instruments, and its financial results are impacted by changes in the market value of such financial instruments.

As of June 30, 2025, the Partnership’s net exposure to floating interest rate fluctuations was approximately $273.8 million based on total interest-bearing contractual obligations of $918.6 million, less the Raquel Knutsen and Torill Knutsen sale and leaseback facilities of $157.3 million, less interest rate swaps of $421.2 million, and less cash and cash equivalents of $66.3 million.

The Daqing Facility became one of the Partnership’s debt obligations upon closing of the acquisition of the Daqing Knutsen on July 2, 2025, and is therefore not included in the Partnership’s outstanding debt as of June 30, 2025. The Daqing Facility is repayable in quarterly installments with a final payment due at maturity on June 13, 2027 of $62.3 million, which includes the balloon payment and last quarterly installment. The facility bears interest at a rate per annum equal to SOFR plus a margin of 1.94%. In connection with this acquisition, the Partnership and KNOT Shuttle Tankers AS became the sole guarantors. The facility is secured by a mortgage on the Daqing Knutsen.

On August 15, 2025, the Partnership closed the refinancing of the first of its two $25 million revolving credit facilities, with the facility being rolled over with NTT TC Leasing Co, Ltd... The new facility will mature in August 2027, bears interest at a rate per annum equal to SOFR plus a margin of 2.3%, and has a commitment fee on any undrawn portion of the facility that varies based on the aggregate borrowing amount: 0.70% per annum for borrowings up to $10 million, 0.60% per annum for borrowings between $10 million and $20 million, and 0.50% per annum for borrowings exceeding $20 million. The commercial terms of the facility are substantially unchanged from the facility entered into in August 2023 with NTT TC Leasing Co, Ltd.. The Partnership is continuing discussions and negotiations with the lender under its second $25 million revolving credit facility, which will mature in November 2025.

On September 16, 2025, the Partnership, through its wholly-owned subsidiary, Knutsen Shuttle Tankers 34 AS, which owns the Tove Knutsen, sold the Tove Knutsen to, and leased her back from, a Japanese-based lessor, for a lease period of 10 years. The gross sale price was $100 million and a portion of the proceeds were used to repay the outstanding loan secured by the vessel and to settle the related interest rate swaps. The bareboat rate under the lease consists of a fixed element per day and there is a fixed-price purchase obligation at maturity. Following closing and after repayment of the loan and settlement of the interest rate swaps, the Partnership realized net proceeds of approximately $32 million after fees and expenses.

The Partnership has commenced discussions and negotiations with its lending group and other institutions and advisors concerning the refinancing of its senior secured loan facility secured by the Synnove Knutsen, which matures in October 2025 with a repayment due at that time of $72.26 million.

Given the negotiations that are already underway and given the Partnership’s history of successfully obtaining financing or refinancing its debt, management believes that it will be able to conclude a refinancing of these facilities on similar terms (including that no re-leverage is required) prior to their respective maturities. However, no assurance can be given that such facilities will be timely refinanced on acceptable terms.

Common Unit Repurchase Program

On July 2, 2025, the Board authorized the repurchase of up to an aggregate of $10 million of the Partnership’s outstanding common units over the subsequent 12 months (the “Program”).

Purchases of common units under the Program will be at prevailing prices on the open market or in privately negotiated transactions, and will be subject to available liquidity, market conditions, credit agreement restrictions, applicable legal requirements, contractual obligations and other factors. The Program does not require the Partnership to acquire any specific number of common units. The Partnership intends to purchase common units under the Program opportunistically with available funds, while maintaining sufficient liquidity to fund its capital needs. The Program may be suspended from time to time, modified, extended or discontinued by Board at any time. As of September 25, 2025, the Partnership had paid $1.64 million to repurchase an aggregate of 226,374 common units at an average price of $7.24 per common unit. Common units repurchased under the Program are being cancelled.

Assets Owned by Knutsen NYK

Pursuant to the omnibus agreement the Partnership entered into with Knutsen NYK at the time of its initial public offering, the Partnership has the option to acquire from Knutsen NYK any offshore shuttle tankers that Knutsen NYK acquires or owns that are employed under charters for periods of five or more years.

While the Partnership continues to believe that key components of its strategy and value proposition are accretive investment in the fleet and a long-term, sustainable distribution, there can be no assurance that the Partnership will acquire any additional vessels from Knutsen NYK. Given the relationship between the Partnership and Knutsen NYK, any such acquisition would be subject to the approval of the Conflicts Committee of the Partnership’s Board of Directors.

As of the date of this release, Knutsen NYK owns, or has ordered, the following vessels and has entered into the following charters:

Outlook

As at June 30, 2025: (i) the Partnership had charters with an average remaining fixed duration of 2.6 years, with the charterers of the Partnership’s vessels having options to extend their charters by an additional 4.2 years on average and (ii) the Partnership had $895 million of remaining contracted forward revenue, excluding charterers’ options and charters agreed or signed after that date. As at June 30, 2025, the eighteen vessels which comprised the Partnership’s fleet had an average age of 10.1 years. During Q2 2025, fourteen of the vessels in our fleet operated in Brazil. With the acquisition on July 2, 2025, of the Daqing Knutsen, the average age of our fleet reduced further (to 9.7 years) and the number of vessels being operated in Brazil increased to fifteen. The market for shuttle tankers in Brazil has continued to tighten, driven by a significant pipeline of new production growth over the coming years, a limited newbuild order book, and typical long-term project viability requiring a Brent oil price of only $35 per barrel.

Shuttle tanker demand in the North Sea has remained subdued for some years, driven by the impact of COVID‑19‑related project delays. These conditions persisted into recent quarters, awaiting anticipated new oil production starts. Most notably, the long-anticipated Johan Castberg field in the Barents Sea and the new Penguins FPSO in the North Sea entered production recently.

Looking ahead, based on supply and demand factors with significant forward visibility and committed capital from industry participants, we believe that the overall medium and long-term outlook for the shuttle tanker market remains favourable.

In the meantime, the Partnership intends to pursue long-term visibility from its charter contracts, build its liquidity, pursue accretive dropdown transactions supportive of long-term cash flow generation, and position itself to benefit from its market-leading role in an improving shuttle tanker market. The Partnership continues to believe that key components of its strategy and value proposition are accretive investment in the fleet and a long-term sustainable distribution and buy-back program.

Moving forward, our day-to-day commercial focus remains on securing further long-term charters with high-quality counterparties that provide the Partnership with stable, predictable cashflows. We are confident that strong operational performance and the successful execution of our strategy will continue to expand our strategic and financial flexibility and to support multi-faceted value creation for our unitholders in the quarters and years ahead.

In the near term, the Partnership believes that there are compelling opportunities to deploy a material portion of its cash flow to facilitate dropdown transactions. The Partnership believes that dropdowns will lead to an increase in the Partnership’s capital value, with growth in contractual backlog leading to increasing cash flow over time. Together with reductions in the average age of the fleet, this increased cash flow should also facilitate refinancings. Combined with strong market fundamentals, this should provide the opportunity to increase sustainable distribution levels in the future.

The Partnership’s financial information for the quarter ended June 30, 2025 included in this press release is preliminary and unaudited and is subject to change in connection with the completion of the Partnership’s quarter end close procedures and further financial review. Actual results may differ as a result of the completion of the Partnership’s quarter end closing procedures, review adjustments and other developments that may arise between now and the time such financial information for the quarter ended June 30, 2025 is finalized.

About KNOT Offshore Partners LP

KNOT Offshore Partners LP owns, operates and acquires shuttle tankers primarily under long-term charters in the offshore oil production regions of Brazil and the North Sea.

KNOT Offshore Partners LP is structured as a publicly traded master limited partnership but is classified as a corporation for U.S. federal income tax purposes, and thus issues a Form 1099 to its unitholders, rather than a Form K‑1. KNOT Offshore Partners LP’s common units trade on the New York Stock Exchange under the symbol “KNOP”.

The Partnership plans to host a conference call on September 26, 2025 at 9:30 AM (Eastern Time) to discuss the results for Q2 2025. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

(U.S. Dollars in thousands)

2025

2024

2025

2024

Operating revenues:

Time charter and bareboat revenues

85,920

82,991

73,437

168,911

146,799

Voyage revenues (1)

—

466

351

466

3,066

Loss of hire insurance recoveries

607

—

607

Other income

533

572

554

1,105

1,109

Total revenues

87,060

84,029

74,420

171,089

151,052

Gain from disposal of vessel

—

1,342

—

1,342

—

Operating expenses:

Vessel operating expenses

33,005

30,609

26,952

63,614

52,861

Voyage expenses and commission (2)

944

767

584

1,711

2,219

Depreciation

29,372

28,763

27,748

58,135

55,490

Impairment (3)

—

16,384

—

16,384

General and administrative expenses

1,555

1,796

1,426

3,351

3,063

Total operating expenses

64,876

61,935

73,094

126,811

130,017

Operating income (loss)

22,184

23,436

1,326

45,620

21,035

Finance income (expense):

Interest income

903

748

897

1,651

1,725

Interest expense

(15,316

)

(14,902

)

(16,863

)

(30,218

)

(34,328

)

Other finance income (expense)

(199

)

(152

)

177

(351

)

(92

)

Realized and unrealized gain (loss) on derivative instruments (4)

(370

)

(1,344

)

1,797

(1,714

)

6,799

Net gain (loss) on foreign currency transactions

(267

)

374

107

(198

)

Total finance income (expense)

(15,249

)

(15,276

)

(13,964

)

(30,525

)

(26,094

)

Income (loss) before income taxes

6,935

8,160

(12,638

)

15,095

(5,059

)

Income tax benefit (expense)

(125

)

(579

)

(213

)

(704

)

(354

)

Net income (loss)

6,810

7,581

(12,851

)

14,391

(5,413

)

Weighted average units outstanding (in thousands of units):

Common units

34,045

Class B units (5)

252

General Partner units

640

(2) Voyage expenses and commission are expenses unique to spot voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, agency fees and commission.

(3) The carrying value of each of the Dan Cisne and the Dan Sabia was written down to its estimated fair value as of June 30, 2024.

(4) Realized gain (loss) on derivative instruments relates to amounts the Partnership actually received (paid) to settle derivative instruments, and the unrealized gain (loss) on derivative instruments relates to changes in the fair value of such derivative instruments, as detailed in the table below.

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

(U.S. Dollars in thousands)

2025

2024

2025

2024

Realized gain (loss):

Interest rate swap contracts

2,521

3,111

3,987

5,631

8,050

Total realized gain (loss):

2,521

3,111

3,987

5,631

8,050

Unrealized gain (loss):

Interest rate swap contracts

(2,891

)

(4,455

)

(2,190

)

(7,345

)

(1,251

)

Total unrealized gain (loss):

(2,891

)

(4,455

)

(2,190

)

(7,345

)

(1,251

)

Total realized and unrealized gain (loss) on derivative instruments:

(370

)

(1,344

)

1,797

(1,714

)

6,799

(5) On September 7, 2021, the Partnership entered into an exchange agreement with Knutsen NYK, and the Partnership’s general partner whereby Knutsen NYK contributed to the Partnership all of Knutsen NYK’s incentive distribution rights (“IDRs”), in exchange for the issuance by the Partnership to Knutsen NYK of 673,080 common units and 673,080 Class B Units, whereupon the IDRs were cancelled (the “IDR Exchange”). As of June 30, 2025, 420,675 of the Class B Units had been converted to common units.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(U.S. Dollars in thousands)

At June 30, 2025

At December 31, 2024

ASSETS

Current assets:

Cash and cash equivalents

66,322

66,933

Amounts due from related parties

2,020

2,230

Inventories

3,598

3,304

Derivative assets

5,084

8,112

Other current assets

17,607

14,793

Total current assets

94,631

95,372

Long-term assets:

Vessels, net of accumulated depreciation

1,512,647

1,462,192

Right-of-use assets

3,860

1,269

Deferred tax assets

3,082

3,326

Derivative assets

2,401

5,189

Accrued income

7,531

4,817

Total Long-term assets

1,529,521

1,476,793

Total assets

1,624,152

1,572,165

LIABILITIES AND EQUITY

Current liabilities:

Trade accounts payable

5,789

5,766

Accrued expenses

18,427

11,465

Current portion of long-term debt

179,030

256,659

Current lease liabilities

1,004

1,172

Income taxes payable

Current portion of contract liabilities

5,529

2,889

Prepaid charter

2,079

7,276

Amount due to related parties

7,202

1,835

Total current liabilities

219,114

287,122

Long-term liabilities:

Long-term debt

735,449

648,075

Lease liabilities

2,856

Derivative liabilities

1,317

—

Contract liabilities

43,355

23,776

Deferred tax liabilities

103

Deferred revenues

1,635

1,869

Total long-term liabilities

784,715

673,908

Total liabilities

1,003,829

961,030

Commitments and contingencies

Series A Convertible Preferred Units

84,308

Equity:

Partners’ capital:

Common unitholders: 34,045,081 units issued and outstanding at June 30, 2025 and December 31, 2024 respectively

522,621

513,603

Class B unitholders: 252,405 units issued and outstanding at June 30, 2025 and December 31, 2024 respectively

3,871

General partner interest: 640,278 units issued and outstanding at June 30, 2025 and December 31, 2024 respectively

9,523

9,353

Total partners’ capital

536,015

526,827

Total liabilities and equity

1,624,152

1,572,165

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

Partners’ Capital

Accumulated

Series A

General

Other

Total

Convertible

Common

Class B

Partner

Comprehensive

Partners’

Preferred

(U.S. Dollars in thousands)

Units

Income (Loss)

Capital

Units

Three Months Ended June 30, 2024 and 2025

Consolidated balance at March 31, 2024

514,760

3,871

9,374

—

528,005

84,308

Net income (loss)

(14,282

)

—

(269

)

—

(14,551

)

1,700

Other comprehensive income

—

Cash distributions

(885

)

—

(16

)

—

(901

)

(1,700

)

Consolidated balance at June 30, 2024

499,593

3,871

9,089

—

512,553

84,308

Consolidated balance at March 31, 2025

518,491

3,871

9,444

—

531,806

84,308

Net income (loss)

5,015

—

5,110

1,700

Other comprehensive income

—

Cash distributions

(885

)

—

(16

)

—

(901

)

(1,700

)

Consolidated balance at June 30, 2025

522,621

3,871

9,523

—

536,015

84,308

Six Months Ended June 30, 2024 and 2025

Consolidated balance at December 31, 2023

510,013

3,871

9,285

—

523,169

84,308

Net income (loss)

(8,650

)

—

(163

)

—

(8,813

)

3,400

Other comprehensive income

—

Cash distributions

(1,770

)

—

(33

)

—

(1,803

)

(3,400

)

Consolidated balance at June 30, 2024

499,593

3,871

9,089

—

512,553

84,308

Consolidated balance at December 31, 2024

513,603

3,871

9,353

—

526,827

84,308

Net income (loss)

10,788

—

203

—

10,991

3,400

Other comprehensive income

—

Cash distributions

(1,770

)

—

(33

)

—

(1,803

)

(3,400

)

Consolidated balance at June 30, 2025

522,621

3,871

9,523

—

536,015

84,308

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended June 30,

(U.S. Dollars in thousands)

2025

2024

OPERATING ACTIVITIES

Net income (loss) (1)

14,391

(5,413

)

Adjustments to reconcile net income (loss) to cash provided by operating activities:

Depreciation

58,135

55,490

Impairment

—

16,384

Amortization of contract intangibles / liabilities

(2,244

)

—

Amortization of deferred revenue

(234

)

(234

)

Amortization of deferred debt issuance cost

1,163

1,089

Drydocking expenditure

(7,592

)

(58

)

Income tax (benefit)/expense

704

354

Income taxes paid

(52

)

(23

)

Unrealized loss on derivative instruments

7,345

1,251

Unrealized (gain) loss on foreign currency transactions

(598

)

148

Gain from disposal of vessel

(1,342

)

—

Changes in operating assets and liabilities:

Decrease (increase) in amounts due from related parties

(255

)

(436

)

Decrease (increase) in inventories

(716

)

(20

)

Decrease (increase) in other current assets

(1,286

)

(1,907

)

Decrease (increase) in accrued income

(2,714

)

—

Increase (decrease) in trade accounts payable

842

(4,636

)

Increase (decrease) in accrued expenses

3,603

(5,058

)

Increase (decrease) prepaid charter

(5,197

)

1,887

Increase (decrease) in amounts due to related parties

4,027

1,754

Net cash provided by operating activities

67,980

60,572

INVESTING ACTIVITIES

Additions to vessel and equipment

(213

)

(75

)

Proceeds from asset swap (net cash)

1,040

—

Net cash provided by (used in) investing activities

827

(75

)

FINANCING ACTIVITIES

Proceeds from long-term debt

—

60,000

Repayment of long-term debt

(64,458

)

(121,971

)

Payment of debt issuance cost

—

(536

)

Cash distributions

(5,203

)

(5,203

)

Net cash used in financing activities

(69,661

)

(67,710

)

Effect of exchange rate changes on cash

243

(89

)

Net increase (decrease) in cash and cash equivalents

(611

)

(7,302

)

Cash and cash equivalents at the beginning of the period

66,933

63,921

Cash and cash equivalents at the end of the period

66,322

56,619

(1) Included in net income (loss) is interest paid amounting to $ 29.5 million and $33.6 million for the six months ended June 30, 2025 and 2024, respectively.

APPENDIX A—RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

EBITDA and Adjusted EBITDA

EBITDA is defined as earnings before interest, depreciation, impairments and taxes. Adjusted EBITDA is defined as earnings before interest, depreciation, impairments, taxes and other financial items (including other finance expenses, realized and unrealized gain (loss) on derivative instruments and net gain (loss) on foreign currency transactions). EBITDA is used as a supplemental financial measure by management and external users of financial statements, such as the Partnership’s lenders, to assess its financial and operating performance and compliance with the financial covenants and restrictions contained in its financing agreements. Adjusted EBITDA is used as a supplemental financial measure by management and external users of financial statements, such as investors, to assess the Partnership’s financial and operating performance. The Partnership believes that EBITDA and Adjusted EBITDA assist 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 EBITDA and Adjusted EBITDA information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest, other financial items, taxes, impairments and depreciation, as applicable, 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 EBITDA and Adjusted EBITDA as financial measures 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. EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be considered as alternatives to net income or any other indicator of Partnership performance calculated in accordance with GAAP.

The table below reconciles EBITDA and Adjusted EBITDA to net income, the most directly comparable GAAP measure.

Three Months Ended

Six Months Ended

June 30,

2025

2024

2025

2024

(U.S. Dollars in thousands)

(unaudited)

Net income (loss)

6,810

(12,851

)

14,391

(5,413

)

Interest income

(903

)

(897

)

(1,651

)

(1,725

)

Interest expense

15,316

16,863

30,218

34,328

Depreciation

29,372

27,748

58,135

55,490

Impairment

—

16,384

—

16,384

Income tax expense

125

213

704

354

EBITDA

50,720

47,460

101,797

99,418

Other financial items (a)

836

(2,002

)

1,958

(6,509

)

Adjusted EBITDA

51,556

45,458

103,755

92,909

(a) Other financial items consist of other finance income (expense), realized and unrealized gain (loss) on derivative instruments and net gain (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. Forward-looking statements include statements with respect to, among other things:

All forward-looking statements included in this release are made only as of the date of this release. 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.