Knot Offshore Partners Lp · NYSE:KNOP
Knot Offshore Partners Lp — Q1 2017 Earnings Presentation
24 slides from Knot Offshore Partners Lp's earnings presentation, May 17, 2017
Slide 1: First Quarter 2017 Results
First Quarter 2017 Results May 17, 2017
Slide 2: Notice to Recipients
Notice to Recipients This presentation is not a prospectus and is not an offer to sell, nor a solicitation of an offer to buy, securities. This presentation contains certain forward-looking statements concerning future events and KNOT Offshore Partners LP’s (“KNOP”) operations, performance and finan
Slide 3: Highlights of an eventful first quarter
Highlights of an eventful first quarter The Partnership generated total revenues of $45.0 million, operating income of $17.5 million and net income of $11.4 million. Generated Adjusted EBITDA1 of $33.2 million and distributable cash flow1of $15.6 million. Fleet operated with 98.6% utilization2
Slide 4: Raising additional $40 million of preferred equity to fund further growth of the Partnership
Raising additional $ 40 million of preferred equity to fund further growth of the Partnership On February 2, 2017, the Partnership issued and sold in a private placement 2,083,333 Series A Preferred Units at a price of $24.00 per unit raising net proceeds of about $ 48.6 million to an affiliate of
Slide 5: Income Statement
Income Statement Unaudited, USD in thousands 1Q 2017 4Q 2016 1Q 2016 FY 2016 Time charter and bareboat revenues 43,747 44,798 41,826 172,878 Loss of hire insurance recoveries 1,150 — — Other income 95 197 200 793 Total revenues 44,992 44,995 42,026 173,671 Vessel operating expenses 10,282 7,693 7,64
Slide 6: Adjusted EBITDA
Adjusted EBITDA Unaudited, USD in thousands 1Q 2017 4Q 2016 1Q 2016 FY 2016 Net income 11,429 19,505 10,663 61,102 Interest income (36) (15) (2) (24) Interest expense 6,215 5,654 5,029 20,864 Depreciation 15,753 14,505 13,892 56,230 Income tax (benefits) expense 3 (24) 3 (15) EBITDA(1) 33,364 39,625
Slide 7: Windsor Knutsen special survey according to plan
Windsor Knutsen special survey according to plan Windsor Knutsen carried out its 10 year special survey in drydock at Brest yard in France – Yard stay of about 17 days Capex and off-hire in line with budget and schedule Off-hire in relation to special survey was 54.1 days which includes the ba
Slide 8: We have a comprehensive insurance package for all our vessels
We have a comprehensive insurance package for all our vessels In order to mitigate the economic costs of any incident which can result in damage and/or off-hire, the Partnership has put in place a comprehensive insurance package with a diverse group of investment-grade insurance companies – The la
Slide 9: Distributable cash flow
Distributable cash flow Unaudited, USD in thousands 1Q 2017 4Q 2016 1Q 2016 FY 2016 Net income 11,429 19,505 10,663 61,102 Add: Depreciation 15,753 14,505 13,892 56,230 Other non-cash items; deferred costs amortization debt 348 315 287 1,198 Unrealized losses from interest rate derivatives and forei
Slide 10: Balance sheet
Balance sheet At March 31, At December 31, At March 31, At December 31, Unaudited, USD in thousands 2017 2016 2017 2016 Current assets: Current liabilities Cash and cash equivalents 34,851 27,664 Current portion of long-term debt 58,872 58,984 Inventories 1,725 1,176 Derivative liabilities 4,446 3,3
Slide 11: Pending - Vigdis Knutsen drop-down
Pending - Vigdis Knutsen drop-down Vigdis Knutsen Contract detail Charterer: Royal Dutch Shell (1) Contract type: Time Charter Contract end date: April 2022 Option period: two consecutive 5 years extension options Trading area: Brazil Estimated NTM EBITDA(1): 16.2 million Estimated NTM
Slide 12: Our contracts are fixed price - not fixed to price of oil
Our contracts are fixed price - not fixed to price of oil Brent Crude Oil Price KNOP Unit ($/bbl) Price $22.70 $50.22 KNOP EBITDA Brent Crude Oil Price KNOP Unit Price Margin (LTM) ($/bbl) 12
Slide 13: Stable and long-term sustainable distribution policy
Stable and long-term sustainable distribution policy Average Distribution Coverage Ratio of 1.18x since IPO Q1 affected by scheduled drydocking of Windsor, Raquel offhire and somewhat equity overhang as there is a delay in investing proceeds from equity offerings Coupon for preferred equity is
Slide 14: The Hilda Knutsen refinancing marks the start of refinancing activity
The Hilda Knutsen refinancing marks the start of refinancing activity Maturity 2018 2019 2021 2023/2024 2025 Type of loan TLF TLF TLF TLF Bank TLF RCF RCF TLF TLF TLF TLF TLF TLF TLF ECA Windsor, Windsor, Windsor, Fortaleza, Vessel security Hilda Hilda Torill Ingrid Bodil, Carmen Bodil, Carmen Bodil
Slide 15: Long-term Contracts Backed by Leading Energy Companies
Long-term Contracts Backed by Leading Energy Companies (2) Fixed contract Option period KNOP fleet has average remaining fixed contract duration of 4.8(2) years Additional 4.12 years on average in Charterers option (1) KNOT has guaranteed the hire rate to April 2018 (five years from IPO date) (2) Pu
Slide 16: Significant growth fleet since IPO
Significant growth fleet since IPO 225% fleet growth since IPO 13 1 1 1 2 3 4 1 IPO fleet 2013 2014 2015 2016 1Q 2017 2Q 2017 End of Q2 2017 16
Slide 17: Dropdown inventory: Two potential acquisitions
Dropdown inventory: Two potential acquisitions(1) Fixed contract Option period Yard Fixed contract periods for the dropdown fleet are 5.0(2)years on average Charterers also have the option to extend these charters by 10.0 years on average (1) The acquisition by KNOP of any dropdown vessels in the fu
Slide 18: Summary
Summary Another steady quarter taking into account the scheduled drydocking of Windsor Knutsen and offhire related to Raquel Knutsen Acquisition of Tordis Knutsen and agreement to acquire Vigdis Knutsen $ 145 million of new equity has been raised this year in addition to $ 100 million of long-
Slide 19: Thank you, any questions?
Shuttle Tanker Market Overview Thank you, any questions? 19
Slide 20: Appendix
Appendix APPENDIX
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDA Adjusted EBITDA refers to earnings before interest, other financial items, taxes, non-controlling interest, depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure used by investors to measure our performance. The Partnership believe
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Distributable Cash Flow Distributable cash flow represents net income adjusted for depreciation and amortization, unrealized gains and losses from derivatives, unrealized foreign exchange gains and losses, distributions on the Series A Preferred Units, goodwill impairment
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures . The reconciliation of Distributable Cash flow is set forth in the table below: For the Quarter Ended (USD in thousands) 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 31-Dec-16 31-Mar-17 Net income 7,186 6,887 8,802 17,567 10,663 11,578 19,357 19,
Slide 24: Reconciliation of estimated net income and estimated EBITDA for KNOT 25
Reconciliation of estimated net income and estimated EBITDA for KNOT 25 For KNOT 25, the entity that the Partnership intends to purchase in the pending acquisition, estimated net income and estimated EBITDA for the twelve months following the closing of the acquisition are based on the following ass
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