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KNOP, KNOT Offshore Partners LP Common
A capital-intensive business, run on heavy physical assets that must be kept working and earn a return above what they cost to maintain.
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Operating margin has run about 27% through the cycle, a wide margin for the work it does — whether that reflects a durable edge or one that can fade is what the record weighs. The operating margin has swung widely — from 8.6% to 48% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2016–2025
realized figures from each filing · older years to the left| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMDec 2025 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| $173M | $213M | $278M | $283M | $279M | $269M | $269M | $291M | $319M | $364M | $364M | RevenueRevenue |
| $82M | $95M | $129M | $128M | $123M | $74M | $66M | $25M | $73M | $85M | $85M | Operating incomeOp. inc. |
| 47.5% | 44.9% | 46.3% | 45.2% | 44.2% | 27.3% | 24.7% | 8.6% | 22.9% | 23.2% | 23.2% | Operating marginOp. mgn |
| $61M | $68M | $82M | $59M | $65M | $54M | $59M | ($34M) | $14M | $23M | $92M | Net incomeNet inc. |
| -0% | -0% | -0% | 0% | 0% | 1% | 1% | — | 4% | 5% | 1% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||||
| $108M | $155M | $149M | $166M | $169M | $166M | $101M | $132M | $137M | $156M | $156M | Operating cash flowOp. cash |
| $56M | $72M | $89M | $90M | $90M | $100M | $107M | $111M | $112M | $120M | $34M | DepreciationDeprec. |
| ($9M) | $15M | ($22M) | $17M | $14M | $13M | ($65M) | $55M | $11M | $13M | $29M | Working capital & otherWC & other |
| $60M | $69M | — | — | — | — | — | — | — | — | $75M | Dividends paidDiv. paid |
| Balance sheet | |||||||||||
| $28M | $46M | $42M | $44M | $53M | $62M | $48M | $64M | $67M | $89M | $89M | Cash & investmentsCash+inv |
| $0 | $0 | — | — | — | — | $8M | $5M | $6M | $4M | $4M | ReceivablesReceiv. |
| $1M | $2M | $2M | $2M | $3M | $3M | $6M | $4M | $3M | $4M | $4M | InventoryInvent. |
| $2M | $5M | $5M | $3M | $4M | $4M | $4M | $10M | $6M | $10M | $10M | Accounts payablePayables |
| ($1M) | ($3M) | ($2M) | ($438K) | ($1M) | ($566K) | $9M | ($2M) | $4M | ($2M) | ($2M) | Operating working capitalOper. WC |
| $31M | $56M | $52M | $53M | $66M | $74M | $86M | $90M | $95M | $111M | $111M | Current assetsCur. assets |
| $78M | $123M | $128M | $104M | $214M | $116M | $390M | $128M | $287M | $427M | $427M | Current liabilitiesCur. liab. |
| 0.4× | 0.5× | 0.4× | 0.5× | 0.3× | 0.6× | 0.2× | 0.7× | 0.3× | 0.3× | 0.3× | Current ratioCurr. ratio |
| $0 | $0 | — | — | — | — | — | — | — | — | $0 | GoodwillGoodwill |
| $1.3B | $1.8B | $1.8B | $1.7B | $1.8B | $1.7B | $1.7B | $1.6B | $1.6B | $1.7B | $1.7B | Total assetsAssets |
| $717M | $1.0B | $1.1B | $995M | $1.0B | $967M | $1.1B | $957M | $905M | $955M | $955M | Total debtDebt |
| $689M | $981M | $1.0B | $952M | $978M | $905M | $1.0B | $893M | $838M | $866M | $866M | Net debt / (cash)Net debt |
| 3.9× | 3.1× | 2.6× | 2.5× | 3.9× | 2.6× | 1.6× | 0.3× | 1.1× | 1.4× | 1.4× | Interest coverageInt. cov. |
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- ThinOperating income $85M ÷ interest expense $62M
What this means
Operating profit covers interest, but with little room. A bad year, a refinancing at higher rates, or a revenue wobble closes the gap fast.
- How heavy is the debt, net of cash? $866M · 10.2× operating profitHeavy net debtCash $89M − debt $955M
What this means
Netting $89M of cash and short-term investments against $955M of debt leaves $866M owed, about 10.2× a year's operating profit (11.3× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Not enough dataIndustry peers: median 4%
What this means
The filing data didn't include the inputs for this check.
- Not enough dataIndustry peers: median 12%
What this means
The filing data didn't include the inputs for this check.
- Cash-backedCash from ops $156M ÷ net income $92M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? —Not enough data
What this means
The filing data didn't include the inputs for this check.
Graham’s defensive tests · 0 of 6 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $364M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.26×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $955M vs ($315M) WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability NearA profit every year (10-yr record) · 1 loss year
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · 2 of 10 yrs
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −99%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.03/share (latest year $2.74), the averaged base the calculator's gate runs on. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2016–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 9 of 10
What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
- Operating margin 46% → 18% (3-yr avg ends)
What this means
Through the cycle the operating margin slipped — about 46% early to 18% lately, median 27% — competition or costs are biting in.
- Worst year 2023 · 8.6% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Dividend record rising
What this means
Paid and raised the dividend across the record, the continuity Graham prized.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2025Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investments$89M
- Receivables$4M
- Inventory$4M
- Other current assets$14M
- Debt due within a year$381M
- Accounts payable$10M
- Other current liabilities$36M
From the company's latest filing.
Inverting the record
Invert: instead of why KNOT Offshore Partners LP Common is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.
2 of the 3 tests turned up something to look into; the other 1 came back clean.
- Look hereIs it less profitable than it was?18.3% vs 46.2%
The operating margin averaged 46.2% early in the record and 18.3% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
- Look hereDid receivables and inventory outpace sales?1% → 2% of sales
Receivables and inventory grew from $1M to $8M while revenue grew 111%: working capital is climbing faster than sales (1% of revenue then, 2% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.
- Did reported profit become cash?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
Peers, Marine Shipping
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| KEXKirby | $3.4B | — | 7.7% | 4% | 10% |
| MATXMatson | $3.3B | 96% | 11.4% | 11% | 12% |
| TDWTidewater Inc. | $1.4B | — | -12.5% | -6% | 3% |
| INSWInternational Seaways Inc. Common Stock | $843M | — | 12.3% | 3% | 33% |
| PANLPangaea Logistics Solutions Ltd. | $632M | — | 7.7% | 10% | 10% |
| LPGDorian LPG Ltd. | $482M | — | 35.2% | 7% | 38% |
| KNOPKNOT Offshore Partners LP Common | $364M | — | 35.8% | — | — |
| GNKGenco Shipping & Trading Limited | $342M | — | -1.1% | -0% | 31% |
| Group median | — | — | 9.6% | — | — |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the home-market price, not the US ADR quote. KNOT Offshore Partners LP Common reports in USD, and every figure here (owner earnings, book value, the share count) is on that ordinary-share basis. Enter the price on the same basis: the local-exchange quote per ordinary share. A US ADR price in dollars bundles the ADR-to-ordinary ratio, so it will not reconcile with these figures and would throw the multiple off.
KNOT Offshore Partners LP Common is profitable, but its owner-earnings base could not be formed from this filing’s tagged data (operating cash flow or capital spending is missing), so the owner-earnings reverse-DCF has no base to grow. We read the price from both ends instead: type a price to see the profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
Revenue, delivered6%/yr’20→’25
Enter a price to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.
Manual order: ← KNDI its page in the Manual KOF →
Industry order: ← KEX the Marine Shipping chapter LPG →