KNOT Offshore Partners LP Q2 FY2025 earnings call

• Q2 financial highlights: Revenues $87.1M, operating income $22.2M, net income $6.8M, adjusted EBITDA $51.6M; available liquidity $104M, $4M higher than Q1. - Q2 developments: Extended charter coverage; Brasil Knutsen to charter with Equinor; Repsol Sinopec extended Raquel Knutsen; Windsor Knutsen started operations with ExxonMobil. - Subsequent to quarter end: Refinanced Tove Knutsen with sale and leaseback ($32M cash); purchased Daqing Knutsen ($95M combination cash/debt); repurchased 226,000 common units under $10M authorization. - Fleet overview: Backlog $895M; fleet of 19 vessels with average age 9.7 years; 89% of vessel time in 2026 covered by fixed contracts. - Debt profile: Updated debt schedule reflecting refinancings; average margin 2.23% over SOFR; confident in debt maturities. - Near-term priorities: Focus on safe operation, growth in earnings visibility/liquidity, opportunistic capital deployment.

Revenues for the second quarter were $87.1 million, operating income was $22.2 million, net income was $6.8 million, and adjusted EBITDA was $51.6 million. As of June 30, 2025, available liquidity was $104 million, consisting of $66.3 million in cash and cash equivalents and $38.5 million in undrawn capacity on credit facilities, which was $4 million higher than at March 31. Overall utilization was 96.8% with full utilization considering 2 drydockings.

• Refinanced Tove Knutsen and purchased Daqing Knutsen without drawing on cash in hand. - Initiated $10M unit buyback program, repurchased units. - Confident in debt maturities due to positive sector momentum.

• Uncertainties in market conditions affecting charterer actions. - Operational factors that could impact utilization and financial results.

Q: On the Daqing Knutsen, when would you expect to take delivery?

A: We took delivery on the day we announced it, which was July 2.

Q: Do you anticipate being able to continue with drop-downs in a shareholder-friendly manner?

A: We think it's unitholder-friendly whenever we do these transactions on accretive terms; we respond to offered vessels on accretive terms, with financial capacity and debt schedule influencing.

Q: Could you talk about contracting discussions for older vessels and mix of fleet expansion and distribution increases?

A: Actively discussing with clients; fleet growth and distributions not competing, fleet rejuvenation important for returns to unitholders.