HOUSTON - BP Midstream Partners LP (“BPMP” or the “Partnership”) today reported results for the fourth quarter and full year 2020.
Commenting on the results, CEO Rip Zinsmeister said: “2020 was a year in which we dealt with unprecedented challenges – from the human tragedy of the COVID-19 pandemic to a historic Atlantic hurricane season. Yet, through all of this uncertainty, we have again demonstrated stability and resilience – a real testament to our high quality assets, the underlying operational and financial strength of the business, and the dedication of the team of people that consistently delivered for us throughout the year. While COVID-19 is still impacting refined products demand, we are optimistic, encouraged by the opportunities we see to build on our track record – continuing to deliver on what we say we are going to do, as you have come to expect from us at BPMP.”
The Partnership has maintained a strong balance sheet and liquidity position, and has a conservative financial framework.
At the end of the fourth quarter 2020, the Partnership had:
During the fourth quarter, total pipeline gross throughput was approximately 1.6 million barrels of oil equivalent per day, around 5% higher compared to the third quarter of 2020.
Gross throughput on offshore pipelines was approximately 4% higher in the fourth quarter, compared to the third quarter, largely reflecting:
Gross throughput on onshore pipelines was approximately 11% higher compared to the third quarter, primarily driven by:
For the full year 2020, total gross throughput was approximately 1.6 million barrels of oil equivalent per day, approximately 4% lower compared to full year 2019.
*Adjusted EBITDA and cash available for distribution are Non-GAAP supplemental financial measures. See reconciliation tables later in this press release.
Net income attributable to the Partnership
Net income attributable to the Partnership for the fourth quarter was $40.8 million, approximately 10% lower compared with the third quarter of 2020, and approximately 14% lower than the same period in 2019. Compared with the third quarter 2020, the result reflected:
On a full year basis, Net income attributable to the Partnership was $168.4 million, broadly flat compared with 2019.
Adjusted EBITDA attributable to the Partnership
Adjusted EBITDA attributable to the Partnership for the fourth quarter was $47.2 million, slightly higher compared with the third quarter of 2020, and around 13% lower than the same period in 2019. Compared with the third quarter of 2020, the result benefited from increased distributions from interests in offshore pipeline joint ventures.
On a full year basis, Adjusted EBITDA attributable to the Partnership was $188.9 million, only approximately 4% lower compared with 2019 and in line with guidance previously provided. Given the challenges in 2020, this was a great achievement.
Cash available for distribution
Cash available for distribution for the fourth quarter was $49.5 million, 16% higher compared with the third quarter of 2020 and approximately 6% lower than the same period in 2019. Compared with the third quarter 2020, the increase reflected the recognition of cash in the fourth quarter 2020 associated with the portion of River Rouge's volumes above the minimum volume commitment level for the full year 2020, as previously guided.
On a full year basis, Cash available for distribution was broadly flat compared to 2019 at $179.6 million and in line with guidance previously provided.
A webcast and conference call will be held at 9:00 a.m. CST on February 25, 2021, hosted by Robert Zinsmeister, chief executive officer; Craig Coburn, chief financial officer; Jack Collins, chief financial officer designate and Geoff Carr, vice president investor relations, to discuss BPMP’s performance in the fourth quarter and full year 2020.
Interested parties may listen to the presentation at www.bpmidstreampartners.com, by clicking on the “2020 Fourth Quarter and Full Year Results Webcast” link, found in the "Events & Presentations" section under the Investor Relations menu option. Financial information, including the earnings release and other investor-related materials, will also be available online. A replay of the webcast will be posted on the BPMP website following the live event. Information on the Partnership's website does not constitute a portion of this press release.
BPMP filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 with the U.S. Securities and Exchange Commission (“SEC”). BPMP’s Annual Report on Form 10-K is available through its website at bpmidstreampartners.com. The filing can be accessed by selecting the “SEC Filings” link. Also, upon written request, limited partners may receive, free of charge, a printed copy of BPMP’s Annual Report on Form 10-K, which includes audited financial statements. Requests should be communicated in writing to BP Midstream Partners, LP, Attention: Investor Relations, 501 Westlake Park Boulevard, Houston, TX 77079.
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, and refined product terminals, 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.
Certain statements contained in this news release constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among other things, statements concerning management’s expectations, beliefs, estimates, forecasts, projections and assumptions. You can identify our forward-looking statements by words such as “anticipate”, “believe”, “estimate”, “budget”, “continue”, “potential”, “guidance”, “effort”, “expect”, “forecast”, “goals”, “objectives”, “outlook”, “intend”, “plan”, “predict”, “project”, “seek”, “target”, “begin”, “could”, “may”, “should” or “would” or other similar expressions that convey the uncertainty of future events or outcomes. 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 growth, future actions, the continued effects of the global COVID-19 pandemic on demand, the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, volumes, capital requirements, conditions or events, future operating results or the ability to generate sales, the potential exposure of the Partnership to market risks, and 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. 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. These risks include, but are not limited to, the following:
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.
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:
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 definitions of Adjusted EBITDA and cash available for distribution may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
References to Adjusted EBITDA 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 non-controlling interests. We define cash available for distribution as Adjusted EBITDA attributable to the Partnership plus net adjustments from volume deficiency agreements and maintenance capital recovery less maintenance capital expenditures, net interest paid/received, cash reserves, and income taxes paid. Cash available for distribution does not reflect changes in working capital balances.
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 2021 because it cannot do so without unreasonable effort and any attempt to do so would be inherently imprecise.
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