Knot Offshore Partners LP Earnings Release—Interim Results for the Period Ended September 30, 2025

Key Terms

adjusted EBITDA financial

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

undrawn revolving credit facility financial

An undrawn revolving credit facility is a flexible loan agreement that a company can access whenever needed, up to a specified limit, without having to borrow the money right away. It’s similar to a credit card with a set spending limit that the company can use or leave unused as circumstances change. For investors, it provides a safety net of available funds, indicating the company's financial readiness and flexibility to handle unexpected expenses or opportunities.

drydocking technical

Drydocking is the process of bringing a ship out of the water to inspect, repair, or maintain its hull and underwater parts. It’s similar to taking a car to a garage for an oil change or repairs, but for a vessel. This maintenance is important because it ensures the ship remains safe and efficient, which can impact a company’s operational costs and overall reliability—factors that matter to investors.

time charter technical

A time charter is an agreement where a ship owner rents out their vessel to a customer for a set period, during which the customer has control over the ship’s use and operation. This arrangement matters to investors because it provides a steady income stream for the ship owner and indicates ongoing demand for shipping services, reflecting the health of global trade and transportation markets.

bareboat charter technical

A bareboat charter is a leasing arrangement where one person or company rents a vessel without crew, equipment, or supplies, essentially taking full control of it as if they own it. It matters to investors because it can be used to generate income from the vessel’s use or to reduce ownership costs, influencing a company's revenue and asset management strategies.

senior secured term loan facility financial

A senior secured term loan facility is a type of borrowed money that a company takes out, which is backed by its valuable assets like property or equipment. Because it is secured by these assets and ranks higher in repayment priority, it is considered safer for lenders and typically offers lower interest rates. For investors, it provides a relatively stable and priority claim on the company's assets if it encounters financial difficulties.

interest rate swap financial

An interest rate swap is a financial agreement where two parties exchange interest payments on a set amount of money over time. Typically, one side pays a fixed interest rate, while the other pays a variable rate that can change with market conditions. This helps investors manage or reduce their exposure to interest rate fluctuations, much like locking in a mortgage rate to avoid future cost increases.

balloon repayment financial

A balloon repayment is a large, final payment made at the end of a loan period, after smaller regular payments have been made along the way. It’s like paying off most of a loan gradually, then settling the remaining balance all at once in a big lump sum. This can matter to investors because it affects how the borrower manages cash flow and the risk that the final payment might be difficult to meet.

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

Financial Highlights

For the three months ended September 30, 2025 (“Q3 2025”), KNOT Offshore Partners LP (“KNOT Offshore Partners” or the “Partnership”; NYSE:KNOP):

• Generated total revenues of $96.9 million, operating income of $30.7 million and net income of $15.1 million.
• Generated Adjusted EBITDA¹ of $61.6 million.
• Reported $125.2 million in available liquidity at September 30, 2025, which was comprised of cash and cash equivalents of $77.2 million and undrawn revolving credit facility capacity of $48 million.

Other Partnership Highlights and Events

• Fleet operated with 99.87% utilization for scheduled operations in Q3 2025, and 96.49% utilization taking into account the scheduled drydocking of the Tove Knutsen, for which the relevant off-hire period occurred during Q3 2025.
• On October 7, 2025, the Partnership declared a quarterly cash distribution of $0.026 per common unit with respect to Q3 2025, which was paid on November 6, 2025, to all common unitholders of record on October 27, 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 Q3 2025 in an aggregate amount of $1.7 million.
• On July 2, 2025, the Partnership acquired the 2022-built DP2 shuttle tanker Daqing Knutsen (the “Acquisition”) from Knutsen NYK Offshore Tankers AS (“KNOT” or “Knutsen NYK”). The purchase price was $95 million, less $70.5 million of outstanding indebtedness under the secured credit facility related to the Daqing Knutsen (the “Daqing Facility”), plus $0.3 million of capitalized fees. The purchase price was subject to customary post-closing adjustments for working capital and an interest rate swap. The vessel is on time charter to PetroChina in Brazil through July 2027. As a term of the Acquisition, KNOT has guaranteed the hire rate for the vessel until 2032 on the same basis as if PetroChina had exercised its option through such date;
• On July 2, 2025, the Board approved the establishment of a buyback program for up to $10 million of the Partnership’s common units. The program was concluded in October. During the entire period through the end of October, the Partnership repurchased a total of 384,739 common units for an aggregate purchase cost of $3.03 million, at an average price of $7.87 per common unit;
• In early July, the Tove Knutsen commenced a scheduled drydocking, following completion of a conventional tanker charter which utilised her voyage to Europe. This drydocking was completed in late August 2025;

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.

• 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.;
• On August 21, 2025, agreement was reached with Shell to extend the term of the current time charter for the Hilda Knutsen by 3 months firm (to June 2026) plus a further 9 months at our option (to March 2027);
• On September 16, 2025, the Partnership sold the Tove Knutsen to, and leased her back from, a Japanese-based lessor, for a lease period of 10 years. The Partnership realized net proceeds of approximately $32 million from the transaction after repayment at its maturity of the loan secured by the Tove Knutsen and the payment of fees and expenses;
• On September 22, 2025, agreement was reached with Equinor to extend the term of the current time charter for the Bodil Knutsen to March 2029, followed by two charterer’s options each of one year;
• On October 20, 2025, Knutsen Shuttle Tankers 35 AS, the Partnership’s wholly-owned subsidiary which owns the vessel Synnøve Knutsen, entered into a new $71.1 million senior secured term loan facility with MUFG Bank (Europe) N.V.. This new facility replaced the previous facility secured by the Synnøve Knutsen.
• In late October, the Synnøve Knutsen commenced a scheduled drydocking, following completion of a conventional tanker charter which utilised her voyage to Europe. This drydocking is due to complete in early December 2025;
• On October 27, 2025, the Partnership announced that the 2025 Annual Meeting is to be held on December 15, 2025, and that the Board had nominated Ms. Pernille Østensjø to serve as the Class IV Elected Director, subject to a vote by the Partnership’s unitholders at the Annual Meeting;
• On October 31, 2025 the Partnership received an unsolicited non-binding proposal from KNOT pursuant to which KNOT would acquire through a wholly-owned subsidiary all publicly held common units of the Partnership in exchange for $10 in cash per common unit (the “KNOT Offer”). KNOT has proposed that a transaction would be effectuated through a merger between the Partnership and a subsidiary of KNOT. The Conflicts Committee of the KNOP Board, which is comprised of only non-KNOT-affiliated directors, has retained Evercore Group L.L.C. and Richards, Layton & Finger, P.A. as independent advisors and is evaluating the KNOT Offer;
• On November 4, 2025, the Vigdis Knutsen began operating under a bareboat charter, following the previously-announced exercise of an option held by Shell to switch from the previous time charter operation. This bareboat charter expires in 2030;
• On November 17, 2025, the Partnership closed the refinancing of the second of its two $25 million revolving credit facilities, with the facility being rolled over with SBI Shinsei Bank, Limited; and
• On November 21, 2025, a time charter for the Fortaleza Knutsen was executed with KNOT, to commence in Q2 2026 for a fixed period of one year plus two charterer’s options each for one additional year.

Derek Lowe, Chief Executive Officer and Chief Financial Officer of KNOT Offshore Partners LP, stated, “The most material development during and since Q3 2025 has been our receipt of the KNOT Offer. This is currently being evaluated by the Conflicts Committee of the Board, which is comprised of only non-KNOT-affiliated directors, along with their independent professional advisors.

On operational matters: we are pleased to report another strong performance in Q3 2025, marked by safe operation at 99.87% from scheduled operations, 96.49% 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 September 30, 2025, we have now secured 100% of charter coverage for Q4 2025 after allowing for scheduled dry dockings, and approximately 93% for 2026 (comprising 98% for the first half and 88% for the second half). 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 six for Knutsen NYK, all of which are scheduled for delivery over 2026-2028. 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.”

Financial Results Overview

Results for Q3 2025 (compared to those for the three months ended June 30, 2025 (“Q2 2025”)) included:

• Revenues of $96.9 million in Q3 2025 ($87.1 million in Q2 2025), with the increase driven by the addition of Daqing Knutsen to the fleet.
• Vessel operating expenses of $33.7 million in Q3 2025 ($33.0 million in Q2 2025). The increase is primarily due to the addition of one vessel to the fleet. However, the growth is less pronounced because Q2 included unusual high bunker fuel costs related to a vessel in dry dock.
• Depreciation of $30.9 million in Q3 2025 ($29.4 million in Q2 2025).
• General and administrative expenses of $1.5 million in Q3 2025 ($1.6 million in Q2 2025).
• Operating income consequently of $30.7 million in Q3 2025 ($22.2 million in Q2 2025).
• Interest expense of $16.5 million in Q3 2025 ($15.3 million in Q2 2025).
• Realized (i.e. cash) gain on derivative instruments of $2.2 million in Q3 2025 (gain of $2.5 million in Q2 2025), and unrealized (i.e. non-cash) loss of $1.8 million in Q3 2025 (unrealized loss of $2.9 million in Q2 2025). Together, there was a realized and unrealized gain on derivative instruments of $0.4 million in Q3 2025 (loss of $0.4 million in Q2 2025).
• Net income consequently of $15.1 million in Q3 2025 ($6.8 million in Q2 2025).

By comparison with the three months ended September 30, 2024 (“Q3 2024”), results for Q3 2025 included:

• An increase of $13.5 million in operating income (to $30.7 million in Q3 2025 from operating income of $17.2 million in Q3 2024), driven primarily by the sale of Dan Sabia and Dan Cisne and the addition of Tuva Knutsen, Live Knutsen and Daqing Knutsen to the fleet. Higher utilization of the fleet and generally improved terms of contracts on certain vessels also contributed to the increase.
• A decrease of $5.2 million in finance expense (to finance expense of $15.5 million in Q3 2025 from finance expense of $20.7 million in Q3 2024), primarily due to an unrealized and realized loss on derivative instruments in Q3 2024 compared to an unrealized and realized gain in Q3 2025.
• An increase of $18.9 million in net income (to a net income of $15.1 million in Q3 2025 from a net loss of $3.8 million in Q3 2024).

Financing and Liquidity

As of September 30, 2025, the Partnership had $125.2 million in available liquidity, which was comprised of cash and cash equivalents of $77.2 million and $48.0 million of capacity under its revolving credit facilities. The Partnership’s revolving credit facilities mature in August 2027 and November 2027 respectively.

The Partnership’s total interest-bearing obligations outstanding as of September 30, 2025 were $986.5 million ($982.2 million net of debt issuance costs). The average margin paid on the Partnership’s outstanding debt during Q3 2025 was approximately 2.22% over SOFR. These obligations are repayable as follows:

		Sale &			Period
(U.S. Dollars in thousands)		Leaseback			repayment			Balloon repayment			Total
Remainder of 2025		$	4,985		$	21,919		$	—		$	26,904
2026			20,258			76,887			286,001			383,146
2027			21,246			38,613			156,679			216,538
2028			22,345			17,979			78,824			119,148
2029			23,373			4,738			—			28,111
2030 and thereafter			160,568			4,738			47,384			212,690
Total		$	252,775		$	164,874		$	568,888		$	986,537

As of September 30, 2025, the Partnership had entered into various interest rate swap agreements for a total notional amount outstanding of $377.7 million, to hedge against the interest rate risks of its variable rate borrowings. As of September 30, 2025, the Partnership receives interest based on SOFR and pays a weighted average interest rate of 2.62% under its interest rate swap agreements, which have an average maturity of approximately 1.59 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 September 30, 2025, the Partnership’s net exposure to floating interest rate fluctuations was approximately $278.8 million based on total interest-bearing contractual obligations of $986.5 million, less the sale and leaseback facilities for Raquel Knutsen, Torill Knutsen and Tove Knutsen totalling $252.8 million, less interest rate swaps of $377.7 million, and less cash and cash equivalents of $77.2 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. 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 terms of the facility are substantially unchanged from the facility entered into in August 2023 with NTT TC Leasing Co, Ltd..

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.

On October 20, 2025, Knutsen Shuttle Tankers 35 AS, the Partnership’s wholly-owned subsidiary which owns the vessel Synnøve Knutsen, entered into a new $71.1 million senior secured term loan facility with MUFG Bank (Europe) N.V.. This new facility replaced the previous facility secured by the Synnøve Knutsen. The new facility is repayable in quarterly installments, bears interest at a rate per annum equal to SOFR plus a margin of 2.01% and will mature in October 2030, at which point the outstanding amount following quarterly repayments is due to be $48.6 million. The terms of the facility are substantially unchanged from the facility entered into in July 2019 with MUFG Bank, Ltd..

On November 17, 2025, the Partnership closed the refinancing of the second of its two $25 million revolving credit facilities, with the facility being rolled over with SBI Shinsei Bank, Limited. The new facility will mature in November 2027, bears interest at a rate per annum equal to SOFR plus a margin of 2.18%, and has a commitment fee on any undrawn portion of the facility of 0.80% per annum. The terms of the facility are substantially unchanged from the facility entered into in November 2023.

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.

There can be no assurance that the Partnership will acquire any additional vessels from 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. In August 2025, Knutsen NYK entered into a new seven-year charter contract with Repsol for one vessel firm with an option to charter one further vessel, both to operate in Brazil. The firm vessel has already been ordered, while the optional vessel remains subject to declaration by the charterer. The charterer has an option to extend the firm charter by up to five additional years. The vessel(s) will be built in China and the firm vessel is expected to be delivered in early 2028.
8. In September 2025, Eli Knutsen was delivered to Knutsen NYK from the yard in China and commenced in October 2025 on a fifteen-year time charter contract with Petrobras for operation in Brazil. Petrobras has the option to extend the charter by up to five further years.

Outlook

As at September 30, 2025: (i) the Partnership had charters with an average remaining fixed duration of 2.64 years, with the charterers of the Partnership’s vessels having options to extend their charters by an additional 4.18 years on average and (ii) the Partnership had $939.5 million of remaining contracted forward revenue, excluding charterers’ options and charters agreed or signed after that date. As at September 30, 2025, the nineteen vessels which comprised the Partnership’s fleet had an average age of 10.0 years. During Q3 2025, fifteen of the vessels in our fleet operated in Brazil. 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.

On November 3, 2025, the Partnership announced that the Board received an unsolicited non-binding proposal, dated October 31, 2025, from KNOT pursuant to which KNOT would acquire through a wholly owned subsidiary all publicly held common units of the Partnership in exchange for $10 in cash per common unit. KNOT has proposed that a transaction would be effectuated through a merger between the Partnership and a subsidiary of KNOT. The Board has authorized the Conflicts Committee, comprised only of non-KNOT affiliated directors, to review and evaluate the KNOT Offer. The Conflicts Committee has retained advisors and discussions regarding the KNOT Offer are ongoing. The proposed transaction is subject to a number of contingencies, including the approval by the Conflicts Committee, the Partnership’s Board and the KNOT board of directors of any definitive agreement and, if a definitive agreement is reached, the approval by the holders of a majority of outstanding common units, Class B units and preferred units (on an “as if converted” basis) voting together as a single class. The transaction would also be subject to customary closing conditions. There can be no assurance that definitive documentation will be executed or that any transaction will materialize.

Shuttle tanker demand in the North Sea remained subdued for some years following 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 this year and volumes are ramping up.

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.

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 December 5, 2025 at 9:30 AM (Eastern Time) to discuss the results for Q3 2025. All unitholders and interested parties are invited to join via the live webcast link on the Partnership’s website: www.knotoffshorepartners.com. A replay of the webcast will be available at the same link following the conclusion of the live call.

December 4, 2025

KNOT Offshore Partners LP

Aberdeen, United Kingdom

Questions should be directed to:

Derek Lowe via email at ir@knotoffshorepartners.com

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,			September 30,
(U.S. Dollars in thousands)		2025			2025			2024			2025			2024
Time charter and bareboat revenues		$	96,329		$	85,920		$	75,682		$	265,240		$	222,481
Voyage revenues (1)			—			—			124			466			3,190
Loss of hire insurance recoveries			—			607			—			607			78
Other income			538			533			486			1,643			1,595
Total revenues			96,867			87,060			76,292			267,956			227,344
Gain from disposal of vessel			—			—			703			1,342			703
Vessel operating expenses			33,724			33,005			29,453			97,337			82,314
Voyage expenses and commission (2)			—			944			951			1,711			3,170
Depreciation			30,940			29,372			27,902			89,076			83,392
Impairment (3)			—			—			—			—			16,384
General and administrative expenses			1,540			1,555			1,475			4,891			4,538
Total operating expenses			66,204			64,876			59,781			193,015			189,798
Operating income (loss)			30,663			22,184			17,214			76,283			38,249
Finance income (expense):
Interest income			832			903			857			2,483			2,582
Interest expense			(16,484)			(15,316)			(16,857)			(46,702)			(51,185)
Other finance expense			(147)			(199)			(179)			(498)			(271)
Realized and unrealized gain (loss) on derivative instruments (4)			376			(370)			(4,561)			(1,338)			2,238
Net gain (loss) on foreign currency transactions			(87)			(267)			28			20			(170)
Total finance expense			(15,510)			(15,249)			(20,712)			(46,035)			(46,806)
Income (loss) before income taxes			15,153			6,935			(3,498)			30,248			(8,557)
Income tax expense			(39)			(125)			(275)			(743)			(628)
Net income (loss)		$	15,114		$	6,810		$	(3,773)		$	29,505		$	(9,185)
Weighted average units outstanding (in thousands of units):
Common units			33,899			34,045			34,045			33,996			34,045
Class B units (5)			252			252			252			252			252
General Partner units			640			640			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)		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												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,				September 30,
(U.S. Dollars in thousands)		2025				2025				2024				2025				2024
Realized gain (loss):
Interest rate swap contracts		$	2,183			$	2,521			$	3,772			$	7,814			$	11,821
Total realized gain (loss):			2,183				2,521				3,772				7,814				11,821
Unrealized gain (loss):
Interest rate swap contracts			(1,807	)			(2,891	)			(8,333	)			(9,152	)			(9,583	)
Total unrealized gain (loss):			(1,807	)			(2,891	)			(8,333	)			(9,152	)			(9,583	)
Total realized and unrealized gain (loss) on derivative instruments:		$	376			$	(370	)		$	(4,561	)		$	(1,338	)		$	2,238

(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 September 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 September 30, 2025			At December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents		$	77,207		$	66,933
Amounts due from related parties			3,654			2,230
Inventories			4,046			3,304
Derivative assets			3,590			8,112
Other current assets			13,605			14,793
Total current assets			102,102			95,372
Long-term assets:
Vessels, net of accumulated depreciation			1,604,944			1,462,192
Right-of-use assets			1,420			1,269
Deferred tax assets			3,103			3,326
Derivative assets			2,004			5,189
Accrued income			8,916			4,817
Total Long-term assets			1,620,387			1,476,793
Total assets		$	1,722,489		$	1,572,165
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable		$	7,005		$	5,766
Accrued expenses			17,875			11,465
Current portion of long-term debt			324,636			256,659
Current lease liabilities			582			1,172
Current portion of derivative liabilities			95			—
Income taxes payable			77			60
Current portion of contract liabilities			9,023			2,889
Prepaid charter			1,878			7,276
Amount due to related parties			6,571			1,835
Total current liabilities			367,742			287,122
Long-term liabilities:
Long-term debt			657,543			648,075
Lease liabilities			838			97
Derivative liabilities			1,192			—
Contract liabilities			62,358			23,776
Deferred tax liabilities			103			91
Deferred revenues			1,518			1,869
Total long-term liabilities			723,552			673,908
Total liabilities		$	1,091,294		$	961,030
Commitments and contingencies
Series A Convertible Preferred Units			84,308			84,308
Equity:
Partners’ capital:
Common unitholders			533,262			513,603
Class B unitholders			3,871			3,871
General partner interest			9,754			9,353
Total partners’ capital			546,887			526,827
Total liabilities and equity		$	1,722,489		$	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				Units			Units				Income (Loss)			Capital				Units
Three Months Ended September 30, 2024 and 2025
Consolidated balance at June 30, 2024		$	499,593			$	3,871		$	9,089			$	—		$	512,553			$	84,308
Net income (loss)			(5,372	)			—			(101	)			—			(5,473	)			1,700
Other comprehensive income			—				—			—				—			—				—
Cash distributions			(885	)			—			(17	)			—			(902	)			(1,700	)
Consolidated balance at September 30, 2024		$	493,336			$	3,871		$	8,971			$	—		$	506,178			$	84,308
Consolidated balance at June 30, 2025		$	522,621			$	3,871		$	9,523			$	—		$	536,015			$	84,308
Net income (loss)			13,166				—			248				—			13,414				1,700
Other comprehensive income			—				—			—				—			—				—
Repurchase of Common Units			(1,640	)			—			—				—			(1,640	)			—
Cash distributions			(885	)			—			(17	)			—			(902	)			(1,700	)
Consolidated balance at September 30, 2025		$	533,262			$	3,871		$	9,754			$	—		$	546,887			$	84,308
Nine Months Ended September 30, 2024 and 2025
Consolidated balance at December 31, 2023		$	510,013			$	3,871		$	9,285			$	—		$	523,169			$	84,308
Net income (loss)			(14,021	)			—			(264	)			—			(14,285	)			5,100
Other comprehensive income			—				—			—				—			—				—
Cash distributions			(2,656	)			—			(50	)			—			(2,706	)			(5,100	)
Consolidated balance at September 30, 2024		$	493,336			$	3,871		$	8,971			$	—		$	506,178			$	84,308
Consolidated balance at December 31, 2024		$	513,603			$	3,871		$	9,353			$	—		$	526,827			$	84,308
Net income (loss)			23,955				—			451				—			24,406				5,100
Other comprehensive income			—				—			—				—			—				—
Repurchase of Common Units			(1,640	)			—			—				—			(1,640	)			—
Cash distributions			(2,656	)			—			(50	)			—			(2,706	)			(5,100	)
Consolidated balance at September 30, 2025		$	533,262			$	3,871		$	9,754			$	—		$	546,887			$	84,308

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
		Nine Months Ended September 30,
(U.S. Dollars in thousands)		2025				2024
OPERATING ACTIVITIES
Net income (loss) (1)		$	29,505			$	(9,185	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation			89,076				83,392
Impairment			—				16,384
Amortization of contract intangibles / liabilities			(4,500	)			(241	)
Amortization of deferred revenue			(350	)			(350	)
Amortization of deferred debt issuance cost			1,792				1,648
Drydocking expenditure			(11,081	)			(462	)
Income tax (benefit)/expense			743				628
Income taxes paid			(64	)			(60	)
Unrealized (gain) loss on derivative instruments			9,152				9,583
Unrealized (gain) loss on foreign currency transactions			(651	)			(4	)
Net gain from disposal of vessel			(1,342	)			(703	)
Changes in operating assets and liabilities:
Decrease (increase) in amounts due from related parties			249				(10,126	)
Decrease (increase) in inventories			(824	)			53
Decrease (increase) in other current assets			2,885				(71	)
Decrease (increase) in accrued income			(4,099	)			(3,407	)
Increase (decrease) in trade accounts payable			1,670				(3,856	)
Increase (decrease) in accrued expenses			2,731				(949	)
Increase (decrease) prepaid charter			(5,399	)			3,902
Increase (decrease) in amounts due to related parties			2,733				9,745
Net cash provided by operating activities			112,226				95,921
INVESTING ACTIVITIES
Additions to vessel and equipment			(204	)			(916	)
Proceeds from asset swap (net cash)			1,040				1,361
Acquisition of Daqing Knutsen (net of cash acquired)			(26,049	)			—
Net cash provided by (used in) investing activities			(25,213	)			445
FINANCING ACTIVITIES
Proceeds from long-term debt			117,000				60,000
Repayment of long-term debt			(183,983	)			(144,753	)
Payment of debt issuance cost			(549	)			(536	)
Cash distributions			(7,805	)			(7,806	)
Repurchase of common units			(1,640	)			—
Net cash used in financing activities			(76,977	)			(93,095	)
Effect of exchange rate changes on cash			238				33
Net increase (decrease) in cash and cash equivalents			10,274				3,304
Cash and cash equivalents at the beginning of the period			66,933				63,921
Cash and cash equivalents at the end of the period		$	77,207			$	67,225

(1)	Included in net income (loss) is interest paid amounting to $45.3 million and $49.7 million for the nine months ended September 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,								Nine Months Ended,
		September 30,				September 30,				September 30,				September 30,
		2025				2024				2025				2024
(U.S. Dollars in thousands)		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Net income (loss)		$	15,114			$	(3,773	)		$	29,505			$	(9,185	)
Interest income			(832	)			(857	)			(2,483	)			(2,582	)
Interest expense			16,484				16,857				46,702				51,185
Depreciation			30,940				27,902				89,076				83,392
Impairment			—				—				—				16,384
Income tax expense			39				275				743				628
EBITDA			61,745				40,404				163,543				139,822
Other financial items (a)			(142	)			4,712				1,816				(1,797	)
Adjusted EBITDA		$	61,603			$	45,116			$	165,359			$	138,025

(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;
• the response to Knutsen NYK’s non-binding proposal to acquire all of KNOT Offshore Partners’ publicy-held common units;
• 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251204269697/en/

Questions should be directed to:

Derek Lowe via email at ir@knotoffshorepartners.com

Source: KNOT Offshore Partners LP