KNOT Offshore Partners LP Earnings Release—Interim Results for the Period Ended March 31, 2025

KNOT Offshore Partners LP (NYSE:KNOP):

Financial Highlights

For the three months ended March 31, 2025 (“Q1 2025”), KNOT Offshore Partners LP (“KNOT Offshore Partners” or the “Partnership”):

• Generated total revenues of $84.0 million, operating income of $23.4 million and net income of $7.6 million.
• Generated Adjusted EBITDA¹ of $52.2 million.
• Reported $100.8 million in available liquidity at March 31, 2025, which was comprised of cash and cash equivalents of $67.3 million and undrawn revolving credit facility capacity of $33.5 million.

Other Partnership Highlights and Events

• Fleet operated with 96.9% utilization for scheduled operations in Q1 2025, and 99.5% utilization taking into account the scheduled drydockings of the Raquel Knutsen and the Windsor Knutsen, for which the relevant off-hire periods commenced late in Q1 2025.
• On April 9, 2025, the Partnership declared a quarterly cash distribution of $0.026 per common unit with respect to Q1 2025, which was paid on May 8, 2025, to all common unitholders of record on April 28, 2025. On the same day, the Partnership declared a quarterly cash distribution to holders of Series A Convertible Preferred Units (“Series A Preferred Units”) with respect to Q1 2025 in an aggregate amount of $1.7 million.
• In January 2025, the final insurance claim payment was received in respect of repair work and loss of hire for the Torill Knutsen, which had arisen from the breakage of a generator rotor in January 2024.
• On January 21, 2025, Petrorio exercised its option to extend the contract of the Brasil Knutsen for two periods of 30 days from May 1, 2025. Redelivery will be July 1, 2025. The vessel will commence on a new time charter with Equinor in the third quarter of 2025 for a fixed period of two years, with options for the charterer to extend the charter by two further one-year periods.
• On January 24, 2025, Shell exercised its option to switch from a time charter on the Vigdis Knutsen to a bareboat charter. This change will take effect during or after July 2025. At the same time, the fixed duration of this charter was extended from 2027 to 2030, with an option for the charterer to extend the charter by a further two years.
• On March 3, 2025, the Partnership’s wholly owned subsidiary, KNOT Shuttle Tankers AS (“KST”), acquired from Knutsen NYK Offshore Tankers AS (“Knutsen NYK”), KNOT Shuttle Tankers 27 AS, the company that owns the shuttle tanker Live Knutsen (the “Live Knutsen Acquisition”). Simultaneously, KST sold KNOT Shuttle Tankers 21 AS, the company that owns the shuttle tanker Dan Sabia, to Knutsen NYK. This effected a swap of these two vessels, the terms of which were set out in our press release of February 27, 2025.
• On March 23, 2025, the Hilda Knutsen began operating under a time charter with Shell for a fixed period of one year.
• On April 15, 2025, Petrorio extended the redelivery timing for the Brasil Knutsen to September 2025, following which the time charter to Equinor will commence.

________________________

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 Q1 2025, marked by safe operation at more than 99% fleet utilization from scheduled operations, 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 March 31, 2025, we have now secured approximately 96% of charter coverage for the final three quarters of 2025, and approximately 75% for 2026. Having executed a number of new contracts and extensions over the last year, we have established good momentum in a strengthening market and remain focused on strengthening and extending our fleetwide charter coverage.

In Brazil, the main offshore oil market where we operate, the outlook is continuing to improve, with robust demand and increasing charter rates. Driven by Petrobras’ continued high production levels and FPSO start-ups in the pre-salt fields that rely upon shuttle tankers, we believe the world’s biggest shuttle tanker market is tightening materially. Our secondary geography, in the North Sea, has taken longer to re-balance, but we welcome the news of the new FPSO production starts for both the UK North Sea-based Penguins and Barents Sea-based Johan Castberg.

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, driven most notably by the aggressive expansion of Brazilian deepwater production capacity, particularly as increasing numbers of shuttle tankers reach or exceed typical retirement age. We are aware of newbuild shuttle tanker orders, including six 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 late 2027 or thereafter, 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 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 Q1 2025 (compared to those for the three months ended December 31, 2024 (“Q4 2024”)) included:

• Revenues of $84.0 million in Q1 2025 ($91.3 million in Q4 2024), where Q4 2024 had included one-off insurance proceeds of $5.9 million.
• Gain from disposal of vessel of $1.3 million in Q1 2025 ($0 in Q4 2024).
• Vessel operating expenses of $30.6 million in Q1 2025 ($26.2 million in Q4 2024), with the increase due primarily to higher maintenance and provisioning costs and the EU ETS costs.
• Depreciation of $28.8 million in Q1 2025 ($28.4 million in Q4 2024).
• General and administrative expenses of $1.8 million in Q1 2025 ($1.5 million in Q4 2024).
• Operating income consequently of $23.4 million in Q1 2025 ($34.7 million in Q4 2024).
• Interest expense of $14.9 million in Q1 2025 ($16.2 million in Q4 2024)
• Realized (i.e. cash) gain on derivative instruments of $3.1 million in Q1 2025 (gain of $3.7 million in Q4 2024), and unrealized (i.e. non-cash) loss of $4.5 million in Q1 2025 (unrealized gain of $0.9 million in Q4 2024). Together, there was a realized and unrealized loss on derivative instruments of $1.3 million in Q1 2025 (gain $4.6 million in Q4 2024).
• Net income consequently of $7.6 million in Q1 2025 (net income of $23.3 million in Q4 2024).

By comparison with the three months ended March 31, 2024 (“Q1 2024”), results for Q1 2025 included:

• an increase of $3.7 million in operating income (to $23.4 million in Q1 2025 from operating income of $19.7 million in Q1 2024), driven primarily by higher utilization of the fleet, greater charter revenues and gain from disposal of vessel.
• an increase of $3.2 million in finance expense (to finance expense of $15.3 million in Q1 2025 from finance expense of $12.1 million in Q1 2024), due primarily to an unrealized loss on derivative instruments in Q1 2025 compared to an unrealized gain in Q1 2024.
• an increase of $0.2 million in net income (to a net income of $7.6 million in Q1 2025 from net income of $7.4 million in Q1 2024).

Financing and Liquidity

As of March 31, 2025, the Partnership had $100.8 million in available liquidity, which was comprised of cash and cash equivalents of $67.3 million and $33.5 million of capacity under its revolving credit facilities. The Partnership’s revolving credit facilities mature between August 2025 and November 2025.

The Partnership’s total interest-bearing obligations outstanding as of March 31, 2025 were $949 million ($944.3 million net of debt issuance costs). The average margin paid on the Partnership’s outstanding debt during Q1 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		$	10,912		$	64,402		$	153,083		$	228,397
2026			15,060			68,004			285,447			368,511
2027			15,751			31,525			93,598			140,874
2028			16,520			13,241			78,824			108,585
2029			17,232			—			—			17,232
2030 and thereafter			85,367			—			—			85,367
Total		$	160,842		$	177,172		$	610,952		$	948,966

As of March 31, 2025, the Partnership had entered into various interest rate swap agreements for a total notional amount outstanding of $462.3 million, to hedge against the interest rate risks of its variable rate borrowings. As of March 31, 2025, the Partnership receives interest based on SOFR and pays a weighted average interest rate of 2.38% under its interest rate swap agreements, which have an average maturity of approximately 1.53 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 March 31, 2025, the Partnership’s net exposure to floating interest rate fluctuations was approximately $258.6 million based on total interest-bearing contractual obligations of $949 million, less the Raquel Knutsen and Torill Knutsen sale and leaseback facilities of $160.8 million, less interest rate swaps of $462.3 million, and less cash and cash equivalents of $67.3 million.

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.

Knutsen NYK owns, or has ordered, the following vessels and has entered into the following charters:

1. In June 2022, Daqing Knutsen was delivered to Knutsen NYK from the yard in China and commenced on a five-year time charter contract with PetroChina International (America) Inc for operation in Brazil. The charterer has options to extend the charter by up to a further five years.
2. In July 2022, Frida Knutsen was delivered to Knutsen NYK from the yard in Korea and commenced in December 2022 on a seven-year time charter contract with Eni for operation in North Sea. The charterer has options to extend the charter by up to a further three years.
3. In August 2022, Sindre Knutsen was delivered to Knutsen NYK from the yard in Korea and commenced in September 2023 on a five-year time charter contract with Eni for operation in the North Sea. The charterer has options to extend the charter by up to a further five years.
4. In November 2022, Knutsen NYK entered into a new fifteen-year time charter contract with Petrobras for a vessel to be constructed and which will operate in Brazil, where the charterer has an option to extend the charter by up to five further years. The vessel will be built in China and is expected to be delivered in late 2025.
5. In February 2024, Knutsen NYK entered into a new ten-year time charter contract with Petrobras for each of three vessels to be constructed and which will operate in Brazil, where the charterer has an option to extend each charter by up to five further years. The vessels will be built in China and are expected to be delivered over 2026 - 2027.
6. In August 2024, Knutsen NYK entered into a new seven-year time charter contract with Petrorio for a vessel to be constructed and which will operate in Brazil, where the charterer has an option to extend the charter by up to eight further years. The vessel will be built in China and is expected to be delivered early in 2027.
7. In October 2024, Hedda Knutsen was delivered to Knutsen NYK from the yard in China and commenced in December 2024 on a ten-year time charter contract with Petrobras for operation in Brazil. Petrobras has the option to extend the charter by up to five further years.
8. In March 2025, Knutsen NYK entered into a new seven-year time charter contract with Equinor for a vessel to be constructed and which will operate in Brazil, where the charterer has an option to extend the charter by up to thirteen further years. The vessel will be built in China and is expected to be delivered early in 2028.

Board of Directors Change

Effective April 1, 2025, the Partnership’s general partner appointed Mr. Masami Okubo to replace Mr. Yasuhiro Fukuda, both of whom are employees of Nippon Yusen Kabushiki Kaisha (“NYK”), on the Partnership’s Board of Directors.

Outlook

As at March 31, 2025: (i) the Partnership had charters with an average remaining fixed duration of 2.3 years, with the charterers of the Partnership’s vessels having options to extend their charters by an additional 4.7 years on average and (ii) the Partnership had $853.8 million of remaining contracted forward revenue, excluding charterers’ options and charters agreed or signed after that date. As at March 31, 2025, the eighteen vessels which comprise the Partnership’s fleet had an average age of 9.8 years. The market for shuttle tankers in Brazil, where fourteen of our current fleet operated during Q1 2025, 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.

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 for the opportunity to increase sustainable distribution levels in the future.

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 Wednesday May 21, 2025 at 9:30 AM (Eastern Time) to discuss the results for Q1 2025. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:

• By dialing 1‑833‑470‑1428 from the US, dialing 1‑833‑950‑0062 from Canada or 1‑404‑975‑4839 if outside North America – please join the KNOT Offshore Partners LP call using access code 259019.
• By accessing the webcast on the Partnership’s website: www.knotoffshorepartners.com.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended
		March 31,				December 31,				March 31,
(U.S. Dollars in thousands)		2025				2024				2024
Operating revenues:
Time charter and bareboat revenues		$	82,991			$	84,434			$	73,362
Voyage revenues (1)			466				438				2,715
Loss of hire insurance recoveries			—				5,892				—
Other income			572				491				555
Total revenues			84,029				91,255				76,632
Gain from disposal of vessel			1,342				—				—
Operating expenses:
Vessel operating expenses			30,609				26,205				25,909
Voyage expenses and commission (2)			767				430				1,635
Depreciation			28,763				28,425				27,742
General and administrative expenses			1,796				1,530				1,637
Total operating expenses			61,935				56,590				56,923
Operating income (loss)			23,436				34,665				19,709
Finance income (expense):
Interest income			748				1,055				828
Interest expense			(14,902	)			(16,167	)			(17,465	)
Other finance expense			(152	)			(87	)			(269	)
Realized and unrealized gain (loss) on derivative instruments (3)			(1,344	)			4,560				5,002
Net gain (loss) on foreign currency transactions			374				(772	)			(226	)
Total finance income (expense)			(15,276	)			(11,411	)			(12,130	)
Income (loss) before income taxes			8,160				23,254				7,579
Income tax benefit (expense)			(579	)			(3	)			(141	)
Net income (loss)		$	7,581			$	23,251			$	7,438
Weighted average units outstanding (in thousands of units):
Common units			34,045				34,045				34,045
Class B units (4)			252				252				252
General Partner units			640				640				640
__________________________
(1) Voyage revenues are revenues unique to spot voyages.
(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) 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
		March 31,				December 31,				March 31,
(U.S. Dollars in thousands)		2025				2024				2024
Realized gain (loss):
Interest rate swap contracts		$	3,111			$	3,698			$	4,063
Total realized gain (loss):			3,111				3,698				4,063
Unrealized gain (loss):
Interest rate swap contracts			(4,455	)			862				939
Total unrealized gain (loss):			(4,455	)			862				939
Total realized and unrealized gain (loss) on derivative instruments:		$	(1,344	)		$	4,560			$	5,002
________________________
(4) 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 March 31, 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 March 31, 2025			At December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents		$	67,260		$	66,933
Amounts due from related parties			2,092			2,230
Inventories			4,247			3,304
Derivative assets			6,445			8,112
Other current assets			19,411			14,793
Total current assets			99,455			95,372
Long-term assets:
Vessels, net of accumulated depreciation			1,535,408			1,462,192
Right-of-use assets			4,100			1,269
Deferred tax assets			3,027			3,326
Derivative assets			3,276			5,189
Accrued income			6,151			4,817
Total Long-term assets			1,551,962			1,476,793
Total assets		$	1,651,417		$	1,572,165
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable		$	7,970		$	5,766
Accrued expenses			14,891			11,465
Current portion of long-term debt			249,437			256,659
Current lease liabilities			986			1,172
Income taxes payable			25			60
Current portion of contract liabilities			5,529			2,889
Prepaid charter			5,244			7,276
Amount due to related parties			6,032			1,835
Total current liabilities			290,114			287,122
Long-term liabilities:
Long-term debt			694,827			648,075
Lease liabilities			3,114			97
Derivative liabilities			661			—
Contract liabilities			44,737			23,776
Deferred tax liabilities			98			91
Deferred revenues			1,752			1,869
Total long-term liabilities			745,189			673,908
Total liabilities			1,035,303			961,030
Commitments and contingencies
Series A Convertible Preferred Units			84,308			84,308
Equity:
Partners’ capital:
Common unitholders:			518,491			513,603
Class B unitholders:			3,871			3,871
General partner interest:			9,444			9,353
Total partners’ capital			531,806			526,827
Total liabilities and equity		$	1,651,417		$	1,572,165

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL
		Partners’ Capital
(U.S. Dollars in thousands)		Common Units				Class B Units			General Partner Units				Accumulated Other Comprehensive Income (Loss)			Total Partners’ Capital				Series A Convertible Preferred Units
Three Months Ended March 31, 2024 and 2025
Consolidated balance at December 31, 2023		$	510,013			$	3,871		$	9,285			$	—		$	523,169			$	84,308
Net income (loss)			5,632				—			106				—			5,738				1,700
Other comprehensive income			—				—			—				—			—				—
Cash distributions			(885	)			—			(17	)			—			(902	)			(1,700	)
Consolidated balance at March 31, 2024		$	514,760			$	3,871		$	9,374			$	—		$	528,005			$	84,308
Consolidated balance at December 31, 2024		$	513,603			$	3,871		$	9,353			$	—		$	526,827			$	84,308
Net income (loss)			5,773				—			108				—			5,881				1,700
Other comprehensive income			—				—			—				—			—				—
Cash distributions			(885	)			—			(17	)			—			(902	)			(1,700	)
Consolidated balance at March 31, 2025		$	518,491			$	3,871		$	9,444			$	—		$	531,806			$	84,308

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
		Three Months Ended March 31,
(U.S. Dollars in thousands)		2025				2024
OPERATING ACTIVITIES
Net income (loss) (1)		$	7,581			$	7,438
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation			28,763				27,742
Amortization of contract intangibles / liabilities			(862	)			—
Amortization of deferred revenue			(117	)			(117	)
Amortization of deferred debt issuance cost			567				546
Drydocking expenditure			(979	)			97
Income tax (benefit)/expense			579				142
Income taxes paid			(52	)			(23	)
Unrealized (gain) loss on derivative instruments			4,455				(939	)
Unrealized (gain) loss on foreign currency transactions			(355	)			187
Gain from disposal of vessel			(1,342	)			—
Changes in operating assets and liabilities:
Decrease (increase) in amounts due from related parties			(327	)			(851	)
Decrease (increase) in inventories			(1,365	)			(590	)
Decrease (increase) in other current assets			(3,085	)			(2,775	)
Decrease (increase) in accrued income			(1,334	)			—
Increase (decrease) in trade accounts payable			3,003				(3,418	)
Increase (decrease) in accrued expenses			67				(434	)
Increase (decrease) prepaid charter			(2,033	)			—
Increase (decrease) in amounts due to related parties			2,857				(209	)
Net cash provided by operating activities			36,021				26,796
INVESTING ACTIVITIES
Additions to vessel and equipment			(213	)			(70	)
Proceeds from asset swap (net cash)			1,040				—
Net cash provided by (used in) investing activities			827				(70	)
FINANCING ACTIVITIES
Repayment of long-term debt			(34,078	)			(37,700	)
Cash distributions			(2,602	)			(2,602	)
Net cash used in financing activities			(36,680	)			(40,302	)
Effect of exchange rate changes on cash			159				(102	)
Net increase (decrease) in cash and cash equivalents			327				(13,678	)
Cash and cash equivalents at the beginning of the period			66,933				63,921
Cash and cash equivalents at the end of the period		$	67,260			$	50,243
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(1) Included in net income (loss) is interest paid amounting to $14.5 million and $17.2 million for the three months ended March 31, 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
		March 31,				December 31,
		2025				2024
(U.S. Dollars in thousands)		(unaudited)				(unaudited)
Net income (loss)		$	7,581			$	23,251
Interest income			(748	)			(1,055	)
Interest expense			14,902				16,167
Depreciation			28,763				28,425
Income tax expense			579				3
EBITDA			51,077				66,791
Other financial items (a)			1,122				(3,701	)
Adjusted EBITDA		$	52,199			$	63,090
_________________________________
(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:

• 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 and conventional tankers;
• market trends in the production of oil in the North Sea, Brazil and elsewhere;
• Knutsen NYK’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 purchase vessels from Knutsen NYK in the future;
• KNOT Offshore Partners’ ability to enter into long-term charters, which KNOT Offshore Partners defines as charters of five years or more, or shorter- term charters or voyage contracts;
• KNOT Offshore Partners’ ability to refinance its indebtedness on acceptable terms and on a timely basis and to make additional borrowings and to access debt and equity markets;
• KNOT Offshore Partners’ distribution policy, forecasts of KNOT Offshore Partners’ ability to make distributions on its common units, Class B Units and Series A Preferred Units, the amount of any such distributions and any changes in such distributions;
• KNOT Offshore Partners’ ability to integrate and realize the expected benefits from acquisitions;
• impacts of supply chain disruptions and the resulting inflationary environment;
• KNOT Offshore Partners’ anticipated growth strategies;
• the effects of a worldwide or regional economic slowdown;
• turmoil in the global financial markets;
• fluctuations in currencies, inflation 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;
• recoveries under KNOT Offshore Partners’ insurance policies;
• the length and cost of drydocking;
• 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;
• 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 Knutsen NYK’s relationships and reputation in the shipping industry;
• KNOT Offshore Partners’ ability to maximize the use of its vessels, including the re-deployment or disposition of vessels no longer under charter;
• the financial condition of KNOT Offshore Partners’ existing or future customers and their ability to fulfill their charter obligations;
• timely purchases and deliveries of newbuilds;
• future purchase prices of newbuilds and secondhand vessels;
• any impairment of the value of KNOT Offshore Partners’ vessels;
• KNOT Offshore Partners’ ability to compete successfully for future chartering and newbuild opportunities;
• acceptance of a vessel by its charterer;
• the impacts of the Russian war with Ukraine, the conflict between Israel and Hamas and the other conflicts in the Middle East;
• termination dates and extensions of charters;
• the expected cost of, and KNOT Offshore Partners’ ability to, comply with governmental regulations (including climate change regulations) and 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;
• the effects of outbreaks of pandemics or contagious diseases, including the impact on KNOT Offshore Partners’ business, cash flows and operations as well as the business and operations of its customers, suppliers and lenders;
• KNOT Offshore Partners’ general and administrative expenses and its fees and expenses payable under the technical management agreements, the management and administration agreements and the administrative services agreement;
• the anticipated taxation of KNOT Offshore Partners and distributions to its unitholders;
• estimated future capital expenditures;
• Marshall Islands economic substance requirements;
• KNOT Offshore Partners’ ability to retain key employees;
• customers’ increasing emphasis on climate, environmental and safety concerns;
• the impact of any cyberattack;
• 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 U.S. Securities and Exchange Commission, including its Annual Report on Form 20‑F for the year ended December 31, 2024 and subsequent reports on Form 6‑K.

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.

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