BP Midstream Partners LP : 2020 First Quarter Results Webcast Slides

bp midstream partners

bp midstream partners 1Q 2020

Financial results

May 8, 2020

Demonstrating resilience

in a

challenging environment

bp midstream partners 1Q 2020 results

1

Brian Sullivan

Vice president, investor relations

bp midstream partners 1Q 2020 results

2

Cautionary statement

bp midstream partners

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. All statements other than statements of historical fact included in this presentation, regarding our strategy, future growth, future operations, future actions, the continued effects of the global COVID-19 pandemic on the demand, the effects of the continued volatility of commodity prices ad the related macroeconomic and political environment, volumes, capital requirements, conditions or events, future operating results or the ability to generate sales, our potential exposure to market risks, statements relating to the expected amount of cash available for distribution and level of distributions, financial position, estimated revenues and losses projected cost, prospects, plans and objectives of management 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, 2019 as filed with the Securities and Exchange Commission (the "SEC") on February 27, 2020, as updated by our subsequent filings with the SEC including the Form 10-Q filed on May 8, 2020. 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".

The Partnership is unable to provide financial guidance for projected net income or net cash provided by operating activities without unreasonable effort, and, therefore, is unable to provide a reconciliation of its Adjusted EBITDA and cash available for distributions projections to net income or net cash provided by operating activities, the most comparable financial measures calculated in accordance with GAAP.

The Partnership has not included a reconciliation of projected cash available for distribution to the nearest GAAP financial measure for 2019 because it cannot do so without unreasonable effort and any attempt to do so would be inherently imprecise.

bp midstream partners 1Q 2020 results	3

Rip Zinsmeister

Chief executive officer

bp midstream partners 1Q 2020 results

4

Agenda

bp midstream partners

Resilience in a challenging environment

• Onshore portfolio with stability
• An advantaged offshore portfolio
• Strong liquidity position

Results

• Operational results
• Financial results

Adapting our 2020 guidance

Q&A

bp midstream partners 1Q 2020 results

5

Resilience in a challenging environment

Exceptional uncertainty in near-term industry outlook

bp midstream partners

A portfolio with financial strength and resilience

bp midstream partners 1Q 2020 results	6

Onshore portfolio with stability

bp midstream partners

1	Highly integrated with BP's Whiting refinery - advantaged refinery
in US Midwest

2 Fee-based revenues with limited direct exposure to commodity price fluctuations

3 Majority of revenues generated from investment grade credit rating sponsor

4 Throughput protected by MVCs1 until end 20202

1. Minimum volume commitments.
2. One of the MVC agreements for Diamondback was renewed in 2020 and will now expire in June 2021.

bp midstream partners 1Q 2020 results	7

An advantaged offshore portfolio	bp midstream
partners
1	Crude qualities highly desired by US Gulf
Coast refiners
2	Shippers with extensive capabilities to
market & trade
3	Investment grade counterparties
4	Production with low relative variable
operating costs
5	Forecast production growth underpinned
bp midstream partners 1Q 2020 results	8

Craig Coburn

Chief financial officer

bp midstream partners 1Q 2020 results

9

Strong liquidity position

Financial frame

Strong financial position entering downturn

Conservative financial framework

Balanced approach to distribution through 2020

Continuing to build cash

bp midstream partners

Liquidity position at end 1Q 2020

Cash and cash equivalents of $105.5m

Receivables of $10.8m

• $10.4m with BP - investment grade counterparty

Term loan and credit facility of $600m

• Available revolver capacity of $132m
• No principal payments until 2025

Gross debt to Adjusted EBITDA ratio of 2.4 times

Distribution coverage ratio of 1.17 times

bp midstream partners 1Q 2020 results	10

Operational results

1Q20 Highlights

• Gross throughput broadly flat vs. 4Q19
• Higher diluent volumes on Diamondback
• Lower BP2 volume due to higher apportionment
• Offshore volumes broadly flat vs. 4Q19

1. Cleopatra gas volumes are converted to mboed by dividing mmscfd by 5.8.

bp midstream

partners

Quarterly pipeline gross throughput1

Thousands, boed

BP2

River rouge

Diamondback

Mars

Ursa

Caesar

Cleopatra

Proteus

Endymion

2,000

1,722

1,729

1,557

1,500

1,000

500

0

1Q 19

4Q 19

1Q 20

bp midstream partners 1Q 2020 results	11

Financial results1 ($ million)				partners
					bp midstream
		1Q19		4Q19			1Q20
	Revenue	30.2		35.0			30.7
	Costs and expenses	10.2		10.8			11.1
	Operating income	20.0		24.2			19.6
	Income from equity method investments	24.4		33.4			31.3
	Interest expense, net	3.7		3.8			3.4
	Net income	40.7		53.8			47.5
	Less: Net income attributable to non-controlling interests	3.5		6.2			5.8
	Net income attributable to the Partnership	37.2		47.6			41.7
	Adjusted EBITDA attributable to the Partnership	44.5		54.2			47.8
	Cash available for distribution attributable to the Partnership	39.7		52.8			44.1

1. Rounding convention has been modified to ensure key line items sum correctly.

bp midstream partners 1Q 2020 results	12

Adapting our 2020 guidance

Full year 2020 guidance	2Q20 guidance2

		Slightly lower gross throughput
Adjusted EBITDA	$190-200m	− COVID-19 impacts across all onshore
		pipelines
		− Broadly flat offshore volumes
Cash available for	$180-190m	Significantly lower Adjusted EBITDA
distribution
	− Lower throughput on River Rouge
Distribution growth	5% vs 20191	Slightly higher Cash available for
		distribution

bp midstream partners

Factors impacting guidance

Reflected in guidance

• Reduced FLA revenues
• Lower onshore asset throughput
• Reduced financing costs

Not included in guidance

• Continued deterioration in oil price
• Lower than expected offshore volumes
• Delays to offshore major project construction timelines
• Changes to offshore facility maintenance schedules
• Additional storage revenue at LOOP
• Operational & maintenance cost reductions3

1. The 5% growth is cumulative 2020 distribution over cumulative distribution 2019, while the previous Guidance on ~10% distribution growth was 4Q2020 over 4Q2019.
2. Compared to the first quarter 2020.

1. These reductions do not impact safety or compliance.

bp midstream partners 1Q 2020 results	13

Rip Zinsmeister

Chief executive officer

bp midstream partners 1Q 2020 results

14

Q&A	bp midstream
partners

Craig Coburn	Rip Zinsmeister	Brian Sullivan
Chief financial officer	Chief executive officer	Vice president, investor relations

bp midstream partners 1Q 2020 results	15

bp midstream partners

Supplementary

information

bp midstream partners 1Q 2020 results

16

Reconciliation of Adjusted EBITDA and CAFD to Net Income1

($ million)

bp midstream partners

		1Q19		4Q19		1Q20
	Net income	40.7		53.8		47.5
	Add:
	Depreciation	0.6		0.7		0.7
	Interest expense, net	3.7		3.8		3.4
	Cash distributions received from equity method investments2	28.5		36.6		34.2
	Less:
	Income from equity method investments	24.4		33.4		31.3
	Adjusted EBITDA	49.1		61.5		54.5
	Less:
	Adjusted EBITDA attributable to non-controlling interests	4.6		7.3		6.7
	Adjusted EBITDA attributable to the Partnership	44.5		54.2		47.8

1. Rounding convention has been modified to ensure key line items sum correctly.

1. These amounts represent 100% of the cash distributions from Mars, Ursa, KM Phoenix and Mardi Gras joint ventures prior to distribution to non-controlling interests.

bp midstream partners 1Q 2020 results	17

Reconciliation of Adjusted EBITDA and CAFD to Net Income1

Continues from previous slide

($ million)

bp midstream partners

	1Q19		4Q19		1Q20
Adjusted EBITDA attributable to the Partnership	44.5		54.2		47.8
Add:
Net adjustments from volume deficiency agreements	(0.7)		2.8		0.1
Maintenance capital recovery2	-		0.3		0.6
Less:
Net interest paid/(received)	7.7		3.8		7.2
Maintenance capital expenditures	0.2		0.7		0.7
Cash reserves3	(3.8)		-		(3.5)
Cash available for distribution attributable to the Partnership	39.7		52.8		44.1

1. Rounding convention has been modified to ensure key line items sum correctly.
2. Relates to the portion of maintenance capital for Griffith Station Incident reimbursable by insurance.
3. Reflects cash reserved due to timing of interest payment(s).

bp midstream partners 1Q 2020 results	18

Reconciliation of Adjusted EBITDA and CAFD to Net		partners
					bp midstream
Cash Provided by Operating Activities1
($ million)
1Q19			4Q19			1Q20
Net cash provided by operating activities	37.0			47.1			48.9
Add:
Interest expense, net	3.7			3.8			3.4
Distributions in excess of earnings from equity method investments	3.2			3.2			2.8
Less:
Change in operating assets and liabilities	(5.3)			(7.4)			0.5
Non-cash adjustments	0.1			-			0.1
Adjusted EBITDA	49.1			61.5			54.5
Less:
Adjusted EBITDA attributable to non-controlling interests	4.6			7.3			6.7
Adjusted EBITDA attributable to the Partnership	44.5			54.2			47.8

1. Rounding convention has been modified to ensure key line items sum correctly.

bp midstream partners 1Q 2020 results	19

Reconciliation of Adjusted EBITDA and CAFD to Net Cash Provided by Operating Activities1

Continues from previous slide

($ million)

bp midstream partners

	1Q19		4Q19		1Q20
Adjusted EBITDA attributable to the Partnership	44.5		54.2		47.8
Add:
Net adjustments from volume deficiency agreements	(0.7)		2.8		0.1
Maintenance capital recovery2	-		0.3		0.6
Less:
Net interest paid/(received)	7.7		3.8		7.2
Maintenance capital expenditures	0.2		0.7		0.7
Cash reserves3	(3.8)		-		(3.5)
Cash available for distribution attributable to the Partnership	39.7		52.8		44.1

1. Rounding convention has been modified to ensure key line items sum correctly.
2. Relates to the portion of maintenance capital for Griffith Station Incident reimbursable by insurance.
3. Reflects cash reserved due to timing of interest payment(s).

bp midstream partners 1Q 2020 results	20

Gross Debt to annualized Adjusted EBITDA attributable to the Partnership1

($ million)

bp midstream partners

	1Q19		4Q19	1Q20
Gross debt	468.0		468.0	468.0
Annualized Adjusted EBITDA attributable to the Partnership2	178.4		216.8	191.2
Gross Debt to annualized Adjusted EBITDA attributable to the partnership ratio2	2.6		2.2	2.4

1. Rounding convention has been modified to ensure key line items sum correctly.
2. Calculated by multiplying Adjusted EBITDA for the quarter by 4.

bp midstream partners 1Q 2020 results	21