Good afternoon and welcome to the KNOT Offshore Partners LP Earnings Release First Quarter 2019 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. John Costain. Please go ahead.

Thank you. If any of you have not read the earnings release or the slide presentation, they're both available on the Investor section of our website. On today's call, our review will include non-U.S. GAAP measures, such as distributable cash flow and adjusted earnings before interest, taxation, depreciation and amortization, the EBITDA. The earnings release includes a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. A quick reminder that any forward-looking statements made during today's call are subject to risks and uncertainties, and these are discussed at length in our annual and quarterly SEC filings. As you know, actual events and results can differ materially from those forward-looking statements. The partnership does not undertake a duty to update any forward-looking statements. Introduction, KNOT Offshore Partners, KNOP, focuses on the shuttle tankers segment. Each vessel is usually built to an individual charter specifications. On the non-volume-based contracts, we transport oil from the shoreside production units to shoreside, effectively mobile pipeline business. The chartered vessels form an integral component of the charter supply chain. Total tank is operated in niche-based and in our sector to date, there has been no speculative ordering of tankers by vessel owners. We have a solid growth outlook also in this sector. Our sponsor Knutsen NYK has placed all their younger assets in the MLP, all had long-term charters after construction and all remains strategically important to their respective charterers. The MLP and sponsor combined are the largest operator of shuttle tankers with 29 vessels on the water and three on order. Our sponsor has plenty of experience having been involved in the design and construction of shuttle tankers for well over 30 years, including being involved with the developments of the design and the pioneering days, growing their fleet organically over…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Hillary Cacanando from Wells Fargo Securities. Please go ahead.

Hi. Thanks for taking my questions. So just looking at the dropdown inventory, there's two, I guess, not delivering until 2020. So the right way to think about I guess, potential dropdown is that there – that you're not going to purchase anything until at least 2020? So we shouldn't expect anything this year?

That's correct, Hillary. And also the – obviously, the third ship that they've ordered, but that's with a view to the – they've got the COA pool and that’s what they view to potentially get in the long-term charter and if somebody comes along and wants the ship we probably will look to - respond and probably look to get it covered and then maybe order another ship, but that's what I think. And then I've got enough internal cargoes to actually just order a new tanker. So potentially there are three candidates, but today there's only two.

And then I guess also in terms of potential distribution increase. I know you – in the past, you've said that the – I guess, that the equity with the yield at current level is not attractive, but like – is there – at what point would you consider that – consider increasing the distribution. Would you like to…?

Well, I think – yes, I mean I can't really decide on the distribution policy. So I said in the last earnings call, I have not – it's not really going to be my decision going forward as to what to do with the distribution, but my view has been that with the market the way it is and the difficulty in raising equity, we don't really want to press the distribution issue. So it's better to build coverage and keep the MLP very stable. And look I think, we could actually add a ship or two in the future from leverage and that's really quite desirable. So I think ultimately when you're paying these sort of levels of yield, it's telling you something about markets really. And I don't think necessarily – best representing - while presenting good figures and a high yield and then pushing the distribution and obviously it weakens – it will weaken the MLP in the short-term.

Right. I mean what's your view of the MLP market actually?

Personally I mean I think the MLP market has changed quite a lot over the last few years. I see a lot of the big companies struggle to raise equity as well. And I think genuinely just got to keep a solid vehicle, because I think if – I mean, on some of the bigger MLPs that raise quite a lot of capital, their unit prices suffered quite heavily because there doesn't seem to be an awful lot of liquidity in the market. I mean a lot of the funds are closed end funds that may basically have a large slice of the MLP units and they have been struggling to attract new investors. I mean, I think a lot of conversions that the MLPs have gone through have made investors shy away from the MLP investment space generally and it has suffered over the last few years, because some of the MLPs basically migrated away and I think investors like to know what they're buying. And I think they suffered – I mean, I also think with the – we're a bit small and also we – that's the problem. I mean, it's hard to grow in this market.

So you think the MLP market is still viable and you don't think there are – like, is there any chance that KNOP could actually sometime in the future be rolled up to the parent or...?

Yes. I think – I mean you're thinking about it intelligently, Hillary. I think there's always a chance of that, but ultimately you have to message properly, at the moment, we intend to continue as an MLP. If there was any decision could change the way the partnership is going to operate, then it would be well signposted. So I wouldn't just be sprung on people, but I mean you can never say never with any company or any MLP going forward what it’s going to do. What you can see from the way KNOP's operated over the last six years. The contracts are really very stable and they're very good quality through all the other issues around the MLP space. This is a very solid investment and it may not be – you may be right, it may not be in the long run. Again, I'm not involved after this [cost] [ph]. So I can't really decide on exactly we'll have any say in the strategy and that something responsible have to think about going forward. But it's like every MLP you talk to, you're not going to get a straightforward answer and say no we’ll stay an MLP for 10 to 15 years, because nobody has that level of visibility. I mean, that the marine space MLPs are no longer included in the Alerian and that's obviously interesting, because it impacts the amount of liquidity and the units of companies outside that Alerian Index.

Well. Thank you, John. It was really nice working with you for the past couple of years and we wish you luck.

I knew, Hillary. Thanks. I'm fine. I'm looking forward to have a simpler life. I think, it's having the two areas of shipping in my involvement its being quite – it's been fascinating actually. I've enjoyed it and certain that you and Michael have been two of the best analysts we've had and I appreciate of how you stayed interest in this.

Thank you. We always say, KNOP has been a quiet executor. You guys have been executing when everyone else has cut their distribution. And so thank you, and good luck. Thank you. It was very…

Thanks, Hillary.

Thank you. Bye.

Thank you. Bye.

[Operator Instructions] There are currently no participants in the Q&A. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. John Costain for closing remarks.

Thank you, everyone, who is listened in and then I appreciate all your interest in the units. And hopefully, you stay with us or you invest to become a bigger investor in the MLP and hopefully it goes from strength-to-strength over the coming years. Thank you all and I'll sign off now. Bye.

This conference is now concluded. Thank you for attending today's presentation. You may now disconnect, and have a good day.