Highlights
For the fourth quarter of 2014, KNOT Offshore Partners LP (“KNOT
Offshore Partners” or the “Partnership”):
-
Generated net income of $5.9 million and operating income of $15.9
million
-
Generated Adjusted EBITDA of $26.5 million (1)
-
Generated distributable cash flow of $15.1 million (1)
In addition:
-
On December 15, 2014, the Partnership completed the acquisition of the
company that owns and operates the shuttle tanker Dan Cisne
from Knutsen NYK Offshore Tankers AS, the owner of the Partnership’s
general partner (“KNOT”). The Dan Cisne is a 59,000
deadweight ton shuttle tanker, delivered in 2011. The vessel was
purchased by KNOT in September 2014 from J. Lauritzen. It is operating
under a twelve year bareboat contract with Transpetro, ending in
September 2023.
-
On November 28, 2014, the Partnership completed the refinancing of the Fortaleza
Knutsen and Recife Knutsen.
-
On February 13, 2015, the Partnership paid a cash distribution of
$0.49 per unit with respect to the quarter ended December 31, 2014 to
unitholders of record on the close of business February 3, 2015. This
corresponds to a distribution of $1.96 per unit on an annualized basis.
(1)
|
Adjusted EBITDA and distributable cash flow are non-GAAP financial
measures 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.
|
Financial Results Overview
KNOT Offshore Partners reports net income of $5.9 million and operating
income of $15.9 million for the fourth quarter of 2014, as compared to
net income of $7.9 million and operating income of $10.0 million for the
fourth quarter of 2013.
All eight of the Partnership’s vessels operated well throughout the
fourth quarter of 2014. The five vessels on time charter achieved 99.6%
utilization (1.9 days off hire). Operating income increased by $5.9
million and total finance expense increased by $7.8 million in the
fourth quarter of 2014 compared to the fourth quarter of 2013. The
increase in operating income in the fourth quarter of 2014 was mainly
due to the Hilda Knutsen and the Torill Knutsen being
included in the Partnership’s results of operation from July 1, 2014.
Total finance expense for the fourth quarter of 2014 included $5.2
million in realized and unrealized derivative losses.
In comparison to the third quarter of 2014 when the Partnership reported
net income of $12.6 million, the lower net income in the fourth quarter
of 2014 was a result of a $7.1 million increase in finance expense. The
increase in finance expense was primarily due to a $6.4 million increase
in realized and unrealized losses on derivative instruments. This
consists of a realized loss of $0.3 million and an unrealized loss of
$3.9 million on interest hedging instruments and unrealized loss on
currency hedging of NOK expenses against the U.S. Dollar of $2.2 million.
Acquisition of Dan Cisne
On December 15, 2014, the Partnership’s wholly owned subsidiary, KNOT
Shuttle Tankers AS, acquired KNOT Shuttle Tankers 20 AS (“KNOT 20”), the
company that owns and operates the shuttle tanker Dan Cisne, from
KNOT for a purchase price of $103.0 million less approximately $82.2 of
existing bank debt (the “Dan Cisne Loan”) and other purchase
price adjustments of $2.6 million. $23.4 million of the Dan Cisne
Loan was prepaid by KNOT 20 at closing. The remaining $58.8 million will
be repaid with semi-annual installments over nine years and a balloon
payment of $6.5 million in September 2023. The Dan Cisne Loan
bears interest at an annual rate equal to 2.4% over LIBOR.
The purchase price was settled by way of a cash payment and seller
financing provided by KNOT in the form of a loan in the amount of
approximately $12.0 million (the “Seller Loan”). The Seller Loan bears
interest at an annual rate equal to 4.5% over LIBOR.
In connection with the acquisition, the Partnership’s management has
recommended that the Board of Directors of the Partnership (the “Board”)
consider an increase in the quarterly cash distribution of between
$0.010 to $0.015 per unit with respect to the quarter ending March 31,
2015. This corresponds to an annual increase of between $0.04 and $0.06
per unit, or 2.0% to 3.0% per unit to an annualized distribution of
between $2.00 and $ 2.02 per unit. Any such increase would be
conditioned on, among other things, approval of such increase by the
Board and the absence of any material adverse developments or
potentially attractive opportunities that would make such an increase
inadvisable.
Refinancing of Fortaleza Knutsen and Recife
Knutsen
On November 28, 2014, the Partnership completed the refinancing of the Fortaleza
Knutsen and Recife Knutsen by drawing down $137.8 million
under its new $140 million facility and repaying existing bank debt of
$123.2 million. The facility is secured by mortgages on the Fortaleza
Knutsen and Recife Knutsen and guaranteed by the Partnership.
The term loan is repayable in 20 consecutive quarterly installments
commencing in September 2014 with a balloon payment equal to 66% of the
initial loan amount due at maturity in June 2019.
Windsor Knutsen
It is probable that the Windsor Knutsen will be dry-docked prior
to the anticipated commencement in the fourth quarter of 2015 of its new
time charter with BG Group Plc (“BG Group”). According to the terms of
the time charter, BG Group will advise the Partnership of its window for
delivery on July 1, 2015. The Partnership estimates that the dry-docking
will take place in August or September 2015, bringing the previously
scheduled dry-docking forward by approximately 22 months.
Financing and Liquidity
As of December 31, 2014, the Partnership had cash and cash equivalents
of $30.7 million. Total interest bearing debt outstanding was $613.2
million including the Seller Loan of $12 million incurred in connection
with the acquisition of the Dan Cisne. The average interest rate
paid on the Partnership’s outstanding debt during the quarter ended
December 31, 2014 was approximately 2.4% over LIBOR.
As of December 31, 2014, the Partnership had entered into various
interest rate swap agreements for a total notional amount of $382.3
million to hedge against the interest rate risks of its variable rate
borrowings. The Partnership does not apply hedge accounting for
derivative instruments. Under the terms of the interest rate swap
agreements, the Partnership receives interest based on three or six
month LIBOR and pays a fixed rate ranging from 1.25% to 2.42%.
As of December 31, 2014, the Partnership’s net exposure to floating
interest rate fluctuations on its outstanding debt was approximately
$200.2 million based on total net interest bearing bank debt of $613.2
million less the interest rate swaps of $382.3 million and less cash and
cash equivalents of $30.7 million.
The Partnership’s outstanding bank debt of $613.2 million as of December
31, 2014 is repayable as follows:
|
|
|
|
|
|
|
|
(US $ in thousands)
|
|
Annual repayment
|
|
|
Balloon repayment
|
2015
|
|
$
|
38,718
|
|
|
$
|
—
|
2016
|
|
|
39,018
|
|
|
|
—
|
2017
|
|
|
39,318
|
|
|
|
—
|
2018
|
|
|
38,387
|
|
|
|
136,500
|
2019
|
|
|
18,132
|
|
|
|
269,678
|
2020 and thereafter
|
|
|
27,000
|
|
|
|
6,470
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
200,573
|
|
|
$
|
412,648
|
|
|
|
|
|
|
|
|
Outlook
The Partnership’s current fleet has an average fixed employment of 5.3
years.
Under the omnibus agreement, the Partnership has the option to purchase
the Ingrid Knutsen and the Raquel Knutsen from KNOT within
24 months of their delivery to charterers.
In August 2014, KNOT purchased the Dan Sabia, which is on
long-term bareboat charter to Transpetro ending in the third quarter of
2023. The Dan Sabia may be offered to the Partnership in the
future under the terms of the omnibus agreement.
On September 12, 2014, KNOT entered into new long-term charters with a
subsidiary of BG Group to provide shuttle tanker services in Brazil
beginning in late 2016. The charters with BG Group will be serviced by
two Suezmax-size DP2 shuttle tanker newbuildings to be constructed by
Hyundai Heavy Industries. Pursuant to the omnibus agreement, the
Partnership will have the option to acquire the vessels from KNOT
following BG Group’s acceptance of the vessels.
In January 2015, KNOT announced an agreement for a long-term time
charter with an international oil company of a new DP2 Suezmax shuttle
tanker to be delivered in the first quarter of 2017. The vessel has been
ordered at Cosco Zhoushan shipyard in China and will be a sister vessel
of Raquel Knutsen. Once in operation, the shuttle tanker will
operate in Brazil where it will transport crude oil from offshore oil
fields to terminals onshore. Pursuant to the omnibus agreement, the
Partnership will have the option to acquire this vessel following
acceptance by the charterer of the vessel.
Pursuant to the omnibus agreement, the Partnership also has the option
to acquire from KNOT any offshore shuttle tankers that KNOT acquires or
owns that are employed under charters for periods of five or more years.
There can be no assurance that the Partnership will acquire any vessels
from KNOT.
The Partnership’s vessels are all engaged in transportation on existing
oil fields. The Board believes, despite the drop in oil prices that
there will be opportunities for growth for the Partnership beyond the
current identified acquisition candidates, and the demand for offshore
shuttle tankers will over time continue to grow based on identified
projects.
The Board is pleased with the development of new business opportunities
and the results of operations of the Partnership for the quarter ended
December 31, 2014, 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
eight offshore shuttle tankers with an average age of 3.3 years
operating under long-term charters.
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
18, 2015 at noon (ET) to discuss the results for the fourth quarter of
2014. All unitholders and interested parties are invited to listen to
the live conference call by choosing from the following options:
-
By dialing 1-855-209-8259 or 1-412-542-4105, if outside North America.
-
By accessing the webcast, which will be available on the Partnership’s
website: www.knotoffshorepartners.com
February 17, 2014
|
KNOT Offshore Partners L.P.
|
Aberdeen, United Kingdom
|
|
Questions should be directed to:
|
Arild Vik (+44 7581 899 777)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED CARVE-OUT
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Three Months Ended September
30, 2014
|
|
Year Ended December 31,
|
|
(USD in thousands)
|
|
2014
|
|
|
2013
|
|
|
|
|
|
2014
|
|
|
2013
|
|
Time charter and bareboat revenues (1)
|
|
|
34,655
|
|
|
|
22,216
|
|
|
|
34,247
|
|
|
|
112,784
|
|
|
|
73,151
|
|
Loss of hire insurance recoveries
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
250
|
|
Other income
|
|
|
28
|
|
|
|
—
|
|
|
|
18
|
|
|
|
57
|
|
|
|
—
|
|
Total revenues
|
|
|
34,683
|
|
|
|
22,216
|
|
|
|
34,265
|
|
|
|
112,841
|
|
|
|
73,401
|
|
Vessel operating expenses
|
|
|
7,357
|
|
|
|
4,427
|
|
|
|
7,601
|
|
|
|
23,879
|
|
|
|
14,288
|
|
Depreciation and amortization
|
|
|
10,559
|
|
|
|
6,785
|
|
|
|
10,201
|
|
|
|
34,322
|
|
|
|
23,768
|
|
General and administrative expenses
|
|
|
832
|
|
|
|
1,001
|
|
|
|
987
|
|
|
|
4,323
|
|
|
|
5,361
|
|
Total operating expenses
|
|
|
18,748
|
|
|
|
12,213
|
|
|
|
18,789
|
|
|
|
62,524
|
|
|
|
43,417
|
|
Operating income
|
|
|
15,935
|
|
|
|
10,003
|
|
|
|
15,476
|
|
|
|
50,317
|
|
|
|
29,984
|
|
Finance income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
9
|
|
|
|
5
|
|
|
|
0
|
|
|
|
13
|
|
|
|
30
|
|
Interest expense
|
|
|
(4,688
|
)
|
|
|
(2,832
|
)
|
|
|
(4,014
|
)
|
|
|
(15,271
|
)
|
|
|
(10,773
|
)
|
Other finance expense
|
|
|
(40
|
)
|
|
|
(250
|
)
|
|
|
(96
|
)
|
|
|
(1,271
|
)
|
|
|
(2,048
|
)
|
Realized and unrealized gain (loss) on derivative instruments (2)
|
|
|
(5,239
|
)
|
|
|
845
|
|
|
|
1,128
|
|
|
|
(6,407
|
)
|
|
|
505
|
|
Net gain (loss) on foreign currency transactions
|
|
|
(54
|
)
|
|
|
20
|
|
|
|
68
|
|
|
|
26
|
|
|
|
193
|
|
Total finance expense
|
|
|
(10,012
|
)
|
|
|
(2,212
|
)
|
|
|
(2,914
|
)
|
|
|
(22,910
|
)
|
|
|
(12,093
|
)
|
Income (loss) before income taxes
|
|
|
5,923
|
|
|
|
7,791
|
|
|
|
12,562
|
|
|
|
27,407
|
|
|
|
17,891
|
|
Income tax benefit (expense)
|
|
|
(15
|
)
|
|
|
111
|
|
|
|
1
|
|
|
|
(15
|
)
|
|
|
(2,827
|
)
|
Net income (loss)
|
|
|
5,908
|
|
|
|
7,902
|
|
|
|
12,563
|
|
|
|
27,392
|
|
|
|
15,064
|
|
Net income (loss) attributable to KNOT Offshore Partners LP Owners
|
|
|
5,908
|
|
|
|
7,902
|
|
|
|
12,563
|
|
|
|
27,392
|
|
|
|
15,064
|
|
|
|
|
|
|
|
Weighted average units outstanding (in thousands of units):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common units
|
|
|
13,808
|
|
|
|
8,568
|
|
|
|
13,657
|
|
|
|
11,209
|
|
|
|
|
|
Subordinated units
|
|
|
8,568
|
|
|
|
8,568
|
|
|
|
8,568
|
|
|
|
8,568
|
|
|
|
|
|
General partner units
|
|
|
457
|
|
|
|
350
|
|
|
|
454
|
|
|
|
404
|
|
|
|
|
|
(1)
|
Time charter revenue for the third and fourth quarters of 2014
includes a non-cash item of approximately $0.9 million in reversal
of contract liability provision and income recognition of prepaid
charterhire. In the first and second quarters of 2014 a non-cash
item of approximately $0.5 million in reversal of contract liability
provision was included.
|
(2)
|
The mark-to-market net loss related to interest rate swaps and
foreign exchange contracts for the fourth quarter of 2014 includes
unrealized loss of $4.2 million and realized loss of $1.0 million.
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED CARVE-OUT BALANCE
SHEET
|
|
|
|
|
|
|
|
|
|
|
|
At December 31,
|
|
(USD in thousands)
|
|
2014
|
|
|
2013
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
30,746
|
|
|
$
|
28,836
|
|
Restricted cash
|
|
|
—
|
|
|
|
458
|
|
Amounts due from related parties
|
|
|
130
|
|
|
|
77
|
|
Inventories
|
|
|
915
|
|
|
|
578
|
|
Current portion of derivative assets
|
|
|
—
|
|
|
|
248
|
|
Other current assets
|
|
|
3,958
|
|
|
|
1,814
|
|
Total current assets
|
|
|
35,749
|
|
|
|
32,011
|
|
Long-term assets:
|
|
|
|
|
|
|
|
|
Vessels and equipment:
|
|
|
|
|
|
|
|
|
Vessels
|
|
|
1,131,321
|
|
|
|
692,926
|
|
Less accumulated depreciation and amortization
|
|
|
(109,464
|
)
|
|
|
(75,141
|
)
|
Net property, plant, and equipment
|
|
|
1,021,857
|
|
|
|
617,785
|
|
Goodwill
|
|
|
6,217
|
|
|
|
5,750
|
|
Deferred debt issuance cost
|
|
|
3,959
|
|
|
|
2,010
|
|
Derivative assets
|
|
|
2,966
|
|
|
|
2,617
|
|
Total assets
|
|
$
|
1,070,748
|
|
|
$
|
660,173
|
|
LIABILITIES AND PARTNERS’ EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Trade accounts payable
|
|
$
|
1,869
|
|
|
$
|
1,107
|
|
Accrued expenses
|
|
|
2,735
|
|
|
|
2,642
|
|
Current portion of long-term debt
|
|
|
38,718
|
|
|
|
29,269
|
|
Derivative liabilities
|
|
|
7,450
|
|
|
|
2,124
|
|
Income taxes payable
|
|
|
362
|
|
|
|
743
|
|
Contract liabilities
|
|
|
1,518
|
|
|
|
1,518
|
|
Prepaid charter and deferred revenue
|
|
|
6,751
|
|
|
|
4,471
|
|
Amount due to related parties
|
|
|
628
|
|
|
|
163
|
|
Total current liabilities
|
|
|
60,031
|
|
|
|
42,037
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
562,503
|
|
|
|
310,359
|
|
Contract liabilities
|
|
|
11,275
|
|
|
|
12,793
|
|
Deferred tax liabilities
|
|
|
1,402
|
|
|
|
2,141
|
|
Long-term debt from related parties
|
|
|
12,000
|
|
|
|
10,349
|
|
Other long-term liabilities
|
|
|
4,172
|
|
|
|
567
|
|
Total liabilities
|
|
|
651,383
|
|
|
|
378,246
|
|
Equity:
|
|
|
|
|
|
|
|
|
Partners’ capital:
|
|
|
|
|
|
|
|
|
Common unitholders
|
|
|
307,544
|
|
|
|
168,773
|
|
Subordinated unitholders
|
|
|
103,680
|
|
|
|
107,857
|
|
General partner interest
|
|
|
8,141
|
|
|
|
5,297
|
|
Total Partners’ capital
|
|
|
419,365
|
|
|
|
281,927
|
|
Total liabilities and equity
|
|
$
|
1,070,748
|
|
|
$
|
660,173
|
|
|
|
|
|
|
|
|
|
|
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 combined financial statements
for the year ended December 31, 2013 filed by KNOT Offshore Partners
with the U.S. Securities and Exchange Commission (the “SEC”) on
April 15, 2014. These allocated costs have been accounted for as an
equity contribution in the combined balance sheets.
APPENDIX A – RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Distributable Cash Flow (“DCF”)
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,
2014
(unaudited)
|
|
Three Months
Ended September 30,
2014
(unaudited)
|
Net income
|
|
$5,908
|
|
$12,563
|
Add:
|
|
|
|
|
Depreciation and amortization
|
|
10,559
|
|
10,201
|
Other non-cash items; deferred costs amortization debt
|
|
1,018
|
|
308
|
Unrealized losses from interest rate derivatives and forward
exchange currency contracts
|
|
4,213
|
|
—
|
Less:
|
|
|
|
|
Estimated maintenance and replacement capital expenditures
(including drydocking reserve)
|
|
(5,747)
|
|
(5,659)
|
Deferred revenue
|
|
(858)
|
|
(858)
|
Unrealized gains from interest rate derivatives and forward exchange
currency contracts
|
|
—
|
|
(1,846)
|
Distributable cash flow
|
|
$15,093
|
|
$14,709
|
|
|
|
|
|
Distributions declared
|
|
$11,460
|
|
$11,460
|
|
|
|
|
|
Coverage ratio
|
|
1.32
|
|
1.28
|
|
|
|
|
|
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,
2014
(unaudited)
|
|
Three Months
Ended December 31,
2013
(unaudited)
|
Net income
|
|
$5,908
|
|
$7,902
|
Interest income
|
|
(9)
|
|
(5)
|
Interest expense
|
|
4,688
|
|
2,832
|
Depreciation and amortization
|
|
10,559
|
|
6,785
|
Income tax (benefits) expense
|
|
15
|
|
(111)
|
EBITDA
|
|
21,161
|
|
17,403
|
Other financial items (a)
|
|
5,333
|
|
(615)
|
Adjusted EBITDA
|
|
$26,494
|
|
$16,788
|
(a)
|
Other financial items consist of other finance 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. Important factors that could cause
actual results to differ materially include, but are not limited to:
-
market trends in the shuttle tanker or general tanker industries,
including hire rates, factors affecting supply and demand, and
opportunities for the profitable operations of shuttle tankers;
-
KNOT’s and KNOT Offshore Partners’ ability to build shuttle tankers
and the timing of the delivery and acceptance of any such 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 effects of a worldwide or regional economic slowdown;
-
turmoil in the global financial markets;
-
fluctuations in currencies and interest rates;
-
fluctuations in the price of oil;
-
general market conditions, including fluctuations in hire rates and
vessel values;
-
changes in KNOT Offshore Partners’ operating expenses, including
drydocking and insurance costs and bunker prices;
-
changes in 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
charters, which KNOT Offshore Partners defines as charters of five
years or more;
-
KNOT Offshore Partners’ ability to maximize the use of its vessels,
including the re-deployment or disposition of vessels no longer under
long-term charter;
-
the financial condition of KNOT Offshore Partners’ existing or future
customers;
-
timely purchases and deliveries of newbuilds;
-
future purchase prices of newbuilds and secondhand vessels;
-
KNOT Offshore Partners’ ability to compete successfully for future
chartering and newbuild 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.
Copyright Business Wire 2015