Knot Offshore Partners LP (KNOP) 2022 Q3 法說會逐字稿

Hello, everyone, and welcome to the KNOT Third Quarter 2022 Earnings Results Conference Call. My name is Charlie and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation. If you would like to register a question please press star followed by 1 on you telephone keypad. I'll now hand over to your host, Gary Chapman, CEO and CFO, to begin. Gary, please go ahead.

大家好，歡迎參加 KNOT 2022 年第三季獲利結果電話會議。我叫查理，今天我將協調通話。您將有機會在演示結束時提出問題。如果您想登記問題，請按電話鍵盤上的星號，然後按 1。現在請主持人兼執行長兼財務長加里·查普曼 (Gary Chapman) 開始發言。加里，請繼續。

Thank you, Charlie. Thank you, and welcome, everybody, to our third quarter 2020 earnings call. The earnings release and this presentation are also available on our website at knotoffshorepartners.com if you want to view them. straight on to Slide 2, which concerns the nature of today's presentation, in particular, the inclusion of forward-looking statements, which are made in good faith, but which contain risks and uncertainties, meaning that actual results may be materially different. The partnership does not have or undertake a duty to update such forward-looking statements. And for further information, please consult our annual and quarterly SEC filings.

謝謝你，查理。謝謝大家，歡迎大家參加我們的 2020 年第三季財報電話會議。如果您想查看收益報告和本簡報，也可以在我們的網站 knotoffshorepartners.com 上查看。直接看投影片2，投影片涉及今天簡報的性質，特別是包含前瞻性陳述，這些陳述是出於善意而做出的，但包含風險和不確定性，這意味著實際結果可能存在重大差異。該合夥企業沒有也不承擔更新此類前瞻性陳述的義務。如需了解更多信息，請查閱我們向 SEC 提交的年度和季度文件。

Today's presentation also includes certain non-U.S. GAAP measures and our earnings release includes a reconciliation of these to the most directly comparable GAAP measures. On to Slide 3, highlights of the third quarter and subsequent. We announced a cash distribution of $0.52 for the quarter for the 29th consecutive time at this level under our 1099 structure and which was the 38th consecutive distribution made since the partnership first listed. We ran at 99.7% utilization for scheduled operations during the third quarter and 92.8%, taking into account the scheduled dry dockings of the lane and Windsor Knutsen vessels. We completed the acquisition of the Sonova Knutsen on July 1, 2022, to bring our fleet up to 18 vessels and at the same time, adding a block of forward revenue and charter coverage as a result.

今天的演示還包括某些非美國公認會計原則措施，我們的收益發布包括這些措施與最直接可比較的公認會計原則措施的調節。幻燈片 3 是第三季及後續季度的亮點。在我們的 1099 結構下，我們連續 29 次宣布本季現金分配為 0.52 美元，這是自合作夥伴首次上市以來連續 38 次分配。第三季度，我們的預定營運利用率為 99.7%，考慮航線和溫莎·克努森船舶的預定乾塢，利用率為 92.8%。我們於 2022 年 7 月 1 日完成了對 Sonova Knutsen 的收購，使我們的船隊數量達到 18 艘，同時增加了一批遠期收入和包機覆蓋範圍。

And all 5 of our vessel dry docking scheduled in 2022 have been completed. In terms of charter developments, Knutsen NYK have taken each of their 1-month options on the Bodil Knutsen to date and have options to keep the vessel until June 2023. We signed a time charter for the Windsor Knutsen with Shell to commence in or around January 2023 for a 1-year fixed period plus a 1-year option. Telenet commenced on its charter with Total energies for 6 months plus a further 6-month option. And although in the second quarter, we announced the redelivery of the Hildenunton, we can confirm that the partnership sponsor, Knutsen NYK, in similar fashion to the Bodil Knutsen arrangement have agreed to time charter the vessel for a 90-day period plus 3 further 30-day option periods, albeit at a reduced charter rate but to help support the partnership's cash flow in the short term.

我們計劃於 2022 年進塢的 5 艘船已全部完成。在包租開發方面，Knutsen NYK 迄今已接受了Bodil Knutsen 的每項1 個月期選擇權，並可選擇將該船保留至2023 年6 月。我們與殼牌簽署了一份Windsor Knutsen 期租合同，將於2023 年 6 月或前後開始動工。2023 年 1 月，為期 1 年固定期限加 1 年選項。 Telenet 開始與 Total energy 簽訂為期 6 個月的租約，另加 6 個月的選擇權。儘管在第二季度，我們宣布重新交付 Hildenunton 號，但我們可以確認，合作夥伴贊助商 Knutsen NYK 以與 Bodil Knutsen 安排類似的方式同意對該船進行期租，租期為 90 天，另加 3 天30 天的選擇期，儘管包機費率較低，但有助於支持合作夥伴的短期現金流。

This arrangement commenced on September 3, 2022, and if all options are taken by Knutsen NYK would currently expire on or around the beginning of March 2023. The time charter for the Tordis Knutsen with Total Energies commenced on September 10, 2022, for a fixed period of 3 months with charter's options to extend the charter by up to 2 further 3-month periods, and Total Energies has already exercised the first of its 2 3-month option periods. On Slide 4, the current time charter for the Brazil Knutson with Galp sign expired in November 2022. However, the partnership has entered into a new time charter contract also with Galp in direct continuation for a period of 1 year, extending the vessels firm employment to November 2023. Regarding the partnership's time charter contract with Equinor for the Bodil Knutsen that is to commence around the end of 2023, this charter was either 1-year firm plus 2 1-year options or 2 years firm with 2 1-year options.

該安排於 2022 年 9 月 3 日開始，如果 Knutsen NYK 採取所有選擇，目前將在 2023 年 3 月初或前後到期。Tordis Knutsen 與 Total Energies 的期租於 2022 年 9 月 10 日開始，固定租金33個月的期限，並可選擇將租約再延長最多2 個3 個月的期限，而Total Energies 已經行使了2 個3 個月的期權期限中的第一個。在投影片4 上，巴西Knutson 與Galp 簽署的當前期租合約已於2022 年11 月到期。不過，該合作夥伴關係也與Galp 簽訂了新的期租合同，直接延續一年，延長了船舶的固定僱用期限至2023年11月。關於該合夥企業與Equinor就Bodil Knutsen將於2023年底開始的定期租船合同，該租船合同要么是1年期固定加2個1年期期權，要么是2年期固定加2個1年期選擇權。

In November 2022, Equinor confirmed their intention to fix the initial charge period at 2 years. Meaning that if all options are taken by Equinor, the charter will be for 4 years and will expire around the end of 2027. We received news that ENI would redeliver the total Knutson to us, and we expect this to occur on or around December 17, 2022. We're now marketing the vessel for new employment. In accordance with the previously announced time charter agreement with ENI for the Ingrid commitment, the partnership is expecting redelivery of the vessel on or around December 7, 2022. The partnership is continuing to market the vessel for new employment during 2023 in anticipation of the commencement of the new 3-year E&I time charter contract commencing in January 2024.

2022 年 11 月，Equinor 確認有意將初始收費期間固定為 2 年。這意味著，如果Equinor 採取所有選擇，則該租約將為期4 年，並將於2027 年底左右到期。我們收到消息稱，ENI 將重新向我們交付Knutson 總量，我們預計這將在12 月17 日左右發生，2022 年。我們現在正在行銷該船以尋找新的就業機會。根據先前宣布的與ENI 就Ingrid 承諾簽訂的期租協議，該合作夥伴預計將在2022 年12 月7 日左右重新交付該船。該合作夥伴將在2023 年期間繼續推銷該船以尋求新的就業機會，以期開始營運。新的 3 年期 E&I 期租合約將於 2024 年 1 月生效。

In terms of the wider market, we have continued to see good levels of activity in Brazil, but the North Sea remains a significant concern as we consider that this could take several further quarters to rebalance -- as we've said before, we are also in this time, looking at the conventional tanker market, where headline spot rates have risen substantially in recent weeks. And although this is a positive development, the reality is that it is not that easy to secure those higher rates. And as part of this type of employment, it is necessary to consider utilization where the vessel may not earn revenue every day when it's between cargoes as it does under a time charter and also fuel costs, which would normally be a cost for our customers under a time charter contract.

就更廣泛的市場而言，我們繼續看到巴西的活動水平良好，但北海仍然是一個重大問題，因為我們認為這可能需要幾個季度才能重新平衡 - 正如我們之前所說，我們正在同樣在這一次，看看傳統油輪市場，近幾週整體即期運價大幅上漲。儘管這是一個積極的進展，但現實是，獲得更高的利率並不容易。作為此類僱用的一部分，有必要考慮利用率，因為船舶可能無法像定期租船那樣每天在貨物之間賺取收入，還需要考慮燃料成本，這通常是我們客戶的成本期租合約。

Although we are also actively looking at the conventional market, it may be that this does not provide a sufficient level of income. Notwithstanding, given the charter developments we have seen, we now have $644 million of contracted forward revenue, excluding options, up from $594 million at the end of June 2022, plus $74.6 million in available liquidity. Slides 5 through 8 are our usual summary of our financial results. And as usual, I will just mention a few points. On Slide 5, our revenues held up well this quarter given the dry docking is ongoing and depreciation was higher as a result of their now being 18 vessels in the fleet from July 1st. Operating expenses are above their historic average, mainly as a result of increased bunker fuel costs related to our time charter vessels that needed to transit to and from their dry docks.

儘管我們也在積極關注傳統市場，但這可能無法提供足夠的收入水準。儘管如此，考慮到我們所看到的包機發展，我們現在擁有6.44 億美元的合約遠期收入（不包括選擇權），高於2022 年6 月底的5.94 億美元，加上7,460 萬美元的可用流動資金。投影片 5 至 8 是我們通常對財務表現的總結。像往常一樣，我只提幾點。在幻燈片 5 上，我們本季的收入保持良好，因為乾船塢正在進行，並且折舊較高，因為從 7 月 1 日起，船隊中的船隻數量已增至 18 艘。營運費用高於歷史平均水平，主要是由於我們的定期租船需要往返乾船塢，導致燃油成本增加。

When time chartered vessels are on higher, fuel is a cost for our customers, that these vessels are off-hire during their dry docks and with fuel costs increasing, this has impacted our results. The other factor affecting operating expenses are crew and crew-related costs, which remain elevated since the onset of COVID and which level may become the new normal as we move forward. With a wide and geographically spread supply base to draw on, we do believe we have some protection against certain elements of inflation that are incurring that are occurring in many countries just now. However, this is something that we, like all companies are keeping under class review.

當期租船舶價格較高時，燃料對我們的客戶來說是一項成本，這些船舶在幹船塢期間停租，隨著燃料成本的增加，這影響了我們的業績。影響營運費用的另一個因素是船員和船員相關成本，自新冠疫情爆發以來，這些成本一直居高不下，隨著我們的前進，這一水平可能會成為新常態。憑藉廣泛且分佈廣泛的供應基礎，我們確實相信我們可以針對許多國家目前正在發生的某些通貨膨脹因素提供一定的保護。然而，像所有公司一樣，我們正在對這一點進行集體審查。

The upturn in interest expenses and realized and unrealized gains and losses on derivative instruments, are driven in part by the recent increases in U.S. dollar interest rates and the forward curve, and again, partly driven by having an extra vessel in the fleet. September 30, 2022, around 61% of our debt was actually or effectively fixed rate through either interest rate swaps or our 2 sale and leaseback financings. On Slide 7, you can see our cash and cash equivalents balance at the end of the quarter of $49.6 million and the debt refinancing due in the third quarter of 2023 has moved to the current portion of our long-term debt balance. This is something we have already started talking to our lenders about and early indications are that we will be able to successfully refinance the 6 underlying vessels in good time by mid-2023 and unacceptable terms.

利息支出以及衍生性商品的已實現和未實現損益的上升，部分是由於最近美元利率和遠期曲線的上漲，部分是由於船隊中多了一艘船。截至 2022 年 9 月 30 日，我們約 61% 的債務實際上或有效地透過利率互換或我們的 2 次售後回租融資固定利率。在投影片 7 上，您可以看到我們季度末的現金和現金等價物餘額為 4,960 萬美元，2023 年第三季到期的債務再融資已轉移到我們長期債務餘額的當前部分。我們已經開始與貸方討論這個問題，早期跡象表明，我們將能夠在 2023 年中期之前及時、以不可接受的條款成功為 6 艘標的船舶提供再融資。

The distribution coverage ratio on Slide 8 was slightly up at 0.6% for the third quarter of 2022. And as we have disclosed previously, although there is a tendency to focus heavily on this figure each quarter, the partnership and the Board instead takes a longer and more rounded view. But of course, that's not to say that a DCR of less than 1 is something that is sustainable. In the context of the distribution, although we do not mechanically link that to the distribution coverage ratio in a given quarter, our Board does take into account our liquidity position, the outlook for the business in our market, our strategic interest and anything else we consider to be relevant.

幻燈片8 中的分配覆蓋率在2022 年第三季度略有上升，達到0.6%。正如我們之前所披露的，儘管每個季度都有重點關注這一數字的趨勢，但合作夥伴關係和董事會卻需要更長的時間和更圓潤的視野。當然，這並不是說 DCR 小於 1 是可持續的。在分配方面，儘管我們沒有機械地將其與特定季度的分配覆蓋率聯繫起來，但我們的董事會確實考慮了我們的流動性狀況、市場業務前景、我們的戰略利益以及我們的其他任何因素。認為是相關的。

We feel this allows us to bring a holistic view in ensuring that we operate in the best interest of our unit holders without jeopardizing our ability to participate in the longer-term shuttle tanker opportunities that are the core of our business. Slide 9 is an update on our contracted revenue and charter portfolio. We've covered many of the contractual updates already, so I won't repeat them here other than to say that while we have had success in filling some of the gaps we had in 2022 and in the longer term, there remains important work to be done in the near term for 2023, particularly in the North Sea, and that is what we are expending a great deal of energy on at the moment. As noted before, at September 30, 2022, we had remaining forward contracted revenue of $644 million, excluding options, with average remaining firm charters of 1.9 years and charters had options to extend these charters by a further 3 years on average.

我們認為，這使我們能夠提供整體視角，確保我們的營運符合單位持有人的最佳利益，而不損害我們參與作為我們業務核心的長期穿梭油輪機會的能力。投影片 9 是我們的合約收入和包機組合的更新。我們已經介紹了許多合約更新，因此我不會在這裡重複它們，只是想說，雖然我們已經成功填補了 2022 年和更長期的一些空白，但仍有重要的工作要做2023 年近期內就能完成，特別是在北海，這也是我們目前投入大量精力的目標。如前所述，截至2022 年9 月30 日，我們剩餘的遠期合約收入為6.44 億美元，不包括選擇權，平均剩餘公司租船期限為1.9 年，並且租船公司可以選擇將這些租船平均再延長3 年。

Then on Slide 10, we have the potential drop-down vessels held by our sponsor, KNOT, that the partnership may choose to purchase in the future. We've now added the 2 recently contracted vessels that are due for delivery in late 2024 and late 2025. It remains the partnership's target to acquire these vessels from the sponsor when surgical opportunities arise. However, there is, of course, no guarantee that this will be possible. Slide 11. We have seen pandemic-related impacts start to recede and FPSO deployment and oil production schedules have accelerated, especially in the Brazilian offshore shuttle tanker service to pre-salt areas.

然後在幻燈片 10 上，我們的贊助商 KNOT 持有潛在的下拉式船隻，合作夥伴將來可能會選擇購買。我們現在添加了 2 艘最近簽約的血管，預計將於 2024 年末和 2025 年末交付。當手術機會出現時，從贊助商處獲得這些血管仍然是合作夥伴關係的目標。然而，當然不能保證這一定會實現。投影片 11。我們看到與疫情相關的影響開始消退，FPSO 部署和石油生產計劃加快，特別是在巴西通往鹽下地區的近海穿梭油輪服務中。

Partly, this is from a belief that higher or high or higher oil prices will persist compared to project breakevens at or below $35 per barrel, driving investment and additional production capacity in the deepwater offshore fields. Although the more mature North Sea market has continued to encounter delays resulting in the current oversupply of shuttle tankers in the region, we saw the arrival into Norway during the second quarter of the delayed Johan Castberg FPSO that is to be operated by Equinor. This is a great example of a large field that will need shuttle tankers for its proven volumes that are today estimated at between 400 million and 650 million barrels of oil equivalent and for throughout its production life, which is expected to be 30 years.

部分原因是人們相信，與每桶 35 美元或以下的專案損益平衡相比，較高或較高或較高的油價將持續存在，從而推動深水海上油田的投資和額外產能。儘管更成熟的北海市場繼續遭遇延誤，導致該地區目前穿梭油輪供應過剩，但我們看到由 Equinor 運營的 Johan Castberg FPSO 已於第二季度抵達挪威。這是一個大型油田的一個很好的例子，該油田將需要穿梭油輪來滿足目前已探明的油當量（目前估計為4 億至6.5 億桶油當量）以及整個生產壽命（預計為30 年）的需要。

On Slide 12, we've highlighted previously only a very small number of new shuttle tanker orders that have been placed in 2022 for deliveries in 2024 and 2025, constituting only approximately 5% of current shuttle tankers in service. Given this and the main shipyards still being effectively full with container ships and LNG carrier orders through 2025. The total order book for shuttle tankers is very muted with only 6 likely to deliver before the end of 2025, all of which are understood to be assigned to long-term charters. Set against anticipated production start-ups from ordered or delivered FPSOs, we expect this will meaningfully tighten the midterm charter market potentially to the point of shortage.

在投影片 12 中，我們之前強調了極少數新的穿梭油輪訂單，這些訂單已於 2022 年下達，並於 2024 年和 2025 年交付，僅佔當前在役穿梭油輪的約 5%。有鑑於此，到 2025 年，主要造船廠仍然充滿了貨櫃船和液化天然氣運輸船訂單。穿梭油輪的總訂單量非常低，只有 6 艘可能在 2025 年底之前交付，據了解，所有這些都將被分配到長期租船合約。與預計訂購或交付的 FPSO 投產相比，我們預計這將顯著收緊中期租船市場，可能導致短缺。

New build shuttle tanker prices also remained elevated, up around 30% since the second half of 2021 as a result of tight shipyard capacity and higher input prices for steel and labor, all of which continues to help the competitiveness of our existing fleet. So in summary for this quarter on Slide 13, we had strong utilization of 99.7% for scheduled operations. We generated distributable cash flow of $10.9 million, and we paid a quarterly distribution of $0.52 for the 29th consecutive quarter. We had $644 million of remaining contracted forward revenue, excluding options at the end of the quarter and no refinance due until the third quarter of 2023.

由於造船廠產能緊張以及鋼材和勞動力投入價格上漲，新建穿梭油輪價格也保持高位，自 2021 年下半年以來上漲了約 30%，所有這些都繼續有助於我們現有船隊的競爭力。因此，總結投影片 13 上的本季度，我們的預定營運利用率高達 99.7%。我們產生了 1090 萬美元的可分配現金流，並且連續第 29 個季度支付了 0.52 美元的季度分配。我們的剩餘合約遠期收入為 6.44 億美元，不包括季度末的選擇權以及 2023 年第三季之前到期的再融資。

As a reminder, the partnership's operations are not exposed to short-term fluctuations in oil prices, volume of oil transported or global oil storage capacity, and our offshore loading charter rates are not as volatile as you find in other segments of shipping either upwards or downwards. In the near term, we focus very much on safe operations, both onboard and onshore, and we aim to maintain our high utilization statistics for scheduled operations. We're talking with our customers as we always do, and are proactively monitoring the wider market, including the conventional tanker market to ensure we can respond flexibly as opportunities arise.

需要提醒的是，該合作夥伴的營運不會受到油價、石油運輸量或全球石油儲存能力的短期波動的影響，而且我們的海上裝載租船費率並不像您在其他運輸領域中發現的那樣波動，無論是向上或向下。向下。短期內，我們非常關注船上和陸上的安全運營，我們的目標是保持預定運營的高利用率統計數據。我們一如既往地與客戶交談，並積極監控更廣泛的市場，包括傳統油輪市場，以確保我們能夠在機會出現時靈活應對。

We're planning for the scheduled dry docks that had to occur in 2023, and it may be worth saying here that all 5 of the dry docks in 2022 were for vessels based in Brazil. And with the drydocks taking place in Europe, these are our most expensive works due to longer mobilization time and fuel costs. In 2023, we have 5 further drydocks. However, 3 of these vessels are already based in Europe, resulting in significantly lower budgeted time and costs. Finally, as mentioned, the speed of recovery in oil production and hence shuttle tanker demand in the North Sea is our biggest cause for concern at this moment. We're working every angle to support our short-term cash flows across our North Sea vessels to find opportunities to reinforce our balance sheet.

我們正在規劃必須在 2023 年進行的預定乾船塢，這裡可能值得一提的是，2022 年的所有 5 個乾船塢都是為巴西的船舶提供的。由於乾船塢在歐洲進行，由於更長的動員時間和燃料成本，這些是我們最昂貴的工程。到 2023 年，我們還將擁有 5 個乾船塢。然而，其中 3 艘船舶已駐紮在歐洲，這大大降低了預算時間和成本。最後，如前所述，石油生產的恢復速度以及北海穿梭油輪的需求是我們目前最擔心的問題。我們正在從各個角度支持我們北海船舶的短期現金流，以尋找加強我們資產負債表的機會。

But if we're not able to do that then soon, then the Board will need to consider how this impacts on our distributable cash flow. At the same time, we continue to believe that the significant mid to long-term expansion of offshore oil production, particularly in pre-salt Brazil, supported by the large number of committed FPSO orders and with low marginal cost of oil production, together with the barriers to entry in our track record, mean we can continue to remain positive with respect to the mid- to long-term outlook. Thank you very much for listening and following this part of today's call, I'll be happy to answer questions.

但如果我們不能很快做到這一點，那麼董事會將需要考慮這對我們的可分配現金流有何影響。同時，我們仍然認為，在大量已承諾的 FPSO 訂單和較低的石油生產邊際成本的支持下，海上石油產量（尤其是巴西鹽下）的中長期顯著擴張，以及我們的業績記錄中的進入障礙意味著我們可以繼續對中長期前景保持樂觀。非常感謝您收聽並關註今天電話會議的這一部分，我很樂意回答問題。

(Operator Instructions) Our first question comes from Liam Burke of B. Riley. Liam.

（操作員說明）我們的第一個問題來自 B. Riley 的 Liam Burke。利亞姆。

Gary, I mean, obviously, you've got 4 vessels with limited chartering options. Your current liquidity position is what it is. Your coverage ratio is lower, and then you have to balance that against the long-term charter opportunities as well as elevated asset values. How are you balancing your coverage ratio? And how long do you think that you're going to have to go before your coverage ratio improves...

加里，我的意思是，顯然，您有 4 艘船，但租賃選擇有限。您目前的流動性狀況就是這樣。您的保險覆蓋率較低，然後您必須在長期包機機會以及資產價值上升之間取得平衡。您如何平衡您的覆蓋率？您認為您需要多長時間才能提高覆蓋率...

Yes. Thanks, Liam. I think the Board is always looking at the whole picture, just as you described there in terms of all of those things. And I think the outlook for us hasn't changed in terms of what we've been saying for several quarters now that the impact will depend on the signing of new charters at good rates. And that's what we were doing yesterday, it's what we're doing today, and it's what we'll be doing tomorrow. And I think we're working really hard to get back to a sustainable position. Like we said, the coverage ratio is not where we want it to be. And we're working really hard to get that back. And I think that's really -- as you've said, you've pointed out the North Sea vessels that we've got there, and that's exactly why we're looking at every angle and including the conventional market to the maximum extent we can to make sure that we can not only get through this but also look after the long-term interest of the unitholders and get us back to a sustainable place.

是的。謝謝，利亞姆。我認為董事會總是著眼於全局，正如您在所有這些方面所描述的那樣。我認為，就我們幾個季度以來所說的而言，我們的前景並沒有改變，現在的影響將取決於以良好的價格簽署新的租船合約。這就是我們昨天正在做的事情，這就是我們今天正在做的事情，這也是我們明天將要做的事情。我認為我們正在非常努力地恢復可持續發展的地位。正如我們所說，覆蓋率沒有達到我們想要的水平。我們正在努力恢復這一點。我認為這確實是——正如您所說，您已經指出了我們在那裡的北海船隻，這正是我們從各個角度審視並最大程度地包括傳統市場的原因可以確保我們不僅能夠渡過難關，還能照顧單位持有人的長期利益，讓我們回到永續發展的境地。

Okay. So what are your options in the North Sea? I mean I understand the conventional charter market is what it is. But if there's overcapacity in the North Sea, there's overcapacity in the North Sea.

好的。那麼，您在北海有什麼選擇呢？我的意思是，我了解傳統的包機市場就是這樣。但如果北海產能過剩，那就是北海產能過剩。

Yes, that's not to say that the vessels aren't doing anything at all. There is business there. Perhaps it's less long term than we would like. But we're talking to all of our customers all of the time. And there requirements change often daily, weekly. So I think for us, we're pushing as many buttons as we can, and that's why we've broadened our horizon to the conventional market as well. There are opportunities out there. I think we've been guiding towards this sort of situation for a little while. The gaps are a little bit nearer now, and we recognize that, which is perhaps what's coming through in the earnings release that we've put out. But the extent of that depends on what charters we can get. And I do think there is some business in the North Sea.

是的，這並不是說這些船隻根本沒有做任何事。那裡有生意。也許這比我們希望的還要短。但我們一直在與所有客戶交談。而且需求每天、每週都會改變。所以我認為對我們來說，我們正在盡可能地按下按鈕，這就是為什麼我們也將視野擴展到傳統市場。那裡有機會。我認為我們已經引導這種情況有一段時間了。現在差距有點接近了，我們意識到這一點，這也許就是我們發布的收益報告中所要傳達的內容。但這的程度取決於我們可以獲得什麼特許權。我確實認為北海有一些生意。

It's not that there's no business. and with the conventional market as well and obviously, the rates in the conventional market at the moment are very positive. So that's very helpful for us. They could go higher. So I think the extent of the impact for us is yet to be seen. And I think we're doing all we can to get some good business for those ships that are open.

並不是說沒有生意。顯然，對於傳統市場來說，目前傳統市場的利率非常正面。這對我們非常有幫助。他們可以走得更高。所以我認為對我們的影響程度還有待觀察。我認為我們正在盡一切努力為那些開放的船舶爭取一些好生意。

Our next question comes from Richard Diamond of Castlewood Capital.

我們的下一個問題來自 Castlewood Capital 的 Richard Diamond。

Gary, I just want to say that the mid to long-term outlook for KNOP is really the best, it's looked since coming public, and it's really short-term challenges. And I know you and the Board will take the right course for creating long-term shareholder value. Earlier this morning, I listened to the front line call, and they showed Q4 SMX rates, again, short-term charter at $65,000 a day with 3-year charters at $35,000 a day. So it looks if the -- if you wanted to do voyages that rates are still strong. Without asking for $1 out, let's say, Suezmax rates went up to $80,000 a day. Would that be competitive for KNOP?

Gary，我只想說，KNOP 的中長期前景確實是最好的，從上市以來來看，這確實是短期的挑戰。我知道您和董事會將採取正確的方針來創造長期股東價值。今天早些時候，我聽取了前線電話，他們再次顯示了第四季度的 SMX 費率，短期包機為每天 65,000 美元，三年包機為每天 35,000 美元。因此，如果你想進行航行，那麼利率仍然很高。比方說，在不要求支付 1 美元的情況下，蘇伊士型油輪的費率升至每天 8 萬美元。這對 KNOP 有競爭力嗎？

Thanks, Richard. You've made some really good points there, particularly around the mid- to long term, which we certainly would agree with. And it is the short term, that's the challenge for us. I think the part of the reason why we've been a little bit raising the caveats about the conventional market is obviously around the fact that the utilization is a little bit unpredictable. Yes, you can sign up for a TC but at a lower rate. And playing in the market really does depend on utilization and to a degree, obviously, fuel and repositioning and ballast costs. So I think it's not so easy to come up with a rate that this would work and this one wouldn't. But I think what we can say is that certainly where the conventional market is today, it's really helpful for us.

謝謝，理查。您在那裡提出了一些非常好的觀點，特別是在中長期方面，我們當然會同意。這是短期的，這對我們來說是個挑戰。我認為我們對傳統市場提出一些警告的部分原因顯然是因為利用率有點難以預測。是的，您可以註冊 TC，但費用較低。市場競爭確實取決於利用率，並且在一定程度上顯然取決於燃料、重新定位和壓載成本。所以我認為要找出一個可行而這個不行的比率並不容易。但我認為我們可以說的是，當今的傳統市場確實對我們很有幫助。

And we are seriously looking at what we can achieve in that market. And I think given the volatility that we're seeing in the market, -- we don't know what's going to happen to rates, et cetera, with what OPEC and Russia are going to do and the price cap beginning of December. There's a lot of things happening at the moment that make it very difficult to think that conventional tanker rates are going to come down in the short term. And that's very helpful for us. So whilst we don't want to necessarily use our vessels in the conventional market, we would much rather be doing offshore loading activities. It does at least give us a realistic and viable chance to earn good money. And you're right, I can't give you a rate. But certainly, despite the caveats we've put, we do feel that it's a good opportunity for us to be able to secure some charters and some income for our vessels.

我們正在認真考慮我們可以在該市場取得什麼成果。我認為，考慮到我們在市場上看到的波動，我們不知道利率等會發生什麼，以及 OPEC 和俄羅斯將採取的行動以及 12 月初的價格上限。目前發生的許多事情使得人們很難認為傳統油輪運價會在短期內下降。這對我們非常有幫助。因此，雖然我們不一定希望在傳統市場上使用我們的船舶，但我們更願意進行海上裝載活動。它至少給了我們一個現實可行的賺錢機會。你是對的，我不能給你一個價格。但當然，儘管我們提出了警告，但我們確實認為這對我們來說是一個很好的機會，可以為我們的船舶獲得一些租船合約和一些收入。

Would it change the -- let's say you decided to charter, let's say, at 2 vessels short term or move them to Brazil. Do you think that psychologically, the North Sea charters would start to become concerned about the availability of capacity.

假設您決定短期租用兩艘船，或將它們移至巴西，這會改變嗎？您認為從心理上講，北海租船公司會開始擔心運力的可用性嗎？

Yes. And certainly, we've seen that already starting in 2024 for sure. And I think some of our customers must already be thinking that way, I think. And we're seeing that in Brazil even today for 2023. So I think that is very, very possible. We've seen a couple of vessels leaving the North Sea just recently. I think -- so again, the numbers are changing regularly. And I think we -- things are moving in the right direction for us. We're not seeing too many variables that are working against us at the moment. newbuild prices are high. certain vessels are leaving the older vessels are perhaps leaving the market in 1s and 2s. And things are being tied up. And certainly in Brazil, that is already the case. What we are doing our best to do is to obviously work with the conditions that we've got in the North Sea and do our very best to sign new business for those vessels. But certainly, the underlying market and the conventional market at least is -- it's supporting us in those efforts, I think.

是的。當然，我們肯定已經從 2024 年開始看到這種情況。我想我們的一些客戶一定已經這麼想了。即使在 2023 年的今天，我們也能在巴西看到這種情況。所以我認為這是非常非常有可能的。我們最近看到幾艘船離開北海。我認為——同樣，這些數字正在定期變化。我認為，事情正在朝著對我們來說正確的方向發展。目前我們沒有看到太多對我們不利的變數。新造船價格很高。某些船隻即將離開，而較舊的船隻可能會在 1 秒或 2 秒內離開市場。事情正在被綁起來。當然在巴西，情況已經如此。我們正在盡力做的顯然是根據我們在北海現有的條件進行合作，並盡最大努力為這些船隻簽訂新業務。但可以肯定的是，我認為基礎市場和傳統市場至少正在支持我們的這些努力。

(Operator Instructions) Our next question comes from James Altschul of Aviation Advisory Service.

（操作員說明）我們的下一個問題來自航空諮詢服務部的 James Altschul。

I guess, I got a couple of questions for you, please. First of all, with regard to your hedge accounting because the accounting -- specifically the realized and unrealized gain on the derivative instruments because I believe in the news release, you said that you're not using hedge accounting. I hope using the right word.

我想，我有幾個問題想問你。首先，關於你的對沖會計，因為會計——特別是衍生工具的已實現和未實現收益，因為我相信新聞稿，你說你沒有使用對沖會計。我希望用正確的字。

That's right.

這是正確的。

Now there's a significant -- if you look at the income statement, there's a significant increase in the interest expense because of the increase in interest rates. But you also have a significant realized and unrealized gain on the derivative -- the derivatives are all related to your interest rate risk, right? I mean you...

現在有一個重要的問題——如果你看一下損益表，你會發現由於利率上升，利息支出顯著增加。但衍生性商品也有可觀的已實現和未實現收益——衍生性商品都與您的利率風險有關，對嗎？我是說你...

Interest rate...

利率...

Yes, yes. I mean, you don't have other kinds of derivatives like the Baltic tanker futures or anything like that, your derivatives are all interest rate related, correct?

是的是的。我的意思是，您沒有其他類型的衍生品，例如波羅的海油輪期貨或類似的東西，您的衍生品都與利率相關，對嗎？

Yes, they're all -- the realized and unrealized gain, there's a breakdown in the earnings release. And the majority of that relates to the valuation of the interest rate swap contracts that goes through the P&L last quarter. because we don't do hedge accounting.

是的，它們都是－已實現和未實現的收益，收益發布中有細分。其中大部分與上季損益表中的利率掉期合約的估值有關。因為我們不做對沖會計。

Okay. So of that figure you're having there, $12.37 million, how much of that relates to... Sorry . This quarter's interest expense, how much can we assume can be offset against the current quarter's interest expense?

好的。所以你那裡的數字是 1237 萬美元，其中有多少與…抱歉有關。本季的利息支出，我們假設可以抵銷本季的利息支出多少？

And I hope I'm phrasing this properly. Well, there are 2 different things. I mean the interest expenses, the interest expense on our debt. And then separately, we have interest rate swap contracts that offset some of that. So they're not actually legally the same thing if you see what I mean. So I think, James, if you want to -- I'm happy to speak to you separately away from this call, if that's helpful to you. If you wanted to drop an e-mail to the IR e-mail address, I'm very happy to talk to you if you want to get into the detail at some point on that.

我希望我的措辭正確。嗯，有兩件事不同。我的意思是利息支出，我們債務的利息支出。另外，我們還有利率掉期合約來抵銷其中的一部分。所以如果你明白我的意思的話，它們實際上在法律上並不是同一件事。所以我想，詹姆斯，如果你願意——我很高興在這次電話會議之外單獨與你交談，如果這對你有幫助的話。如果您想向 IR 電子郵件地址發送電子郵件，如果您想在某個時候了解詳細信息，我非常樂意與您交談。

Okay. I will understand that better. Next question, because you -- in the press release, you indicated that, I guess, a couple of the vessels, which -- that were redelivered that's the right word. They're currently on short-term charter to, I believe, your sponsor, but at a somewhat lower rate about -- can you give me -- give us an estimate of what the quarterly revenue impact of these lower rates will be in those particular vessels, how much of which we -- yes.

好的。我會更好地理解這一點。下一個問題，因為你在新聞稿中指出，我想，有幾艘船被重新交付，這是正確的詞。我相信，他們目前與您的贊助商簽訂了短期包機合同，但費率稍低，您能給我一些關於這些較低費率對季度收入影響的估計嗎？特定的船隻，我們有多少——是的。

We've traditionally not broken down our fleet by vessel for a number of different reasons. And I'm not going to do that here. And in particular, because that is a rate that is somewhat private between the company and its sponsor. However, those rates have been reviewed and checked by our independent conflicts committee as being appropriate rates given the circumstances. And actually, we believe that it's positive for the business to have those charters in place because the alternative, certainly up until this period, the alternative was potentially no income at all for a period of time. So I think we don't generally break down our fleet in that respect, and we try to steer our investors away from looking at individual vessels and instead focusing on the total revenues.

由於多種不同的原因，我們傳統上不會按船隻劃分我們的船隊。我不會在這裡這樣做。特別是，因為這是公司與其贊助商之間有點私密的利率。然而，這些費率已經過我們的獨立衝突委員會的審查和檢查，認為是考慮到具體情況的適當費率。事實上，我們認為，制定這些章程對企業來說是積極的，因為替代方案，當然直到這個時期，替代方案可能是在一段時間內根本沒有收入。因此，我認為我們通常不會在這方面分解我們的船隊，我們試圖引導投資者不要關注個別船隻，而是專注於總收入。

Well, I don't want to press the point, but there's more than one vessel effect. I was looking for an aggregate impact on the quarterly revenues of the transition of these covers 2 or 3 vessels to the short-term charters, would you be able to give us that number? I mean talking about...

好吧，我不想加強這一點，但容器效應不只一種。我正在尋找將 2 或 3 艘船舶轉為短期租船對季度收入的整體影響，您能給我們這個數字嗎？我的意思是談論...

Yes. No, sorry, James, I'm not going to give you a number on that because I think, as I say, you'll just be able to -- there are 2 vessels, you'll just be able to take the number divided by 2. So it will kind of lead me in the same in the direction.

是的。不，對不起，詹姆斯，我不會給你一個數字，因為我認為，正如我所說，你將能夠 - 有 2 艘船，你將能夠接受這個數字除以2。所以它會引導我朝著相同的方向前進。

Okay. And the final thing is this is not a question actually, and I know this is not a -- this is supposed to be Q&A not pontificating, but I would put as an investor, I would like to put in my 2 cents and no pun intended, urge all of you to be conservative in calculating determining your next distributions. I mean, obviously, I enjoy getting a nice quarterly distribution from every 3 months. But to me, the most important thing is the long-term strength of the balance sheet and the company. And as you well know, there are an awful lot of companies that created some major problems for themselves by paying dividends and well in excess of what they could really afford starting with General Electric and General Motors. So again, I would encourage you to be conservative when it comes to making your next decision regarding that distribution.

好的。最後一件事是，這實際上不是一個問題，我知道這不是一個——這應該是問答而不是武斷，但我想說，作為投資者，我想投入我的 2 美分，沒有雙關語出於目的，敦促大家在計算確定下一個分佈時保持保守。我的意思是，顯然，我喜歡每 3 個月獲得一次不錯的季度分配。但對我來說，最重要的是資產負債表和公司的長期實力。眾所周知，有許多公司透過支付遠遠超出其真正承受能力的股息，為自己帶來了一些重大問題，從通用電氣和通用汽車開始。因此，我再次鼓勵您在做出有關該分配的下一個決定時保持保守。

Yes. I appreciate that, James. And I've said before on previous earnings call, and I'm happy to say it again, we try to run this business on a conservative basis. We're generally not inclined to make rush decisions. We try very hard to do the best for our unitholders and also making sure that we can access the benefits that we think are going to come in the good markets that we see in the future. So yes, I fully get the point.

是的。我很感激，詹姆斯。我之前在之前的財報電話會議上說過，我很高興再說一遍，我們嘗試在保守的基礎上經營這項業務。我們通常不傾向於做出倉促的決定。我們非常努力地為我們的單位持有者提供最好的服務，並確保我們能夠獲得我們認為未來良好市場將會帶來的好處。所以是的，我完全明白這一點。

(Operator Instructions) Our next question comes from (inaudible) Church, who's an individual investor.

（操作員說明）我們的下一個問題來自（聽不清楚）Church，他是一位個人投資者。

Just wanted to have a quick question. Realistically, what are the chances of spending some of the cash on repurchasing shares on the open market... That's all...

只是想問一個簡單的問題。實際上，花一些現金在公開市場上回購股票的機會有多大……僅此而已……

Thanks, (inaudible). Yes. No, look, we've never ruled that out. It's something that the Board has always kept on the table. We've historically not done that. We've not gone down that route. We felt that the money has been better used and it makes more sense to keep that money in cash in the business. And obviously, it's a decision for the Board rather than myself, so I won't sort of pontificate on what the board might or might not decide to do in the future. But we haven't typically done that. And I think at the moment, with our outlook. I think the business probably needs the cash that it's got. And we're focused on getting all of the charters that we need at good rates so that we're in a good, sustainable position. So I think to answer your question, I don't think it's on the cards at the moment. But as I say, I won't speak on behalf of the Board. But I think at the moment, that's probably not our priority.

謝謝，（聽不清楚）。是的。不，看，我們從未排除過這種可能性。這是董事會一直保留在桌面上的事情。我們歷史上沒有這樣做過。我們沒有走那條路。我們認為這筆錢得到了更好的利用，並且將這筆錢以現金形式保留在企業中更有意義。顯然，這是董事會的決定，而不是我自己的決定，所以我不會武斷地談論董事會將來可能會或可能不會決定做什麼。但我們通常不會這樣做。我認為目前我們的前景是這樣的。我認為該企業可能需要現有的現金。我們致力於以優惠的價格獲得我們所需的所有包機，以便我們處於良好的、可持續的地位。所以我想回答你的問題，我認為目前還不可能。但正如我所說，我不會代表董事會發言。但我認為目前這可能不是我們的首要任務。

I see. I only asked because the coverage ratio is below 1. That's the only reason.

我懂了。我問這個只是因為覆蓋率低於1。這是唯一的原因。

Yes. Yes. Thank you for your question.

是的。是的。謝謝你的問題。

(Operator Instructions) Our next question comes from [Rob Silvera] of R.E. Silvera and Associates Marine Surveyors.

（操作員說明）我們的下一個問題來自 R.E. 的 [Rob Silvera]。 Silvera 和 Associates 海洋測量師。

Yes, are very concerned about this last report that you put out for a number of reasons, not just the financial reasons. But what it seems to point to based on your past actions. And my first question is, what was your purpose of revealing all of the new and upcoming shuttle tankers of Knutsen NYK that may be available in the future. Why did you reveal all of those.

是的，我們非常關注您發布的最後一份報告，原因有很多，而不僅僅是財務原因。但根據你過去的行為，它似乎指向什麼。我的第一個問題是，您透露 Knutsen NYK 未來可能推出的所有新型和即將推出的穿梭油輪的目的是什麼？你為什麼要透露所有這些。

Yes, Rob, that slide has sort of been in our presentation certainly as long as I've been performing this role. And we always like to disclose what the sponsor has because through the Omnibus agreement, we have the ability to purchase those ships from the sponsor at a point in the future, subject to all kinds of different things. But I think it's important that we disclose that information so that people can understand where the future might be in terms of fleet growth for the business. So there's nothing sinister about it. It's really just trying to be transparent.

是的，羅布，自從我擔任這個角色以來，這張投影片就一直在我們的簡報中。我們總是喜歡披露贊助商擁有的東西，因為透過綜合協議，我們有能力在未來的某個時候從贊助商那裡購買這些船隻，但要遵守各種不同的條件。但我認為我們揭露這些資訊很重要，以便人們能夠了解業務機隊成長的未來發展方向。所以這並沒有什麼險惡的。這實際上只是想變得透明。

Okay. Well, currently, with our current situations with expiring contracts and the need to employ the ships. The report is obviously very troubling to the market because we've lost over a year's worth of dividends in the price of stock for today. As we speak, it's down at $11.66, down $2.37. So that's very discouraging. And I think based on your past -- pardon my hoarse throat, your past conference calls, on the last one, you had said that there were no new drop-downs coming that you contemplated. And then this latest drop-down, which came in July comes as a surprise based on what you're telling people that is going to happen in the future. And that's also happened a few quarters back when you mentioned nothing about drop-downs. And then right after the conference call within a week, there was a drop down, and you didn't tell us that, that was coming or even contemplated at that point in time. And I think that's -- (inaudible) hurts.

好的。嗯，目前，鑑於我們目前的情況，合約即將到期，並且需要使用船隻。這份報告顯然令市場非常不安，因為我們今天的股價已經損失了一年多的股利。就在我們說話的時候，它跌至 11.66 美元，下跌了 2.37 美元。所以這非常令人沮喪。我認為根據你的過去——請原諒我嘶啞的喉嚨，你過去的電話會議，在最後一次電話會議上，你曾說過你沒有考慮過新的下拉菜單。然後，根據您告訴人們未來將發生的情況，7 月出現的最新下拉清單令人驚訝。幾個季度前也發生過這種情況，當時您沒有提到下拉式選單。然後就在電話會議結束後的一周內，出現了下降，而你沒有告訴我們，那是即將到來的，甚至是在那個時間點考慮的。我認為這——（聽不清楚）很痛苦。

Robert, the previous earnings call in August, the drop-down had already happened. It was effective 1st of July and the previous earnings call was in August. So...

羅伯特，在八月的上一次財報電話會議上，股價下跌已經發生了。該政策於 7 月 1 日生效，上一次財報電話會議是在 8 月。所以...

Yes, I'm sorry. I missed that one. It was the one before. that, that you said it? forgive me...

是的，對不起。我錯過了那個。就是之前那個。那，那是你說的嗎？對不起...

Yes. But the drop downs that we've done certainly recently have been using cash and debt and it's basically internally financed. So we haven't had to dilute any of the existing unitholders in order to do that. And in order to bring in those new revenue streams.

是的。但我們最近所做的下降肯定是使用現金和債務，基本上是內部融資。因此，我們不必為此稀釋任何現有的單位持有人。為了帶來這些新的收入來源。

So I understand...

所以我明白了...

And we put out the KNOT vessels, which was your original point, so that people can see what those vessels might be, and we always are looking to drop vessels down at an appropriate time when we think we benefit from doing that. So well, at this point, it's certainly something that we want to do.

我們推出了 KNOT 船隻，這是您最初的觀點，以便人們可以看到這些船隻可能是什麼，並且我們總是希望在我們認為這樣做可以受益的適當時間放下船隻。那麼，在這一點上，這肯定是我們想做的事情。

Yes. But at this point in time, when you're struggling to get new contracts to fill the ships we have, I think it does not serve a good purpose to imply that there may be future drop-downs with the raising of interest rates and raising of the debt levels that we have because this last one, you paid cash and you assume the debt. And altogether, we paid $119 million for a ship that turned out that it's actually defective and had to be repaired, which is not something that looks good...

是的。但在這個時候，當你正在努力獲得新合約來填補我們現有的船舶時，我認為暗示未來可能會隨著利率的提高和提高而下降，這並沒有什麼好處。我們的債務水平，因為在最後一個，你支付了現金並承擔了債務。總共，我們花了 1.19 億美元買了一艘船，結果發現它實際上有缺陷，必須修理，這看起來不太好...

I think... That's a little bit harsh because all of vessels have troubles and they get fixed. And that's the same as your car is the same as anything else. I mean, it wasn't -- I know give you a little bit of...

我認為……這有點苛刻，因為所有船隻都有問題並且都得到了修復。這就像你的汽車和其他任何東西一樣。我的意思是，這不是——我知道給你一點…

It troubles me to see a used vessel go for $119 million in total cost. That was troubling. Anyhow, I'm (inaudible). I am a shareholder for many, many years now that we're going to, in the near future, do some more drop-downs with conditions as they are until we get good contracts for our vessels because it's obvious you do not want to operate in the spot market, even though rates are high. And I can understand why you don't want to because you're really not designed to compete against the VLCCs or the Suezmaxes that are doing that every day. So that's my feeling that...

看到一艘二手船的總成本高達 1.19 億美元，我感到很不安。這很令人不安。無論如何，我（聽不清楚）。我已經是股東很多年了，在不久的將來，我們將在有條件的情況下進行更多的下拉交易，直到我們為我們的船舶獲得良好的合同，因為很明顯你不想經營在現貨市場，儘管利率很高。我可以理解為什麼你不想這樣做，因為你真的不是為了與每天都這樣做的超大型油輪或蘇伊士型油輪競爭而設計的。所以這就是我的感覺...

Well, we do and we are happy to go into the conventional market. I mean all of these things are not so simple as looking at a headline rate and saying, yes, we can get that. But there's no reticence from us about putting our vessels in the conventional tanker market if we think that's the best thing to do -- and certainly..

嗯，我們願意，而且我們很高興進入傳統市場。我的意思是，所有這些事情並不像查看標題利率並說“是的，我們可以得到它”那麼簡單。但如果我們認為這是最好的選擇，那麼我們會毫不猶豫地將我們的船舶投入傳統油輪市場——當然…

What size we advantage. What size are we classified as Suezmax?

我們有多大的優勢。我們將蘇伊士型油輪歸類為多大尺寸？

Yes, most of the North Sea are Aframax and then we've got the (inaudible), which is Suezmax.

是的，北海的大部分地區都是阿芙拉型油輪，然後我們有（聽不清楚）蘇伊士型油輪。

I see. Okay. Well, that's my concern. I know you want to be conservative, and I just -- I really don't want to see us increase our debt and increase our drop-downs at this point in time until we have solidified our existing fleet because next year, like you say, we face another 5 dry-dockings, which are very tough on earnings. So that's my input, okay?

我懂了。好的。嗯，這是我關心的問題。我知道你想要保守，我只是 - 我真的不想看到我們此時增加債務並增加我們的下降，直到我們鞏固現有機隊，因為明年，就像你說的，我們還面臨著另外5 次進塢，這對獲利來說非常困難。這就是我的意見，好嗎？

Reassure you, we won't be doing any drop-downs unless it makes sense. So it's not that we grow -- it's not to grow at all costs per MLP...

請放心，除非有意義，否則我們不會進行任何下拉式選單。所以這並不是說我們在成長──也不是為了每個 MLP 不惜一切代價成長…

How does it make sense? How -- can you explain to me how it makes sense -- in a time when interest rates have risen and will probably rise some more, and we have ships that are not contracted for that may be open to having to go in the spot market. How is (inaudible) and drop-down beneficial?

這有什麼意義呢？你能向我解釋一下這有何意義嗎？在利率已經上升並且可能會進一步上升的情況下，我們有未簽訂合約的船舶可能不得不進入現貨市場。 （聽不清楚）和下拉式選單有什麼好處？

Well, because -- and I'm not saying we're going to do a drop down, but the way that we think about the drop down is whether or not by itself as a stand-alone ship, does it make the MLP stronger? Is it in the interest of everybody for us to take that when you look at the cash flows associated with that vessel. So if we pay x dollars for it, is it creating free cash flow for us by buying that vessel at that price with the debt that it has and the charter that it has. And so -- and also considering the fact that we will have to pay a certain amount of equity for it, and that may be generated through internal funds or debt. But as a project, as a vessel, it has to stand alone and be a good piece of business -- and accretive add to the partnership. Otherwise, obviously, we won't do it.

嗯，因為——我並不是說我們要進行下降，但我們考慮下降的方式是它本身是否作為一艘獨立的船，是否會讓 MLP 變得更強大？當您查看與該船相關的現金流時，我們採取這種做法是否符合每個人的利益？因此，如果我們支付 x 美元購買它，是否可以通過以該價格購買該船以及其所擁有的債務和特許權來為我們創造自由現金流。因此，也要考慮到我們必須為此支付一定數量的股本，而這可能是透過內部資金或債務產生的。但作為一個項目，作為一個船舶，它必須獨立並成為一項良好的業務，並為合作夥伴關係帶來增值。否則，顯然我們不會這麼做。

Well, that's good to hear. The thing that's really discouraging is the market's reaction to the current report, which is quite discouraging because to see a whole years of dividends wiped out in the price of the stock. Okay. That's my input, Gary. Please consider that. And have a nice holiday bless you.

嗯，很高興聽到這個消息。真正令人沮喪的是市場對目前報告的反應，這非常令人沮喪，因為看到一整年的股息在股票價格中消失了。好的。這就是我的意見，加里。請考慮一下。祝你假期愉快。

Thank you.

謝謝。

At this time, we currently have no further questions. I'll hand back over to Gary for any closing remarks.

目前，我們沒有進一步的問題。我將把結束語交給加里。

Well, thank you, everybody, and I wish everybody well for the holiday season, if we don't speak to you.

好吧，謝謝大家，如果我們不跟你們說話的話，我祝大家假期愉快。

And thank you again for listening. Ladies and gentlemen, this concludes today's call. You may now disconnect your lines.

再次感謝您的聆聽。女士們、先生們，今天的電話會議到此結束。現在您可以斷開線路。