Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2021 | |
Document And Entity Information | |
Document Type | 6-K |
Entity Registrant Name | KNOT Offshore Partners LP |
Entity Central Index Key | 0001564180 |
Document Period End Date | Jun. 30, 2021 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q2 |
Entity File Number | 001-35866 |
Entity Address, Address Line One | 2 Queen’s Cross, |
Entity Address, Postal Zip Code | AB15 4YB |
Entity Address, City or Town | Aberdeen, Aberdeenshire |
Entity Address, Country | GB |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Operating revenues: (Notes 3, 4 and 13) | ||||
Time charter and bareboat revenues | $ 66,513 | $ 70,250 | $ 132,111 | $ 137,476 |
Loss of hire insurance recoveries (Note 5) | 4,397 | 10,279 | ||
Other income | 27 | 9 | 28 | 607 |
Total revenues | 70,937 | 70,259 | 142,418 | 138,083 |
Operating expenses: (Note 13) | ||||
Vessel operating expenses | 17,394 | 13,112 | 35,954 | 28,746 |
Depreciation | 23,831 | 22,451 | 47,515 | 44,824 |
Write-down (Note 19) | 29,421 | 29,421 | ||
General and administrative expenses | 1,492 | 1,337 | 3,113 | 2,724 |
Total operating expenses | 72,138 | 36,900 | 116,003 | 76,294 |
Operating income (loss) | (1,201) | 33,359 | 26,415 | 61,789 |
Finance income (expense): | ||||
Interest income | 3 | 121 | ||
Interest expense (Note 6) | (6,804) | (8,512) | (14,176) | (18,974) |
Other finance expense (Note 6) | (250) | (199) | (409) | (307) |
Realized and unrealized gain (loss) on derivative instruments (Note 7) | (2,265) | (3,092) | 5,746 | (26,782) |
Net gain (loss) on foreign currency transactions | (144) | 127 | (96) | (297) |
Total finance expense | (9,463) | (11,673) | (8,935) | (46,239) |
Income (loss) before income taxes | (10,664) | 21,686 | 17,480 | 15,550 |
Income tax benefit (Note 9) | (261) | (3) | (264) | (6) |
Net income (loss) | (10,925) | 21,683 | 17,216 | 15,544 |
Series A Preferred unitholders' interest in net income | 1,759 | 1,800 | 3,559 | 3,600 |
General Partner's interest in net income | (233) | 368 | 253 | 221 |
Limited Partners' interest in net income | $ (12,451) | $ 19,515 | $ 13,404 | $ 11,723 |
Earnings per unit (Basic): (Note 15) | ||||
General Partner unit (basic) | $ (0.38) | $ 0.60 | $ 0.41 | $ 0.36 |
Earnings per unit (Diluted): (Note 15) | ||||
General Partner unit (basic) | (0.38) | 0.60 | 0.41 | 0.36 |
Common Units | ||||
Earnings per unit (Basic): (Note 15) | ||||
Common unit (basic) | (0.38) | 0.60 | 0.41 | 0.36 |
Earnings per unit (Diluted): (Note 15) | ||||
Common unit (diluted) | $ (0.38) | $ 0.58 | $ 0.41 | $ 0.36 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income (loss) | $ (10,925) | $ 21,683 | $ 17,216 | $ 15,544 |
Comprehensive income (loss) | $ (10,925) | $ 21,683 | $ 17,216 | $ 15,544 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash and cash equivalents (Note 8) | $ 51,589 | $ 52,583 | |
Amounts due from related parties (Note 13) | 1,762 | 5,726 | |
Inventories | 3,264 | 2,652 | |
Other current assets (Note 18) | 14,381 | 5,511 | |
Total current assets | 70,996 | 66,472 | |
Long-term assets: | |||
Vessels, net of accumulated depreciation and impairment (Notes 8, 10 and 19) | 1,642,026 | 1,708,786 | |
Right-of-use assets (Note 4) | 3,061 | 1,490 | |
Intangible assets, net (Note 11) | 378 | 681 | |
Derivative assets (Notes 7 and 8) | 168 | ||
Accrued income | 2,164 | 2,867 | |
Total long term assets | 1,647,797 | 1,713,824 | |
Total assets | 1,718,793 | 1,780,296 | |
Current liabilities: | |||
Trade accounts payable (Note 13) | 3,804 | 3,848 | |
Accrued expenses | 5,866 | 5,380 | |
Current portion of long-term debt (Notes 8 and 12) | 351,370 | 184,188 | |
Current lease liabilities (Note 4) | 641 | 652 | |
Current portion of derivative liabilities (Notes 7 and 8) | 9,984 | 10,695 | |
Income taxes payable | 276 | 86 | |
Current portion of contract liabilities (Note 11) | 1,518 | 1,518 | |
Prepaid charter | 7,821 | 5,424 | |
Amount due to related parties (Note 13) | 3,450 | 2,140 | |
Total current liabilities | 384,730 | 213,931 | |
Long-term liabilities: | |||
Long-term debt (Notes 8 and 12) | 646,348 | 846,157 | |
Lease liabilities (Note 4) | 2,419 | 838 | |
Derivative liabilities (Notes 7 and 8) | 8,495 | 19,358 | |
Contract liabilities (Note 11) | 1,410 | 2,168 | |
Deferred tax liabilities (Note 9) | 294 | 295 | |
Total long-term liabilities | 658,966 | 868,816 | |
Total liabilities | 1,043,696 | 1,082,747 | |
Commitments and contingencies (Note 14) | |||
Series A Convertible Preferred Units (1) | [1] | 84,367 | 89,264 |
Partners' capital: | |||
Common unitholders | 580,248 | 597,390 | |
General partner interest | 10,482 | 10,895 | |
Total partners' capital | 590,730 | 608,285 | |
Total liabilities and equity | $ 1,718,793 | $ 1,780,296 | |
[1] | On May 27, 2021, Tortoise Direct Opportunities Fund LP, the holder of 416,677 of the Partnership’s Series A Convertible Preferred Units, sold 208,333 of its Series A Preferred Units to KNOT and converted 208,334 Series A Preferred Units to 215,292 common units based on a conversion rate of 1.0334 . |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) | May 27, 2021shares | Jun. 30, 2021shares |
Shares converted | (208,334) | |
Common Units | ||
Shares converted | 215,292 | |
Tortoise Direct Opportunities Fund LP | Common Units | ||
Shares converted | 215,292 | |
Conversion rate | 1.0334 | |
Series A Convertible Preferred Units | Tortoise Direct Opportunities Fund LP | ||
Shares held | 416,677 | |
Shares sold | 208,333 | |
Shares converted | 208,334 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Partners' Capital - USD ($) $ in Thousands | General Partner Units | Common Units | Total | |
Beginning balance at Dec. 31, 2019 | $ 11,155 | $ 611,241 | $ 622,396 | |
Net income (loss) | 221 | 11,723 | 11,944 | |
Cash distributions | (666) | (35,402) | (36,068) | |
Ending balance at Jun. 30, 2020 | 10,710 | 587,562 | 598,272 | |
Convertible preferred units, beginning balance at Dec. 31, 2019 | 89,264 | |||
Net income | 3,600 | |||
Cash distributions | (3,600) | |||
Convertible preferred units, ending balance at Jun. 30, 2020 | 89,264 | |||
Beginning balance at Mar. 31, 2020 | 10,675 | 585,748 | 596,423 | |
Net income (loss) | 368 | 19,515 | 19,883 | |
Cash distributions | (333) | (17,701) | (18,034) | |
Ending balance at Jun. 30, 2020 | 10,710 | 587,562 | 598,272 | |
Convertible preferred units, beginning balance at Mar. 31, 2020 | 89,264 | |||
Net income | 1,800 | |||
Cash distributions | (1,800) | |||
Convertible preferred units, ending balance at Jun. 30, 2020 | 89,264 | |||
Beginning balance at Dec. 31, 2020 | 10,895 | 597,390 | 608,285 | |
Net income (loss) | 253 | 13,404 | 13,657 | |
Cash distributions | (666) | (35,402) | (36,068) | |
Conversion of preferred units to common units | [1] | 4,856 | 4,856 | |
Ending balance at Jun. 30, 2021 | 10,482 | 580,248 | 590,730 | |
Convertible preferred units, beginning balance at Dec. 31, 2020 | [2] | 89,264 | ||
Conversion of preferred units to common units | [1] | (4,856) | ||
Net income | 3,559 | |||
Cash distributions | (3,600) | |||
Convertible preferred units, ending balance at Jun. 30, 2021 | [2] | 84,367 | ||
Beginning balance at Mar. 31, 2021 | 11,048 | 605,544 | 616,592 | |
Net income (loss) | (233) | (12,451) | (12,684) | |
Cash distributions | (333) | (17,701) | (18,034) | |
Conversion of preferred units to common units | [1] | 4,856 | 4,856 | |
Ending balance at Jun. 30, 2021 | $ 10,482 | $ 580,248 | 590,730 | |
Convertible preferred units, beginning balance at Mar. 31, 2021 | 89,264 | |||
Conversion of preferred units to common units | [1] | (4,856) | ||
Net income | 1,759 | |||
Cash distributions | (1,800) | |||
Convertible preferred units, ending balance at Jun. 30, 2021 | [2] | $ 84,367 | ||
[1] | On May 27, 2021, Tortoise Direct Opportunities Fund LP, the holder of 416,677 of the Partnership’s Series A Convertible Preferred Units, sold 208,333 of its Series A Preferred Units to KNOT and converted 208,334 Series A Preferred Units to 215,292 common units based on a conversion rate of 1.0334 . | |||
[2] | On May 27, 2021, Tortoise Direct Opportunities Fund LP, the holder of 416,677 of the Partnership’s Series A Convertible Preferred Units, sold 208,333 of its Series A Preferred Units to KNOT and converted 208,334 Series A Preferred Units to 215,292 common units based on a conversion rate of 1.0334 . |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Partners' Capital (Parenthetical) | May 27, 2021shares | Jun. 30, 2021shares |
May 27, 2021: Conversion of Series A Preferred Units | (208,334) | |
Common Units | ||
May 27, 2021: Conversion of Series A Preferred Units | 215,292 | |
Tortoise Direct Opportunities Fund LP | Common Units | ||
May 27, 2021: Conversion of Series A Preferred Units | 215,292 | |
Conversion rate | 1.0334 | |
Tortoise Direct Opportunities Fund LP | Series A Convertible Preferred Units | ||
Shares held | 416,677 | |
Shares sold | 208,333 | |
May 27, 2021: Conversion of Series A Preferred Units | 208,334 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
OPERATING ACTIVITIES | |||||
Net income | $ (10,925) | $ 21,683 | $ 17,216 | $ 15,544 | |
Adjustments to reconcile net income to cash provided by operating activities: | |||||
Depreciation | 23,831 | 22,451 | 47,515 | 44,824 | $ 89,743 |
Write-down related to vessel | 29,421 | 29,421 | |||
Amortization of contract intangibles / liabilities | (456) | (456) | |||
Amortization of deferred debt issuance cost | 656 | 626 | 1,758 | 1,262 | |
Drydocking expenditure | (3,428) | (2,666) | |||
Income tax expense | 261 | 3 | 264 | 6 | |
Income taxes paid | (74) | (78) | |||
Interest expenses | 12,418 | 18,974 | |||
Interest paid | (12,571) | (18,888) | |||
Unrealized (gain) loss on derivative instruments | (11,742) | 26,685 | |||
Unrealized (gain) loss on foreign currency transactions | 27 | (56) | |||
Changes in operating assets and liabilities: | |||||
Decrease (increase) in amounts due from related parties | 3,964 | 959 | |||
Decrease (increase) in inventories | (613) | 50 | |||
Decrease (increase) in other current assets | (8,929) | (699) | |||
Decrease (increase) in accrued revenue | 703 | 551 | |||
Increase (decrease) in trade accounts payable | (8) | (198) | |||
Increase (decrease) in accrued expenses | 640 | (1,947) | |||
Increase (decrease) prepaid charter | 2,399 | (3,116) | |||
Increase (decrease) in amounts due to related parties | 1,310 | 38 | |||
Net cash provided by operating activities | 79,814 | 80,789 | |||
INVESTING ACTIVITIES | |||||
Net cash used in investing activities | (6,748) | (216) | |||
FINANCING ACTIVITIES | |||||
Proceeds from long-term debt | 99,300 | ||||
Repayment of long-term debt | (132,208) | (42,973) | |||
Payment of debt issuance cost | (1,478) | (13) | |||
Cash distribution | (39,668) | (39,668) | |||
Net cash used in financing activities | (74,054) | (82,654) | |||
Effect of exchange rate changes on cash | (6) | (8) | |||
Net increase (decrease) in cash and cash equivalents | (994) | (2,089) | |||
Cash and cash equivalents at the beginning of the period | 52,583 | 43,525 | 43,525 | ||
Cash and cash equivalents at the end of the period | $ 51,589 | $ 41,436 | 51,589 | 41,436 | $ 52,583 |
Property, Plant and Equipment, Excluding Acquired Vessels | |||||
INVESTING ACTIVITIES | |||||
Disposals (additions) to vessel and equipment | $ (6,748) | $ (216) |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2021 | |
Description of Business | |
Description of Business | 1) Description of Business KNOT Offshore Partners LP (the “Partnership”) was formed as a limited partnership under the laws of the Republic of the Marshall Islands. The Partnership was formed for the purpose of acquiring 100% ownership interests in four shuttle tankers owned by Knutsen NYK Offshore Tankers AS (“KNOT”) in connection with the Partnership’s initial public offering of its common units (the “IPO”), which was completed on April 15, 2013. As of June 30, 2021, the Partnership had a fleet of seventeen shuttle tankers, the Windsor Knutsen Bodil Knutsen Recife Knutsen Fortaleza Knutsen Carmen Knutsen, Hilda Knutsen, Torill Knutsen Dan Cisne Dan Sabia, Ingrid Knutsen Raquel Knutsen, Tordis Knutsen, Vigdis Knutsen, Lena Knutsen Brasil Knutsen Anna Knutsen Tove Knutsen The consolidated financial statements have been prepared assuming that the Partnership will continue as a going concern. The Partnership expects that its primary future sources of funds will be available cash, cash from operations, borrowings under any new loan agreements and the proceeds of any equity financings. The Partnership believes that these sources of funds (assuming the current rates earned from existing charters) will be sufficient to cover operational cash outflows and ongoing obligations under the Partnership’s financing commitments to pay loan interest and make scheduled loan repayments and to make distributions on its outstanding units. Accordingly, as of August 26, 2021, the Partnership believes that its current resources, including the undrawn portion of its revolving credit facilities of $50 million, are sufficient to meet working capital requirements for its current business for at least the next twelve months. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2) Summary of Significant Accounting Policies (a) Basis of Preparation The accompanying unaudited condensed consolidated interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. In the opinion of management of the Partnership, all adjustments considered necessary for a fair presentation, which are of normal recurring nature, have been included. All intercompany balances and transactions are eliminated. The unaudited condensed consolidated financial statements do not include all the disclosures and information required for a complete set of annual financial statements; and, therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements for the year ended December 31, 2020, which are included in the Partnership’s Annual Report on Form 20-F (the “2020 20-F”). Vessels and Equipment Historically, the useful life of the Partnership’s vessels and equipment was assessed as 25 years commencing from the date the vessel and equipment were delivered from the shipyard. As of June 30, 2021, the Partnership has considered factors related to the ongoing use of the vessels and equipment, gradual shifts in market conditions and other long-term factors associated with the global oil and maritime transportation industries and based on this has reassessed the useful life as being 23 years. This change in estimate will be applied prospectively from July 1, 2021 and impacts the entire fleet of shuttle tanker vessels. The change in estimate did however not impact income, net income nor earnings per share basic and diluted for the three and six months ended June 30, 2021. (b) Significant Accounting Policies The accounting policies adopted in the preparation of the unaudited condensed consolidated interim financial statements are consistent with those followed in the preparation of the Partnership’s audited consolidated financial statements for the year ended December 31, 2020, as contained in the Partnership’s 2020 20-F. (c) Recent Accounting Pronouncements Adoption of new accounting standards No new accounting standards have recently been adopted. Accounting pronouncements not yet adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The update provides temporary optional expedients and exceptions to the guidance in US GAAP on contract modifications and hedge accounting, to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. For all types of hedging relationships, the guidance allows an entity to change the reference rate and other critical terms related to reference rate reform without having to dedesignate the relationship. The guidance is effective upon issuance through December 31, 2022. Although the Partnership does not apply hedge accounting, the Partnership has debt and interest rate swaps that reference LIBOR. The Partnership is evaluating the impact of the guidance on the consolidated financial statements. Other recently issued accounting pronouncements are not expected to materially impact the Partnership. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2021 | |
Segment Information | |
Segment Information | 3) Segment Information The Partnership has not presented segment information as it considers its operations to occur in one reportable segment, the shuttle tanker market. As of June 30, 2021 and 2020, the Partnership’s fleet consisted of seventeen vessels and sixteen vessels, respectively, and operated under time charters and bareboat charters. Under the time charters and bareboat charters, the charterer, not the Partnership, controls the choice of which trading areas the applicable Vessel will serve. Accordingly, the Partnership’s management, including the chief operating decision makers, does not evaluate performance according to geographical region. The following table presents time charter and bareboat revenues and percentages of revenues for material customers that accounted for more than 10% of the Partnership’s consolidated revenues during the three and six months ended June 30, 2021 and 2020. All of these customers are subsidiaries of major international oil companies. Three Months Ended June 30, Six Months Ended June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Eni Trading and Shipping S.p.A. $ 10,915 16 % $ 10,953 16 % $ 21,748 16 % $ 22,088 16 % Fronape International Company, a subsidiary of Petrobras Transporte S.A. 11,249 17 % 11,249 16 % 22,378 17 % 22,498 16 % Repsol Sinopec Brasil, S.A., a subsidiary of Repsol Sinopec Brasil, B.V. 9,282 14 % 9,285 13 % 18,075 14 % 15,178 11 % Brazil Shipping I Limited, a subsidiary of Royal Dutch Shell 16,168 24 % 20,512 29 % 32,156 24 % 41,236 30 % Galp Sinopec Brasil Services B.V. 8,881 13 % 8,881 13 % 17,665 13 % 17,763 13 % The Partnership has financial assets that expose it to credit risk arising from possible default by a counterparty. The Partnership considers its counterparties to be creditworthy banking and financial institutions and does not expect any significant loss to result from non-performance by such counterparties. The maximum loss due to credit risk that the Partnership would incur if counterparties failed completely to perform would be the carrying value of cash and cash equivalents, and derivative assets. The Partnership, in the normal course of business, does not demand collateral from its counterparties. |
Operating Leases
Operating Leases | 6 Months Ended |
Jun. 30, 2021 | |
Operating Leases | |
Operating Leases | 4) Operating Leases Revenues The Partnership's primary source of revenues is chartering its shuttle tankers to its customers. The Partnership uses two types of contracts, time charter contracts and bareboat charter contracts. The Partnership's time-charter contracts include both a lease component, consisting of the bareboat element of the contract, and non-lease component, consisting of operation of the Vessel for the customers, which includes providing the crewing and other services related to the Vessel's operations, the cost of which is included in the daily hire rate, except when off hire. The following table presents the Partnership's revenues by time charter and bareboat charters and other revenues for the three and six months ended June 30, 2021 and 2020: Three Months Ended June 30, Six Months Ended June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Time charter revenues (service element included) $ 55,264 $ 59,001 $ 109,733 $ 114,978 Bareboat revenues 11,249 11,249 22,378 22,498 Other revenues (loss of hire insurance recoveries and other income) 4,424 9 10,307 607 Total revenues $ 70,937 $ 70,259 $ 142,418 $ 138,083 As of June 30, 2021, the minimum contractual future revenues to be received from time charters and bareboat charters during the next five years and thereafter are as follows (including service element of the time charter, but excluding unexercised customer option periods): (U.S. Dollars in thousands) 2021 (excluding the six months ended June 30, 2021) $ 131,436 2022 184,259 2023 99,805 2024 102,560 2025 76,916 2026 and thereafter 46,775 Total $ 641,751 The minimum contractual future revenues should not be construed to reflect total charter hire revenues for any of the years. Minimum contractual future revenues are calculated based on certain assumptions such as operating days per year. In addition, minimum contractual future revenues presented in the table above have not been reduced by estimated off-hire time for periodic maintenance. The amounts may vary given unscheduled future events such as vessel maintenance. The Partnership’s fleet as of June 30, 2021 consisted of: ● the Fortaleza Knutsen , a shuttle tanker built in 2011 that is currently operating under a bareboat charter that expires in March 2023 with Fronape International Company, a subsidiary of Petrobras Transporte S.A. (“Transpetro”); ● the Recife Knutsen , a shuttle tanker built in 2011 that is currently operating under a bareboat charter that expires in August 2023 with Transpetro; ● the Bodil Knutsen , a shuttle tanker built in 2011 that is currently operating under a time charter with Knutsen Shuttle Tankers Pool AS, a subsidiary of KNOT, for an initial three-month period commencing on May 13, 2021 and then on a rolling one-month basis, possibly for the remainder of 2021. The vessel is expected to undergo installation of a VOC recovery plant in the third or fourth quarter of 2021 and will commence on a new time charter contract with a major oil company in the fourth quarter of 2023 or the first quarter of 2024 ; ● the Windsor Knutsen , a conventional oil tanker built in 2007 and retrofitted to a shuttle tanker in 2011. The Windsor Knutsen has been idle since December 2020, other than for a short-term voyage of seven days. The vessel is expected to operate under a one-year time charter contract (with owner's option to substitute, and with charterer's options to extend the charter by one one-year period and then one six-month period) with a major oil company. The charter is expected to commence in September 2021. The signing of this contract remains outstanding pending a number of final details which are expected to be resolved shortly; ● the Carmen Knutsen , a shuttle tanker built in 2013 that is currently operating under a time charter that expires in January 2023 , with Repsol Sinopec Brasil, B.V. a subsidiary of Repsol Sinopec Brasil, S.A. (“Repsol”), with options to extend until January 2026 ; ● the Hilda Knutsen , a shuttle tanker built in 2013 that is currently operating under a time charter that expires in August 2022 with Eni Trading and Shipping S.p.A. (“ENI”), with options to extend until August 2025 ; ● the Torill Knutsen , a shuttle tanker built in 2013 that is currently operating under a time charter that expires in November 2022 with ENI, with options to extend until November 2024 ; ● the Dan Cisne , a shuttle tanker built in 2011 that is currently operating under a bareboat charter that expires in September 2023 with Transpetro; ● the Dan Sabia , a shuttle tanker built in 2012 that is currently operating under a bareboat charter that expires in January 2024 with Transpetro; ● the Ingrid Knutsen , a shuttle tanker built in 2013 that is currently operating under a time charter that expires in February 2024 with Vår Energi Marine AS, a Norwegian subsidiary of Vår Energi AS, with options to extend until February 2029 ; ● the Raquel Knutsen , a shuttle tanker built in 2015 that is currently operating under a time charter that expires in June 2025 with Repsol, with options to extend until June 2030 ; ● the Tordis Knutsen , a shuttle tanker built in 2016 that is currently operating under a time charter that expires in January 2022 , with a subsidiary of Shell. The vessel will commence on a new 3 -year time charter contract with a major oil company in 2023 ; ● the Vigdis Knutsen , a shuttle tanker built in 2017 that is currently operating under a time charter that expires in the second quarter of 2022 with a subsidiary of Shell. The vessel will commence on a new 3 -year time charter contract with a major oil company in 2023 ; ● the Lena Knutsen , a shuttle tanker built in 2017 that is currently operating under a time charter that expires in the third quarter of 2022 with a subsidiary of Shell. The vessel will commence on a new 3 -year time charter contract with a major oil company in 2023 ; ● the Brasil Knutsen , a shuttle tanker built in 2013 that is currently operating under a time charter that expires in September 2022 with Galp Sinopec Brazil Services B.V. (“Galp”), with options to extend until September 2028 ; and ● the Anna Knutsen , a shuttle tanker built in 2017 that is currently operating under a time charter that expires in March 2022 with Galp, with options to extend until March 2028 . ● the Tove Knutsen , a shuttle tanker built in 2020 that is currently operating under a time charter that expires in October 2027 with Equinor, with options to extend until October 2040 . Lease obligations The Partnership does not have any material leased assets but has some leased equipment on operational leases on the various ships operating on time charter contracts. As of June 30, 2021, the right-of-use asset and lease liability for operating leases A maturity analysis of the Partnership’s lease liabilities from leased-in equipment as of June 30, 2021 is as follows: (U.S. Dollars in thousands) 2021 (excluding the six months ended June 30, 2021) $ 352 2022 703 2023 703 2024 703 2025 703 2026 and thereafter 59 Total $ 3,223 Less imputed interest 163 Carrying value of operating lease liabilities $ 3,060 |
Insurance Proceeds
Insurance Proceeds | 6 Months Ended |
Jun. 30, 2021 | |
Insurance Proceeds | |
Insurance Proceeds | 5) Insurance proceeds Windsor Knutsen In December 2020, the Windsor Knutsen 14 million, respectively, for loss of hire proceeds which were recorded as a component of total revenues since day rates are recovered under the terms of the policy. In addition, for the three and six months ended June 30, 2021, the Partnership recorded $2.5 million and $4.1 million, respectively, for recoveries up to the amount of loss under hull and machinery insurance for repairs as a result of the engine block damage to the Windsor Knutsen. Tove Knutsen In March 2021, the Tove Knutsen million, respectively, for loss of hire proceeds which were recorded as a component of total revenues since day rates are recovered under the terms of the policy. In addition, for the three and six months ended June 30, 2021, the Partnership recorded $0.3 million and $0.5 million respectively, for recoveries up to the amount of loss under hull and machinery insurance for repairs to controllable pitch propeller on the Tove Knutsen. million which is classified under vessel operating expense. Bodil Knutsen In April 2021, the Bodil Knutsen |
Other Finance Expenses
Other Finance Expenses | 6 Months Ended |
Jun. 30, 2021 | |
Other Finance Expenses | |
Other Finance Expenses | 6) Other Finance Expenses (a) Interest Expense The following table presents the components of interest cost as reported in the consolidated statements of operations for the three and six months ended June 30, 2021 and 2020: Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Interest expense $ 6,148 $ 7,886 $ 12,418 $ 17,712 Amortization of debt issuance cost and fair value of debt assumed 656 626 1,758 1,262 Total interest cost $ 6,804 $ 8,512 $ 14,176 $ 18,974 (b) Other Finance Expense The following table presents the components of other finance expense for three and six months ended June 30, 2021 and 2020: Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Bank fees, charges $ 132 $ 137 $ 215 $ 184 Commitment fees 118 62 194 123 Total other finance expense $ 250 $ 199 $ 409 $ 307 |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments | |
Derivative Instruments | 7) Derivative Instruments The unaudited condensed consolidated interim financial statements include the results of interest rate swap contracts to manage the Partnership’s exposure related to changes in interest rates on its variable rate debt instruments and the results of foreign exchange forward contracts to manage its exposure related to changes in currency exchange rates on its operating expenses, mainly crew expenses, in currency other than the U.S. Dollar and on its contract obligations. The Partnership does not apply hedge accounting for derivative instruments. The Partnership does not speculate using derivative instruments. By using derivative financial instruments to economically hedge exposures to changes in interest rates, the Partnership exposes itself to credit risk and market risk. Derivative instruments that economically hedge exposures are used for risk management purposes, but these instruments are not designated as hedges for accounting purposes. Credit risk is the failure of the counterparty to perform under the terms of the derivative instrument. When the fair value of a derivative instrument is positive, the counterparty owes the Partnership, which creates credit risk for the Partnership. When the fair value of a derivative instrument is negative, the Partnership owes the counterparty, and, therefore, the Partnership is not exposed to the counterparty’s credit risk in those circumstances. The Partnership minimizes counterparty credit risk in derivative instruments by entering into transactions with major banking and financial institutions. The derivative instruments entered into by the Partnership do not contain credit risk-related contingent features. The Partnership has not entered into master netting agreements with the counterparties to its derivative financial instrument contracts. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates, currency exchange rates or commodity prices. The market risk associated with interest rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. The Partnership assesses interest rate risk by monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating economical hedging opportunities. The Partnership has historically used variable interest rate mortgage debt to finance its vessels. The variable interest rate mortgage debt obligations expose the Partnership to variability in interest payments due to changes in interest rates. The Partnership believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, the Partnership has entered into London Interbank Offered Rate (“LIBOR”)-based interest rate swap contracts to manage fluctuations in cash flows resulting from changes in the benchmark interest rate of LIBOR. These swaps change the variable rate cash flow exposure on the mortgage debt obligations to fixed cash flows. Under the terms of the interest rate swap contracts, the Partnership receives LIBOR-based variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent of fixed rate debt for the notional amount of its debt hedged. As of June 30, 2021 and December 31, 2020, the total notional amount of the Partnership’s outstanding interest rate swap contracts that were entered into in order to hedge outstanding or forecasted debt obligations were $472.6 million and $516.2 million, respectively. As of June 30, 2021 and December 31, 2020, the carrying amount of the interest rate swaps contracts was a net liability of $18.3 million and $30.1 million, respectively. See Note 8—Fair Value Measurements. Changes in the fair value of interest rate swap contracts are reported in realized and unrealized gain (loss) on derivative instruments in the same period in which the related interest affects earnings. The Partnership and its subsidiaries utilize the U.S. Dollar as their functional and reporting currency, because all of their revenues and the majority of their expenditures, including the majority of their investments in vessels and their financing transactions, are denominated in U.S. Dollars. Payment obligations in currencies other than the U.S. Dollar, and in particular operating expenses in NOK, expose the Partnership to variability in currency exchange rates. The Partnership believes that it is prudent to limit the variability of a portion of its currency exchange exposure. To meet this objective, the Partnership entered into foreign exchange forward contracts to manage fluctuations in cash flows resulting from changes in the exchange rates towards the U.S. Dollar. The agreements change the variable exchange rate to fixed exchange rates at agreed dates The following table presents the realized and unrealized gains and losses that are recognized in earnings as net gain (loss) on derivative instruments for the three and six months ended June 30, 2021 and 2020: Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Realized gain (loss): Interest rate swap contracts $ (2,087) $ (191) $ (5,996) $ 12 Foreign exchange forward contracts — (109) — (109) Total realized gain (loss): (2,087) (300) (5,996) (97) Unrealized gain (loss): Interest rate swap contracts (178) (3,457) 11,742 (26,438) Foreign exchange forward contracts — 665 — (247) Total unrealized gain (loss): (178) (2,792) 11,742 (26,685) Total realized and unrealized gain (loss) on derivative instruments: $ (2,265) $ (3,092) $ 5,746 $ (26,782) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | 8) Fair Value Measurements (a) Fair Value of Financial Instruments The following table presents the carrying amounts and estimated fair values of the Partnership’s assets and liabilities that are measured at fair value on a recurring and non-recurring basis as of June 30, 2021 and December 31, 2020. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. June 30, 2021 December 31, 2020 Carrying Fair Carrying Fair (U.S. Dollars in thousands) Amount Value Amount Value Recurring: Financial assets: Cash and cash equivalents $ 51,589 $ 51,589 $ 52,583 $ 52,583 Non-current derivative assets: Interest rate swap contracts 168 168 — — Financial liabilities: Current derivative liabilities: Interest rate swap contracts 9,984 9,984 10,695 10,695 Non-current derivative liabilities: Interest rate swap contracts 8,495 8,495 19,358 19,358 Long-term debt, current and non-current 1,003,211 1,003,211 1,036,118 1,036,118 Non-Recurring: Non-current assets: Vessel 48,156 48,156 — — The carrying amounts shown in the table above are included in the consolidated balance sheets under the indicated captions. Carrying amount of long-term debt, current and non-current, above excludes capitalized debt issuance cost of $5.5 million and $5.8 million as of June 30, 2021 and December 31, 2020 , respectively. The carrying value of trade accounts receivable, trade accounts payable and receivables/payables to owners and affiliates approximate their fair value. The fair values of the financial instruments shown in the above table as of June 30, 2021 and December 31, 2020 represent the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. Those fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Partnership’s own judgment about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Partnership based on the best information available in the circumstances, including expected cash flows, appropriately risk-adjusted discount rates and available observable and unobservable inputs. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: ● Cash and cash equivalents and restricted cash : The fair value of the Partnership’s cash balances approximates the carrying amounts due to the current nature of the amounts. As of June 30, 2021 and December 31, 2020 there is no restricted cash. ● Interest rate swap contracts : The fair value of interest rate swap contracts is determined using an income approach using the following significant inputs: (1) the term of the swap contract (weighted average of 3.8 years and 4.3 years, as of June 30, 2021 and December 31, 2020 , respectively), (2) the notional amount of the swap contract (ranging from $6.2 million to $38.8 million as of June 30,2021 and ranging from $7.0 million to $40.1 million as of December 31, 2020), discount rates interpolated based on relevant LIBOR swap curves; and (3) the rate on the fixed leg of the swap contract (rates ranging from 0.71% to 2.90% as of June 30, 2021 and from 0.71% to 2.90% as of December 31, 2020). ● Long-term debt : With respect to long-term debt measurements, the Partnership uses market interest rates and adjusts for risks, such as its own credit risk. In determining an appropriate spread to reflect its credit standing, the Partnership considered interest rates currently offered to KNOT for similar debt instruments of comparable maturities by KNOT’s and the Partnership’s bankers as well as other banks that regularly compete to provide financing to the Partnership. ● Vessel : In estimating fair value the Partnership considers factors related to vessel age, expected residual value, ongoing use of the vessels and equipment, shifts in market conditions and other impacting factors associated with the global oil and maritime transportation industries. This exercise in the second quarter of 2021 resulted in a write-down in respect of the Windsor Knutsen using a discounted cash flow approach. The Partnership determined the discounted cash flows for the Windsor Knutsen using projected future redeployment opportunities and estimated residual value, discounted at an estimated market participant rate of 6.38% . The projected future redeployment opportunities take into consideration the Partnership’s projected time-charter rates that could be contracted in future periods. In establishing these estimates, the Partnership considered the specific attributes of this Vessel, current and future potential discussions with potential customers, and available redeployment opportunities. (b) Fair Value Hierarchy The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis (including items that are required to be measured at fair value or for which fair value is required to be disclosed) as of June 30, 2021 and December 31, 2020: Fair Value Measurements at Reporting Date Using Quoted Price in Active Significant Carrying Markets for Other Significant Value Identical Observable Unobservable June 30, Assets Inputs Inputs (U.S. Dollars in thousands) 2021 (Level 1) (Level 2) (Level 3) Recurring: Financial assets: Cash and cash equivalents $ 51,589 $ 51,589 $ — $ — Current derivative assets: Interest rate swap contracts 168 — 168 — Financial liabilities: Non-current derivative liabilities: Interest rate swap contracts 9,984 — 9,984 — Non-current derivative liabilities: Interest rate swap contracts 8,495 — 8,495 — Long-term debt, current and non-current 1,003,211 — 1,003,211 — Non-Recurring: Non-current assets: Vessel 48,156 — — 48,156 Fair Value Measurements at Reporting Date Using Quoted Price in Active Significant Carrying Markets for Other Significant Value Identical Observable Unobservable December 31, Assets Inputs Inputs (U.S. Dollars in thousands) 2020 (Level 1) (Level 2) (Level 3) Financial assets: Cash and cash equivalents $ 52,583 $ 52,583 $ — $ — Current derivative assets: Interest rate swap contracts — — — — Foreign exchange forward contracts — — — — Non-current derivative assets: Interest rate swap contracts — — — — Financial liabilities: Current derivative liabilities: Interest rate swap contracts 10,695 — 10,695 — Non-current derivative liabilities: Interest rate swap contracts 19,358 — 19,358 — Long-term debt, current and non-current 1,036,118 — 1,036,118 — The Partnership’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers into or out of Level 1 and Level 2 as of June 30, 2021 and December 31, 2020 . As of June 30, 2021, one non-recurring asset was recognized as Level 3. The following table provide information about the valuation techniques and significant unobservable inputs used in the valuation of Level 3 assets measured at fair value on a non-recurring basis as of June 30, 2021. Significant Fair unobservable (U.S. Dollars in thousands) Value Valuation technique inputs: WACC (1) Non-Recurring: Non-current assets: Windsor Knutsen $ 48,156 Discounted cash flow Discount rate 6.38 % (1) WACC is defined as weighted average cost of capital |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Taxes | |
Income Taxes | 9) Income Taxes Components of Current and Deferred Tax Expense After the reorganization of the Partnership’s predecessor’s activities into the new group structure in February 2013, all profit from continuing operations in Norway is taxable within the tonnage tax regime. The consequence of the reorganization is a one-time entrance tax into the Norwegian tonnage tax regime due to the Partnership’s acquisition of the shares in the subsidiary that owns the Fortaleza Knutsen Recife Knutsen The total amount of the entrance tax was estimated to be $3.0 million, which was recognized in the three months ended March 31, 2013. At September 30, 2017 the Partnership acquired the shares in the subsidiary that owns the Lena Knutsen The taxes payable, mainly related to the entrance tax, are calculated based on the Norwegian corporate tax rate of 22% for 2021 and 2020, and the deferred tax liabilities, also mainly related to the entrance tax, are calculated based on a tax rate of 22% effective as from January 1, 2021 and January 1, 2020, respectively. $0.1 million of the entrance tax was paid both during the first quarter of 2021 and 2020. As of June 30, 2021 and December 31, 2020, UK income tax is presented as income taxes payable, while $0.3 million and $0.3 million is presented as non-current deferred taxes payable, respectively. Significant components of current and deferred income tax expense attributable to income from continuing operations for the three and six months ended June 30, 2021 and 2020 were as follows: Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Income before income taxes $ (10,664) $ 21,686 $ 17,480 $ 15,550 Income tax (expense) (261) (3) (264) (6) Effective tax rate $ 2 % $ 0 % $ (2) % $ 0 % Income tax expenses for the three and six months ended June 30, 2021 and 2020 consist of the following: Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Income tax benefit (expense) - Norwegian tonnage tax $ (258) $ — $ (258) $ — Income tax benefit (expense) - UK (3) (3) (6) (6) Income tax benefit (expense) $ (261) $ (3) $ (264) $ (6) Effective tax rate 2 % 0 % (2) % 0 % The Partnership records a valuation allowance for deferred tax assets when it is more likely than not that some of or all of the benefit from the deferred tax assets will not be realized. In assessing the realizability of deferred tax assets, which relates to financial loss carry forwards and other deferred tax assets within the tonnage tax regime, the Partnership considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized taking into account all the positive and negative evidence available. As of June 30, 2021 and December 31, 2020 there are no deferred tax assets recognized. |
Vessels and Equipment
Vessels and Equipment | 6 Months Ended |
Jun. 30, 2021 | |
Vessels and Equipment | |
Vessels and Equipment | 10) Vessels and Equipment As of June 30, 2021 and December 2020, Vessels with a book value of $1,642 million and $1,709 million, respectively, are pledged as security held as a guarantee for the Partnership’s long-term debt. See Note 12—Long-term debt. Vessels & Accumulated Accumulated write (U.S. Dollars in thousands) equipment depreciation down Net Vessels Vessels, December 31, 2019 $ 2,129,012 $ (451,524) $ — $ 1,677,488 Additions 115,277 — — 115,277 Drydock costs 5,764 — — 5,764 Disposals — — — — Depreciation for the year — (89,743) — (89,743) Vessels, December 31, 2020 $ 2,250,053 $ (541,267) $ — $ 1,708,786 Additions (1) 6,748 — — 6,748 Drydock costs 3,428 — — 3,428 Disposals (2,641) 2,641 — — Depreciation and write down for the period (2) — (47,515) (29,421) (76,936) Vessels, June 30, 2021 $ 2,257,588 $ (586,141) $ (29,421) $ 1,642,026 (1) During the scheduled second renewal survey drydocking of the Bodil Knutsen a ballast water treatment system was installed on the vessel. (2) The carrying value of the Windsor Knutsen was written down to its estimated fair value as of June 30, 2021, see Note 19 - Write-down of long-lived assets. Drydocking activity for the year ended June 30, 2021 and December 31, 2020 is summarized as follows: (U.S. Dollars in thousands) At June 30, 2021 At December 31, 2020 Balance at the beginning of the year $ 17,106 $ 18,523 Costs incurred for dry docking 3,428 2,724 Costs allocated to drydocking as part of acquisition of asset — 3,040 Drydock amortization (3,948) (7,181) Balance at the end of the year $ 16,586 $ 17,106 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets | |
Intangible Assets | 11) Intangible Assets and Contract Liabilities (a) Intangible assets Above market Above market time charter time charter Total (U.S. Dollars in thousands) Tordis Knutsen Vigdis Knutsen intangibles Intangibles, December 31, 2019 $ 608 $ 678 $ 1,286 Amortization for the year (303) (302) (605) Intangibles, December 31, 2020 $ 305 $ 376 $ 681 Amortization for the period (152) (151) (303) Intangibles, June 30, 2021 $ 153 $ 225 $ 378 The intangible for the above-market value of the time charter contract associated with the Tordis Knutsen Vigdis Knutsen The estimated future amortization of intangible assets at June 30, 2021 is as follows: (U.S. Dollars in thousands) Remainder of 2021 303 2022 75 Total $ 378 (b) Contract Liabilities The unfavorable contractual rights for charters associated with Fortaleza Knutsen Recife Knutsen Fortaleza Knutsen Recife Knutsen Fortaleza Knutsen Recife Knutsen Amortization for Amortization for Balance of the year ended Balance of the six Months Balance of December 31, December 31, December 31, ended June 30, June 30, (U.S. Dollars in thousands) 2019 2020 2020 2021 2021 Contract liabilities: Unfavourable contract rights $ (5,203) $ 1,517 $ (3,686) $ 758 $ (2,928) Total amortization income $ 1,517 $ 758 Accumulated amortization for contract liabilities was $15.3 million and $14.5 million as of June 30, 2021 and December 31, 2020, respectively. The amortization of contract liabilities that is classified under time charter and bareboat revenues for the next five years is expected to be as follows: (U.S. Dollars in thousands) Remainder of 2021 759 2022 1,518 2023 651 2024 — 2025 — 2026 — Total $ 2,928 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2021 | |
Long-Term Debt | |
Long-Term Debt | 12) Long-Term Debt As of June 30, 2021 and December 31, 2020, the Partnership had the following debt amounts outstanding: June 30, December 31, (U.S. Dollars in thousands) Vessel 2021 2020 $320 million loan facility Windsor Knutsen, Bodil Knutsen, Carmen Knutsen, Fortaleza Knutsen, Recife Knutsen, Ingrid Knutsen $ 237,190 $ 252,245 $55 million revolving credit facility 5,000 34,279 Hilda loan facility Hilda Knutsen 75,385 78,462 Torill loan facility Torill Knutsen 78,333 81,667 $172.5 million loan facility Dan Cisne, Dan Sabia 52,140 58,340 Raquel loan facility Raquel Knutsen — 52,725 Tordis loan facility Tordis Knutsen 73,341 75,871 Vigdis loan facility Vigdis Knutsen 74,606 77,136 Lena loan facility Lena Knutsen 73,500 75,950 Brasil loan facility Brasil Knutsen 47,855 50,997 Anna loan facility Anna Knutsen 60,157 62,196 Tove loan facility Tove Knutsen 84,066 86,250 $25 million revolving credit facility with NTT 25,000 25,000 $25 million revolving credit facility with Shinsei 25,000 25,000 Raquel Sale & Leaseback Raquel Knutsen 91,638 — Total long-term debt $ 1,003,211 $ 1,036,118 Less: current installments 353,643 186,723 Less: unamortized deferred loan issuance costs 2,273 2,535 Current portion of long-term debt 351,370 184,188 Amounts due after one year 649,568 849,395 Less: unamortized deferred loan issuance costs 3,220 3,238 Long-term debt, less current installments, and unamortized deferred loan issuance costs $ 646,348 $ 846,157 The Partnership’s outstanding debt of $1,003.2 million as of June 30, 2021 is repayable as follows: (U.S. Dollars in thousands) Sale & Leaseback Period repayment Balloon repayment Total Remainder of 2021 $ 2,433 $ 43,142 $ 70,811 $ 116,386 2022 4,960 70,348 236,509 311,817 2023 5,177 54,672 230,906 290,755 2024 5,418 13,011 123,393 141,822 2025 5,640 3,276 65,506 74,422 2026 and thereafter 68,009 — — 68,009 Total $ 91,637 $ 184,449 $ 727,125 $ 1,003,211 As of June 30, 2021, the interest rates on the Partnership’s loan agreements were LIBOR plus a fixed margin ranging from 1.75% to 2.40%. On June 30, 2021, the Partnership’s subsidiary, KNOT Shuttle Tankers AS, which owns all of the Partnership’s vessel-owning entities, extended the maturity of its $25 million unsecured revolving facility with NTT Finance Corporation on unchanged terms. The extended facility matures in August 2023. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions | |
Related Party Transactions | 13) Related Party Transactions (a) Related Parties Net income (expense) from related parties included in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020 are as follows: Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Statements of operations: Time charter and bareboat revenues: Time charter income from KNOT (1) $ 1,866 $ 105 $ 1,866 $ 4,883 Operating expenses: Vessel operating expenses (2) 5,000 4,392 7,752 6,856 Technical and operational management fee from KNOT to Vessels (3) 2,106 1,703 4,214 3,406 Operating expenses from other related parties (4) 172 66 299 229 General and administrative expenses: Administration fee from KNOT Management (5) 379 244 666 474 Administration fee from KOAS (5) 201 165 395 323 Administration fee from KOAS UK (5) 19 31 37 61 Administration and management fee from KNOT (6) 20 40 29 85 Total income (expenses) $ (6,031) $ (6,536) $ (11,526) $ (6,551) At June 30, At December 31, (U.S. Dollars in thousands) 2021 2020 Balance Sheet: Vessels: Drydocking supervision fee from KNOT (7) $ 134 $ 47 Total $ 134 $ 47 (1) Time charter income from KNOT: On December 17, 2018, the Partnership's subsidiary that owns the Windsor Knutsen and Royal Dutch Shell ("Shell") agreed to suspend the vessel's time charter contract. The suspension period commenced March 4, 2019 and ended April 5, 2020, when the vessel was redelivered to Shell. During the suspension period, the Windsor Knutsen operated under a time charter contract with Knutsen Shuttle Tankers Pool AS on the same terms as the existing time charter contract with Shell. After completing its drydock in the second quarter of 2021, the Bodil Knutsen has operated under a time charter with Knutsen Shuttle Tankers Pool AS for an initial three-month period commencing on May 13, 2021 and then on a rolling one-month basis. (2) Vessel operating expenses: KNOT Management or KNOT Management Denmark provides technical and operational management of the vessels on time charter including crewing and crew training services. (3) Technical and operational management fee, from KNOT Management or KNOT Management Denmark to Vessels : KNOT Management or KNOT Management Denmark provides technical and operational management of the vessels on time charter including crewing, purchasing, maintenance and other operational service. In addition, there is also a charge for 24-hour emergency response services provided by KNOT Management for all vessels managed by KNOT Management. (4) Operating expenses from other related parties : Simsea Real Operations AS, a company jointly owned by the Partnership’s Chairman of the Board, Trygve Seglem, and by other third-party shipping companies in Haugesund, provides simulation, operational training assessment and other certified maritime courses for seafarers. The cost is course fees for seafarers. Knutsen OAS Crewing AS, a subsidiary of TSSI, provides administrative services related to East European crew on vessels operating on time charter contracts. The cost is a fixed fee per month per East European crew onboard the vessel. (5) Administration fee from KNOT Management, Knutsen OAS Shipping AS (“KOAS”) and Knutsen OAS (UK) Ltd. (“KOAS UK”) : Administration costs include compensation and benefits of KNOT Management’s management and administrative staff as well as other general and administration expenses. Some benefits are also provided by KOAS and KOAS UK . Net administration costs are total administration cost plus a 5% margin, reduced for the total fees for services delivered by the administration staffs and the estimated shareholder costs for KNOT that have not been allocated. As such, the level of net administration costs as a basis for the allocation can vary from year to year based on the administration and financing services offered by KNOT to all the vessels in its fleet each year. KNOT Management also charges each subsidiary a fixed annual fee for the preparation of the statutory financial statement. (6) Administration and management fee from KNOT Management and KNOT Management Denmark : For bareboat charters, the shipowner is not responsible for providing crewing or other operational services and the customer is responsible for all vessel operating expenses and voyage expenses. However, each of the vessels under bareboat charters is subject to a management and administration agreement with either KNOT Management or KNOT Management Denmark, pursuant to which these companies provide general monitoring services for the vessels in exchange for an annual fee. (7) Drydocking supervision fee from KNOT and KOAS : KNOT and KOAS provide supervision and hire out service personnel during drydocking of the vessels. The fee is calculated as a daily fixed fee. (b) Transactions with Management and Directors See the footnotes to Note 13(a)—Related Party Transactions for a discussion of transactions with management and directors included in the consolidated statements of operations. (c) Amounts Due from (to) Related Parties Balances with related parties consisted of the following: At June 30, At December 31, (U.S. Dollars in thousands) 2021 2020 Balance Sheet: Trading balances due from KOAS $ 55 $ 170 Trading balances due from KNOT and affiliates (1) 1,707 5,556 Amount due from related parties $ 1,762 $ 5,726 Trading balances due to KOAS $ 2,489 $ 1,596 Trading balances due to KNOT and affiliates 961 544 Amount due to related parties $ 3,450 $ 2,140 (1) On December 31, 2020, the Partnership's wholly owned subsidiary, KNOT Shuttle Tankers AS, acquired KNOT's 100% interest in KNOT Shuttle Tankers 34 AS ("KNOT 34"), the company that owns and operates the Tove Knutsen Trading balances due from KNOT and affiliates as of December 31, 2020 includes the post-closing settlement amount of $3.6 million related to the acquisition of the Tove Knutsen. Amounts due from (to) related parties are unsecured and intended to be settled in the ordinary course of business. The majority of these related party transactions relate to vessel management and other fees due to KNOT, KNOT Management, KOAS UK and KOAS. (d) Trade accounts payable Trade accounts payable to related parties are included in total trade accounts payable in the balance sheet. The balances to related parties consisted of the following: At June 30, At December 31, (U.S. Dollars in thousands) 2021 2020 Balance Sheet: Trading balances due to KOAS $ 920 $ 1,304 Trading balances due to KNOT and affiliates 522 902 Trade accounts payables to related parties $ 1,442 $ 2,206 Trading balances from KNOT and affiliates are included in other current assets in the balance sheet. The balances from related parties consisted of the following: At June 30, At December 31, (U.S. Dollars in thousands) 2021 2020 Balance Sheet: Trading balances due from KNOT and affiliates $ 893 $ 1,697 Trading balances due from KOAS 353 450 Other current assets from related parties $ 1,246 $ 2,147 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14) Commitments and Contingencies Assets Pledged As of June 30, 2021 and December 31, 2020, Vessels with a book value of $1,642 million and $1,709 million, respectively, were pledged as security held as guarantee for the Partnership’s long-term debt and interest rate swap obligations. See Note 7—Derivative Instruments, Note 10 - Vessels and Equipment and Note 12—Long-Term Debt. Claims and Legal Proceedings Under the Partnership's time charters, claims to reduce the hire rate payments can be made if the Vessel does not perform to certain specifications in the agreements. No accrual for possible claim was recorded for the period ended June 30, 2021 and the year ended December 31, 2020. From time to time, the Partnership is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the consolidated financial position, results of operations or cash flows. Insurance The Partnership maintains insurance on all the Vessels to insure against marine and war risks, which include damage to or total loss of the Vessels, subject to deductible amounts that average $0.15 million per Vessel, and loss of hire. Under the loss of hire policies, the insurer will pay a compensation for the lost hire rate agreed in respect of each Vessel for each day, in excess of 14 deductible days, for the time that the Vessel is out of service as a result of damage, for a maximum of 180 days. In addition, the Partnership maintains protection and indemnity insurance, which covers third-party legal liabilities arising in connection with the Vessels’ activities, including, among other things, the injury or death of third-party persons, loss or damage to cargo, claims arising from collisions with other vessels and other damage to other third-party property, including pollution arising from oil or other substances. This insurance is unlimited, except for pollution, which is limited to $1 billion per vessel per incident. The protection and indemnity insurance is maintained through a protection and indemnity association, and as a member of the association, the Partnership may be required to pay amounts above budgeted premiums if the member claims exceed association reserves, subject to certain reinsured amounts. If the Partnership experiences multiple claims each with individual deductibles, losses due to risks that are not insured or claims for insured risks that are not paid, it could have a material adverse effect on the Partnership’s results of operations and financial condition. Windsor Knutsen In December 2020, the Windsor Knutsen million, respectively, for loss of hire proceeds which were recorded as a component of total revenues since day rates are recovered under the terms of the policy. In addition, for the three and six months ended June 30, 2021, the Partnership recorded $2.5 million and $4.1 million, respectively, for recoveries up to the amount of loss under hull and machinery insurance for repairs as a result of the engine block damage to the Windsor Knutsen. Tove Knutsen In March 2021, the Tove Knutsen million, respectively, for loss of hire proceeds which were recorded as a component of total revenues since day rates are recovered under the terms of the policy. In addition, for the three and six months ended June 30, 2021, the Partnership recorded $0.3 million and $0.5 million respectively, for recoveries up to the amount of loss under hull and machinery insurance for repairs as a result of the leakage from the controllable pitch propeller to the Tove Knutsen. Bodil Knutsen In April 2021, the Bodil Knutsen |
Earnings per Unit and Cash Dist
Earnings per Unit and Cash Distributions | 6 Months Ended |
Jun. 30, 2021 | |
Earnings per Unit and Cash Distributions | |
Earnings per Unit and Cash Distributions | 15) Earnings per Unit and Cash Distributions The calculations of basic and diluted earnings per unit (1) are presented below: Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands, except per unit data) 2021 2020 2021 2020 Net income (loss) $ (10,925) $ 21,683 $ 17,216 $ 15,544 Less: Series A Preferred unitholders’ interest in net income 1,759 1,800 3,559 3,600 Net income attributable to the unitholders of KNOT Offshore Partners LP (12,684) 19,883 13,657 11,944 Less: Distributions (2) 18,150 18,034 36,184 36,068 Under (over) distributed earnings (30,834) 1,849 (22,527) (24,124) Under (over) distributed earnings attributable to: Common unitholders (3) (30,268) 1,815 (22,114) (23,679) General Partner (566) 34 (413) (445) Weighted average units outstanding (basic) (in thousands): Common unitholders 32,782 32,694 32,738 32,694 General Partner 615 615 615 615 Weighted average units outstanding (diluted) (in thousands): Common unitholders (4) 36,619 36,596 36,594 36,648 General Partner 615 615 615 615 Earnings per unit (basic) Common unitholders $ (0.38) $ 0.60 $ 0.41 $ 0.36 General Partner (0.38) 0.60 0.41 0.36 Earnings per unit (diluted): Common unitholders (4) $ (0.38) $ 0.58 $ 0.41 $ 0.36 General Partner (0.38) 0.60 0.41 0.36 Cash distributions declared and paid in the period per unit (5) 0.52 0.52 1.04 1.04 Subsequent event: Cash distributions declared and paid per unit relating to the period (6) 0.52 0.52 1.04 1.04 (1) Earnings per unit have been calculated in accordance with the cash distribution provisions set forth in the Partnership Agreement. (2) This refers to distributions made or to be made in relation to the period irrespective of the declaration and payment dates and based on the number of units outstanding at the record date. This includes cash distributions to the IDR holder (KNOT) for the three months ended June 30, 2021 and 2020 of $0.7 million and for the six months ended June 30, 2021 and 2020 of $1.4 million. (3) This includes the net income attributable to the IDR holder. The net income attributable to IDRs for the three months ended June 30, 2021 and 2020 was $0.7 million and for the six months ended June 30, 2021 and 2020 was $1.4 . (4) Diluted weighted average units outstanding and earnings per unit diluted for the three and six months ended June 30, 2021 and 2020 does not reflect any potential common shares relating to the convertible preferred units since the assumed issuance of any additional shares would be anti-dilutive. (5) Refers to cash distributions declared and paid during the period. (6) Refers to cash distributions declared and paid subsequent to the period end. On May 27, 2021, Tortoise Direct Opportunities Fund LP, the holder of 416,677 of the Partnership’s Series A Convertible Preferred Units, sold 208,333 of its Series A Preferred Units to KNOT and converted 208,334 Series A Preferred Units to 215,292 common units based on a conversion rate of 1.0334. As of June 30, 2021, 73.7% of the Partnership’s total number of common units outstanding representing limited partner interests were held by the public (in the form of 24,251,518 common units) and 26.0% of such units were held directly by KNOT (in the form of 8,567,500 common units). In addition, KNOT, through its ownership of the General Partner, held a 1.83% general partner interest (in the form of 615,117 general partner units) and a 0.3% limited partner interest (in the form of 90,368 common units). KNOT also holds 208,333 Series A Preferred Units. Earnings per unit – basic is determined by dividing net income, after deducting the amount of net income attributable to the Series A Preferred Units and the distribution paid or to be made in relation to the period, by the weighted-average number of units outstanding during the applicable period. The computation of limited partners’ interest in net income per common unit – diluted assumes the issuance of common units for all potentially dilutive securities consisting of 3,541,666 Series A Preferred Units. Consequently, the net income attributable to limited partners’ interest is exclusive of any distributions on the Series A Preferred Units. In addition, the weighted average number of common units outstanding has been increased assuming the Series A Preferred Units have been converted to common units using the if-converted method. The computation of limited partners’ interest in net income per common unit – diluted does not assume the issuance of Series A Preferred Units if the effect would be anti-dilutive. The General Partner’s and common unitholders’ interest in net income was calculated as if all net income was distributed according to the terms of the Partnership Agreement, regardless of whether those earnings would or could be distributed. The Partnership Agreement does not provide for the distribution of net income. Rather, it provides for the distribution of available cash, which is a contractually defined term that generally means all cash on hand at the end of each quarter less the amount of cash reserves established by the Board to provide for the proper conduct of the Partnership’s business, including reserves for maintenance and replacement capital expenditures, anticipated credit needs and capital requirements and any accumulated distributions on, or redemptions of, the Series A Preferred Units. In addition, KNOT, as the initial holder of all IDRs, has the right, at the time when it has received incentive distributions at the highest level to which it is entitled (48.0% for each of the prior four consecutive fiscal quarters), to reset the initial cash target distribution levels at higher levels based on the distribution at the time of the exercise of the reset election. Unlike available cash, net income is affected by non-cash items, such as depreciation and amortization, unrealized gains and losses on derivative instruments and unrealized foreign currency gains and losses. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2021 | |
Acquisitions | |
Acquisitions | 16) Acquisitions In December 2020, the Partnership acquired from KNOT equity interests in the subsidiary which owns and operates the Tove Knutsen. The Board and the Conflicts Committee approved the purchase price for the transaction. The Conflicts Committee retained a financial advisor to assist with its evaluation of the transaction. The detail of the transaction are as follows: Final Tove Knutsen December 31, (U.S. Dollars in thousands) 2020 Purchase consideration (1) $ 21,898 Less: Fair value of net assets acquired: Vessels and equipment (2) 117,978 Intangibles: Above market time charter — Cash 804 Inventories 136 Derivatives assets (liabilities) (3,537) Others current assets 270 Amounts due from related parties — Long-term debt (93,139) Long-term debt from related parties — Deferred debt issuane 769 Trade accounts payable (430) Accrued expenses (622) Amounts due to related parties (331) Subtotal 21,898 Difference between the purchase price and fair value of net assets acquired $ — (1) The purchase consideration comprises the following: Final ToveKnutsen December 31, (U.S. Dollars in thousands) 2020 Cash consideration paid to KNOT (from KNOP) $ 25,430 Purchase price adjustments (3,596) Acquisition-related costs 64 Purchase price $ 21,898 (2) Vessel and Equipment includes allocations to dry docking (in thousands) of $3,040 . |
Unit Activity
Unit Activity | 6 Months Ended |
Jun. 30, 2021 | |
Unit Activity | |
Unit Activity | 17) Unit Activity The following table shows the movement in number of common units, general partner units and Series A Preferred Units from December 31, 2020 until June 30, 2021. (in units) Common Units General Partner Units Convertible Preferred Units December 31, 2020 32,694,094 615,117 3,750,000 May 27, 2021: Conversion of Series A Preferred Units 215,292 — (208,334) June 30, 2021 32,909,386 615,117 3,541,666 On May 27, 2021 Tortoise Direct Opportunities Fund LP, the holder of 416,677 of the Partnership’s Series A Convertible Preferred Units sold 208,333 of its Series A Preferred Units to KNOT and converted 208,334 Series A Preferred Units to 215,292 common units based on with a Series A conversion rate of 1.0334. |
Trade Accounts Receivable and O
Trade Accounts Receivable and Other Current Assets | 6 Months Ended |
Jun. 30, 2021 | |
Trade Accounts Receivable and Other Current Assets | |
Trade Accounts Receivable and Other Current Assets | 18) Trade Accounts Receivable and Other Current Assets (a) Trade Accounts Receivable Trade accounts receivables are presented net of provisions for expected credit loss. As of June 30, 2021 and December 31, 2020, there were no provision for expected credit loss. (b) Other Current Assets The following table presents other currents assets of June 30, 2021 and December 31, 2020: (U.S. Dollars in thousands) At June 30, 2021 At December 31, 2020 Insurance claims for recoveries 7,477 — Refund of value added tax 1,762 1,429 Prepaid expenses 1,392 1,050 Other receivables 3,750 3,032 Total other current assets $ 14,381 $ 5,511 |
Write-Down of Long-Lived Assets
Write-Down of Long-Lived Assets | 6 Months Ended |
Jun. 30, 2021 | |
Write-Down of Long-Lived Assets | |
Write-Down of Long-Lived Assets | 19) Write-Down of Long-Lived Assets The carrying value of the Partnership’s fleet is regularly assessed as events or changes in circumstances may indicate that a vessel’s net carrying value exceeds the net undiscounted cash flows expected to be generated over its remaining useful life, and in such situation the carrying amount of the vessel is reduced to its estimated fair value. The Partnership considers factors related to vessel age, expected residual value, ongoing use of the vessels and equipment, shifts in market conditions and other impacting factors associated with the global oil and maritime transportation industries. This exercise in the second quarter of 2021 resulted in a write-down in respect of the Windsor Knutsen Windsor Knutsen Windsor Knutsen |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events | |
Subsequent Events | 20) Subsequent Events The Partnership has evaluated subsequent events from the balance sheet date through August 26, 2021, the date at which the unaudited condensed consolidated interim financial statements were available to be issued, and determined that there are no other items to disclose, except as follows: On August 12, 2021, the Partnership paid a quarterly cash distribution of $0.52 per common unit with respect to the quarter ended June 30, 2021 to all common unitholders of record on July 29, 2021. On August 12, 2021, the Partnership paid a cash distribution to holders of Series A Convertible Preferred Units (“Series A Preferred Units”) with respect to the quarter ended June 30, 2021 in an aggregate amount equal to $1.7 million. On August 25, 2021 the Partnership’s subsidiaries that own the Tordis Knutsen Vigdis Knutsen Lena Knutsen Anna Knutsen Brasil Knutsen on the vessels. The senior secured credit facilities will refinance the previously existing term loans related to these vessels which were due to mature between November 2021 and July 2022. Closing of the senior secured credit facility is anticipated to occur in September 2021. On August 26, 2021, the Partnership entered into a sales agreement with B. Riley Securities, Inc. (the “Agent”). Under the terms of the at the market sales agreement, the Partnership may offer and sell up to $100 million of common units under the ATM program (the “ATM program”), from time to time, through the Agent. The Partnership intends to use the net proceeds of any sales of common units for general partnership purposes, which may include, among other things, the repayment of indebtedness or the funding of acquisitions or other capital expenditures. After the balance sheet date, there continues to be significant macroeconomic uncertainty as a result of the Coronavirus (COVID-19) outbreak. The scale and duration of this development remains uncertain and could materially impact the Partnership's earnings and cash flow. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Preparation | (a) Basis of Preparation The accompanying unaudited condensed consolidated interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. In the opinion of management of the Partnership, all adjustments considered necessary for a fair presentation, which are of normal recurring nature, have been included. All intercompany balances and transactions are eliminated. The unaudited condensed consolidated financial statements do not include all the disclosures and information required for a complete set of annual financial statements; and, therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements for the year ended December 31, 2020, which are included in the Partnership’s Annual Report on Form 20-F (the “2020 20-F”). |
Significant Accounting Policies | (b) Significant Accounting Policies The accounting policies adopted in the preparation of the unaudited condensed consolidated interim financial statements are consistent with those followed in the preparation of the Partnership’s audited consolidated financial statements for the year ended December 31, 2020, as contained in the Partnership’s 2020 20-F. |
Vessels and Equipment | Vessels and Equipment Historically, the useful life of the Partnership’s vessels and equipment was assessed as 25 years commencing from the date the vessel and equipment were delivered from the shipyard. As of June 30, 2021, the Partnership has considered factors related to the ongoing use of the vessels and equipment, gradual shifts in market conditions and other long-term factors associated with the global oil and maritime transportation industries and based on this has reassessed the useful life as being 23 years. This change in estimate will be applied prospectively from July 1, 2021 and impacts the entire fleet of shuttle tanker vessels. The change in estimate did however not impact income, net income nor earnings per share basic and diluted for the three and six months ended June 30, 2021. |
Recent Accounting Pronouncements | (c) Recent Accounting Pronouncements Adoption of new accounting standards No new accounting standards have recently been adopted. Accounting pronouncements not yet adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The update provides temporary optional expedients and exceptions to the guidance in US GAAP on contract modifications and hedge accounting, to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. For all types of hedging relationships, the guidance allows an entity to change the reference rate and other critical terms related to reference rate reform without having to dedesignate the relationship. The guidance is effective upon issuance through December 31, 2022. Although the Partnership does not apply hedge accounting, the Partnership has debt and interest rate swaps that reference LIBOR. The Partnership is evaluating the impact of the guidance on the consolidated financial statements. Other recently issued accounting pronouncements are not expected to materially impact the Partnership. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Information | |
Schedule consolidated revenues and percentages of revenues for customers | Three Months Ended June 30, Six Months Ended June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Eni Trading and Shipping S.p.A. $ 10,915 16 % $ 10,953 16 % $ 21,748 16 % $ 22,088 16 % Fronape International Company, a subsidiary of Petrobras Transporte S.A. 11,249 17 % 11,249 16 % 22,378 17 % 22,498 16 % Repsol Sinopec Brasil, S.A., a subsidiary of Repsol Sinopec Brasil, B.V. 9,282 14 % 9,285 13 % 18,075 14 % 15,178 11 % Brazil Shipping I Limited, a subsidiary of Royal Dutch Shell 16,168 24 % 20,512 29 % 32,156 24 % 41,236 30 % Galp Sinopec Brasil Services B.V. 8,881 13 % 8,881 13 % 17,665 13 % 17,763 13 % |
Operating Leases (Tables)
Operating Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Operating Leases | |
Schedule of Partnership's revenues by time charter and bareboat charters and other revenues | Three Months Ended June 30, Six Months Ended June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Time charter revenues (service element included) $ 55,264 $ 59,001 $ 109,733 $ 114,978 Bareboat revenues 11,249 11,249 22,378 22,498 Other revenues (loss of hire insurance recoveries and other income) 4,424 9 10,307 607 Total revenues $ 70,937 $ 70,259 $ 142,418 $ 138,083 |
Schedule of minimum contractual future revenues | (U.S. Dollars in thousands) 2021 (excluding the six months ended June 30, 2021) $ 131,436 2022 184,259 2023 99,805 2024 102,560 2025 76,916 2026 and thereafter 46,775 Total $ 641,751 |
Schedule of maturity analysis of partnership's lease liabilities | A maturity analysis of the Partnership’s lease liabilities from leased-in equipment as of June 30, 2021 is as follows: (U.S. Dollars in thousands) 2021 (excluding the six months ended June 30, 2021) $ 352 2022 703 2023 703 2024 703 2025 703 2026 and thereafter 59 Total $ 3,223 Less imputed interest 163 Carrying value of operating lease liabilities $ 3,060 |
Other Finance Expenses (Tables)
Other Finance Expenses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Finance Expenses | |
Schedule of components of interest cost | Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Interest expense $ 6,148 $ 7,886 $ 12,418 $ 17,712 Amortization of debt issuance cost and fair value of debt assumed 656 626 1,758 1,262 Total interest cost $ 6,804 $ 8,512 $ 14,176 $ 18,974 |
Schedule of components of other finance expense | Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Bank fees, charges $ 132 $ 137 $ 215 $ 184 Commitment fees 118 62 194 123 Total other finance expense $ 250 $ 199 $ 409 $ 307 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments | |
Schedule of realized and unrealized gains and losses recognized in earnings | Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Realized gain (loss): Interest rate swap contracts $ (2,087) $ (191) $ (5,996) $ 12 Foreign exchange forward contracts — (109) — (109) Total realized gain (loss): (2,087) (300) (5,996) (97) Unrealized gain (loss): Interest rate swap contracts (178) (3,457) 11,742 (26,438) Foreign exchange forward contracts — 665 — (247) Total unrealized gain (loss): (178) (2,792) 11,742 (26,685) Total realized and unrealized gain (loss) on derivative instruments: $ (2,265) $ (3,092) $ 5,746 $ (26,782) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements | |
Carrying amounts and estimated fair values of financial instruments | June 30, 2021 December 31, 2020 Carrying Fair Carrying Fair (U.S. Dollars in thousands) Amount Value Amount Value Recurring: Financial assets: Cash and cash equivalents $ 51,589 $ 51,589 $ 52,583 $ 52,583 Non-current derivative assets: Interest rate swap contracts 168 168 — — Financial liabilities: Current derivative liabilities: Interest rate swap contracts 9,984 9,984 10,695 10,695 Non-current derivative liabilities: Interest rate swap contracts 8,495 8,495 19,358 19,358 Long-term debt, current and non-current 1,003,211 1,003,211 1,036,118 1,036,118 Non-Recurring: Non-current assets: Vessel 48,156 48,156 — — |
Schedule of assets and liabilities measured at fair value on recurring basis | Fair Value Measurements at Reporting Date Using Quoted Price in Active Significant Carrying Markets for Other Significant Value Identical Observable Unobservable June 30, Assets Inputs Inputs (U.S. Dollars in thousands) 2021 (Level 1) (Level 2) (Level 3) Recurring: Financial assets: Cash and cash equivalents $ 51,589 $ 51,589 $ — $ — Current derivative assets: Interest rate swap contracts 168 — 168 — Financial liabilities: Non-current derivative liabilities: Interest rate swap contracts 9,984 — 9,984 — Non-current derivative liabilities: Interest rate swap contracts 8,495 — 8,495 — Long-term debt, current and non-current 1,003,211 — 1,003,211 — Non-Recurring: Non-current assets: Vessel 48,156 — — 48,156 Fair Value Measurements at Reporting Date Using Quoted Price in Active Significant Carrying Markets for Other Significant Value Identical Observable Unobservable December 31, Assets Inputs Inputs (U.S. Dollars in thousands) 2020 (Level 1) (Level 2) (Level 3) Financial assets: Cash and cash equivalents $ 52,583 $ 52,583 $ — $ — Current derivative assets: Interest rate swap contracts — — — — Foreign exchange forward contracts — — — — Non-current derivative assets: Interest rate swap contracts — — — — Financial liabilities: Current derivative liabilities: Interest rate swap contracts 10,695 — 10,695 — Non-current derivative liabilities: Interest rate swap contracts 19,358 — 19,358 — Long-term debt, current and non-current 1,036,118 — 1,036,118 — |
Schedule of valuation techniques and significant unobservable inputs used in the valuation of Level 3 assets measured at fair value on a non-recurring basis | Significant Fair unobservable (U.S. Dollars in thousands) Value Valuation technique inputs: WACC (1) Non-Recurring: Non-current assets: Windsor Knutsen $ 48,156 Discounted cash flow Discount rate 6.38 % |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Income Taxes | |
Significant Components of Current and Deferred Income Tax Expense Attributable to Income from Continuing Operations | Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Income before income taxes $ (10,664) $ 21,686 $ 17,480 $ 15,550 Income tax (expense) (261) (3) (264) (6) Effective tax rate $ 2 % $ 0 % $ (2) % $ 0 % |
Summary of Taxation | Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Income tax benefit (expense) - Norwegian tonnage tax $ (258) $ — $ (258) $ — Income tax benefit (expense) - UK (3) (3) (6) (6) Income tax benefit (expense) $ (261) $ (3) $ (264) $ (6) Effective tax rate 2 % 0 % (2) % 0 % |
Vessels and Equipment (Tables)
Vessels and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Vessels and Equipment | |
Schedule of vessels and equipment | Vessels & Accumulated Accumulated write (U.S. Dollars in thousands) equipment depreciation down Net Vessels Vessels, December 31, 2019 $ 2,129,012 $ (451,524) $ — $ 1,677,488 Additions 115,277 — — 115,277 Drydock costs 5,764 — — 5,764 Disposals — — — — Depreciation for the year — (89,743) — (89,743) Vessels, December 31, 2020 $ 2,250,053 $ (541,267) $ — $ 1,708,786 Additions (1) 6,748 — — 6,748 Drydock costs 3,428 — — 3,428 Disposals (2,641) 2,641 — — Depreciation and write down for the period (2) — (47,515) (29,421) (76,936) Vessels, June 30, 2021 $ 2,257,588 $ (586,141) $ (29,421) $ 1,642,026 |
Schedule of drydocking activity | (U.S. Dollars in thousands) At June 30, 2021 At December 31, 2020 Balance at the beginning of the year $ 17,106 $ 18,523 Costs incurred for dry docking 3,428 2,724 Costs allocated to drydocking as part of acquisition of asset — 3,040 Drydock amortization (3,948) (7,181) Balance at the end of the year $ 16,586 $ 17,106 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets | |
Schedule of intangible assets | Above market Above market time charter time charter Total (U.S. Dollars in thousands) Tordis Knutsen Vigdis Knutsen intangibles Intangibles, December 31, 2019 $ 608 $ 678 $ 1,286 Amortization for the year (303) (302) (605) Intangibles, December 31, 2020 $ 305 $ 376 $ 681 Amortization for the period (152) (151) (303) Intangibles, June 30, 2021 $ 153 $ 225 $ 378 |
Summary of estimated future amortization of intangible assets | (U.S. Dollars in thousands) Remainder of 2021 303 2022 75 Total $ 378 |
Schedule of contract liabilities | Amortization for Amortization for Balance of the year ended Balance of the six Months Balance of December 31, December 31, December 31, ended June 30, June 30, (U.S. Dollars in thousands) 2019 2020 2020 2021 2021 Contract liabilities: Unfavourable contract rights $ (5,203) $ 1,517 $ (3,686) $ 758 $ (2,928) Total amortization income $ 1,517 $ 758 |
Schedule of expected amortization of contract liabilities | (U.S. Dollars in thousands) Remainder of 2021 759 2022 1,518 2023 651 2024 — 2025 — 2026 — Total $ 2,928 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Long-Term Debt | |
Schedule of long-term debt | June 30, December 31, (U.S. Dollars in thousands) Vessel 2021 2020 $320 million loan facility Windsor Knutsen, Bodil Knutsen, Carmen Knutsen, Fortaleza Knutsen, Recife Knutsen, Ingrid Knutsen $ 237,190 $ 252,245 $55 million revolving credit facility 5,000 34,279 Hilda loan facility Hilda Knutsen 75,385 78,462 Torill loan facility Torill Knutsen 78,333 81,667 $172.5 million loan facility Dan Cisne, Dan Sabia 52,140 58,340 Raquel loan facility Raquel Knutsen — 52,725 Tordis loan facility Tordis Knutsen 73,341 75,871 Vigdis loan facility Vigdis Knutsen 74,606 77,136 Lena loan facility Lena Knutsen 73,500 75,950 Brasil loan facility Brasil Knutsen 47,855 50,997 Anna loan facility Anna Knutsen 60,157 62,196 Tove loan facility Tove Knutsen 84,066 86,250 $25 million revolving credit facility with NTT 25,000 25,000 $25 million revolving credit facility with Shinsei 25,000 25,000 Raquel Sale & Leaseback Raquel Knutsen 91,638 — Total long-term debt $ 1,003,211 $ 1,036,118 Less: current installments 353,643 186,723 Less: unamortized deferred loan issuance costs 2,273 2,535 Current portion of long-term debt 351,370 184,188 Amounts due after one year 649,568 849,395 Less: unamortized deferred loan issuance costs 3,220 3,238 Long-term debt, less current installments, and unamortized deferred loan issuance costs $ 646,348 $ 846,157 |
Schedule of partnership's outstanding debt repayable | The Partnership’s outstanding debt of $1,003.2 million as of June 30, 2021 is repayable as follows: (U.S. Dollars in thousands) Sale & Leaseback Period repayment Balloon repayment Total Remainder of 2021 $ 2,433 $ 43,142 $ 70,811 $ 116,386 2022 4,960 70,348 236,509 311,817 2023 5,177 54,672 230,906 290,755 2024 5,418 13,011 123,393 141,822 2025 5,640 3,276 65,506 74,422 2026 and thereafter 68,009 — — 68,009 Total $ 91,637 $ 184,449 $ 727,125 $ 1,003,211 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions | |
Schedule of Related Party Costs and Expenses | Net income (expense) from related parties included in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020 are as follows: Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands) 2021 2020 2021 2020 Statements of operations: Time charter and bareboat revenues: Time charter income from KNOT (1) $ 1,866 $ 105 $ 1,866 $ 4,883 Operating expenses: Vessel operating expenses (2) 5,000 4,392 7,752 6,856 Technical and operational management fee from KNOT to Vessels (3) 2,106 1,703 4,214 3,406 Operating expenses from other related parties (4) 172 66 299 229 General and administrative expenses: Administration fee from KNOT Management (5) 379 244 666 474 Administration fee from KOAS (5) 201 165 395 323 Administration fee from KOAS UK (5) 19 31 37 61 Administration and management fee from KNOT (6) 20 40 29 85 Total income (expenses) $ (6,031) $ (6,536) $ (11,526) $ (6,551) At June 30, At December 31, (U.S. Dollars in thousands) 2021 2020 Balance Sheet: Vessels: Drydocking supervision fee from KNOT (7) $ 134 $ 47 Total $ 134 $ 47 (1) Time charter income from KNOT: On December 17, 2018, the Partnership's subsidiary that owns the Windsor Knutsen and Royal Dutch Shell ("Shell") agreed to suspend the vessel's time charter contract. The suspension period commenced March 4, 2019 and ended April 5, 2020, when the vessel was redelivered to Shell. During the suspension period, the Windsor Knutsen operated under a time charter contract with Knutsen Shuttle Tankers Pool AS on the same terms as the existing time charter contract with Shell. After completing its drydock in the second quarter of 2021, the Bodil Knutsen has operated under a time charter with Knutsen Shuttle Tankers Pool AS for an initial three-month period commencing on May 13, 2021 and then on a rolling one-month basis. (2) Vessel operating expenses: KNOT Management or KNOT Management Denmark provides technical and operational management of the vessels on time charter including crewing and crew training services. (3) Technical and operational management fee, from KNOT Management or KNOT Management Denmark to Vessels : KNOT Management or KNOT Management Denmark provides technical and operational management of the vessels on time charter including crewing, purchasing, maintenance and other operational service. In addition, there is also a charge for 24-hour emergency response services provided by KNOT Management for all vessels managed by KNOT Management. (4) Operating expenses from other related parties : Simsea Real Operations AS, a company jointly owned by the Partnership’s Chairman of the Board, Trygve Seglem, and by other third-party shipping companies in Haugesund, provides simulation, operational training assessment and other certified maritime courses for seafarers. The cost is course fees for seafarers. Knutsen OAS Crewing AS, a subsidiary of TSSI, provides administrative services related to East European crew on vessels operating on time charter contracts. The cost is a fixed fee per month per East European crew onboard the vessel. (5) Administration fee from KNOT Management, Knutsen OAS Shipping AS (“KOAS”) and Knutsen OAS (UK) Ltd. (“KOAS UK”) : Administration costs include compensation and benefits of KNOT Management’s management and administrative staff as well as other general and administration expenses. Some benefits are also provided by KOAS and KOAS UK . Net administration costs are total administration cost plus a 5% margin, reduced for the total fees for services delivered by the administration staffs and the estimated shareholder costs for KNOT that have not been allocated. As such, the level of net administration costs as a basis for the allocation can vary from year to year based on the administration and financing services offered by KNOT to all the vessels in its fleet each year. KNOT Management also charges each subsidiary a fixed annual fee for the preparation of the statutory financial statement. (6) Administration and management fee from KNOT Management and KNOT Management Denmark : For bareboat charters, the shipowner is not responsible for providing crewing or other operational services and the customer is responsible for all vessel operating expenses and voyage expenses. However, each of the vessels under bareboat charters is subject to a management and administration agreement with either KNOT Management or KNOT Management Denmark, pursuant to which these companies provide general monitoring services for the vessels in exchange for an annual fee. (7) Drydocking supervision fee from KNOT and KOAS : KNOT and KOAS provide supervision and hire out service personnel during drydocking of the vessels. The fee is calculated as a daily fixed fee. |
Schedule of amounts due from and due to related parties | At June 30, At December 31, (U.S. Dollars in thousands) 2021 2020 Balance Sheet: Trading balances due from KOAS $ 55 $ 170 Trading balances due from KNOT and affiliates (1) 1,707 5,556 Amount due from related parties $ 1,762 $ 5,726 Trading balances due to KOAS $ 2,489 $ 1,596 Trading balances due to KNOT and affiliates 961 544 Amount due to related parties $ 3,450 $ 2,140 (1) On December 31, 2020, the Partnership's wholly owned subsidiary, KNOT Shuttle Tankers AS, acquired KNOT's 100% interest in KNOT Shuttle Tankers 34 AS ("KNOT 34"), the company that owns and operates the Tove Knutsen Trading balances due from KNOT and affiliates as of December 31, 2020 includes the post-closing settlement amount of $3.6 million related to the acquisition of the Tove Knutsen. |
Schedule of other current asset balances from related parties | At June 30, At December 31, (U.S. Dollars in thousands) 2021 2020 Balance Sheet: Trading balances due from KNOT and affiliates $ 893 $ 1,697 Trading balances due from KOAS 353 450 Other current assets from related parties $ 1,246 $ 2,147 |
Schedule of Trade Accounts Payable to Related Parties | At June 30, At December 31, (U.S. Dollars in thousands) 2021 2020 Balance Sheet: Trading balances due to KOAS $ 920 $ 1,304 Trading balances due to KNOT and affiliates 522 902 Trade accounts payables to related parties $ 1,442 $ 2,206 |
Earnings per Unit and Cash Di_2
Earnings per Unit and Cash Distributions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings per Unit and Cash Distributions | |
Schedule of calculations of basic and diluted earnings per unit | Three Months Ended Six Months Ended June 30, June 30, (U.S. Dollars in thousands, except per unit data) 2021 2020 2021 2020 Net income (loss) $ (10,925) $ 21,683 $ 17,216 $ 15,544 Less: Series A Preferred unitholders’ interest in net income 1,759 1,800 3,559 3,600 Net income attributable to the unitholders of KNOT Offshore Partners LP (12,684) 19,883 13,657 11,944 Less: Distributions (2) 18,150 18,034 36,184 36,068 Under (over) distributed earnings (30,834) 1,849 (22,527) (24,124) Under (over) distributed earnings attributable to: Common unitholders (3) (30,268) 1,815 (22,114) (23,679) General Partner (566) 34 (413) (445) Weighted average units outstanding (basic) (in thousands): Common unitholders 32,782 32,694 32,738 32,694 General Partner 615 615 615 615 Weighted average units outstanding (diluted) (in thousands): Common unitholders (4) 36,619 36,596 36,594 36,648 General Partner 615 615 615 615 Earnings per unit (basic) Common unitholders $ (0.38) $ 0.60 $ 0.41 $ 0.36 General Partner (0.38) 0.60 0.41 0.36 Earnings per unit (diluted): Common unitholders (4) $ (0.38) $ 0.58 $ 0.41 $ 0.36 General Partner (0.38) 0.60 0.41 0.36 Cash distributions declared and paid in the period per unit (5) 0.52 0.52 1.04 1.04 Subsequent event: Cash distributions declared and paid per unit relating to the period (6) 0.52 0.52 1.04 1.04 (1) Earnings per unit have been calculated in accordance with the cash distribution provisions set forth in the Partnership Agreement. (2) This refers to distributions made or to be made in relation to the period irrespective of the declaration and payment dates and based on the number of units outstanding at the record date. This includes cash distributions to the IDR holder (KNOT) for the three months ended June 30, 2021 and 2020 of $0.7 million and for the six months ended June 30, 2021 and 2020 of $1.4 million. (3) This includes the net income attributable to the IDR holder. The net income attributable to IDRs for the three months ended June 30, 2021 and 2020 was $0.7 million and for the six months ended June 30, 2021 and 2020 was $1.4 . (4) Diluted weighted average units outstanding and earnings per unit diluted for the three and six months ended June 30, 2021 and 2020 does not reflect any potential common shares relating to the convertible preferred units since the assumed issuance of any additional shares would be anti-dilutive. (5) Refers to cash distributions declared and paid during the period. (6) Refers to cash distributions declared and paid subsequent to the period end. On May 27, 2021, Tortoise Direct Opportunities Fund LP, the holder of 416,677 of the Partnership’s Series A Convertible Preferred Units, sold 208,333 of its Series A Preferred Units to KNOT and converted 208,334 Series A Preferred Units to 215,292 common units based on a conversion rate of 1.0334. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Acquisitions | |
Schedule of purchase price for the transaction | Final Tove Knutsen December 31, (U.S. Dollars in thousands) 2020 Purchase consideration (1) $ 21,898 Less: Fair value of net assets acquired: Vessels and equipment (2) 117,978 Intangibles: Above market time charter — Cash 804 Inventories 136 Derivatives assets (liabilities) (3,537) Others current assets 270 Amounts due from related parties — Long-term debt (93,139) Long-term debt from related parties — Deferred debt issuane 769 Trade accounts payable (430) Accrued expenses (622) Amounts due to related parties (331) Subtotal 21,898 Difference between the purchase price and fair value of net assets acquired $ — (1) The purchase consideration comprises the following: Final ToveKnutsen December 31, (U.S. Dollars in thousands) 2020 Cash consideration paid to KNOT (from KNOP) $ 25,430 Purchase price adjustments (3,596) Acquisition-related costs 64 Purchase price $ 21,898 (2) Vessel and Equipment includes allocations to dry docking (in thousands) of $3,040 . |
Unit activity (Tables)
Unit activity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Unit Activity | |
Schedule of movement in number of common units, general partner units and Series A Preferred Units | The following table shows the movement in number of common units, general partner units and Series A Preferred Units from December 31, 2020 until June 30, 2021. (in units) Common Units General Partner Units Convertible Preferred Units December 31, 2020 32,694,094 615,117 3,750,000 May 27, 2021: Conversion of Series A Preferred Units 215,292 — (208,334) June 30, 2021 32,909,386 615,117 3,541,666 |
Trade Accounts Receivable and_2
Trade Accounts Receivable and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Trade Accounts Receivable and Other Current Assets | |
Schedule of Other Current Assets | (U.S. Dollars in thousands) At June 30, 2021 At December 31, 2020 Insurance claims for recoveries 7,477 — Refund of value added tax 1,762 1,429 Prepaid expenses 1,392 1,050 Other receivables 3,750 3,032 Total other current assets $ 14,381 $ 5,511 |
Description of Business (Detail
Description of Business (Details) $ in Millions | 1 Months Ended | |||
Apr. 30, 2013item | Aug. 26, 2021USD ($) | Jun. 30, 2021item | Dec. 31, 2020item | |
Description of Business | ||||
Ownership interest in shuttle tankers acquired at formation (as a percent) | 100.00% | |||
Number of shuttle tankers acquired at formation | 4 | |||
Number of operating vessels | 17 | 16 | ||
Undrawn portion of revolving credit facilities | $ | $ 50 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2021 | |
Vessels and Equipment | |
Asset's estimated useful life | 25 years |
Change in Accounting Method Accounted for as Change in Estimate [Member] | |
Vessels and Equipment | |
Asset's estimated useful life | 23 years |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($)item | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)segmentitem | Jun. 30, 2020USD ($) | Dec. 31, 2020item | |
Segment Information | |||||
Revenues | $ 70,937 | $ 70,259 | $ 142,418 | $ 138,083 | |
Number Of Vessels | item | 17 | 17 | 16 | ||
Number of reportable segments | segment | 1 | ||||
Eni Trading and Shipping S.p.A. | |||||
Segment Information | |||||
Revenues | $ 10,915 | 10,953 | $ 21,748 | 22,088 | |
Fronape International Company, a subsidiary of Petrobras Transporte S.A. | |||||
Segment Information | |||||
Revenues | 11,249 | 11,249 | 22,378 | 22,498 | |
Repsol Sinopec Brasil, S.A., a subsidiary of Repsol Sinopec Brasil, B.V. | |||||
Segment Information | |||||
Revenues | 9,282 | 9,285 | 18,075 | 15,178 | |
Brazil Shipping I Limited, a subsidiary of Royal Dutch Shell | |||||
Segment Information | |||||
Revenues | 16,168 | 20,512 | 32,156 | 41,236 | |
Galp Sinopec Brasil Services B.V. | |||||
Segment Information | |||||
Revenues | $ 8,881 | $ 8,881 | $ 17,665 | $ 17,763 | |
Revenues [Member] | Eni Trading and Shipping S.p.A. | Customer Concentration Risk [Member] | |||||
Segment Information | |||||
Benchmark percentage of revenues and combined revenues concentration | 16.00% | 16.00% | 16.00% | 16.00% | |
Revenues [Member] | Fronape International Company, a subsidiary of Petrobras Transporte S.A. | Customer Concentration Risk [Member] | |||||
Segment Information | |||||
Benchmark percentage of revenues and combined revenues concentration | 17.00% | 16.00% | 17.00% | 16.00% | |
Revenues [Member] | Repsol Sinopec Brasil, S.A., a subsidiary of Repsol Sinopec Brasil, B.V. | Customer Concentration Risk [Member] | |||||
Segment Information | |||||
Benchmark percentage of revenues and combined revenues concentration | 14.00% | 13.00% | 14.00% | 11.00% | |
Revenues [Member] | Brazil Shipping I Limited, a subsidiary of Royal Dutch Shell | Customer Concentration Risk [Member] | |||||
Segment Information | |||||
Benchmark percentage of revenues and combined revenues concentration | 24.00% | 29.00% | 24.00% | 30.00% | |
Revenues [Member] | Galp Sinopec Brasil Services B.V. | Customer Concentration Risk [Member] | |||||
Segment Information | |||||
Benchmark percentage of revenues and combined revenues concentration | 13.00% | 13.00% | 13.00% | 13.00% | |
Minimum [Member] | Revenues [Member] | Customer Concentration Risk [Member] | |||||
Segment Information | |||||
Benchmark percentage of revenues and combined revenues concentration | 10.00% | 10.00% | 10.00% | 10.00% |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Leases | ||||
Revenue from contract with customers | $ 66,513 | $ 70,250 | $ 132,111 | $ 137,476 |
Other revenues (loss of hire insurance recoveries and other income) | 4,424 | 9 | 10,307 | 607 |
Total revenues | 70,937 | 70,259 | 142,418 | 138,083 |
Time charter revenues (service element included) | ||||
Operating Leases | ||||
Revenue from contract with customers | 55,264 | 59,001 | 109,733 | 114,978 |
Bareboat revenues | ||||
Operating Leases | ||||
Revenue from contract with customers | $ 11,249 | $ 11,249 | $ 22,378 | $ 22,498 |
Operating Leases - Minimum Cont
Operating Leases - Minimum Contractual Future Revenues (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Minimum contractual future revenues | |
2021 (excluding the six months ended June 30, 2021) | $ 131,436 |
2022 | 184,259 |
2023 | 99,805 |
2024 | 102,560 |
2025 | 76,916 |
2026 and thereafter | 46,775 |
Total | $ 641,751 |
Operating Leases - Additional I
Operating Leases - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2021 | |
Fortaleza Knutsen | |
Operating Leases | |
Current bareboat charter expiration year | 2023 |
Recife Knutsen | |
Operating Leases | |
Current bareboat charter expiration year | 2023 |
Bodil Knutsen | |
Operating Leases | |
Time charter expiration year under options to extend | 2024 |
Carmen Knutsen | |
Operating Leases | |
Current time charter expiration year | 2023 |
Time charter expiration year under options to extend | 2026 |
Hilda Knutsen | |
Operating Leases | |
Current time charter expiration year | 2022 |
Time charter expiration year under options to extend | 2025 |
Torill Knutsen [Member] | |
Operating Leases | |
Current time charter expiration year | 2022 |
Time charter expiration year under options to extend | 2024 |
Dan Cisne [Member] | |
Operating Leases | |
Current bareboat charter expiration year | 2023 |
Dan Sabia [Member] | |
Operating Leases | |
Current bareboat charter expiration year | 2024 |
Ingrid Knutsen [Member] | |
Operating Leases | |
Current time charter expiration year | 2024 |
Time charter expiration year under options to extend | 2029 |
Raquel Knutsen | |
Operating Leases | |
Current time charter expiration year | 2025 |
Time charter expiration year under options to extend | 2030 |
Tordis Knutsen [Member] | |
Operating Leases | |
Fixed term of contract | 3 years |
Current time charter expiration year | 2022 |
Time charter expiration year under options to extend | 2023 |
Vigdis Knutsen [Member] | |
Operating Leases | |
Fixed term of contract | 3 years |
Current time charter expiration year | 2022 |
Time charter expiration year under options to extend | 2023 |
Lena Knutsen [Member] | |
Operating Leases | |
Fixed term of contract | 3 years |
Current time charter expiration year | 2022 |
Time charter expiration year under options to extend | 2023 |
Brasil Knutsen [Member] | |
Operating Leases | |
Current time charter expiration year | 2022 |
Time charter expiration year under options to extend | 2028 |
Anna Knutsen [Member] | |
Operating Leases | |
Current time charter expiration year | 2022 |
Time charter expiration year under options to extend | 2028 |
Tove Knutsens [Member] | |
Operating Leases | |
Current time charter expiration year | 2027 |
Time charter expiration year under options to extend | 2040 |
Operating Leases - Lease obliga
Operating Leases - Lease obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Operating Leases | |||
Right-of-use asset | $ 3,061 | $ 3,061 | $ 1,490 |
Lease liability | $ 3,060 | $ 3,060 | |
Weighted average discount rate (as a percent) | 2.30% | 2.30% | |
Weighted average remaining lease term | 4 years 7 months 6 days | 4 years 7 months 6 days | |
Operating lease payments | $ 200 | $ 300 | |
Partnership's lease liabilities from leased-in equipment | |||
2021 (excluding the six months ended June 30, 2021) | 352 | 352 | |
2022 | 703 | 703 | |
2023 | 703 | 703 | |
2024 | 703 | 703 | |
2025 | 703 | 703 | |
2026 and thereafter | 59 | 59 | |
Total | 3,223 | 3,223 | |
Less imputed interest | 163 | 163 | |
Carrying value of operating lease liabilities | $ 3,060 | $ 3,060 |
Insurance Proceeds (Details)
Insurance Proceeds (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Insurance Proceeds | |||||
Deductible period under business interruption insurance | 14 days | ||||
Loss of hire insurance payments recorded as a component of total revenues | $ 4,397 | $ 10,279 | |||
Net vessel operating expense | 17,394 | $ 13,112 | 35,954 | $ 28,746 | |
Windsor Knutsen | |||||
Insurance Proceeds | |||||
Deductible period under business interruption insurance | 14 days | ||||
Loss of hire insurance payments recorded as a component of total revenues | 3,700 | 8,700 | |||
Recoveries for repairs | 2,500 | 4,100 | |||
Claimed insurance recoveries including vessel operating expense | 4,000 | 4,000 | |||
Net vessel operating expense | 100 | ||||
Windsor Knutsen | Maximum [Member] | |||||
Insurance Proceeds | |||||
Deductible period under business interruption insurance | 180 days | ||||
Tove Knutsen | |||||
Insurance Proceeds | |||||
Loss of hire insurance payments recorded as a component of total revenues | 700 | 1,500 | |||
Recoveries for repairs | 300 | 500 | |||
Claimed insurance recoveries including vessel operating expense | 400 | 400 | |||
Net vessel operating expense | 100 | ||||
Bodil Knutsen | |||||
Insurance Proceeds | |||||
Recoveries for repairs | $ 500 | 500 | |||
Claimed insurance recoveries including vessel operating expense | 300 | ||||
Net vessel operating expense | $ 200 |
Other Finance Expenses - Compon
Other Finance Expenses - Components Interest Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other Finance Expenses | ||||
Interest expense | $ 6,148 | $ 7,886 | $ 12,418 | $ 17,712 |
Amortization of debt issuance cost and fair value of debt assumed | 656 | 626 | 1,758 | 1,262 |
Total interest cost | $ 6,804 | $ 8,512 | $ 14,176 | $ 18,974 |
Other Finance Expenses - Comp_2
Other Finance Expenses - Components of other finance expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other Finance Expenses | ||||
Bank fees, charges | $ 132 | $ 137 | $ 215 | $ 184 |
Commitment fees | 118 | 62 | 194 | 123 |
Total other finance expense | $ 250 | $ 199 | $ 409 | $ 307 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - Interest rate swap contracts [Member] - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Derivative Instruments | ||
Carrying amount of derivative liabilities | $ 18.3 | $ 30.1 |
Notional amount | $ 472.6 | $ 516.2 |
Derivative Instruments - Realiz
Derivative Instruments - Realized and Unrealized Gains and Losses Recognized in Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net gain (loss) on derivative instruments | ||||
Realized gain (loss) | $ (2,087) | $ (300) | $ (5,996) | $ (97) |
Unrealized gain (loss) | (178) | (2,792) | 11,742 | (26,685) |
Total realized and unrealized gain (loss) on derivative instruments | (2,265) | (3,092) | 5,746 | (26,782) |
Interest rate swap contracts [Member] | ||||
Net gain (loss) on derivative instruments | ||||
Realized gain (loss) | (2,087) | (191) | (5,996) | 12 |
Unrealized gain (loss) | $ (178) | (3,457) | $ 11,742 | (26,438) |
Foreign exchange forward contracts [Member] | ||||
Net gain (loss) on derivative instruments | ||||
Realized gain (loss) | (109) | (109) | ||
Unrealized gain (loss) | $ 665 | $ (247) |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Estimated Fair Values of Partnership 's Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets: | |||
Non-current derivative assets | $ 168 | ||
Financial liabilities: | |||
Current derivative liabilities | 9,984 | $ 10,695 | |
Non-current derivative liabilities | 8,495 | 19,358 | |
Vessel | 1,642,026 | 1,708,786 | $ 1,677,488 |
Carrying Amount [Member] | |||
Financial assets: | |||
Cash and cash equivalents | 51,589 | 52,583 | |
Financial liabilities: | |||
Long-term debt, current and non-current | 1,003,211 | 1,036,118 | |
Carrying Amount [Member] | Non-Recurring | |||
Financial liabilities: | |||
Vessel | 48,156 | ||
Carrying Amount [Member] | Interest rate swap contracts [Member] | |||
Financial assets: | |||
Non-current derivative assets | 168 | ||
Financial liabilities: | |||
Current derivative liabilities | 9,984 | 10,695 | |
Non-current derivative liabilities | 8,495 | 19,358 | |
Fair Value [Member] | |||
Financial assets: | |||
Cash and cash equivalents | 51,589 | 52,583 | |
Financial liabilities: | |||
Long-term debt, current and non-current | 1,003,211 | 1,036,118 | |
Fair Value [Member] | Non-Recurring | |||
Financial liabilities: | |||
Vessel | 48,156 | ||
Fair Value [Member] | Interest rate swap contracts [Member] | |||
Financial assets: | |||
Non-current derivative assets | 168 | ||
Financial liabilities: | |||
Current derivative liabilities | 9,984 | 10,695 | |
Non-current derivative liabilities | $ 8,495 | $ 19,358 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | |
Fair Value, assets and liabilities measured on recurring and nonrecurring basis | |||
Deferred debt issuance cost | $ 5,500,000 | $ 5,800,000 | |
Restricted cash | $ 0 | $ 0 | |
Non-Recurring | Level 3 | Weighted Average [Member] | |||
Fair Value, assets and liabilities measured on recurring and nonrecurring basis | |||
Vessel, Measurement input | 6.38 | ||
Interest rate swap contracts [Member] | |||
Fair Value, assets and liabilities measured on recurring and nonrecurring basis | |||
Weighted average remaining terms | 3 years 9 months 18 days | 4 years 3 months 18 days | |
Interest rate swap contracts [Member] | Minimum [Member] | |||
Fair Value, assets and liabilities measured on recurring and nonrecurring basis | |||
Notional amount per contract | $ 6,200,000 | $ 7,000,000 | |
Fixed interest rate | 0.71% | 0.71% | |
Interest rate swap contracts [Member] | Maximum [Member] | |||
Fair Value, assets and liabilities measured on recurring and nonrecurring basis | |||
Notional amount per contract | $ 38,800,000 | $ 40,100,000 | |
Fixed interest rate | 2.90% | 2.90% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets: | |||
Non-current derivative assets | $ 168 | ||
Financial liabilities: | |||
Current derivative liabilities | 9,984 | $ 10,695 | |
Non-current derivative liabilities | 8,495 | 19,358 | |
Vessel | 1,642,026 | 1,708,786 | $ 1,677,488 |
Carrying Amount [Member] | |||
Financial assets: | |||
Cash and cash equivalents | 51,589 | 52,583 | |
Financial liabilities: | |||
Long-term debt, current and non-current | 1,003,211 | 1,036,118 | |
Fair Value [Member] | |||
Financial assets: | |||
Cash and cash equivalents | 51,589 | 52,583 | |
Financial liabilities: | |||
Long-term debt, current and non-current | 1,003,211 | 1,036,118 | |
Interest rate swap contracts [Member] | Carrying Amount [Member] | |||
Financial assets: | |||
Current derivative assets | 168 | ||
Non-current derivative assets | 168 | ||
Financial liabilities: | |||
Current derivative liabilities | 9,984 | 10,695 | |
Non-current derivative liabilities | 8,495 | 19,358 | |
Interest rate swap contracts [Member] | Fair Value [Member] | |||
Financial assets: | |||
Non-current derivative assets | 168 | ||
Financial liabilities: | |||
Current derivative liabilities | 9,984 | 10,695 | |
Non-current derivative liabilities | 8,495 | 19,358 | |
Non-Recurring | Carrying Amount [Member] | |||
Financial liabilities: | |||
Vessel | 48,156 | ||
Non-Recurring | Fair Value [Member] | |||
Financial liabilities: | |||
Vessel | 48,156 | ||
Quoted Price in Active Markets for Identical Assets (Level 1) [Member] | Fair Value [Member] | |||
Financial assets: | |||
Cash and cash equivalents | 51,589 | 52,583 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value [Member] | |||
Financial liabilities: | |||
Long-term debt, current and non-current | 1,003,211 | 1,036,118 | |
Significant Other Observable Inputs (Level 2) [Member] | Interest rate swap contracts [Member] | Fair Value [Member] | |||
Financial assets: | |||
Current derivative assets | 168 | ||
Financial liabilities: | |||
Current derivative liabilities | 9,984 | 10,695 | |
Non-current derivative liabilities | 8,495 | $ 19,358 | |
Level 3 | Non-Recurring | Fair Value [Member] | |||
Financial liabilities: | |||
Vessel | $ 48,156 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Value transfers into or out of Level 1, Level 2 or Level 3 (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value Measurements | ||
Transfers amount Fair value assets level 1 to level 2 | $ 0 | $ 0 |
Transfers amount Fair value assets level 2 to level 1 | 0 | 0 |
Transfers amount Fair value liabilities level 1 to level 2 | 0 | 0 |
Transfers amount Fair value liabilities level 2 to level 1 | 0 | 0 |
Transfers amount Fair value assets level 3 to level 1 | 0 | 0 |
Transfers amount Fair value liabilities level 3 to level 1 | 0 | 0 |
Transfers amount Fair value liabilities level 3 to level 2 | $ 0 | $ 0 |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation of Level 3 assets measured at fair value on a non-recurring basis (Details) - Non-Recurring - Level 3 | Jun. 30, 2021USD ($) |
Weighted Average [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Vessel, Measurement input | 6.38 |
Windsor Knutsen | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Property, Plant, and Equipment, Fair Value Disclosure | $ 48,156 |
Windsor Knutsen | Weighted Average [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Vessel, Measurement input | 6.38 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Current and Deferred Income Tax Expense Attributable to Income from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Taxes | ||||
Income before income taxes | $ (10,664) | $ 21,686 | $ 17,480 | $ 15,550 |
Income tax benefit (expense) | $ 261 | $ 3 | $ 264 | $ 6 |
Effective tax rate | 2.00% | 0.00% | (2.00%) | 0.00% |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2017 | Mar. 31, 2013 |
Income Taxes | ||||||||
Entrance tax | $ 3,000 | |||||||
Entrance tax, annual decline in gain | 20.00% | |||||||
Ordinary income tax rate | 22.00% | 22.00% | ||||||
Income tax rate, deferred tax liabilities | 22.00% | 22.00% | ||||||
Entrance tax payable, current | $ 100 | $ 100 | ||||||
Entrance tax payable, non current | $ 300 | $ 300 | ||||||
Entrance tax payable related to acquisition | $ 100 | |||||||
Deferred tax assets recognized | $ 0 | $ 0 |
Income Taxes - Summary of Taxat
Income Taxes - Summary of Taxation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Rate Reconciliation | ||||
Income tax benefit (expense) | $ (261) | $ (3) | $ (264) | $ (6) |
Effective tax rate | 2.00% | 0.00% | (2.00%) | 0.00% |
Norwegian Tonnage Tax Regime [Member] | ||||
Income Tax Rate Reconciliation | ||||
Income tax benefit (expense) | $ (258) | $ (258) | ||
UK tax | ||||
Income Tax Rate Reconciliation | ||||
Income tax benefit (expense) | $ (3) | $ (3) | $ (6) | $ (6) |
Vessels and Equipment - Pledged
Vessels and Equipment - Pledged Assets (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Vessels and Equipment | ||
Book value of assets pledged as security for long-term debt | $ 1,642 | $ 1,709 |
Vessels and Equipment - Long-Te
Vessels and Equipment - Long-Term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Vessels & equipment - Activity | |||||
Vessels and equipment, beginning balance | $ 2,250,053 | $ 2,129,012 | $ 2,129,012 | ||
Additions | 6,748 | 115,277 | |||
Drydock costs | 3,428 | 5,764 | |||
Disposals | (2,641) | ||||
Vessels and equipment, ending balance | $ 2,257,588 | 2,257,588 | 2,250,053 | ||
Accumulated depreciation - Activity | |||||
Accumulated depreciation, beginning balance | (541,267) | (451,524) | (451,524) | ||
Accumulated depreciation, disposals | 2,641 | ||||
Depreciation for the period | (23,831) | $ (22,451) | (47,515) | (44,824) | (89,743) |
Accumulated depreciation, ending balance | (586,141) | (586,141) | (541,267) | ||
Accumulated write down - Activity | |||||
Depreciation and write down for the period | (29,421) | (29,421) | |||
Accumulated write down, ending balance | (29,421) | (29,421) | |||
Net Vessels - Activity | |||||
Net vessel, beginning balance | 1,708,786 | $ 1,677,488 | 1,677,488 | ||
Additions | 6,748 | 115,277 | |||
Drydock costs | 3,428 | 5,764 | |||
Depreciation and write down for the period | (76,936) | (89,743) | |||
Net vessel, ending balance | $ 1,642,026 | $ 1,642,026 | $ 1,708,786 |
Vessels and Equipment - Drydock
Vessels and Equipment - Drydocking Activity (Details) - Vessels & Equipment - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Movement in Capitalized Drydocking Costs [Roll Forward] | ||
Balance at the beginning of the year | $ 17,106 | $ 18,523 |
Costs incurred for drydocking | 3,428 | 2,724 |
Costs allocated to drydocking as part of acquisition of asset | 3,040 | |
Drydock amortization | (3,948) | (7,181) |
Balance at the end of the year | $ 16,586 | $ 17,106 |
Intangible Assets and Contract
Intangible Assets and Contract Liabilities - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Intangible Assets | ||
Intangibles assets, beginning balance | $ 681 | $ 1,286 |
Amortization for the year | (303) | (605) |
Intangibles assets, ending balance | 378 | 681 |
Above Market Value Of Time Charter [Member] | Tordis Knutsen [Member] | ||
Intangible Assets | ||
Intangibles assets, beginning balance | 305 | 608 |
Amortization for the year | (152) | (303) |
Intangibles assets, ending balance | 153 | 305 |
Above Market Value Of Time Charter [Member] | Vigdis Knutsen [Member] | ||
Intangible Assets | ||
Intangibles assets, beginning balance | 376 | 678 |
Amortization for the year | (151) | (302) |
Intangibles assets, ending balance | $ 225 | $ 376 |
Intangible Assets and Contrac_2
Intangible Assets and Contract Liabilities - Additional information (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | ||
Aug. 31, 2011 | Mar. 31, 2011 | Jun. 30, 2021 | Dec. 31, 2020 | |
Intangible Assets | ||||
Accumulated amortization for contract liabilities | $ 15.3 | $ 14.5 | ||
Recife Knutsen | ||||
Intangible Assets | ||||
Period for amortization of unfavorable contractual rights | 12 years | |||
Fortaleza Knutsen | ||||
Intangible Assets | ||||
Period for amortization of unfavorable contractual rights | 12 years | |||
Tordis Knutsen [Member] | Above Market Value Of Time Charter [Member] | ||||
Intangible Assets | ||||
Remaining term of the contract | 4 years 9 months 18 days | |||
Vigdis Knutsen [Member] | Above Market Value Of Time Charter [Member] | ||||
Intangible Assets | ||||
Remaining term of the contract | 4 years 10 months 24 days |
Intangible Assets and Contrac_3
Intangible Assets and Contract Liabilities - Summary of Estimated Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Estimated future amortization of intangible assets | |||
Remainder of 2021 | $ 303 | ||
2022 | 75 | ||
Total | $ 378 | $ 681 | $ 1,286 |
Intangible Assets and Contrac_4
Intangible Assets and Contract Liabilities - Schedule of Contract Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Contract liabilities: | ||
Unfavorable contract rights, Beginning Balance | $ (3,686) | $ (5,203) |
Amortization income | 758 | 1,517 |
Unfavorable contract rights, Ending Balance | $ (2,928) | $ (3,686) |
Intangible Assets and Contrac_5
Intangible Assets and Contract Liabilities - Amortization of Contract Liabilities Classified Under Time Charter and Bareboat Revenues (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Amortization of contract liabilities | |||
Remainder of 2021 | $ 759 | ||
2022 | 1,518 | ||
2023 | 651 | ||
Total | $ 2,928 | $ 3,686 | $ 5,203 |
Long-Term Debt - Components (De
Long-Term Debt - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Long-Term Debt | ||
Long-term debt | $ 1,003,211 | $ 1,036,118 |
Less: current installments | 353,643 | 186,723 |
Less: unamortized deferred loan issuance costs | 2,273 | 2,535 |
Current portion of long-term debt | 351,370 | 184,188 |
Amounts due after one year | 649,568 | 849,395 |
Less: unamortized deferred loan issuance costs | 3,220 | 3,238 |
Long-term debt, less current installments, and unamortized deferred loan issuance costs | 646,348 | 846,157 |
$320 million loan facility | ||
Long-Term Debt | ||
Long-term debt | 237,190 | 252,245 |
Debt instrument face amount | 320,000 | 320,000 |
$55 million revolving credit facility | ||
Long-Term Debt | ||
Long-term debt | 5,000 | 34,279 |
Debt instrument face amount | 55,000 | 55,000 |
Hilda Loan Facility [Member] | ||
Long-Term Debt | ||
Long-term debt | 75,385 | 78,462 |
Torill Loan Facility [Member] | ||
Long-Term Debt | ||
Long-term debt | 78,333 | 81,667 |
$172.5 million loan facility | ||
Long-Term Debt | ||
Long-term debt | 52,140 | 58,340 |
Debt instrument face amount | 172,500 | 172,500 |
Raquel Loan Facility [Member] | ||
Long-Term Debt | ||
Long-term debt | 52,725 | |
Tordis Loan Facility [Member] | ||
Long-Term Debt | ||
Long-term debt | 73,341 | 75,871 |
Vigdis Loan Facility [Member] | ||
Long-Term Debt | ||
Long-term debt | 74,606 | 77,136 |
Lena Loan Facility [Member] | ||
Long-Term Debt | ||
Long-term debt | 73,500 | 75,950 |
Brasil Loan Facility [Member] | ||
Long-Term Debt | ||
Long-term debt | 47,855 | 50,997 |
Anna loan facility | ||
Long-Term Debt | ||
Long-term debt | 60,157 | 62,196 |
Tove loan facility | ||
Long-Term Debt | ||
Long-term debt | 84,066 | 86,250 |
$25 million revolving credit facility | ||
Long-Term Debt | ||
Debt instrument face amount | 25,000 | |
$25 million revolving credit facility | NTT | ||
Long-Term Debt | ||
Long-term debt | 25,000 | 25,000 |
Debt instrument face amount | 25,000 | 25,000 |
$25 million revolving credit facility | Shinsei | ||
Long-Term Debt | ||
Long-term debt | 25,000 | 25,000 |
Debt instrument face amount | 25,000 | $ 25,000 |
Raquel Sale & Leaseback | ||
Long-Term Debt | ||
Long-term debt | $ 91,638 |
Long-Term Debt - Summary of Par
Long-Term Debt - Summary of Partnership's Outstanding Debt Repayable (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Instrument, Redemption [Line Items] | ||
Remaining 2021 | $ 116,386 | |
2022 | 311,817 | |
2023 | 290,755 | |
2024 | 141,822 | |
2025 | 74,422 | |
2026 and thereafter | 68,009 | |
Total | 1,003,211 | $ 1,036,118 |
Sale & Leaseback | ||
Debt Instrument, Redemption [Line Items] | ||
Remaining 2021 | 2,433 | |
2022 | 4,960 | |
2023 | 5,177 | |
2024 | 5,418 | |
2025 | 5,640 | |
2026 and thereafter | 68,009 | |
Total | 91,637 | |
Periodic repayment | ||
Debt Instrument, Redemption [Line Items] | ||
Remaining 2021 | 43,142 | |
2022 | 70,348 | |
2023 | 54,672 | |
2024 | 13,011 | |
2025 | 3,276 | |
Total | 184,449 | |
Balloon repayment | ||
Debt Instrument, Redemption [Line Items] | ||
Remaining 2021 | 70,811 | |
2022 | 236,509 | |
2023 | 230,906 | |
2024 | 123,393 | |
2025 | 65,506 | |
Total | $ 727,125 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Long-Term Debt | |
Outstanding debt | $ 1,003.2 |
Partnership's loan agreements | London Interbank Offered Rate (LIBOR) | Minimum [Member] | |
Long-Term Debt | |
Long-term debt, fixed margin percentage | 1.75% |
Partnership's loan agreements | London Interbank Offered Rate (LIBOR) | Maximum [Member] | |
Long-Term Debt | |
Long-term debt, fixed margin percentage | 2.40% |
$25 million revolving credit facility | |
Long-Term Debt | |
Debt instrument face amount | $ 25 |
Related Party Transactions - Re
Related Party Transactions - Related Party Costs and Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Related Party Transaction | ||||
Operating expenses from other related parties | $ 172 | $ 66 | $ 299 | $ 229 |
Total expenses | (6,031) | (6,536) | (11,526) | (6,551) |
KNOT Management | ||||
Related Party Transaction | ||||
Administration fee | 379 | 244 | 666 | 474 |
KOAS [Member] | ||||
Related Party Transaction | ||||
Administration fee | 201 | 165 | $ 395 | 323 |
Margin rate on administration cost | 5.00% | |||
KOAS UK [Member] | ||||
Related Party Transaction | ||||
Administration fee | 19 | 31 | $ 37 | 61 |
Margin rate on administration cost | 5.00% | |||
KNOT [Member] | ||||
Related Party Transaction | ||||
Time charter income from KNOT | 1,866 | 105 | $ 1,866 | 4,883 |
Vessel operating expenses | 5,000 | 4,392 | 7,752 | 6,856 |
Technical and operational management fee from KNOT to Vessels | 2,106 | 1,703 | 4,214 | 3,406 |
Administration fee | $ 20 | $ 40 | $ 29 | $ 85 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Dues Payables to Related Party (Detail) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction | ||
Drydocking supervision fee | $ 134 | $ 47 |
KNOT [Member] | ||
Related Party Transaction | ||
Drydocking supervision fee | $ 134 | $ 47 |
Related Party Transactions - Am
Related Party Transactions - Amounts Due from and Due to Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2021 | |
Related Party Transaction | ||
Amount due from related parties | $ 5,726 | $ 1,762 |
Amount due to related parties | $ (2,140) | (3,450) |
Acquisitions from KNOT | Tove Knutsen | ||
Related Party Transaction | ||
Percentage of interest acquired | 100.00% | |
KOAS [Member] | ||
Related Party Transaction | ||
Amount due from related parties | $ 170 | 55 |
Amount due to related parties | (1,596) | (2,489) |
KNOT and affiliates | ||
Related Party Transaction | ||
Amount due from related parties | 5,556 | 1,707 |
Amount due to related parties | (544) | $ (961) |
KNOT and affiliates | Vigdis Knutsen [Member] | ||
Related Party Transaction | ||
Amount due from related parties | $ 3,600 |
Related Party Transactions - Tr
Related Party Transactions - Trade Accounts Payable (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction | ||
Trade accounts payables to related parties | $ 1,442 | $ 2,206 |
KOAS [Member] | ||
Related Party Transaction | ||
Trade accounts payables to related parties | 920 | 1,304 |
KNOT and affiliates | ||
Related Party Transaction | ||
Trade accounts payables to related parties | $ 522 | $ 902 |
Related Party Transactions - Ot
Related Party Transactions - Other current assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||
Other current assets from related parties | $ 1,246 | $ 2,147 |
KOAS [Member] | ||
Related Party Transaction [Line Items] | ||
Trading balances | 353 | 450 |
KNOT and affiliates | ||
Related Party Transaction [Line Items] | ||
Trading balances | $ 893 | $ 1,697 |
Commitments and Contingencies -
Commitments and Contingencies - Assets Pledged, Claims and Legal Proceedings (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Commitments and Contingencies | ||
Book value of assets pledged as security for long-term debt and interest rate swap obligations | $ 1,642,000,000 | $ 1,709,000,000 |
Accrued claim | $ 0 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Insurance (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Insurance Proceeds | |||||
Insurance coverage deductible amount per vessel | $ 150 | $ 150 | |||
Deductible period under business interruption insurance | 14 days | ||||
Period of coverage under business interruption insurance | 180 days | ||||
Limit of protection and indemnity insurance for pollution, per vessel per incident | 1,000,000 | $ 1,000,000 | |||
Loss of hire insurance payments recorded as a component of total revenues | 4,397 | 10,279 | |||
Net vessel operating expense | 17,394 | $ 13,112 | 35,954 | $ 28,746 | |
Windsor Knutsen | |||||
Insurance Proceeds | |||||
Deductible period under business interruption insurance | 14 days | ||||
Recoveries for repairs | 2,500 | 4,100 | |||
Loss of hire insurance payments recorded as a component of total revenues | 3,700 | 8,700 | |||
Claimed insurance recoveries including vessel operating expense | 4,000 | 4,000 | |||
Net vessel operating expense | 100 | ||||
Tove Knutsen | |||||
Insurance Proceeds | |||||
Recoveries for repairs | 300 | 500 | |||
Loss of hire insurance payments recorded as a component of total revenues | 700 | 1,500 | |||
Claimed insurance recoveries including vessel operating expense | 400 | 400 | |||
Net vessel operating expense | 100 | ||||
Bodil Knutsen | |||||
Insurance Proceeds | |||||
Recoveries for repairs | $ 500 | 500 | |||
Claimed insurance recoveries including vessel operating expense | 300 | ||||
Net vessel operating expense | $ 200 |
Earnings per Unit and Cash Di_3
Earnings per Unit and Cash Distributions - Calculations of Basic and Diluted Earnings per Unit (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings per Unit and Cash Distributions | ||||
Net income (loss) | $ (10,925) | $ 21,683 | $ 17,216 | $ 15,544 |
Series A Preferred unitholders' interest in net income | 1,759 | 1,800 | 3,559 | 3,600 |
Net income attributable to the unitholders of KNOT Offshore Partners LP | (12,684) | 19,883 | 13,657 | 11,944 |
Less: Distributions | 18,150 | 18,034 | 36,184 | 36,068 |
Under (over) distributed earnings | $ (30,834) | $ 1,849 | $ (22,527) | $ (24,124) |
Weighted average units outstanding (basic): | ||||
General Partner | 615 | 615 | 615 | 615 |
Weighted average units outstanding (diluted): | ||||
General Partner | 615 | 615 | 615 | 615 |
Earnings per unit (basic): | ||||
General Partner | $ (0.38) | $ 0.60 | $ 0.41 | $ 0.36 |
Earnings per unit (diluted): | ||||
General Partner | (0.38) | 0.60 | 0.41 | 0.36 |
Cash distributions declared and paid in the period per unit | 0.52 | 0.52 | 1.04 | 1.04 |
Subsequent event: Cash distributions declared and paid per unit relating to the period | $ 0.52 | $ 0.52 | $ 1.04 | $ 1.04 |
Common Units | ||||
Earnings per Unit and Cash Distributions | ||||
Net income attributable to the unitholders of KNOT Offshore Partners LP | $ (12,451) | $ 19,515 | $ 13,404 | $ 11,723 |
Weighted average units outstanding (basic): | ||||
Weighted average units outstanding, basic | 32,782 | 32,694 | 32,738 | 32,694 |
Weighted average units outstanding (diluted): | ||||
Weighted average units outstanding, diluted | 36,619 | 36,596 | 36,594 | 36,648 |
Earnings per unit (basic): | ||||
Earnings per unit (basic) | $ (0.38) | $ 0.60 | $ 0.41 | $ 0.36 |
Earnings per unit (diluted): | ||||
Earnings per unit (diluted) | $ (0.38) | $ 0.58 | $ 0.41 | $ 0.36 |
Limited Partner [Member] | Common Units | ||||
Earnings per Unit and Cash Distributions | ||||
Under (over) distributed earnings | $ (30,268) | $ 1,815 | $ (22,114) | $ (23,679) |
General Partner Units | ||||
Earnings per Unit and Cash Distributions | ||||
Net income attributable to the unitholders of KNOT Offshore Partners LP | (233) | 368 | 253 | 221 |
Under (over) distributed earnings | (566) | 34 | (413) | (445) |
IDR Holders | ||||
Earnings per Unit and Cash Distributions | ||||
Net income (loss) | 700 | 700 | 1,400 | 1,400 |
Less: Distributions | $ 700 | $ 700 | $ 1,400 | $ 1,400 |
Earnings per Unit and Cash Di_4
Earnings per Unit and Cash Distributions - Additional Information (Details) | May 27, 2021shares | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2021shares |
Distribution Made to Limited Partner | ||||||
May 27, 2021: Conversion of Series A Preferred Units | (208,334) | |||||
Series A Preferred Stock | ||||||
Distribution Made to Limited Partner | ||||||
Potentially dilutive preferred units | 3,541,666 | |||||
IDR Holders | Maximum [Member] | ||||||
Distribution Made to Limited Partner | ||||||
Required percentage of operating surplus distribution | 48.00% | 48.00% | 48.00% | 48.00% | ||
Common Units | ||||||
Distribution Made to Limited Partner | ||||||
May 27, 2021: Conversion of Series A Preferred Units | 215,292 | |||||
Common Units | Public | ||||||
Distribution Made to Limited Partner | ||||||
Number of common units and subordinated units outstanding | 24,251,518 | |||||
Common Units | KNOT [Member] | ||||||
Distribution Made to Limited Partner | ||||||
Number of common units and subordinated units outstanding | 8,567,500 | |||||
Tortoise Direct Opportunities Fund LP | Series A Preferred Stock | ||||||
Distribution Made to Limited Partner | ||||||
Shares held | 416,677 | |||||
Shares sold | 208,333 | |||||
May 27, 2021: Conversion of Series A Preferred Units | 208,334 | |||||
Tortoise Direct Opportunities Fund LP | Common Units | ||||||
Distribution Made to Limited Partner | ||||||
May 27, 2021: Conversion of Series A Preferred Units | 215,292 | |||||
Conversion rate | 1.0334 | |||||
Public | Partnership [Member] | ||||||
Distribution Made to Limited Partner | ||||||
Percentage of limited partner interest | 73.70% | |||||
KNOT [Member] | Common Units | Series A Preferred Stock | ||||||
Distribution Made to Limited Partner | ||||||
May 27, 2021: Conversion of Series A Preferred Units | 208,333 | |||||
KNOT [Member] | Partnership [Member] | ||||||
Distribution Made to Limited Partner | ||||||
Percentage of limited partner interest | 26.00% | |||||
KNOT [Member] | KNOT [Member] | ||||||
Distribution Made to Limited Partner | ||||||
Number of general partner units outstanding | 615,117 | |||||
KNOT [Member] | Common Units | KNOT [Member] | ||||||
Distribution Made to Limited Partner | ||||||
Number of common units and subordinated units outstanding | 90,368 | |||||
KNOT [Member] | Partnership [Member] | ||||||
Distribution Made to Limited Partner | ||||||
Percentage of limited partner interest | 0.30% | |||||
Percentage of general partner interest | 1.83% |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - Tove Knutsen $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Acquisitions | |
Purchase consideration | $ 21,898 |
Less: Fair value of net assets acquired: | |
Vessels and equipment | 117,978 |
Cash | 804 |
Inventories | 136 |
Derivatives assets (liabilities) | (3,537) |
Others current assets | 270 |
Long-term debt | (93,139) |
Deferred debt issuance | 769 |
Trade accounts payable | (430) |
Accrued expenses | (622) |
Amounts due to related parties | (331) |
Subtotal | $ 21,898 |
Acquisitions - Purchase Conside
Acquisitions - Purchase Consideration (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Acquisitions | |
Allocation to drydocking included in property, plant and equipment | $ 3,040 |
Tove Knutsen | |
Acquisitions | |
Cash consideration paid to KNOT (from KNOP) | 25,430 |
Purchase price adjustments | (3,596) |
Acquisition-related costs | 64 |
Purchase price | $ 21,898 |
Unit activity (Details)
Unit activity (Details) | May 27, 2021shares | Jun. 30, 2021shares |
Limited Partners' Capital Account [Line Items] | ||
May 27, 2021: Conversion of Series A Preferred Units | (208,334) | |
Convertible Preferred Units, Beginning balance | 3,750,000 | |
Convertible Preferred Units, End balance | 3,541,666 | |
General Partner Units | ||
Limited Partners' Capital Account [Line Items] | ||
Units, Beginning balance | 615,117 | |
Units, Ending balance | 615,117 | |
Common Units | ||
Limited Partners' Capital Account [Line Items] | ||
Units, Beginning balance | 32,694,094 | |
May 27, 2021: Conversion of Series A Preferred Units | 215,292 | |
Units, Ending balance | 32,909,386 | |
Tortoise Direct Opportunities Fund LP | Common Units | ||
Limited Partners' Capital Account [Line Items] | ||
May 27, 2021: Conversion of Series A Preferred Units | 215,292 | |
Conversion rate | 1.0334 | |
Tortoise Direct Opportunities Fund LP | Series A Convertible Preferred Units | ||
Limited Partners' Capital Account [Line Items] | ||
May 27, 2021: Conversion of Series A Preferred Units | 208,334 | |
Shares held | 416,677 | |
Shares sold | 208,333 |
Trade Accounts Receivable and_3
Trade Accounts Receivable and Other Current Assets - Trade Accounts Receivable (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Trade Accounts Receivable and Other Current Assets | ||
Provision for Doubtful Accounts | $ 0 | $ 0 |
Trade Accounts Receivable and_4
Trade Accounts Receivable and Other Current Assets - Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Trade Accounts Receivable and Other Current Assets | ||
Insurance claims for recoveries | $ 7,477 | |
Refund of value added tax | 1,762 | $ 1,429 |
Prepaid expenses | 1,392 | 1,050 |
Other receivables | 3,750 | 3,032 |
Total other current assets | $ 14,381 | $ 5,511 |
Write-Down of Long-Lived Asse_2
Write-Down of Long-Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Write-Down of Long-Lived Assets | ||
Write-down related to vessel | $ 29,421 | $ 29,421 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Millions | Aug. 26, 2021USD ($) | Aug. 25, 2021USD ($)installment | Aug. 12, 2021USD ($)$ / shares |
Subsequent Events | |||
Cash distributions paid in the period per unit | $ / shares | $ 0.52 | ||
$345 senior secured credit facility | |||
Subsequent Events | |||
Debt instrument face amount | $ 345 | ||
Number of quarterly installments | installment | 20 | ||
Balloon payment to be paid | $ 219 | ||
$345 senior secured credit facility | London Interbank Offered Rate (LIBOR) | |||
Subsequent Events | |||
Interest margin percentage | 2.05% | ||
Series A Preferred Unit [Member] | |||
Subsequent Events | |||
Cash distributions | $ 1.7 | ||
Common Units | ATM | |||
Subsequent Events | |||
Issuance of common stock units | $ 100 |