BP Midstream Partners LP (NYSE: BPMP):
BusinessHighlights
Completed initial public offering (the “IPO”) on NYSE on
October 30, 2017Gross throughput on a pro forma basis
increased by 15%, as compared to 2016
•
On October 30, 2017, BP Midstream Partners
LP (“BPMP,” the “Partnership,” “we,” “us” or “our”) completed its
IPO of 42,500,000 common units representing limited partner
interests at a price to the public of $18.00 per unit. Subsequent
to the closing of the IPO, the underwriters partially exercised
their over-allotment option and purchased 5,294,358 additional
common units at $18.00 per unit.
•
Pipeline gross throughput on a pro forma
basis (including amounts related to our unconsolidated equity
investments) in 2017 increased by 15%, as compared to 2016,
underpinned by higher throughput on BP#2 crude oil pipeline system
and production growth in the Gulf of Mexico.
FinancialHighlights
Financial highlights for the period
subsequent to the IPO:Generated net income attributable to the
Partnership of $21.8 millionGenerated net cash from
operating activities attributable to the Partnership of $29.2
millionReported Adjusted EBITDA* attributable to the
Partnership of $23.5 millionGenerated cash available for
distribution* attributable to the Partnership of $23.3
millionDeclared $0.1798 per unit prorated quarterly
distribution
•
Revenues for the three months ended
December 31, 2017 were $27.6 million, of which $19.5 million were
related to the period subsequent to the IPO. BP p.l.c. ("BP") and
its affiliates accounted for 98% of these revenues.
•
Total maintenance spend** for the three
months ended December 31, 2017 was $2.6 million, which included
$2.4 million of maintenance expenses and $0.2 million of
maintenance capital expenditures. Total maintenance spend
subsequent to the IPO was $1.5 million, which included $1.4 million
of maintenance expenses and $0.1 million of maintenance capital
expenditures.
•
Cash on hand was $32.7 million, and
outstanding borrowings were $15.0 million under our $600.0 million
unsecured revolving credit facility with an affiliate of BP, at
December 31, 2017.
•
On January 17, 2018, the board of
directors declared its first cash distribution of $0.1798 per
limited partner unit for the period subsequent to the IPO. This
amount corresponds to the prorated minimum quarterly distribution
of $0.2625 per unit, or $1.05 per unit on an annualized basis.
•
Distribution coverage ratio was 1.2 times
for the period subsequent to the IPO.
*
Adjusted EBITDA and cash available for
distribution are non-GAAP supplemental financial measures. See
reconciliation tables later in this press release.
**
Total maintenance spend represents the sum
of the Partnership’s maintenance expenses and its maintenance
capital expenditures during the period indicated. Because the
Partnership recognizes significant maintenance expenses that are
not capitalized, the combined total maintenance spend represents a
more complete measure of its ongoing maintenance efforts.
Webcast
andConferenceCall
A webcast and conference call will be held
at 9:00 a.m. CST, hosted by Robert Zinsmeister, Chief Executive
Officer, Craig Coburn, Chief Financial Officer, and Brian Sullivan,
Vice President Investor Relations, to discuss BPMP’s performance in
the fourth quarter and the full year 2017. Interested parties may
listen to the presentation at www.bpmidstreampartners.com, by
clicking on the “2017 Fourth Quarter Financial Results Webcast”
link, found under the "Events & presentations" section. A
replay of the webcast will be available following the live event.
The Partnership has also posted an updated investor presentation to
its website. Information on the Partnership's website does not
constitute a portion of this press release.
Robert Zinsmeister – Chief
Executive Officer:“Following the successful initial public offering
of BPMP, we have delivered a solid set of results for our first
quarter as a listed entity and we are excited about the
opportunities in front of us. As a sponsored MLP, we have a strong
relationship with BP, which is well capitalized with an
investment-grade credit rating and will maintain a significant
interest in BPMP. Our asset portfolio is strategically located and
highly integrated which will create stable and predictable cash
flows giving us the financial flexibility to execute our growth
aspirations.”
About BP Midstream Partners
BPMP is a fee-based, growth-oriented master limited partnership
formed by BP Pipelines (North America), Inc. (“BP Pipelines”) to
own, operate, develop and acquire pipelines and other midstream
assets. BPMP’s assets consist of interests in entities that own
crude oil, natural gas, refined products and diluent pipelines
serving as key infrastructure for BP and other customers to
transport onshore crude oil production to BP’s Whiting Refinery and
offshore crude oil and natural gas production to key refining
markets and trading and distribution hubs. Certain of BPMP’s assets
deliver refined products and diluent from the Whiting Refinery and
other U.S. supply hubs to major demand centers.
For more information on BPMP and the assets owned by BPMP,
please visit www.bpmidstreampartners.com.
Factors Affecting Comparability
- The financial results prior to the IPO
on October 30, 2017 only included the results of the BP2, River
Rouge and Diamondback pipeline systems and related assets
(collectively, “our accounting predecessor”, the “Predecessor”, or
the “Wholly Owned Assets”). Our equity method investment, Mars
Pipeline Company LLC, and our consolidated subsidiary, Mardi Gras
Transportation System Company LLC, are not included in the results
of our accounting predecessor.
- Effective October 30, 2017, the
Partnership pays an annual fee to BP Pipelines, initially $13.3
million, for general and administrative services, and reimburses BP
Pipelines for operating services under an omnibus agreement with BP
Pipelines. In addition, we are expected to incur incremental cash
expenses associated with being a publicly traded partnership.
- Effective October 30, 2017, the
Partnership entered into commercial agreements that contain minimum
volume commitments with a major related-party customer. These
agreements were not in place prior to the IPO.
- Federal and state income taxes were
reflected on the historical financial statements of our accounting
predecessor. BPMP is a non-taxable entity and will not record any
income tax expense in its consolidated financial statements.
Factors affecting comparability are detailed further in the
“Factors Affecting the Comparability of Our Financial Results” in
our annual report on Form 10-K for the year ended December 31, 2017
filed with the Securities and Exchange Commission (“SEC”) on March
22, 2018.
Cautionary Statement
Certain statements contained in this news release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements represent BPMP’s expectations or beliefs concerning
future events, and it is possible that the results described in
this news release will not be achieved. These forward-looking
statements are subject to risks, uncertainties and other factors,
many of which are outside of BPMP’s control, which could cause
actual results to differ materially from the results discussed in
the forward-looking statements. Any forward-looking statement
speaks only as of the date on which it is made, and, except as
required by law, BPMP does not undertake any obligation to update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. New factors emerge from
time to time, and it is not possible for BPMP to predict all such
factors. When considering these forward-looking statements, you
should keep in mind the risk factors and other cautionary
statements found in BPMP’s filings with the SEC, including the
annual report on Form 10-K for the year ended December 31, 2017
filed with SEC on March 22, 2018. The risk factors and other
factors noted in BPMP’s SEC filings could cause its actual results
to differ materially from those contained in any forward-looking
statement.
Non-GAAP Financial Measures
This press release includes the terms Adjusted EBITDA and cash
available for distribution. Adjusted EBITDA and cash available for
distribution are non-GAAP supplemental financial measures that
management and external users of our consolidated financial
statements, such as industry analysts, investors, lenders and
rating agencies, may use to assess:
- our 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;
- the ability of our business to generate
sufficient cash to support our decision to make distributions to
our unitholders;
- our ability to incur and service debt
and fund capital expenditures; and
- the viability of acquisitions and other
capital expenditure projects and the returns on investment of
various investment opportunities.
We believe that the presentation of Adjusted EBITDA and cash
available for distribution provides useful information to investors
in assessing our 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, respectively. 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.
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. You should not consider Adjusted EBITDA or
cash available for distribution in isolation or as a substitute for
analysis of our results as reported under GAAP. Additionally,
because Adjusted EBITDA and cash available for distribution may be
defined differently by other companies in our industry, our
definition of Adjusted EBITDA and cash available for distribution
may not be comparable to similarly titled measures of other
companies, thereby diminishing its utility.
References to Adjusted EBITDA in this press release refer to net
income before net interest expense, income taxes, gain or loss from
disposition of property, plant and equipment and depreciation and
amortization, plus cash
distributed to the Partnership from equity method investments for
the applicable period, less income from equity method investments.
We define Adjusted EBITDA attributable to the Partnership as
Adjusted EBITDA less Adjusted EBITDA attributable to
noncontrolling interests. We define cash available for distribution
as Adjusted EBITDA attributable to the Partnership
LP less maintenance capital
expenditures attributable to the Partnership, net interest
paid/received, cash reserves, income taxes paid and net adjustments
from volume deficiency payments attributable to the Partnership.
Cash available for distribution will not reflect changes in working
capital balances.
RESULTS OF OPERATIONS
(UNAUDITED)
Three Months EndedDecember 31, Twelve Months
EndedDecember 31, (in thousands of dollars, unless
otherwise indicated) 2017(1)
2016(2) 2017(1)
2016(3) Revenue $ 27,607 $ 21,466 $ 108,151 $
103,003
Costs and expenses Operating expenses 3,975 4,022
16,167 14,141 Maintenance expenses 1,990 879 4,898 2,918
Loss/(Gain) from disposition of property, plant and equipment 1 —
(5 ) — General and administrative 3,938 2,755 7,565 8,159
Depreciation 666 687 2,673 2,604 Property and other taxes 126
111 393 366
Total costs and expenses
10,696 8,454 31,691 28,188
Operating
income 16,911 13,012 76,460 74,815 Income from equity method
investments 17,916 — 17,916 — Other income 133 235 25 520 Interest
expense, net 107 — 107 — Income tax expense 2,099 5,181
25,318 29,465
Net income 32,754 $ 8,066
68,976 $ 45,870 Less: Predecessor net income prior to the IPO on
October 30, 2017 2,880 39,102 Net income subsequent
to the IPO 29,874 29,874 Less: Net income attributable to
noncontrolling interests 8,099 8,099
Net income
attributable to the Partnership subsequent to the IPO $ 21,775
$ 21,775
Net income attributable to the
Partnership per limited partner unit - basic and diluted (in
dollars): Common units $ 0.21 $ 0.21 Subordinated units $ 0.21
$ 0.21
Distributions per limited partner unit (in
dollars): Common units $ 0.1798 $ 0.1798 Subordinated units $
0.1798 $ 0.1798
Weighted average number of limited
partner units outstanding - basic and diluted (in millions):
Common units – public 47.8 47.8 Common units – BP Holdco 4.6 4.6
Subordinated units – BP Holdco 52.4 52.4 (1) Our revenue and
operating income for the three and twelve months ended December 31,
2017 reflect results of our accounting predecessor from October 1,
2017 to October 29, 2017 and January 1, 2017 to October 29, 2017,
respectively, and results of the Partnership from October 30, 2017
to December 31, 2017. Refer to table below for amounts attributable
each of the periods discussed above:
Three Months EndedDecember 31,
2017
Twelve Months EndedDecember 31,
2017
Revenue Predecessor revenue $ 8,085 $ 88,629 Partnership
revenue 19,522 19,522 Total revenue $ 27,607 $
108,151
Operating income Predecessor operating income
$ 4,846 $ 64,395 Partnership operating income 12,065 12,065
Total operating income $ 16,911 $ 76,460 (2) Results reflect
our accounting predecessor for the period from October 1, 2016 to
December 31, 2016. (3) Results reflect our accounting predecessor
for the period from January 1, 2016 to December 31, 2016.
ADDITIONAL FINANCIAL DATA
(in thousands of dollars, except per-unit data and ratio
data) October 30, 2017-December 31, 2017
Quarterly distribution declared per unit (prorated, in dollars) $
0.1798 Adjusted EBITDA attributable to the Partnership subsequent
to the IPO 23,490 Cash available for distribution attributable to
the Partnership 23,310 Distribution declared: Limited partner units
– public 8,592 Limited partner units – BP Holdco 10,238 General
partner units – BP Holdco — Total distribution declared 18,830
Coverage ratio(1) 1.2 (1) Coverage ratio is equal to Cash available
for distribution attributable to the Partnership divided by Total
distribution declared.
RECONCILIATION OF ADJUSTED EBITDA AND
CASH AVAILABLE FOR DISTRIBUTION TO NET INCOME
(in thousands of dollars)
Three MonthsEnded
December31, 2017(1)
Twelve MonthsEnded
December31, 2017(2)
Net income $ 32,754 $ 68,976 Add: Depreciation 666 2,673
Loss/(Gain) from disposition of property, plant and equipment 1 (5
) Income tax expense 2,099 25,318 Interest expense, net 107 107
Cash distribution received from equity method investments – Mars
12,540 12,540 Cash distribution received from equity method
investments – Mardi Gras Joint Ventures 17,365 17,365 Less: Income
from equity method investments – Mars 7,793 7,793 Income from
equity method investments – Mardi Gras Joint Ventures 10,123
10,123
Adjusted EBITDA 47,616 109,058 Less:
Distributions of prorated fourth quarter joint venture dividends to
prior owners 9,427 9,427 Adjusted EBITDA attributable to
Predecessor prior to the IPO on October 30, 2017 5,186 66,628
Adjusted EBITDA attributable to noncontrolling interests 9,513
9,513
Adjusted EBITDA attributable to the
Partnership subsequent to the IPO 23,490 23,490 Less:
Maintenance capital expenditure attributable to the Partnership
subsequent to the IPO 58 58 Net adjustments from volume deficiency
payments attributable to the Partnership subsequent to the IPO 174
174 Add: Net interest received by the Partnership subsequent to the
IPO 52 52
Cash available for distribution
attributable to the Partnership $ 23,310 $ 23,310
(1) Data reflects the results of our accounting predecessor from
October 1, 2017 to October 29, 2017 and the results of the
Partnership from October 30, 2017 to December 31, 2017. (2) Data
reflects the results of our accounting predecessor from January 1,
2017 to October 29, 2017 and the results of the Partnership from
October 30, 2017 to December 31, 2017.
RECONCILIATION OF ADJUSTED EBITDA AND
CASH AVAILABLE FOR DISTRIBUTION TO NET CASH PROVIDED BY OPERATING
ACTIVITIES
(in thousands of dollars)
Twelve Months EndedDecember 31,
2017(1)
Net cash provided by operating activities $ 69,241 Add:
Income tax expense 25,318 Interest expense, net 107 Distributions
in excess of earnings from equity method investments 7,242 Less:
Non-cash adjustments 661 Change in accounts receivable – related
parties (11,050 ) Change in other assets and liabilities 3,239
Adjusted EBITDA 109,058 Less: Distributions of
prorated fourth quarter joint venture dividends to prior owners
9,427 Adjusted EBITDA attributable to Predecessor prior to the IPO
on October 30, 2017 66,628 Adjusted EBITDA attributable to
noncontrolling interests 9,513
Adjusted EBITDA
attributable to the Partnership subsequent to the IPO 23,490
Less: Maintenance capital expenditure attributable to the
Partnership subsequent to the IPO 58 Net adjustments from volume
deficiency payments attributable to the Partnership subsequent to
the IPO 174 Add: Net interest received by the Partnership
subsequent to the IPO 52
Cash available for distribution
attributable to the Partnership $ 23,310 (1) Data
reflects the results of our accounting predecessor from January 1,
2017 to October 29, 2017 and the results of the Partnership from
October 30, 2017 to December 31, 2017.
SELECTED OPERATING DATA
Three Months EndedDecember 31, Twelve Months
EndedDecember 31, 2017 2016
2017 2016 Pipeline throughput (thousands of
barrels per day) (1)(2) BP2 297 201 291 237 Diamondback
56 63 56 82 River Rouge 60 50 60 60
Total Wholly Owned
Assets 413 314 407 379 Mars 449 396 469 388
Caesar 200 198 212 197 Cleopatra (3) 22 24 24 24 Proteus 165 135
161 129 Endymion 165 135 161 129
Mardi Gras Joint Ventures
552 492 558 479
Average revenue per barrel ($ per
barrel)(2)(4) Total Wholly Owned Assets $ 0.73 $ 0.73 $
0.73 $ 0.73 Mars 1.40 1.44 1.41 1.41 Mardi Gras Joint Ventures 0.67
0.68 0.67 0.68 (1) Pipeline throughput is defined as the volume of
delivered barrels. (2) Interests in Mars and Mardi Gras were
contributed to the Partnership on October 30, 2017. Throughput and
average revenue per barrel for Mars and the Mardi Gras Joint
Ventures are presented on a 100% basis for the three months and
twelve months ended December 31, 2017 and 2016. (3) Natural gas is
converted to oil equivalent at 5.8 million cubic feet per one
thousand barrels. (4) Based on reported revenues from
transportation and allowance oil divided by delivered barrels over
the same time period.
CAPITAL EXPENDITURES(1)
Three Months EndedDecember 31, Twelve Months
EndedDecember 31, (in thousands of dollars)
2017 2016 2017 2016 Cash
spent on maintenance capital expenditures $ 194 $ 1,063 $ 2,257 $
3,402 (Decrease)/Increase in accrued capital expenditures (28 )
1,079 (1,306 ) 585
Total capital expenditures
incurred $ 166 $ 2,142 $ 951 $ 3,987 (1)
Capital expenditures presented above are related to the Wholly
Owned Assets.
SELECTED BALANCE SHEET DATA
(UNAUDITED)
December 31, (in thousands of dollars) 2017
2016 Cash and cash equivalents $ 32,694 $ — Property,
plant and equipment, net 69,488 71,235 Total assets 605,658 87,586
Short-term debt 15,000 — Equity 580,855 73,942 The
information in this release reflects the unaudited consolidated
financial position and results of BP Midstream Partners LP.
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version on businesswire.com: https://www.businesswire.com/news/home/20180322005665/en/
BP Press Office, US:Brett Clanton, +1
281-366-4463uspress@bp.comorBP Press Office, London:+44 (0)207 496
4076bppress@bp.com
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