KNOT Offshore Partners LP Earnings Release—Interim Results for the Period Ended March 31, 2019

Highlights

For the three months ended March 31, 2019, KNOT Offshore Partners LP
(“KNOT Offshore Partners” or the “Partnership”):

• Generated total revenues of $70.5 million, operating income of
  $32.4 million and net income of $12.9 million
• Generated quarterly Adjusted EBITDA of $54.8 million¹
• Generated quarterly distributable cash flow of $25.7 million¹
• Reported a distribution coverage ratio of 1.43²
• Fleet operated with 99.8% utilization for scheduled operations

Other events:

• On May 14, 2019, the Partnership obtained approval to extend the
  maturity of its $25 million unsecured revolving credit facility
  maturing in August 2019 with the same commercial terms. The
  refinancing is expected to close in June, 2019.
• On May 15, 2019, the Partnership paid a cash distribution of $0.52 per
  common unit with respect to the quarter ended March 31, 2019 to all
  common unitholders of record on May 2, 2019. On May 15, 2019, the
  Partnership also paid a cash distribution to the Series A Preferred
  unitholders with respect to the quarter ended March 31, 2019 in an
  aggregate amount equal to $1.8 million.

Financial Results Overview

Total revenues were $70.5 million for the three months ended March 31,
2019 (the “first quarter”) compared to $70.9 million for the three
months ended December 31, 2018 (the “fourth quarter”). The decrease was
mainly related to two less operational earnings days for the fleet in
first quarter. The decrease was partly offset by the full earnings for
the first quarter for both Ingrid Knutsen and Torill Knutsen as
a result of the completion of their scheduled first special survey
drydockings during the fourth quarter.

Vessel operating expenses for the first quarter of 2019 were
$14.5 million, an increase of $0.3 million from $14.2 million in the
fourth quarter of 2018. The increase was mainly due higher operating
costs on average for the fleet due to the strengthening of the Norwegian
Kroner (NOK) against the U.S Dollar. The increase was partially offset
by decreased costs for the Ingrid Knutsen, which finished its
scheduled drydocking in the end of the fourth quarter.

General and administrative expenses were $1.3 million for the first
quarter of 2019, which is unchanged from the fourth quarter of 2018.

Depreciation was $22.4 million for the first quarter of 2019, a decrease
of $0.1 million from $22.5 million in the fourth quarter of 2018. The
decrease is mainly due to decreased depreciation for the Ingrid
Knutsen and the Torill Knutsen due to drydock additions in
the fourth quarter of 2018.

As a result, operating income for the first quarter of 2019 was
$32.4 million compared to $33.0 million in the fourth quarter of 2018.

Interest expense for the first quarter of 2019 was $13.7 million, an
increase of $0.3 from $13.4 million for the fourth quarter of 2018 due
to higher LIBOR on average for all credit facilities.

As a result, net income for the first quarter of 2019 was $12.9 million
compared to $8.8 million for the fourth quarter of 2018.

Net income for the first quarter of 2019 decreased by $17.8 million from
net income of $30.7 million for the three months ended March 31, 2018 to
net income of $12.9 million for the three months ended March 31, 2019.
The operating income for the first quarter of 2019 increased by
$0.5 million compared to operating income of $31.9 million in the first
quarter of 2018, mainly due to increased earnings from the Anna
Knutsen being included in the Partnership’s results of operations
from March 1, 2018. Total finance expense for the first quarter of 2019
increased by $18.4 million compared to finance expense $1.1 million for
the first quarter of 2018. The increase was mainly due to increased loss
on realized and unrealized loss on derivative instruments and increased
interest expense due to additional debt in connection with the
acquisitions of the Anna Knutsen and a higher LIBOR on average.

Realized and unrealized loss on derivative instruments was $5.9 million
in the first quarter of 2019, compared to a loss of $10.9 million in the
fourth quarter of 2018. The unrealized non-cash element of the
mark-to-market loss was $6.2 million for the first quarter of 2019
compared to a loss of $11.3 million for the fourth quarter of 2018. Of
the unrealized loss for the first quarter of 2019, $7.1 million is
related to a mark-to-market loss on interest rate swaps and a gain of
$0.9 million is related to foreign exchange contracts.

Distributable cash flow was $25.7 million for the first quarter of 2019
compared to $27.3 million for the fourth quarter of 2018. The decrease
in distributable cash flow is mainly due to two less operational
earnings days and higher operating expenses on average for the fleet
during the first quarter of 2019. After review there was also a small
upward adjustment made to the annual estimated maintenance and
replacement capital expenditures.

The distribution declared for the first quarter of 2019 was $0.52 per
common unit, equivalent to an annualized distribution of $2.08.

Operational review

The Partnership’s vessels operated throughout the first quarter of 2019
with 99.8% utilization for scheduled operations.

Financing and Liquidity

As of March 31, 2019, the Partnership had $71.8 million in available
liquidity, which consisted of cash and cash equivalents of $43.1 million
and $28.7 million of capacity under its revolving credit facilities. The
revolving credit facilities mature in August 2019 and September 2023.
The Partnership’s total interest-bearing debt outstanding as of March
31, 2019 was $1,069.0 million ($1,059.6 million net of debt issuance
cost). The average margin paid on the Partnership’s outstanding debt
during the first quarter of 2019 was approximately 2.1% over LIBOR.

As of March 31, 2019, the Partnership had entered into foreign exchange
forward contracts, selling a total notional amount of $25.0 million
against the NOK at an average exchange rate of NOK 8.28 per 1.00 U.S.
Dollar. These foreign exchange forward contracts are economic hedges for
certain vessel operating expenses and general expenses in NOK.

As of March 31, 2019, the Partnership had entered into various interest
rate swap agreements for a total notional amount of $552.4 million to
hedge against the interest rate risks of its variable rate borrowings.
As of March 31, 2019, the Partnership receives interest based on three
or six-month LIBOR and pays a weighted average interest rate of 1.86%
under its interest rate swap agreements, which have an average maturity
of approximately 4.7 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, 2019, the Partnership’s net exposure to floating
interest rate fluctuations on its outstanding debt was approximately
$473.5 million based on total interest-bearing debt outstanding of
$1,069.0 million, less interest rate swaps of $552.4 million and less
cash and cash equivalents of $43.1 million. The Partnership’s
outstanding interest-bearing debt of $1,069.0 million as of March 31,
2019 is repayable as follows:

(U.S. Dollars in thousands)		Period repayment				Balloon repayment
Remainder of 2019		$		66,203		$		25,000
2020				85,945				—
2021				86,545				70,811
2022				71,210				236,509
2023				55,535				202,185
2024 and thereafter				15,181				153,893
Total		$		380,619		$		688,398

On May 14, 2019, the Partnership obtained approval to extend the
maturity of its $25 million unsecured revolving credit facility maturing
in August 2019 with the same commercial terms. The refinancing is
expected to close in June 2019.

Distributions

On May 15, 2019, the Partnership paid a cash distribution of $0.52 per
common unit with respect to the quarter ended March 31, 2019 to all
common unitholders of record on May 2, 2019. On May 15, 2019, the
Partnership also paid a cash distribution to the Series A Preferred
unitholders with respect to the quarter ended March 31, 2019 in an
aggregate amount equal to $1.8 million.

Outlook

There are no dry dockings scheduled for any of the Partnership’s fleet
during the remainder of 2019.

As of March 31, 2019, the Partnership’s fleet of sixteen vessels had an
average remaining fixed contract duration of 3.4 years. In addition, the
charterers of the Partnership’s time charter vessels have options to
extend their charters by an additional 4.4 years on average.

In September 2018, Knutsen NYK, the owner of the Partnership’s general
partner, entered into new long- term charters with Equinor for two
Suezmax DP2 shuttle tanker newbuildings to be constructed by Hyundai
Heavy Industries in South Korea with delivery scheduled in the second
half of 2020. In December 2018, Knutsen NYK ordered a new Suexmax DP2
shuttle tanker newbuilding to be constructed by Cosco Shipyard in China
and to be delivered in early 2021. This shuttle tanker is a replacement
vessel for the Knutsen NYK fleet and will be operating in its COA pool
if it is not contracted under a long-term charter before delivery.
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.

The Board believes that demand for newbuild offshore shuttle tankers
will continue to be driven over time based on the requirement to replace
older tonnage in the North Sea and Brazil and further expansion into
deep water offshore oil production areas such as in Pre-salt Brazil and
the Barents Sea. The Board further believes that significant growth in
demand exists and that this will continue for new shuttle tankers as the
availability of existing vessels has reduced and modern operational
demands have increased. Consequently, there should be opportunities to
further grow the Partnership.

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
sixteen offshore shuttle tankers with an average age of 5.7 years.

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 Friday, May 24, 2019
at noon (Eastern Time) to discuss the results for the first quarter of
2019, and invites all unitholders and interested parties 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 for the next seven
  days on the Partnership’s website: www.knotoffshorepartners.com.

May 23, 2019
KNOT Offshore Partners L.P.
Aberdeen, United
Kingdom

Questions should be directed to:
John Costain (+44 7496 170 620)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
				Three Months Ended												Year Ended, December 31
(U.S. Dollars in thousands)				March 31, 2019				December 31, 2018				March 31, 2018				2018
Time charter and bareboat revenues(1)		$		70,548		$		70,878		$		67,386		$		278,191
Loss of hire insurance recoveries				—				—				—				450
Other income(2)				1				53				655				815
Total revenues				70,549				70,931				68,041				279,456
Vessel operating expenses				14,456				14,221				13,247				56,730
Depreciation				22,431				22,450				21,574				88,756
General and administrative expenses				1,298				1,289				1,345				5,290
Total operating expenses				38,185				37,960				36,166				150,776
Operating income				32,364				32,971				31,875				128,680
Finance income (expense):
Interest income				238				247				136				739
Interest expense				(13,657)				(13,364)				(10,594)				(49,956)
Other finance expense				(118)				(228)				(337)				(1,260)
Realized and unrealized gain (loss) on derivative instruments(3)				(5,929)				(10,905)				9,977				4,039
Net gain (loss) on foreign currency transactions				(26)				91				(330)				(79)
Total finance expense				(19,492)				(24,159)				(1,148)				(46,517)
Income before income taxes				12,872				8,812				30,727				82,163
Income tax benefit (expense)				(3)				18				(3)				2
Net income				12,869				8,830				30,724				82,165
Weighted average units outstanding (in thousands of units):
Common units				32,694				32,694				32,694				32,694
General Partner units				615				615				615				615

(1)		Time charter revenues for the first quarter of 2019, fourth quarter of 2018 and the first quarter of 2018 include a non-cash item of
		approximately $0.8 million, $0.9 million and $1.2 million, respectively, in reversal of contract liability and asset provision, income
		recognition of prepaid charter hire and accrued income for the Carmen Knutsen and for the Brasil Knutsen based on the average charter
		rate for the fixed period.
(2)		Other income is mainly related to guarantee income from Knutsen NYK. Pursuant to the omnibus agreement, Knutsen NYK agreed to
		guarantee the payments of the hire rate that is equal to or greater than the hire rate payable under the initial charters of the Bodil
		Knutsen and the Windsor Knutsen for a period of five years from the closing date of the Partnership’s initial public offering. In
		October 2015, the Windsor Knutsen commenced operating under a new Shell time charter. The hire rate for the new charter is below
		the initial charter hire rate and the difference between the new hire rate and the initial rate was paid by Knutsen NYK until
		April 15, 2018.
(3)		Realized gains (losses) on derivative instruments relate to amounts the Partnership actually received (paid) to settle derivative
		instruments, and the unrealized gains (losses) on derivative instruments related to changes in the fair value of such derivative
		instruments, as detailed in the table below:

		Three Months Ended
(U.S. Dollars in thousands)		March 31, 2019				December 31, 2018				March 31, 2018
Realized gain (loss):
Interest rate swap contracts		$		1,078		$		711		$		(304)
Foreign exchange forward contracts				(788)				(359)				1,105
Total realized gain (loss):				290				352				801
Unrealized gain (loss):
Interest rate swap contracts				(7,098)				(9,896)				8,946
Foreign exchange forward contracts				879				(1,361)				230
Total unrealized gain (loss):				(6,219)				(11,257)				9,176
Total realized and unrealized gain (loss) on derivative instruments:		$		(5,929)		$		(10,905)		$		9,977

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(U.S. Dollars in thousands)			At March 31, 2019					At December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents			$		43,105			$		41,712
Amounts due from related parties					1,330					1,141
Inventories					2,565					2,443
Derivative assets					3,957					4,621
Other current assets					2,557					2,462
Total current assets					53,514					52,379
Long-term assets:
Vessels, net of accumulated depreciation					1,744,573					1,767,080
Right-of-use assets(4)					2,210					—
Intangible assets, net					1,740					1,891
Derivative assets					5,775					11,667
Accrued income					4,332					3,807
Total Long-term assets					1,758,630					1,784,445
Total assets			$		1,812,144			$		1,836,824
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable			$		3,206			$		4,800
Accrued expenses					6,430					6,464
Current portion of long-term debt					106,996					106,926
Current lease liabilities					552					—
Current portion of derivative liabilities					862					1,740
Income taxes payable					15					130
Current portion of contract liabilities					1,518					1,518
Prepaid charter					6,429					5,771
Amount due to related parties					594					1,070
Total current liabilities					126,602					128,419
Long-term liabilities:
Long-term debt					952,642					970,365
Lease liabilities(4)					1,658					—
Derivative liabilities					887					345
Contract liabilities					4,825					5,203
Deferred tax liabilities					456					453
Total long-term liabilities					960,468					976,366
Total liabilities					1,087,070					1,104,785
Commitments and contingencies
Series A Convertible Preferred Units					89,264					89,264
Equity:
Partners’ capital:
Common unitholders					624,408					631,244
General partner interest					11,402					11,531
Total partners’ capital					635,810					642,775
Total liabilities and equity			$		1,812,144			$		1,836,824

(4)		In July 2018 the Financial Accounting Standards Board (the “FASB”) issued targeted improvements to the leasing guidance allowing for
		an optional transition method that allow entities to initially apply the new lease standard and its disclosures at the transition date and
		recognize as cumulative-effect adjustments to the opening balance of retained earnings. The Partnership adopted the new leasing
		standard on January 1, 2019.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL
		Partners' Capital								Accumulated Other Comprehensive Income (Loss)				Total Partners' Capital				Serie A Convertible Preferred Units
(U.S. Dollars in thousands)		Common Units				General Partner Units
Consolidated balance at December 31, 2017		$		628,471		$		11,479		$		—		$		639,950		$		89,264
Net income				28,390				534				—				28,924				1,800
Other comprehensive income				—				—				—				—				—
Cash distributions				(17,701)				(333)				—				(18,034)				(1,800)
Net proceeds from issuance of common units				(4)				—				—				(4)				—
Consolidated balance at March 31, 2018		$		639,156				11,680				—				650,836				89,264
Consolidated balance at December 31, 2018		$		631,244		$		11,531		$		—		$		642,775		$		89,264
Net income				10,865				204				—				11,069				1,800
Other comprehensive income				—				—				—				—				—
Cash distributions				(17,701)				(333)				—				(18,034)				(1,800)
Consolidated balance at March 31, 2019		$		624,408		$		11,402		$		—		$		635,810		$		89,264

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
				Three Months Ended March 31,
(U.S. Dollars in thousands)				2019				2018
OPERATING ACTIVITIES
	Net income			$		12,869		$		30,724
	Adjustments to reconcile net income to cash provided by operating activities:
		Depreciation				22,431				21,574
		Amortization of contract intangibles / liabilities				(228)				(228)
		Amortization of deferred revenue				—				(372)
		Amortization of deferred debt issuance cost				656				574
		Drydocking expenditure				76				(526)
		Income tax expense				3				3
		Income taxes paid				(121)				(172)
		Unrealized (gain) loss on derivative instruments				6,219				(9,477)
		Unrealized (gain) loss on foreign currency transactions				14				(79)
	Changes in operating assets and liabilities:
		Decrease (increase) in amounts due from related parties				(190)				(243)
		Decrease (increase) in inventories				(122)				50
		Decrease (increase) in other current assets				(95)				1,274
		Decrease (increase) in accrued revenue				(525)				(589)
		Increase (decrease) in trade accounts payable				(1,592)				(2,536)
		Increase (decrease) in accrued expenses				(34)				(371)
		Increase (decrease) prepaid charter				659				(8,319)
		Increase (decrease) in amounts due to related parties				(476)				1,129
	Net cash provided by operating activities					39,544				32,416
INVESTING ACTIVITIES
	Acquisition of Anna Knutsen (net of cash acquired)					—				(15,376)
	Net cash (used in) investing activities					—				(15,376)
FINANCING ACTIVITIES
	Proceeds from long-term debt					—				145,500
	Repayment of long-term debt					(18,330)				(121,200)
	Repayment of long-term debt from related parties					—				(22,536)
	Payment of debt issuance cost					21				(1,053)
	Cash distribution					(19,834)				(19,834)
	Net proceeds from issuance of common units					—				(4)
	Net cash (used in) financing activities					(38,143)				(19,127)
		Effect of exchange rate changes on cash				(8)				35
	Net increase (decrease) in cash and cash equivalents					1,393				(2,051)
	Cash and cash equivalents at the beginning of the period					41,712				46,104
Cash and cash equivalents at the end of the period				$		43,105		$		44,053

APPENDIX A—RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Distributable Cash Flow (“DCF”)

Distributable cash flow represents net income adjusted for depreciation,
unrealized gains and losses from derivatives, unrealized foreign
exchange gains and losses, distributions on the Series A Convertible
Preferred Units, 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, the
Partnership’s capital assets. The Partnership believes distributable
cash flow is an important measure of operating performance used by
management and investors in publicly-traded partnerships to compare cash
generating performance of the Partnership from period to period and to
compare the cash generating performance for specific periods to the cash
distributions (if any) that are expected to be paid to the common
unitholders, the Partnership’s general partner and the holder of the
incentive distribution rights. 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.

(U.S. Dollars in thousands)				Three Months Ended March 31, 2019 (unaudited)				Three Months Ended December 31, 2018 (unaudited)
Net income		$		12,869		$		8,830
Add:
Depreciation				22,431				22,450
Other non-cash items; Amortization of deferred debt issuance cost				656				683
Unrealized losses from interest rate derivatives and foreign exchange currency contracts				6,219				11,257
Less:
Estimated maintenance and replacement capital expenditures (including drydocking reserve)				(13,879)				(13,250)
Distribution to Series A Preferred Units				(1,800)				(1,800)
Other non-cash items; deferred revenue and amortization of intangible assets				(228)				(291)
Other non-cash items; accrued income				(525)				(615)
Distributable cash flow		$		25,743		$		27,264
Distributions declared		$		18,034		$		18,034
Distribution coverage ratio (1)				1.43				1.51

(1)		Distribution coverage ratio is equal to distributable cash flow divided by distributions declared for the period presented.

EBITDA and Adjusted EBITDA

EBITDA is defined as earnings before interest, depreciation and taxes.
Adjusted EBITDA refers to earnings before interest, depreciation, taxes,
goodwill impairment charges 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, goodwill impairment charges
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.

(U.S. Dollars in thousands)				Three Months Ended March 31 2019 (unaudited)				Three Months Ended December 31 2018 (unaudited)
Net income		$		12,869		$		8,830
Interest income				(238)				(247)
Interest expense				13,657				13,364
Depreciation				22,431				22,450
Income tax expense				3				(18)
EBITDA				48,722				44,379
Other financial items (a)				6,073				11,042
Adjusted EBITDA				54,795				55,421

(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. 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;
• 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;
• forecasts of KNOT Offshore Partners’ ability to make or increase
  distributions on its common units and to make distributions on its
  Series A Convertible Preferred Units and the amount of any such
  distributions;
• 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;
• 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 Knutsen NYK’s
  relationships and reputation in the shipping industry;
• KNOT Offshore Partners’ ability to purchase vessels from Knutsen NYK
  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 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;
• 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 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 maintenance and replacement capital expenditures;
• Marshall Islands economic substance requirements;
• 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 U.S Securities
  and Exchange Commission, including its Annual Report on Form 20-F for
  the year ended December 31, 2018 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.

¹ EBITDA, Adjusted EBITDA and distributable cash flow 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, Adjusted EBITDA and distributable cash flow and a
reconciliation to net income, the most directly comparable GAAP
financial measure.

² Distribution coverage ratio is equal to distributable cash
flow divided by distributions declared for the period presented.

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