BP Midstream Partners LP First Quarter 2018 Results MAY 10, 2018 Rip Zinsmeister CHIEF EXECUTIVE OFFICER Craig Coburn CHIEF FINANCIAL OFFICER 1
Cautionary statement FORWARD LOOKING STATEMENTS This presentation includes various forward looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, regarding BP Midstream Partners LP s ( BP Midstream, we, us or our ) strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward looking statements. These statements often include the words could, believe, anticipate, intend, estimate, expect, project and similar expressions are intended to identify forward looking statements, although not all forward looking statements contain such identifying words. These forward looking statements are based on BP Midstream's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. In accordance with safe harbor provisions of the Private Securities Litigation Reform Act of 1995, these statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, which could cause future outcomes to differ materially from those set forth in forward looking statements. In particular, expressed or implied statements concerning future actions, future drop downs, volumes, capital requirements, conditions or events, future impact of prior acquisitions, future operating results or the ability to generate sales, the potential exposure of BP Midstream to market risks, and statements relating to expected Adjusted EBITDA, future growth, income, cash flow and the amount of distributions are forward looking statements. Forward looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward looking statements. Forward looking statements speak only as of the date of this presentation, and we disclaim any obligation to update such statements for any reason, except as required by law. All forward looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this paragraph. Many of the factors that will determine these results are beyond our ability to control or predict. These factors include the risk factors described in BP Midstream s annual report for the year ended December 31, 2017 as filed with the Securities and Exchange Commission (the SEC ) on March 22, 2018, as updated by our subsequent filings with the SEC. If any of those risks occur, it could cause our actual results to differ materially from those contained in any forward looking statement. Because of these risks and uncertainties, you should not place undue reliance on any forward looking statement. This presentation has been prepared by BP Midstream and includes market data and other statistical information from sources believed by BP Midstream to be reliable, including independent industry publications, government publications or other published independent sources. Some data are also based on BP Midstream s good faith estimates, which are derived from its review of internal sources as well as the independent sources described above. Although BP Midstream believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness. NON GAAP FINANCIAL MEASURES BP Midstream has included the non GAAP financial measures Adjusted EBITDA and cash available for distribution based on information in its financial statements. Adjusted EBITDA and cash available for distribution are supplemental financial measures that management and external users of BP Midstream s financial statements, such as industry analysts, investors, lenders and rating agencies may use, to assess: (i) BP Midstream s operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods; (ii) the ability of BP Midstream s business to generate sufficient cash to support its decision to make distributions to its unitholders; (iii) BP Midstream s ability to incur and service debt and fund capital expenditures; and (iv) the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. BP Midstream believes that the presentation of Adjusted EBITDA and cash available for distribution provides useful information to management and investors in assessing its financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA and cash available for distribution are net income and net cash provided by operating activities. Adjusted EBITDA and cash available for distribution should not be considered as an alternative to GAAP net income or net cash provided by operating activities, respectively. Adjusted EBITDA and cash available for distribution have important limitations as analytical tools because they exclude some but not all items that affect net income and net cash provided by operating activities. Adjusted EBITDA or cash available for distribution should not be considered in isolation or as a substitute for analysis of results as reported under GAAP. Additionally, because Adjusted EBITDA and cash available for distribution may be defined differently by other companies in the industry, BP Midstream s definition of Adjusted EBITDA and cash available for distribution may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. For reconciliations of Adjusted EBITDA and cash available for distribution to their most directly comparable GAAP measures, see Supplementary Information. References to pro forma asset portfolio mean our asset portfolio immediately following our initial public offering on October 30, 2017, presented if we owned such assets for full years 2016 and 2017. BP Midstream presents such data on a pro forma basis for illustrative purposes only. The presentation of data on a pro forma basis does not purport to project (and should not be read as projecting) our future performance on a 12 month basis or in any other future time period. 2
Agenda Operational results Financial results Financial frame Asset dropdowns Q&A 3
Impact of FERC ruling No material impact to either existing portfolio or ROFO 1 assets Tariff Rate Types for Existing Asset Portfolio % of 2018 Forecast 2 Cash Available For Distribution No Cost of Service-based rates in existing portfolio Very few Cost of Service-based rates in ROFO 1 assets that are future dropdown candidates BP affiliate is the only shipper on many of our pipelines mitigating risk of rate protest 39% 61% No permanent or material impact expected from changes to indexing in 2020 (1) Right of First Offer. (2) Based on IPO forecast for twelve months ending December 31, 2018 in our Prospectus dated October 25, 2017. 4
First quarter 2018 operational results Gross Throughput 1,2 kboepd Average Revenue per Barrel 1,2,3 $ per boe 1,600 1.50 1,200 +5% 1.00 800 0.50 400 0 4Q17 1Q18 Endymion Proteus Cleopatra Caesar 0.00 Total Wholly Owned Assets 4Q17 Mars Mardi Gras Joint Ventures 1Q18 Mars Diamondback River rouge BP2 (1) Cleopatra gas volumes are converted to kboepd by dividing MMscf/d by 5.8. (2) Assumes pro forma asset portfolio for full fourth quarter 2017. (3) Based on reported revenue from transportation and allowance oil divided by delivered barrels over the same time period. 5
First quarter 2018 financial results $million 1Q17 4Q17 1Q18 1Q18 IPO Forecast Revenue 1 26.6 27.6 26.6 26.8 Costs and expenses 6.2 10.7 8.6 9.7 Operating income 20.4 16.9 18.0 17.1 Income from equity method investments - 17.9 22.8 23.7 Other loss (income) 0.2 (0.1) - - Interest expense, net - 0.1 0.1 0.2 Income tax expense 7.9 2.0 - - Net income 12.3 32.8 40.7 40.6 Less: Predecessor net income prior to the IPO on October 30, 2017 12.3 2.9 - - Net income subsequent to the IPO - 29.9 40.7 40.6 Less: Net income attributable to non-controlling interests N/A 8.1 10.2 10.9 Net income attributable to the Partnership N/A 21.8 30.5 29.7 Adjusted EBITDA attributable to the Partnership N/A 23.5 35.2 32.4 Cash available for distribution attributable to the Partnership N/A 23.3 36.5 31.7 (1) 1Q18 Revenue does not include any net adjustments for volume deficiency under the throughput and deficiency agreements with BP Products North America. In relation to these agreements, we recorded $1.3 million in net adjustments from volume deficiency agreements. 6
Financial frame 2017 Pro forma asset portfolio 2018 Existing asset portfolio Through 2020 Organic and inorganic Gross throughput 1.4 million boed ~1.5 million boed Sufficient to support 5 6% organic distribution growth Average revenue per bbl 1 Wholly owned: $0.73 Mars: $1.41 Mardi Gras JV: $0.67 Broadly flat with 2017 3 Sufficient to support 5 6% organic distribution growth Maintenance Total Actual Maintenance Spend $8 million 2 Estimated Total Maintenance Spend ~$7 million Consistent with 2018 4 Cash available for distribution Subsequent to IPO: $23 million > $126 million Sufficient for mid-teens, per annum, unit distribution growth Debt As at Dec 31, 2017: $15 million Debt to Adjusted EBITDA ratio not to exceed 3.5 times; target credit metrics consistent with investment grade (1) Cleopatra gas volumes are converted to kboepd by dividing MMscf/d by 5.8. (2) Based on financials for our predecessor prior to October 30, 2017, and financials for BPMP, including our post-ipo asset portfolio, from October 30 to December 31, 2017. (3) On a portfolio basis. (4) Subject to future dropdown activity. 7
Asset dropdowns Stable & predictable cash flows Strategically located assets BP s Pool of US qualifying income Opportunity for growth 2016 & 2017 EBITDA PROXY 1 $4 & 8bn (1) EBITDA proxy = Earnings before interest, tax, depreciation and amortization, calculated as Underlying replacement cost operating profit (loss) before interest & tax + Depreciation, depletion and amortization, for BP s US geographical area only, as sourced from BP s Quarterly F&OI, for 2016 and 2017. Refer www.bp.com. Amounts have been rounded. 8
1Q 2018 RESULTS Q&A Rip Zinsmeister Chief Executive Officer Craig Coburn Chief Financial Officer Brian Sullivan Vice President, Investor Relations 9
1Q 2018 RESULTS Supplementary Information 10
Reconciliation of Adjusted EBITDA and CAFD to Net Income $million 1Q17 4Q17 1Q18 1Q18 IPO Forecast Net income 12.3 32.8 40.7 40.6 Add: Depreciation 0.7 0.7 0.7 0.7 Income tax expense 7.9 2.0 - - Interest expense, net - 0.1 0.1 0.2 Cash distributions received from equity method investments 1-29.9 31.6 29.1 Less: Income from equity method investments - 17.9 22.8 23.7 Adjusted EBITDA 20.9 47.6 50.3 46.9 Less: Distributions of prorated fourth quarter joint venture dividends to prior owners N/A 9.4 - - Adjusted EBITDA attributable to Predecessor prior to the IPO on October 30, 2017 N/A 5.2 - - Adjusted EBITDA attributable to non-controlling interests N/A 9.5 15.1 14.5 Adjusted EBITDA attributable to the Partnership N/A 23.5 35.2 32.4 (1) These amounts represent 100% of the cash distributions from Mars and Mardi Gras Joint Ventures prior to distribution to non-controlling interests Continues on next slide 11
Reconciliation of Adjusted EBITDA and CAFD to Net Income Continues from previous slide $million 1Q17 4Q17 1Q18 1Q18 IPO Forecast Adjusted EBITDA attributable to the Partnership N/A 23.5 35.2 32.4 Add: Less: Net adjustments from volume deficiency agreements N/A (0.2) 1.3 - Net interest received/(paid) N/A 0.1 - (0.1) Maintenance capital expenditures N/A 0.1-0.6 Cash available for distribution attributable to the Partnership N/A 23.3 36.5 31.7 12
Reconciliation of Adjusted EBITDA and CAFD to Net Cash Provided by Operating Activities $million 1Q17 4Q17 1Q18 Net cash provided by operating activities 10.8 35.0 42.1 Add: Income tax expense 7.9 2.0 - Interest expense, net - 0.1 0.1 Distributions in excess of earnings from equity method investments - 7.2 6.1 Change in operating assets and liabilities 2.7 3.3 2.0 Less: Non-cash adjustments 0.5 - - Adjusted EBITDA 20.9 47.6 50.3 Less: Distributions of prorated fourth quarter joint venture dividends to prior owners N/A 9.4 - Adjusted EBITDA attributable to Predecessor prior to the IPO on October 30, 2017 N/A 5.2 - Adjusted EBITDA attributable to non-controlling interests N/A 9.5 15.1 Adjusted EBITDA attributable to the Partnership N/A 23.5 35.2 Continues on next slide 13
Reconciliation of Adjusted EBITDA and CAFD to Net Cash Provided by Operating Activities Continues from previous slide $million 1Q17 4Q17 1Q18 Adjusted EBITDA attributable to the Partnership N/A 23.5 35.2 Add: Less: Net adjustments from volume deficiency agreements N/A (0.2) 1.3 Net interest received N/A 0.1 - Maintenance capital expenditure N/A 0.1 - Cash available for distribution attributable to the Partnership N/A 23.3 36.5 14
Debt to Adjusted EBITDA attributable to the Partnership $million 1Q17 4Q17 1Q18 Gross debt - 15.0 15.0 Adjusted EBITDA attributable to the Partnership - 23.5 35.2 Debt to adjusted EBITDA attributable to the partnership ratio (times) - 0.6 0.4 15
Sample ROFO 1 Pipeline Assets Downstream pipelines Asset Name BP Interest Pipeline Length (miles) Remaining Mardi Gras interest 80% 2 390 BP1 100% 694 Ursa 23% 40 Cherry Point Crude 100% 5 Milan to Wood River 100% 214 Dubuque to Twin Cities 100% 237 Bradley Road 100% 11 Manhattan to Wilmington 100% 12 Miami Valley 100% 93 White Oak O Hare 100% 97 Whiting to Dubuque 100% 207 Whiting to Indy 100% 151 Pipeline Joint Ventures 13 70% Xylene Line 100% 527 (1) Right of First Offer. (2) Represents remaining interest owned by BP and its affiliates, excluding contribution to BPMP at IPO. 16