10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38260

BP Midstream Partners LP

(Exact name of registrant as specified in its charter)

Delaware	82-1646447
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

501 Westlake Park Boulevard, Houston, Texas 77079

(Address of principal executive offices) (Zip Code)

(281) 366-2000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ý	Smaller reporting company ¨
Emerging growth company ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨    No  ý

As of August 8, 2018, the registrant had 52,375,535 common units and 52,375,535 subordinated units outstanding.

BP MIDSTREAM PARTNERS LP

TABLE OF CONTENTS

Item	Page
PART I - Financial Information	3
1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Changes in Equity	5
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements (Unaudited)	7
2. Management's Discussion and Analysis of Financial Condition and Results of Operations	20
3. Quantitative and Qualitative Disclosures about Market Risk	31
4. Controls and Procedures	31
PART II - Other Information
1. Legal Proceedings	32
1A. Risk Factors	32
5. Other Information	32
6. Exhibits	33
Signatures	34

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS (UNAUDITED)

BP MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30, 2018			December 31, 2017
	(in thousands of dollars)
ASSETS
Current assets
Cash and cash equivalents	$	40,527		$	32,694
Accounts receivable – third parties	217			188
Accounts receivable – related parties	9,258			9,481
Prepaid expenses	1,506			1,370
Other current assets	839			1,655
Total current assets	52,347			45,388
Equity method investments (Note 2)	470,074			487,999
Property, plant and equipment, net (Note 3)	68,815			69,488
Other assets	3,263			2,783
Total assets	$	594,499		$	605,658
LIABILITIES
Current liabilities
Short-term debt (Note 5)	$	—		$	15,000
Accounts payable – third parties	762			269
Accounts payable – related parties	1,641			2,270
Deferred revenue and credits	2,186			—
Accrued liabilities (Note 4)	3,139			4,481
Total current liabilities	7,728			22,020
Long-term portion of environmental remediation obligations	3,263			2,783
Total liabilities	10,991			24,803
Commitments and contingencies (Note 10)
EQUITY
Common unitholders – public (47,794,358 units issued and outstanding)	829,903			824,613
Common unitholders – BP Holdco (4,581,177 units issued and outstanding)	(46,640		)	(47,141		)
Subordinated unitholders – BP Holdco (52,375,535 units issued and outstanding)	(533,242		)	(538,947		)
Total partners' capital	250,021			238,525
Non-controlling interests	333,487			342,330
Total equity	583,508			580,855
Total liabilities and equity	$	594,499		$	605,658

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

3

BP MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
	(in thousands of dollars, unless otherwise indicated)
			Predecessor					Predecessor
Revenue
Third parties	$	766	$	566		$	1,564	$	1,474
Related parties	28,169		26,319			53,990		52,054
Total revenue	28,935		26,885			55,554		53,528
Costs and expenses
Operating expenses – third parties	3,032		1,830			5,666		3,318
Operating expenses – related parties	1,026		1,875			1,988		3,867
Maintenance expenses – third parties	847		729			883		1,289
Maintenance expenses – related parties	24		192			44		192
Gain from disposition of property, plant and equipment	—		(6		)	—		(6		)
General and administrative – third parties	415		(44		)	1,203		44
General and administrative – related parties	3,442		982			6,865		2,361
Depreciation	662		662			1,324		1,332
Property and other taxes	112		46			223		154
Total costs and expenses	9,560		6,266			18,196		12,551
Operating income	19,375		20,619			37,358		40,977
Income from equity method investments	20,842		—			43,681		—
Other loss	—		312			—		488
Interest expense, net	25		—			139		—
Income before income taxes	40,192		20,307			80,900		40,489
Income tax expense	—		7,933			—		15,816
Net income	40,192		$	12,374		80,900		$	24,673
Less: Net income attributable to non-controlling interests	9,722					19,891
Net income attributable to the Partnership	$	30,470				$	61,009
Net income attributable to the Partnership per limited partner unit – basic and diluted (in dollars):
Common units	$	0.29				$	0.58
Subordinated units	$	0.29				$	0.58
Distributions declared per limited partner unit (in dollars, Note 7):
Common units	$	0.2725				$	0.5400
Subordinated units	$	0.2725				$	0.5400
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

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

4

BP MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

		Partnership														Predecessor
(in thousands of dollars)		Common Unitholders – Public			Common Unitholders – BP Holdco			Subordinated Unitholders – BP Holdco			General Partner		Non-controlling Interests			Net Parent Investment			Total
Balance at December 31, 2016		$	—		$	—		$	—		$	—	$	—		$	73,942		$	73,942
	Net income	—			—			—			—		—			24,673			24,673
	Net transfers to Parent	—			—			—			—		—			(18,510		)	(18,510		)
Balance at June 30, 2017		$	—		$	—		$	—		$	—	$	—		$	80,105		$	80,105
Balance at December 31, 2017		$	824,613		$	(47,141	)	$	(538,947	)	$	—	$	342,330		$	—		$	580,855
	Cumulative effect of accounting change (Note 2)	(1,253		)	(120		)	(1,373		)	—		—			—			(2,746		)
	Net income	27,836			2,669			30,504			—		19,891			—			80,900
	Distributions to unitholders	(21,377		)	(2,048		)	(23,426		)	—		—			—			(46,851		)
	Unit-based compensation	84			—			—			—		—			—			84
	Distributions to non-controlling interests	—			—			—			—		(28,734		)	—			(28,734		)
Balance at June 30, 2018		$	829,903		$	(46,640	)	$	(533,242	)	$	—	$	333,487		$	—		$	583,508

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

5

BP MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30,
	2018			2017
	(in thousands of dollars)
				Predecessor
Cash flows from operating activities
Net income	$	80,900		$	24,673
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,324			1,332
Deferred income taxes	—			539
Share-based compensation	84			104
Loss due to changes in fair value of allowance oil receivable	—			488
Gain from disposition of property, plant and equipment	—			(6		)
Income from equity method investments	(43,681		)	—
Distributions of earnings received from equity method investments	47,807			—
Changes in operating assets and liabilities
Accounts receivable – third parties	(29		)	234
Accounts receivable – related parties	223			(5,258		)
Allowance oil receivable	—			(761		)
Prepaid expenses and other current assets	(136		)	(71		)
Accounts payable – third parties	493			169
Accounts payable – related parties	(629		)	46
Deferred revenue and credits	2,186			—
Accrued liabilities	(705		)	(648		)
Long-term portion of environmental remediation obligations	—			(231		)
Other liabilities	—			(162		)
Net cash provided by operating activities	87,837			20,448
Cash flows from investing activities
Capital expenditures	(472		)	(1,840		)
Distributions in excess of earnings from equity method investments	11,053			—
Proceeds from disposition of property, plant and equipment	—			6
Net cash provided by (used in) investing activities	10,581			(1,834		)
Cash flows from financing activities
Net transfers to Parent – prior to the IPO	—			(18,614		)
Repayment of short-term debt	(15,000		)	—
Distributions to unitholders	(46,851		)	—
Distributions to non-controlling interests	(28,734		)	—
Net cash used in financing activities	(90,585		)	(18,614		)
Net change in cash and cash equivalents	7,833			—
Cash and cash equivalents at beginning of the period	32,694			—
Cash and cash equivalents at end of the period	$	40,527		$	—
Supplemental cash flow information
Non-cash investing transactions
Accrued capital expenditures	$	198		$	—

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

6

BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

1. Business and Basis of Presentation

BP Midstream Partners LP (either individually or together with its subsidiaries, as the context requires, the “Partnership”) is a Delaware limited partnership formed on May 22, 2017 by BP Pipelines (North America) Inc. (“BP Pipelines”), an indirect wholly owned subsidiary of BP p.l.c. (“BP”), a “foreign private issuer” within the meaning of the Securities Exchange Act of 1934, as amended.

On October 30, 2017, the Partnership completed its initial public offering (the "IPO") of common units representing limited partner interests. A total of 47,794,358 common units, including 5,294,358 common units pertaining to the exercise of the underwriters' over-allotment option, were issued to the public unitholders in connection with our IPO. Unless otherwise stated or the context otherwise indicates, all references to “we,” “our,” “us,” “Predecessor,” or similar expressions for time periods prior to the IPO refer to BP Midstream Partners LP Predecessor, which consisted of the historical assets and operations of the Predecessor Assets (as defined below). For time periods subsequent to the IPO, “we,” “our,” “us,” or similar expressions refer to the legal entity BP Midstream Partners LP.

The term “our Parent” refers to BP Pipelines, any entity that wholly owns BP Pipelines, indirectly or directly, including BP and BP America Inc. (“BPA”), an indirect wholly owned subsidiary of BP, and any entity that is wholly owned by the aforementioned entities, excluding BP Midstream Partners LP Predecessor and the Partnership.

Business

We are a fee-based, growth-oriented master limited partnership formed by BP Pipelines to own, operate, develop and acquire pipelines and other midstream assets. Our 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 refinery in Whiting, Indiana (the “Whiting Refinery”) and offshore crude oil and natural gas production to key refining markets and trading and distribution hubs. Certain of our assets deliver refined products and diluent from the Whiting Refinery and other U.S. supply hubs to major demand centers.

Our assets consist of the following:

• BP Two Pipeline Company LLC, which owns the BP#2 crude oil pipeline system (“BP2”).

• BP River Rouge Pipeline Company LLC, which owns the Whiting to River Rouge refined products pipeline system (“River Rouge”).

• BP D-B Pipeline Company LLC, which owns the Diamondback diluent pipeline system (“Diamondback”). BP2, River Rouge, and Diamondback are located in the Midwest region of the United States, and together are referred to as the "Predecessor Assets" or the "Wholly Owned Assets".

• A 28.5% ownership interest in Mars Oil Pipeline Company, LLC (“Mars”), which owns a major corridor crude oil pipeline system in the Gulf of Mexico.

• A 20% managing member interest in Mardi Gras Transportation System Company, LLC (“Mardi Gras”), which holds the following investments in joint ventures located in the Gulf of Mexico:

• A 56% ownership interest in Caesar Oil Pipeline Company, LLC (“Caesar”),

• A 53% ownership interest in Cleopatra Gas Gathering Company, LLC (“Cleopatra”),

• A 65% ownership interest in Proteus Oil Pipeline Company, LLC (“Proteus”), and,

• A 65% ownership interest in Endymion Oil Pipeline Company, LLC (“Endymion”).

• Together Endymion, Caesar, Cleopatra and Proteus are referred to as the “Mardi Gras Joint Ventures.”

We generate the majority of our revenue by charging fees for the transportation of crude oil, refined products and diluent through our pipelines under long-term agreements with minimum volume commitments. We do not engage in the marketing and trading of any commodities. All of our operations are conducted in the United States, and all our long-lived assets are located in the United States. Our operations consist of one reportable segment.

Certain businesses of ours are subject to regulation by various authorities including, but not limited to the Federal Energy Regulatory Commission ("FERC"). Regulatory bodies exercise statutory authority over matters such as common carrier tariffs, construction, rates and ratemaking and agreements with customers.

7

BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

Basis of Presentation

Our condensed consolidated financial statements have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”). These rules and regulations conform to the accounting principles contained in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification, the single source of accounting principles generally accepted in the United States (“GAAP”).

Certain information and footnote disclosures normally included in the annual consolidated financial statements have been condensed or omitted from these condensed consolidated financial statements. The condensed consolidated financial statements as of June 30, 2018, and for the three and six months ended June 30, 2018 and 2017, included herein, are unaudited. These financial statements include all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of our consolidated financial position, results of operations and cash flows. Unless otherwise specified, all such adjustments are of a normal and recurring nature. The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year. These unaudited condensed consolidated financial statements and other information included in this quarterly report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the "2017 Annual Report").

Prior to the IPO, our financial position, results of operations and cash flows consisted of the Predecessor's operations, which represented a combined reporting entity. Subsequent to the IPO, our financial position, results of operations and cash flows consist of consolidated BP Midstream Partners LP activities and balances. All intercompany accounts and transactions within the financial statements have been eliminated for all periods presented.

Prior to the IPO, our condensed consolidated statements of operations include expense allocations to the Predecessor for certain functions performed by our Parent on our behalf, including allocations of general corporate expenses related to finance, accounting, treasury, legal, information technology, human resources, shared services, government affairs, insurance, health, safety, security, employee benefits, incentives, severance and environmental functional support. The portion of expenses that are specifically identifiable to the Predecessor Assets are directly recorded to the Predecessor, with the remainder allocated on the basis of headcount, throughput volumes, miles of pipe and other measures. Our management believes the assumptions underlying the financial statements, including the assumptions regarding the allocation of general corporate expenses from our Parent, are reasonable. Nevertheless, the financial statements may not include all of the expenses that would have been incurred, had we been a stand-alone entity during the periods prior to the IPO and may not reflect our financial position, results of operations and cash flows, had we been a stand-alone entity during such periods. See Note 6 - Related Party Transactions.

Prior to the IPO, the Predecessor Assets did not own or maintain separate bank accounts. Our Parent used a centralized approach to cash management and historically funded our operating and investing activities as needed within the boundaries of a documented funding agreement. Accordingly, cash held by our Parent at the corporate level was not allocated to us for any of the periods prior to the IPO. During such periods, we reflected the cash generated by our operations and expenses paid by our Parent on our behalf as a component of Net parent investment on our condensed consolidated balance sheets, and as a net distribution to our Parent on our condensed consolidated statements of cash flows. We also did not include any interest income on the net cash transfers to our Parent. In connection with the IPO, we established our own cash accounts for the funding of our operating and investing activities.

All financial information presented for the periods after the IPO represents the condensed consolidated results of operations, financial position and cash flows of the Partnership. Accordingly:

• Our condensed consolidated statements of operations for the three and six months ended June 30, 2018 and condensed consolidated statement cash flows for the six months ended June 30, 2018 consist of the consolidated results of the Partnership. Our condensed consolidated statements of operations for the three and six months ended June 30, 2017 and condensed consolidated statement cash flows for the six months ended June 30, 2017 consist of the combined results of the Predecessor.

• Our condensed consolidated balance sheets at June 30, 2018 and December 31, 2017 consist of the consolidated balances of the Partnership.

• Our condensed consolidated statement of changes in equity for the six months ended June 30, 2018 consist of the consolidated results for the Partnership. Our condensed consolidated statement of changes in equity for the six months ended June 30, 2017 consists of the combined results of the Predecessor.

8

BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

Summary of Significant Accounting Policies

There have been no significant changes to our accounting policies as disclosed in Note 2 - Summary of Significant Accounting Policies in our 2017 Annual Report.

Recent Accounting Pronouncements

In May2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)". ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 to defer the adoption date for ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period for public business entities and to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019 for all other entities. This ASU is effective as of January 1, 2019 for an emerging growth company ("EGC"). We expect to transition from EGC status to large accelerated as of December 31, 2018, as such we will reflect the adoption in our on Annual Report on Form 10-K for the year ended December 31, 2018. ASU 2014-09 was further amended in March 2016 by the provisions of ASU 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," in April 2016 by the provisions of ASU 2016-10, "Identifying Performance Obligations and Licensing", in May 2016 by the provisions of ASU 2016-12, "Narrow-Scope Improvements and Practical Expedients", in December 2016 by the provisions of ASU 2016-20, "Technical Corrections to Topic 606, Revenue from Contracts with Customers" and in September 2017 by the provisions of ASU 2017-13, "Revenue Recognition (Topic 605) and Revenue from Contracts with Customers (Topic 606)." We have evaluated the impact that the adoption of the provisions under Topic 606 will have on our revenue contracts, consolidated financial statements and the accompanying notes. Based upon our assessment, the new standard may impact the timing of revenue recognition, but we do not expect significant changes to the amounts recognized for each reporting period. We will adopt the new standard under the modified retrospective transition method by December 31, 2018.

In February 2016, the FASB issued ASU 2016-02, "Leases", which improves transparency and comparability among organizations by requiring lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities and for annual reporting periods beginning after December 15, 2019 and interim reporting periods beginning after December 15, 2020 for all other entities. This ASU is effective as of January 1, 2019 for us, as we expect to transition from EGC status to large accelerated as of December 31, 2018. In January 2018, the FASB issued ASU 2018-01, "Leases (Topic 842), Land Easement Practical Expedient for Transition to Topic 842". This ASU permits an entity to continue to apply its current accounting policy for land easements that existed before the effective date of Topic 842. Once an entity adopts Topic 842, it would apply prospectively to all new (or modified) land easements to determine whether the arrangement contains a lease. Topic 842 requires adoption by application of a modified retrospective transition approach and is effective for us on the same effective date as ASU 2016-02. We are currently evaluating the impact the adoption of these standards will have on our consolidated financial statements and the accompanying notes and we will have our assessment completed prior to December 31, 2018.

For additional information on accounting pronouncements issued prior to December 2017, see Note 2 - Summary of Significant Accounting Policies in our 2017 Annual Report.

9

BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

2. Equity Method Investments

We account for our ownership interests in Mars and the Mardi Gras Joint Ventures using the equity method for financial reporting purposes. Our financial results include our proportionate share of the Mars’ and Mardi Gras Joint Ventures’ net income, which is reflected in Income from equity method investments on the condensed consolidated statements of operations.

Summarized financial information for each of our equity method investments on a 100% basis is as follows:

	Three Months Ended June 30, 2018
			Mardi Gras Joint Ventures
	Mars		Caesar		Cleopatra		Proteus		Endymion		Total Mardi Gras Joint Ventures		Total
Statement of operations data
Revenues	$	51,867	$	9,832	$	5,222	$	8,305	$	8,992	$	32,351	$	84,218
Operating expenses	21,381		3,548		2,419		2,924		3,486		12,377		33,758
Net income	30,489		6,284		2,803		5,381		5,616		20,084		50,573

	Six Months Ended June 30, 2018
			Mardi Gras Joint Ventures
	Mars		Caesar		Cleopatra		Proteus		Endymion		Total Mardi Gras Joint Ventures		Total
Statement of operations data
Revenues	$	109,042	$	21,435	$	10,983	$	16,905	$	18,428	$	67,751	$	176,793
Operating expenses	43,029		7,427		4,691		6,271		8,228		26,617		69,646
Net income	66,023		14,008		6,292		10,634		10,420		41,354		107,377

The table below summarizes the balances and activities related to each of our equity method investments that we recorded for the three and six months ended June 30, 2018:

	Three Months Ended June 30, 2018
				Mardi Gras Joint Ventures
	Mars			Caesar			Cleopatra			Proteus			Endymion			Total Mardi Gras Joint Ventures			Total
Beginning Balance	$	60,117		$	121,795		$	122,446		$	85,553		$	86,574		$	416,368		$	476,485
Distributions	(10,118		)	(4,480		)	(2,385		)	(5,070		)	(5,200		)	(17,135		)	(27,253		)
Income from equity method investments	8,689			3,519			1,486			3,498			3,650			12,153			20,842
Ending Balance	$	58,688		$	120,834		$	121,547		$	83,981		$	85,024		$	411,386		$	470,074

10

BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

	Six Months Ended June 30, 2018
				Mardi Gras Joint Ventures
	Mars			Caesar			Cleopatra			Proteus			Endymion			Total Mardi Gras Joint Ventures			Total
Beginning Balance	$	65,561		$	123,586		$	123,512		$	87,144		$	88,196		$	422,438		$	487,999
Cumulative effect of accounting change*	(2,746		)	—			—			—			—			—			(2,746		)
Distributions	(22,943		)	(10,597		)	(5,300		)	(10,075		)	(9,945		)	(35,917		)	(58,860		)
Income from equity method investments	18,816			7,845			3,335			6,912			6,773			24,865			43,681
Ending Balance	$	58,688		$	120,834		$	121,547		$	83,981		$	85,024		$	411,386		$	470,074

* The financial results of Mars reflect the adoption of ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" on January 1, 2018 under the modified retrospective transition method through a cumulative adjustment to equity. Our impact from this accounting change to our Mars investment was $(2,746), offset to partners' capital. The Mardi Gras Joint Ventures will adopt this ASU on January 1, 2019.

3. Property, Plant and Equipment

Property, plant and equipment consisted of the following:

	June 30,			December 31,
	2018			2017
Land	$	155		$	155
Right-of-way assets	1,380			1,380
Buildings and improvements	12,032			12,032
Pipelines and equipment	92,208			92,083
Other	510			509
Construction in progress	587			67
Property, plant and equipment, gross	106,872			106,226
Less: Accumulated depreciation	(38,057		)	(36,738		)
Property, plant and equipment, net	$	68,815		$	69,488

4. Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30,		December 31,
	2018		2017
Current portion of environmental remediation obligations	$	839	$	1,655
Other accrued liabilities	2,300		2,826
Accrued liabilities	$	3,139	$	4,481

Accrued interest and fees related to our credit facility were $155 and $159 as of June 30, 2018 and December 31, 2017, respectively, included in Other accrued liabilities. See Note 5 - Debt for further discussion of accrued interest and fees on debt with our related party.

11

BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

5. Debt

On October 30, 2017, the Partnership entered into a $600.0 million unsecured revolving credit facility agreement (the “Credit Facility”) with an affiliate of BP. A summary of certain key terms of the Credit Facility is included in Note 7 - Debt in our 2017 Annual Report.

On May 4, 2018, the Partnership repaid outstanding borrowings under the Credit Facility. This short-term debt had a principal balance of $15.0 million at the time of repayment and the repayment was made using cash on hand.

There were $0 of outstanding borrowings under the Credit Facility at June 30, 2018 and $15 million outstanding at December 31, 2017. Interest charges and fees related to the Credit Facility were $0.2 million and $0.4 million for the three and six months ended June 30, 2018 respectively, and $0 for the three and six months ended June 30, 2017.

For the three and six months ended June 30, 2018, the weighted average interest rate for the Credit Facility was 2.2%. This facility includes customary fees, including a commitment fee of 0.10% and a utilization fee of 0.20% per annum.

6. Related Party Transactions

Related party transactions include transactions with our Parent and our Parent’s affiliates, including those entities in which our Parent has an ownership interest but does not have control. In addition to the fixed loss allowance arrangements discussed in Note 2- Summary of Significant Accounting Policies in our 2017 Annual Report and the Credit Facility discussed above, we have entered into the following transactions with our related parties:

Omnibus Agreement

In connection with the IPO, the Partnership entered into an omnibus agreement with BP Pipelines and certain of its affiliates, including BP Midstream Partners GP LLC (our "general partner"). This agreement addresses, among other things, (i) the Partnership's obligation to pay an annual fee for general and administrative services provided by BP Pipelines and its affiliates, (ii) the Partnership's obligation to reimburse BP Pipelines for personnel and other costs related to the direct operation, management and maintenance of the assets and (iii) the Partnership's obligation to reimburse BP Pipelines for services and certain direct or allocated costs and expenses incurred by BP Pipelines or its affiliates on behalf of the Partnership.

Pursuant to the omnibus agreement, BP Pipelines will indemnify the Partnership and fund the costs of required remedial action for its known historical and legacy spills and releases and other environmental and litigation claims identified in the omnibus agreement. BP Pipelines will also indemnify the Partnership with respect to subsidiaries for which it is the operator for certain title defects and for failures to obtain certain consents and permits necessary to conduct its business for one year following the closing of our IPO.

Further, the omnibus agreement addresses the granting of a license from BPA to the Partnership with respect to use of certain BP trademarks and trade name.

Cash Management Program

Prior to the IPO, we did not have our standalone cash accounts but participated in our Parent’s centralized cash management and funding system. See Note 1 - Business and Basis of Presentation for further discussion.

In connection with the IPO, we established our own cash accounts for the funding of our operating and investing activities but continued to participate in our Parent’s centralized cash management and funding system.

Related Party Revenue

We provide crude oil, refined products and diluent transportation services to related parties and generate revenue through published tariffs. We have commercial arrangements with BP Products North America, Inc. ("BP Products") that include minimum volume commitments. Under these fee-based agreements, we provide transportation services to BP Products and BP Products has committed to pay us for minimum volumes of crude oil, refined products and diluent, regardless of whether such volumes are physically shipped by BP Products through our pipelines during the term of the agreements. See Note 8 - Related Party Transactions

12

BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

in our 2017 Annual Report for further discussion regarding these agreements. We also have a fixed loss allowance (“FLA”) arrangement with BP Products, which provides us with additional income. See Note 8 - Fair Value Measurements for further information.

Our revenue from related parties was $28,169and $53,990 for the three and six months ended June 30, 2018 respectively, and $26,319 and $52,054for the three and six months ended June 30, 2017, respectively.

We did not recognize any deficiency revenue under the throughput and deficiency agreements with BP Products for the three and six months ended June 30, 2018, respectively and for the three and six months ended June 30, 2017, respectively. We recorded $2,186 and $0 inDeferred revenue and credits on our condensed consolidated balance sheets at June 30, 2018 and December 31, 2017, respectively.

Related Party Expenses

All employees performing services on behalf of our operations are employees of our Parent. Our Parent also procures our insurance policies on our behalf and performs certain general corporate functions for us related to finance, accounting, treasury, legal, information technology, human resources, shared services, government affairs, insurance, health, safety, security, employee benefits, incentives, severance and environmental functional support. Personnel and operating costs incurred by our Parent on our behalf are included in either Operating expenses – related parties or General and administrative – related parties in the condensed consolidated statements of operations, depending on the nature of the service provided.

Prior to our IPO, we were allocated operating and indirect general corporate expenses incurred by our Parent. See Note 1 - Business and Basis of Presentation for a summary of the allocation methodology.

Subsequent to the IPO, we pay BP Pipelines an annual fee of $13,300 in the form of monthly installments under the omnibus agreement for general and administrative services provided by BP Pipelines and its affiliates. We also reimburse BP Pipelines for personnel and other costs related to the direct operation, management and maintenance of the assets and services and certain direct or allocated costs and expenses incurred by BP Pipelines or its affiliates on our behalf pursuant to the terms in the omnibus agreement.

For the three and six months ended June 30, 2018 and 2017, we recorded the following amounts for related party expenses, which also included the expenses related to share-based compensation discussed below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
			Predecessor				Predecessor
Operating expenses—related parties	$	1,026	$	1,875	$	1,988	$	3,867
Maintenance expenses—related parties	24		192		44		192
General and administrative—related parties	3,442		982		6,865		2,361
Total costs and expenses—related parties	$	4,492	$	3,049	$	8,897	$	6,420

Share-based Compensation

Certain employees of our Parent supporting our operations were historically granted awards under share option plans and equity-settled employee share plans. Prior to the IPO, these share-based compensation costs were allocated to us as part of the cost allocations from our Parent. These costs were $61 and $104 for the three and six months ended June 30, 2017, respectively, recorded in General and administrative – related parties on the condensed consolidated statements of operations.

Subsequent to the IPO, the share-based compensation related to the employees of our Parent who provide services to us is charged to the Partnership pursuant to the terms of the omnibus agreement. The Partnership also issued its own unit-based compensation under our long term incentive plan. See Note 11 - Unit-Based Compensation.

13

BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

Non-controlling Interests

We control and consolidate Mardi Gras via an agreement between us and our Parent, under which we have the right to vote 100% of Mardi Gras’ ownership interests in each of the Mardi Gras Joint Ventures. Non-controlling interests consist of the 80% ownership interest in Mardi Gras retained by our Parent upon the completion of the IPO and held at June 30, 2018. Net income attributable to non-controlling interests is the product of the non-controlling interests ownership percentage and the net income of Mardi Gras. We report Non-controlling interests as a separate component of equity on our condensed consolidated balance sheets and Net income attributable to non-controlling interests on our condensed consolidated statements of operations.

7. Net Income Per Limited Partner Unit

On February 15, 2018, we paid a prorated quarterly cash distribution of $0.1798 per limited partner unit to unitholders of record on February 1, 2018, for the period from October 30 through December 31, 2017.

On May 15, 2018, we paid a quarterly cash distribution of $0.2675 per limited partner unit to unitholders of record on May 1, 2018, for the period from January 1 through March 31, 2018.

On July 18, 2018, the board of directors of our general partner declared a quarterly cash distribution of $0.2725 per limited partner unit to unitholders of record on August 1, 2018, for the period from April 1 through June 30, 2018. This distribution will be paid on August 15, 2018.

Net income per limited partner unit is only calculated for the three and six months ended June 30, 2018 as no units were outstanding in the same periods of 2017. The following tables show the allocation of net income to arrive at net income per limited partner unit for the three and six months ended June 30, 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018		2018
Net income attributable to the Partnership	$	30,470	$	61,009
Less:
Incentive distribution rights currently held by the General Partner	—		—
Limited partners' distribution declared on common units	14,272		28,282
Limited partners' distribution declared on subordinated units	14,272		28,282
Net income attributable to the Partnership in excess of distributions	$	1,926	$	4,445

	Three Months Ended June 30, 2018
	General Partner		Limited Partners' Common Units		Limited Partners' Subordinated Units		Total
Distributions declared	$	—	$	14,272	$	14,272	$	28,544
Net income attributable to the Partnership in excess of distributions	—		963		963		1,926
Net income attributable to the Partnership	$	—	$	15,235	$	15,235	$	30,470
Weighted average units outstanding:
Basic			52,376		52,376		104,752
Diluted			52,382		52,376		104,758
Net income per limited partner unit (in dollars):
Basic			$	0.29	$	0.29
Diluted			$	0.29	$	0.29

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BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

	Six Months Ended June 30, 2018
	General Partner		Limited Partners' Common Units		Limited Partners' Subordinated Units		Total
Distributions declared	$	—	$	28,282	$	28,282	$	56,564
Net income attributable to the Partnership in excess of distributions	$	—	$	2,223	$	2,222	4,445
Net income attributable to the Partnership	$	—	$	30,505	$	30,504	$	61,009
Weighted average units:
Basic			52,376		52,376		104,752
Diluted			52,382		52,376		104,758
Net income per limited partner unit (in dollars):
Basic			$	0.58	$	0.58
Diluted			$	0.58	$	0.58

8. Fair Value Measurements

We measure assets and liabilities requiring fair value presentation and disclose such amounts according to the quality of valuation inputs under the fair value hierarchy. The carrying amounts of our financial instruments included in current assets and current liabilities approximate fair value due to their short-term nature and maturity.

Our tariff for crude oil transportation on BP2 includes a fixed percentage FLA per barrel, which is a separate fee under the applicable crude oil tariff to cover evaporation and other loss in transit. In the periods presented, all our revenue on BP2 was generated from services to our Parent. We recognize FLA income in Revenue - related parties in the condensed consolidated statements of operations during the periods when commodities are transported.

Allowance oil receivable incurred prior to October 1, 2017 contained an embedded derivative, which we recorded at fair value on the condensed consolidated balance sheets together with its host arrangement. We recorded the changes in fair value in Other income (loss) on the condensed consolidated statements of operations. Allowance oil receivable balance incurred prior to October 1, 2017, including the embedded derivative, was classified as Level 2 in the fair value hierarchy. Such balances were entirely settled upon the IPO.

Allowance oil receivable incurred subsequent to October 1, 2017 no longer contains an embedded derivative or results in gain or loss related to the change in its fair value pursuant to the revised settlement price determination in a related party agreement between us and our Parent. We now settle the allowance oil at the end of each period; therefore, the balances are entirely recorded in Accounts receivable - related parties after October 1, 2017.

In the three and six months ended June 30, 2018, we recognized FLA income of$2,860 and $5,000, respectively.In the three and six months ended June 30, 2017, we recognized FLA income of $2,061 and $3,997, respectively, and a loss due to the changes in fair value of $312 and $488, respectively, related to the FLA arrangement with our Parent.

9. Income Taxes

Prior to our IPO, the Predecessor was a part of BPA and was included in the income tax returns of BPA. Our tax provision prior to the IPO was prepared on a separate return basis, as if the Predecessor was a separate group of companies under common ownership. The Predecessor recorded income tax expense of $7,933 and $15,816 for the three and six months ended June 30, 2017, respectively.

BP Midstream Partners LP is not a taxable entity for U.S. federal and state income tax purposes. Taxes on our net income are generally borne by our partners through the allocation of taxable income. The condensed consolidated financial statements, therefore, do not include a provision for income tax after the IPO.

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BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

10. Commitments and Contingencies

Legal Proceedings

From time to time, we are party to ongoing legal proceedings in the ordinary course of business. For each of our outstanding legal matters, if any, we evaluate the merits of the case, our exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. While the outcome of these proceedings cannot be predicted with certainty, we do not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or liquidity.

Indemnification

Under our omnibus agreement, our Parent will indemnify us for certain environmental liabilities, litigation and other matters attributable to the ownership or operation of our assets prior to the closing of the IPO. For the purposes of determining the indemnified amount of any loss suffered or incurred by the Partnership, the Partnership’s ownership of 28.5% in Mars, and 20% in Mardi Gras, and Mardi Gras’ 56% ownership in Caesar, 53% ownership in Cleopatra, 65% ownership in Endymion and 65% ownership in Proteus will be taken into account. Indemnification for certain identified environmental liabilities is subject to a cap of $25.0 million without any deductible. Other matters covered by the omnibus agreement are subject to a cap of $15.0 million and an aggregate deductible of $0.5 million before we are entitled to indemnification. Indemnification for any unknown environmental liabilities is limited to liabilities due to occurrences prior to the closing of the IPO and that are identified before the third anniversary of the closing of the IPO.

Environmental Matters

We are subject to federal, state, and local environmental laws and regulations. We record provisions for environmental liabilities based on management’s best estimates, using all information that is available at the time. In making environmental liability estimations, we consider the material effect of environmental compliance, pending legal actions against us and potential third-party liability claims. Often, as the remediation evaluation and effort progresses, additional information is obtained, requiring revisions to estimated costs. We are indemnified by our Parent under the omnibus agreement against environmental cleanup costs for incidents that occurred prior to the IPO. Subsequent to the IPO, revisions to the estimated environmental liability for conditions that are not indemnified under the omnibus agreement with our Parent are reflected in our condensed consolidated statements of operations in the year in which they are probable and reasonably estimable.

We accrued $4,102 and $4,438 for environmental liabilities at June 30, 2018 and December 31, 2017, respectively. The balances are related to incidents that occurred prior to the IPO and are entirely indemnified by our Parent. As a result, we recorded corresponding indemnification assets of $4,102 and $4,438 on the condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017.

11. Unit-Based Compensation

Long-Term Incentive Plan

Our general partner has adopted the BP Midstream Partners LP 2017 Long Term Incentive Plan (the “LTIP”). Awards under the LTIP are available for eligible officers, directors, employees and consultants of the general partner and its affiliates, who perform services for the Partnership. The LTIP allows the Partnership to grant unit options, unit appreciation rights, restricted units, phantom units, unit awards, cash awards, performance awards, distribution equivalent rights, substitute awards and other unit-based awards. The maximum aggregate number of common units that may be issued pursuant to the awards granted under the LTIP shall not exceed 5,502,271, subject to proportionate adjustment in the event of unit splits and similar events.

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BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

Unit-Based Awards under the LTIP

The following is a summary of phantom unit award activities of the Partnership’s common units for the six months ended June 30, 2018:

	Phantom Units
	Number of Units (in units)	Weighted Average Grant Date Fair Value per Unit (in dollars)
Outstanding at December 31, 2017	8,468	$	17.48
Granted	3,737	20.07
Outstanding at June 30, 2018	12,205	$	18.27
Vested at June 30, 2018	—	—

For the three and six months ended June 30, 2018, total compensation expense recognized for phantom unit awards was $45 and $84, respectively. The unrecognized compensation cost related to phantom unit awards was $120 at June 30, 2018, which is expected to be recognized over a weighted average period of 0.5 years. There were no forfeitures for the six months ended June 30, 2018.

12. Variable Interest Entity

We control and consolidate our variable interest entity Mardi Gras because we are the primary beneficiary. Mardi Gras holds equity interests in the Mardi Gras Joint Ventures and accounts for them as equity method investments. Mardi Gras does not have any other operations or activities. See Note 15 - Variable Interest Entity in our 2017 Annual Report for further discussion.

The financial position of Mardi Gras at June 30, 2018 and December 31, 2017, its financial performance for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017, as reflected in our condensed consolidated financial statements, are as follows:

	June 30, 2018		December 31, 2017
Balance sheet
Equity method investments	$	411,386	$	422,438
Non-controlling interests	333,487		342,330

	Three Months Ended June 30,			Six Months Ended June 30,
	2018		2017	2018		2017
Statement of operations
Income from equity method investments	$	12,153	*	$	24,865	*
Less: Net income attributable to non-controlling interests	9,722		*	19,891		*
Net impact on Net income attributable to the Partnership	$	2,431	*	$	4,974	*

* Information is not applicable as the interest in Mardi Gras was contributed to the Partnership on October 30, 2017.

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BP MIDSTREAM PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of dollars, unless otherwise indicated)

	Six Months Ended June 30,
	2018			2017
Statement of cash flows
Cash flows from operating activities
Distributions of earnings received from equity method investments	$	24,865		*
Cash flows from investing activities
Distribution in excess of earnings from equity method investments	11,053			*
Cash flows from financing activities
Distributions to non-controlling interests	(28,734		)	*
Net change on BPMP's cash and cash equivalents	$	7,184		*

* Information is not applicable as the interest in Mardi Gras was contributed to the Partnership on October 30, 2017.

13. Subsequent Events

We have evaluated subsequent events through the issuance of these condensed consolidated financial statements. Based on this evaluation, it was determined that no subsequent events occurred, other than the item noted below, that require recognition or disclosure in the condensed consolidated financial statements.

Cash Distribution

On July 18, 2018, we declared a cash distribution of $0.2725 per limited partner unit to unitholders of record on August 1, 2018, for the three months ended June 30, 2018. The distribution will be paid on August 15, 2018 and will total $28.5 million, with $13.0 million being distributed to our non-affiliated common unitholders and $15.5 million being distributed to BP Midstream Partners Holdings LLC ("BP Holdco") in respect of its ownership of our common and subordinated units.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q (the “Quarterly Report”) includes various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). All statements other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected cost, prospects, plans and objectives of management, are forward-looking statements.

When used in this Quarterly Report, you can identify our forward-looking statements by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “plan,” “predict,” “project,” “seek,” “target,” “could,” “may,” “should,” “would” or other similar expressions that convey the uncertainty of future events or outcomes, although not all forward-looking statements contain such identifying words. When considering forward-looking statements, you should carefully consider the risk factors and other cautionary statements described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 and other cautionary statements contained in this filing.

We based forward-looking statements on our current expectations and assumptions about future events and currently available information as to the outcome and timing of future events. We caution you that these statements are not guarantees of future performance as they involved assumptions that, while made in good faith, may prove to be incorrect, and involve risks and uncertainties we cannot predict. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements.

Forward-looking statements may include statements about:

• The continued ability of BP and any non-affiliate customers to satisfy their obligations under our commercial and other agreements and the impact of lower market prices for crude oil, natural gas, refined products and diluent.

• The volume of crude oil, natural gas, refined products and diluent we transport or store and the prices that we can charge our customers.

• The tariff rates with respect to volumes that we transport through our regulated assets, which rates are subject to review and possible adjustment imposed by federal and state regulators.

• Changes in revenue we realize under the fixed loss allowance provisions of our fees and tariffs resulting from changes in underlying commodity prices.

• Fluctuations in the prices for crude oil, natural gas, refined products and diluent.

• The level of onshore and offshore production and demand for crude oil, natural gas, refined products and diluent.

• Changes in global economic conditions and the effects of a global economic downturn on the business of BP and the business of its suppliers, customers, business partners and credit lenders.

• Liabilities associated with the risks and operational hazards inherent in transporting and/or storing crude oil, natural gas, refined products and diluent.

• Curtailment of operations or expansion projects due to unexpected leaks or spills; severe weather disruption; riots, strikes, lockouts or other industrial disturbances; or failure of information technology systems due to various causes, including unauthorized access or attack.

• Costs or liabilities associated with federal, state and local laws and regulations relating to environmental protection and safety, including spills, releases and pipeline integrity.

• Costs associated with compliance with evolving environmental laws and regulations on climate change.

• Costs associated with compliance with safety regulations and system maintenance programs, including pipeline integrity management program testing and related repairs.

• Changes in tax status.

• Changes in the cost or availability of third-party vessels, pipelines, rail cars and other means of delivering and transporting crude oil, natural gas, refined products and diluent.

• Direct or indirect effects on our business resulting from actual or threatened terrorist incidents or acts of war.

• Changes in, and availability to us, of the equity and debt capital markets.

Should one or more of the risks or uncertainties described in this Quarterly Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Unless otherwise stated or the context otherwise indicates, all references to “we,” “our,” “us,” “Predecessor Assets,” “Predecessor,” or similar expressions for time periods prior to the initial public offering (the "IPO") date of October 30, 2017 refer to BP Midstream Partners LP Predecessor, our predecessor for accounting purposes. For time periods subsequent to the IPO, “we,” “our,” “us,” or similar expressions refer to the legal entity BP Midstream Partners LP (the "Partnership"). The term “our Parent” refers to BP Pipelines (North America), Inc. (“BP Pipelines”), any entity that wholly owns BP Pipelines, indirectly or directly, including BP America Inc. and BP p.l.c. (“BP”), and any entity that is wholly owned by the aforementioned entities, excluding BP Midstream Partners LP Predecessor and the Partnership.

The following management discussion and analysis of financial conditions and results of operations should be read in conjunction with the unaudited financial statements and accompanying notes in this quarterly report and our Annual Report on Form 10-K for the year ended December 31, 2017 (our "2017 Annual Report").

Partnership Overview

We are a fee-based, growth-oriented master limited partnership formed by BP Pipelines on May 22, 2017 to own, operate, develop and acquire pipelines and other midstream assets. On October 30, 2017, the Partnership completed its IPO of common units representing limited partner interests. A total of 47,794,358 common units, including 5,294,358 common units pertaining to the exercise of the underwriters' over-allotment option, were issued to the public unitholders in connection with our IPO. On October 26, 2017, the Partnership's common units began trading on the New York Stock Exchange ("NYSE") under the symbol "BPMP".

Our 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 crude oil refinery in Whiting, Indiana (the "Whiting Refinery") and offshore crude oil and natural gas production to key refining markets and trading and distribution hubs. Certain of our assets deliver refined products and diluent from the Whiting Refinery and other U.S. supply hubs to major demand centers.

Our assets consist of the following:    

• BP Two Pipeline Company LLC, which owns the BP#2 crude oil pipeline system (“BP2”).

• BP River Rouge Pipeline Company LLC, which owns the Whiting to River Rouge refined products pipeline system (“River Rouge”).

• BP D-B Pipeline Company LLC, which owns the Diamondback diluent pipeline system (“Diamondback”). BP2, River Rouge, and Diamondback are located in the Midwest region of the United States, and together are referred to as the "Predecessor Assets" or the "Wholly Owned Assets".

• A 28.5% ownership interest in Mars Oil Pipeline Company, LLC (“Mars”), which owns a major corridor crude oil pipeline system in the Gulf of Mexico.

• A 20% managing member interest in Mardi Gras Transportation System Company, LLC (“Mardi Gras”), which holds the following investments in joint ventures located in the Gulf of Mexico:

• A 56% ownership interest in Caesar Oil Pipeline Company, LLC (“Caesar”),

• A 53% ownership interest in Cleopatra Gas Gathering Company, LLC (“Cleopatra”),

• A 65% ownership interest in Proteus Oil Pipeline Company, LLC (“Proteus”), and,

• A 65% ownership interest in Endymion Oil Pipeline Company, LLC (“Endymion”). Together Endymion, Caesar, Cleopatra and Proteus are referred to as the “Mardi Gras Joint Ventures.”

How We Evaluate Our Operations

Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include: (i) safety and environmental metrics, (ii) revenue (including FLA) from throughput and utilization; (iii) operating expenses and maintenance spend; (iv) Adjusted EBITDA (as defined below); and (v) cash available for distribution (as defined below).

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Preventative Safety and Environmental Metrics

We are committed to maintaining and improving the safety, reliability and efficiency of our operations. We have implemented

reporting programs requiring all employees and contractors of our Parent who provide services to us to record environmental and safety related incidents. Our management team uses these existing programs and data to evaluate trends and potential interventions to deliver on performance targets. We integrate health, occupational safety, process safety and environmental principles throughout our operations in order to reduce and eliminate environmental and safety related incidents.

Throughput

The amount of revenue our business generates primarily depends on our fee-based transportation agreements with shippers, our tariffs and the volumes of crude oil, natural gas, refined products and diluent that we handle on our pipelines. We generate the majority of our revenue by charging fees under long-term agreements with minimum volume commitments.

The volumes that we handle on our pipelines are primarily affected by the supply of, and demand for, crude oil, natural gas, refined products and diluent in the markets served directly or indirectly by our assets. Our results of operations are impacted by our ability to:

• utilize any remaining unused capacity on, or add additional capacity to, our pipeline systems;

• increase throughput volumes on our pipeline systems by making connections to existing or new third-party pipelines or other facilities, primarily driven by the anticipated supply of and demand for crude oil, natural gas, refined products and diluent;

• identify and execute organic expansion projects; and

• increase throughput volumes via acquisitions.

Operating Expenses and Total Maintenance Spend

Operating Expenses

Our management seeks to maximize our profitability by effectively managing our operating expenses. These expenses are comprised primarily of labor expenses (including contractor services), general materials, supplies, minor maintenance, utility costs (including electricity and fuel) and insurance premiums. Utility costs fluctuate based on throughput volumes and the grades of crude oil and types of refined products we handle. Our other operating expenses generally remain relatively stable across broad ranges of throughput volumes, but can fluctuate from period to period depending on the mix of activities performed during that period.

Total Maintenance Spend

We calculate Total Maintenance Spend as the sum of maintenance expenses and maintenance capital expenditures, excluding any reimbursable maintenance capital expenditures. We track these expenses on a combined basis because it is useful to understanding our total maintenance requirements. Total Maintenance Spend for the six months ended June 30, 2018 and 2017, respectively, is shown in the table below:

	Six Months Ended June 30,
	2018		2017
	(in thousands of dollars)
			Predecessor
Wholly Owned Assets
Maintenance expenses	$	927	$	1,481
Maintenance capital expenditures	472		1,840
Total Maintenance Spend - Wholly Owned Assets	$	1,399	$	3,321

We seek to maximize our profitability by effectively managing our maintenance expenses, which consist primarily of safety and environmental integrity programs. We seek to manage our maintenance expenses on the pipelines we operate by scheduling maintenance over time to avoid significant variability in our maintenance expenses and minimize their impact on our cash flows, without compromising our commitment to safety and environmental stewardship.

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Our maintenance expenses represent the costs we incur that do not significantly extend the useful life or increase the expected output of our property, plant and equipment. These expenses include pipeline repairs, replacements of immaterial sections of pipelines, inspections, equipment rentals and costs incurred to maintain compliance with existing safety and environmental standards, irrespective of the magnitude of such compliance expenses. Our maintenance expenses vary significantly from period to period because certain of our expenses are the result of scheduled safety and environmental integrity programs, which occur on a multi-year cycle and require substantial outlays.

Adjusted EBITDA and Cash Available for Distribution

We define Adjusted EBITDA as 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 present these financial measures because we believe replacing our proportionate share of our equity method investments’ net income with the cash received from such equity method investments more accurately reflects the cash flow from our business, which is meaningful to our investors.

We compute and present cash available for distribution and define it as Adjusted EBITDA attributable to the Partnership plus net adjustments from volume deficiency agreements, 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.

Adjusted EBITDA and cash available for distribution are non-GAAP supplemental financial measures, which are metrics that management and external users of our condensed 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 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. Please read “Reconciliation of Non-GAAP Measures” section below for the reconciliation of net income and cash provided by operating activities to Adjusted EBITDA and cash available for distribution.

Factors Affecting the Comparability of Our Financial Results

Our results of operations subsequent to the IPO are not comparable to our Predecessor’s historical results of operations for the reasons described below:

Revenues

Prior to July 1, 2017, our Predecessor did not have agreements that contained minimum volume commitments. As of July 1, 2017, we entered into a throughput and deficiency agreement with BP Products for transporting diluent on Diamondback under a joint tariff agreement with a third-party carrier that contains minimum volume requirements.  In connection with the IPO, we entered into additional throughput and deficiency agreements that contain minimum volume requirements with BP Products for each of our three Wholly Owned Assets. See Note 8 - Related Party Transactions in the Notes to Consolidated Financial Statements in our 2017 Annual Report.

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Contribution of Interests in Investments

Immediately prior to the consummation of the IPO, BP Pipelines contributed to us 28.5% ownership interest in Mars and 20% managing member interest in Mardi Gras. We control and consolidate Mardi Gras via an agreement between us and our Parent, under which we have the right to vote 100% of Mardi Gras’ ownership interests in each of the Mardi Gras Joint Ventures. Historical Predecessor results of operations consist of only the Predecessor Assets.

Expenses

Our Predecessor’s operating and general and administrative expenses included charges for the management and operations of our assets and certain general corporate overhead, shared services and operating services allocated to us by BP Pipelines through October 29, 2017. These allocated expenses included but were not limited to finance, accounting, treasury, legal, information technology, human resources, shared services, government affairs, insurance, health, safety, security, employee benefits, incentives, severance and environmental functional support. These expenses were charged or allocated to our Predecessor Assets based on the nature of the expenses.

Subsequent to the IPO, BP Pipelines charges us a combination of fixed and reimbursable charges for administrative and operating services under our omnibus agreement. We pay an annual fee, initially $13.3 million, to BP Pipelines for general and administrative services. The omnibus fee is structured to support all of our onshore and offshore assets, while the expenses allocated to the Predecessor only covered the Wholly Owned Assets.

Income Taxes

Federal income taxes were reflected on the historical financial statements of our Predecessor. The Partnership is a pass-through entity for federal and state income tax purposes and is not subject to federal and state income tax expense in its financial results.

Financing

There are differences in the way we finance our operations as compared to the way our Predecessor historically financed its operations. Historically, our Predecessor’s operations were financed as part of BP Pipelines’ integrated operations, and our Predecessor did not record any separate costs associated with financing its operations. Our Predecessor largely relied on internally-generated cash flows and capital contributions from BP Pipelines to satisfy its capital expenditure requirements. Subsequent to the IPO, funding for future capital expenditures is primarily from external sources, including affiliate borrowings under our $600.0 million Credit Facility and potential future issuances of equity and debt securities.

We intend to make cash distributions to our unitholders at a minimum distribution rate of $0.2625 per unit per quarter ($1.05 per unit on an annualized basis). Based on the terms of our cash distribution policy, we expect that we will distribute to our unitholders and our general partner, as the holder of our incentive distribution rights, most of the cash generated by our operations.

Factors Affecting Our Business

Our business can be negatively affected by sustained downturns or slow growth in the economy in general, and is impacted by the mix of services requested by the customers of our pipelines, competition and changes in regulatory requirements affecting our customers’ operations.

Major Expansion Projects

We currently have one major expansion project planned in 2018. An affiliate of Royal Dutch Shell plc ("Shell") is currently building the Mattox pipeline, which will connect to Proteus for the mutual benefit of all parties involved. Through this upstream connection, Proteus will transport all of the volumes from Shell's recently sanctioned Appomattox platform. Proteus is also constructing a new connecting platform adjacent to South Pass 89E platform that will accommodate volumes from the Mattox pipeline. In addition, the new Proteus platform will provide space for future pumping equipment and the ability to increase the capacity of the Proteus system to over 700 kbpd.

The total project cost is expected to be approximately $386.0 million from 2015 to 2019, which are fully reimbursable to Proteus from third-party investors that are not affiliated with the Partnership. During the three months ended June 30, 2018, Proteus incurred $25.5 million of capitalized costs. We expect the Appomattox expansion capital expenditures to be approximately $151.0 million in 2018.

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Customers

BP is our primary customer. Transportation revenue from BP represented 97.4% and 97.2% of our revenues for the three and six months ended June 30, 2018, respectively, and 97.3% and 96.5% for the three and six months ended June 30, 2017, respectively. BP’s volumes represented approximately 54.7% and 54.2% of the aggregate total volumes transported on the Wholly Owned Assets, Mars and the Mardi Gras Joint Ventures combined for the three and six months ended June 30, 2018, respectively. BP’s volumes represented approximately97.7% and 96.9%of the aggregate total volumes transported on the Wholly Owned Assets for the three and six months ended June 30, 2017, respectively.

In addition, we transport crude oil, natural gas and diluent for a mix of third-party customers, including crude oil producers, refiners, marketers and traders, and our assets are connected to other crude oil, natural gas and diluent pipeline systems. In addition to serving directly connected Midwestern U.S. and Gulf Coast markets, our pipelines have access to customers in various regions of the United States and Canada through interconnections with other major pipelines. Our customers use our transportation services for a variety of reasons. Producers of crude oil require the ability to deliver their product to market and frequently enter into firm transportation contracts to ensure that they will have sufficient capacity available to deliver their product to delivery points with greatest market liquidity. Marketers and traders generate income from buying and selling crude oil, natural gas, refined products and diluent to capitalize on price differentials over time or between markets. Our customer mix can vary over time and largely depends on the crude oil, natural gas, refined products and diluent supply and demand dynamics in our markets.

Competition

Our pipelines face competition from a variety of alternative transportation methods including rail, water borne movements including barging and shipping, trucking and other pipelines that service the same markets as our pipelines. Competition for BP2 and River Rouge common carrier pipelines is based primarily on connectivity to sources of supply and demand, while Diamondback faces competition for Gulf Coast sourced diluent from third-party pipelines, which have made direct connections at Manhattan, Illinois. Our offshore pipelines compete for new production on the basis of geographic proximity to the production, cost of connection, available capacity, transportation rates and access to onshore markets.

Regulation

Our interstate common carrier pipelines are subject to regulation by various federal, state and local agencies including the FERC, Environmental Protection Agency ("EPA") and the Department of Transportation ("DOT"). For more information on federal, state and local regulations affecting our business, see Part I, Item 1 and 2. Business and Properties in our 2017 Annual Report.

Acquisition Opportunities

We plan to pursue acquisitions of complementary assets from BP as well as third parties. We also may pursue acquisitions jointly with BP Pipelines. Neither BP nor any of its affiliates are under any obligation, however, to sell or offer to sell us additional assets or to pursue acquisitions jointly with us, and we are under no obligation to buy any additional assets from them or to pursue any joint acquisitions with them. We will focus our acquisition strategy on transportation and midstream assets within the crude oil, natural gas and refined products sectors. We believe that we are well positioned to acquire midstream assets from BP, and particularly BP Pipelines, as well as third parties, should such opportunities arise. Identifying and executing acquisitions will be a key part of our strategy. However, if we do not make acquisitions on economically acceptable terms, our future growth will be limited, and the acquisitions we do make may reduce, rather than increase, our available cash.

Seasonality

The volumes of crude oil, refined products and diluent transported in our pipelines are directly affected by the level of supply and demand for such commodities in the markets served directly or indirectly by our assets. However, many effects of seasonality on our revenue will be substantially mitigated through the use of our fee-based long-term agreements with BP Products that include minimum volume commitments.

24

Results of Operations

The following tables and discussion contain a summary of our consolidated results of operations for the three and six months ended June 30, 2018 and 2017.

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
	(in thousands of dollars)
			Predecessor					Predecessor
Revenue	$	28,935	$	26,885		$	55,554	$	53,528
Costs and expenses
Operating expenses	4,058		3,705			7,654		7,185
Maintenance expenses	871		921			927		1,481
Gain from disposition of property, plant and equipment	—		(6		)	—		(6		)
General and administrative	3,857		938			8,068		2,405
Depreciation	662		662			1,324		1,332
Property and other taxes	112		46			223		154
Total costs and expenses	9,560		6,266			18,196		12,551
Operating income	19,375		20,619			37,358		40,977
Income from equity method investments	20,842		—			43,681		—
Other loss	—		312			—		488
Interest expense, net	25		—			139		—
Income before income taxes	40,192		20,307			80,900		40,489
Income tax expense	—		7,933			—		15,816
Net income	40,192		$	12,374		80,900		$	24,673
Less: Net income attributable to non-controlling interests	9,722					19,891
Net income attributable to the Partnership	$	30,470				$	61,009
Adjusted EBITDA**	$	47,290	$	20,963		$	97,542	$	41,815
Less: Adjusted EBITDA attributable to non-controlling interests	13,708		*			28,734		*
Adjusted EBITDA attributable to the Partnership	$	33,582	*			$	68,808	*
* Information is not applicable for the periods prior to the IPO.
** See Reconciliation of Non-GAAP Measures below.

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	Three Months Ended June 30,				Six Months Ended June 30,
Pipeline throughput (thousands of barrels per day)(1)(2)	2018		2017		2018		2017
BP2	295		281		291		277
Diamondback	73		58		77		62
River Rouge	65		60		63		60
Total Wholly Owned Assets	433		399		431		399
Mars	451		506		458		473
Caesar	174		218		190		220
Cleopatra(3)	21		24		22		26
Proteus	175		154		179		161
Endymion	175		154		179		161
Mardi Gras Joint Ventures	545		550		570		568
Average revenue per barrel ($ per barrel)(2)(4)
Total Wholly Owned Assets	$	0.73	$	0.74	$	0.71	$	0.74
Mars	1.15		1.35		1.20		1.40
Mardi Gras Joint Ventures	0.65		0.67		0.65		0.67
(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 and six months ended June 30, 2018, and 2017. Data presented for Mars and Mardi Gras Joint Ventures for the three and six months ended June 30, 2017 are for informational purposes only and are not included in our Predecessor financial results.
(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.

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Total revenue increased for the three months ended June 30, 2018 compared to the three months ended June 30, 2017. Revenue on BP2 increased $0.8 million attributable to a 5.2% increase in throughput volume and $0.8 million increase in FLA revenue. Revenue for River Rouge increased by $0.5 million due to 7.4% increase in throughput volume. Revenue for Diamondback increased by $0.1 million due to a 25.5% increase in throughput volume offset partially by an 18.2% reduction in weighted average tariff rate. Other revenue decreased by $0.1 million compared to the prior year period.

Operating expenses increased slightly for the three months ended June 30, 2018, compared to the three months ended June 30, 2017 primarily due to an increase in insurance for the proportional share of the insurance for the equity method investments.

Maintenance expense remained relatively flat for the three months ended June 30, 2018, compared to the three months ended June 30, 2017.

General and administrative expense increased by $2.9 million, or 311.0%, in the three months ended June 30, 2018, compared to the three months ended June 30, 2017. For the three months ended June 30, 2018, general and administrative expenses primarily consist of $3.3 million under our omnibus agreement with our Parent, compared to $1.0 million of charges allocated in the three months ended June 30, 2017 to our Predecessor. In addition, the three months ended June 30, 2018 included $0.4 million for audit and legal fees. Subsequent to the IPO, general and administrative expenses previously allocated to the Predecessor are now covered in the omnibus agreement with our Parent.

Property and other tax expense remained flat at less than $0.1 million in both of the three months ended June 30, 2018 and 2017.

Income from equity method investments was $20.8 million in the three months ended June 30, 2018 due to earnings from Mars and Mardi Gras Joint Ventures subsequent to IPO.

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Other loss for the three months ended June 30, 2017 represents the changes in fair value of the embedded derivative associated with the allowance oil receivable incurred by our Predecessor prior to October 1, 2017. Pursuant to a related party agreement, allowance oil receivable incurred on and after October 1, 2017 is settled at the commodity prices of the movement month and no longer contains an embedded derivative that would result in gain and losses due to changes in fair value.

Interest expense was $0.1 million for the three months ended June 30, 2018. In connection with the IPO, we entered into the $600.0 million Credit Facility. Interest expense, net consisted of interest expense and commitment and utilization fees, which were partially offset by interest income on cash deposits held by the Partnership. The Predecessor entity in comparison had no related debt or credit facility to drive interest expense.

Income tax expense for the Predecessor entity in the three months ended June 30, 2017 was $7.9 million. Prior to the IPO, the Predecessor was included in the consolidated income tax returns of our Parent which is subject to federal and state income taxes. The effective tax rate during the three months ended June 30, 2017 was at 39.1%. Subsequent to the IPO, the Partnership is treated as a pass-through entity for federal and state income tax purposes. There is no federal and state income taxes for the period subsequent the IPO.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Total revenue increased for the six months ended June 30, 2018 compared to the six months ended June 30, 2017. Throughput revenue on BP2 increased by $1.5 million due to a 5.2% increase in throughput volume and a $1.0 million increase in FLA revenue. Throughput revenue on River Rouge increased by $0.6 million due to a 5.1% increase in throughput volume. Overall six month period results on Diamondback were lower due to a 27.8% decrease in the weighted average tariff rates versus the prior six month period, partially offset by a 25.4% increase in throughput volume. Other revenue decreased by $0.4 million compared to the prior year to date period.

Operating expenses increased by $0.5 million for the six months ended June 30, 2018, compared to the six months ended June 30, 2017 primarily due to an increase in insurance for the proportional share of the insurance for the equity method investments.

Maintenance expenses decreased by $0.6 million, or 37.4%, in the six months ended June 30, 2018, compared to the six months ended June 30, 2017, primarily as a result of $0.1 million decrease in maintenance spend on Diamondback, $0.2 million decrease in maintenance spend on River Rouge and $0.1 million decrease in maintenance spend on BP2 related to corrosion work.

General and administrative expenses increased by $5.7 million, or 235.5%, in the six months ended June 30, 2018, compared to the six months ended June 30, 2017. For the six months ended June 30, 2018, general and administrative expenses primarily consist of $6.6 million under our omnibus agreement with our Parent and $0.5 million for audit fees and $0.4 million for services required as a publicly traded partnership, compared to $2.4 million of charges allocated in the six months ended June 30, 2017 to the Predecessor by our Parent.

Depreciation expense remained relatively flat at $1.3 million in both the six months ended June 30, 2018 and 2017.

Property and other tax expense remained relatively flat at $0.2 million in both of the six months ended June 30, 2018 and 2017.

Income from equity method investments was $43.7 million in the six months ended June 30, 2018 due to earnings from Mars and the Mardi Gras Joint Ventures subsequent to IPO.

Other loss was $0.5 million in the six months ended June 30, 2017. Other loss represents the changes in fair value of the embedded derivative associated with the allowance oil receivable incurred prior to October 1, 2017. Pursuant to a related party agreement, allowance oil receivable incurred on and after October 1, 2017 is settled at the commodity prices of the movement month and no longer contains an embedded derivative that would result in gain and losses due to changes in fair value.

Interest expense, net was $0.1 million in the six months ended June 30, 2018. In connection with the IPO, we entered into the $600.0 million Credit Facility. The $0.1 million of net interest consisted of interest expense and commitment and utilization fees, which were partially offset by interest income on cash deposits held by the Partnership.

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Income tax expense in the six months ended June 30, 2017 was $15.8 million for the Predecessor. Prior to the IPO, the Predecessor was included in the consolidated income tax returns of our Parent which is subject to federal and state income taxes. The effective tax rate during the six months ended June 30, 2017 was at 39.1%. Subsequent to the IPO, the Partnership is treated as a pass-through entity for federal and state income tax purposes. There is no federal and state income taxes for the period subsequent the IPO.

Reconciliation of Non-GAAP Measures

The following tables present a reconciliation of Adjusted EBITDA to net income and to net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018		2017
	(in thousands of dollars)
				Predecessor					Predecessor
Reconciliation of Adjusted EBITDA and Cash Available for Distribution to Net Income
Net income	$	40,192		$	12,374		80,900		$	24,673
Add:
Depreciation	662			662			1,324		1,332
Gain from disposition of property, plant and equipment	—			(6		)	—		(6		)
Income tax expense	—			7,933			—		15,816
Interest expense, net	25			—			139		—
Cash distributions received from equity method investments — Mars	10,118			—			22,943		—
Cash distributions received from equity method investments — Mardi Gras Joint Ventures	17,135			—			35,917		—
Less:
Income from equity method investments — Mars	8,689			—			18,816		—
Income from equity method investments — Mardi Gras Joint Ventures	12,153			—			24,865		—
Adjusted EBITDA	47,290			$	20,963		97,542		$	41,815
Less:
Adjusted EBITDA attributable to non-controlling interests	13,708						28,734
Adjusted EBITDA attributable to the Partnership	33,582						68,808
Add:
Net adjustments from volume deficiency agreements	(509		)				823
Less:
Net interest paid/(received)	162						146
Maintenance capital expenditures	387						472
Cash available for distribution attributable to the Partnership	$	32,524					$	69,013

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	Six Months Ended June 30,
	2018			2017
	(in thousands of dollars)
				Predecessor
Reconciliation of Adjusted EBITDA and Cash Available for Distribution to Net Cash Provided by Operating Activities
Net cash provided by operating activities	$	87,837		$	20,448
Add:
Income tax expense	—			15,816
Interest expense, net	139			—
Distribution in excess of earnings from equity method investments	11,053			—
Changes in other assets and liabilities	(1,403		)	6,682
Less:
Non-cash adjustments	84			1,131
Adjusted EBITDA	$	97,542		$	41,815
Less:
Adjusted EBITDA attributable to non-controlling interests	28,734
Adjusted EBITDA attributable to the Partnership	68,808
Add:
Net adjustments from volume deficiency agreements	823
Less:
Net interest paid/(received)	146
Maintenance capital expenditures	472
Cash available for distribution attributable to the Partnership	$	69,013

Capital Resources and Liquidity

We maintain separate bank accounts from BP Pipelines which continues to provide treasury services on our general partner’s behalf under our omnibus agreement. We expect our ongoing sources of liquidity to include cash generated from operations (including distribution from our equity method investments), borrowings under our Credit Facility and issuances of debt and additional equity securities. The entities in which we own an interest may also incur debt. We believe that cash generated from these sources will be sufficient to meet our short-term working capital requirements and long-term capital expenditure requirements and to make quarterly cash distributions.

Cash Distributions

The board of directors of our general partner has adopted a cash distribution policy pursuant to which we intend to pay a minimum quarterly distribution of $0.2625 per unit per quarter, which equates to approximately $27.5 million per quarter, or approximately $110.0 million per year in the aggregate, based on the number of common and subordinated units currently outstanding. We intend to pay such distributions to the extent we have sufficient cash after the establishment of cash reserves and the payment of our expenses, including payments to our general partner and its affiliates.

On July 18, 2018, we declared a cash distribution of $0.2725 per limited partner unit to unitholders of record on August 1, 2018, for the three months ended June 30, 2018. The distribution reflects an increase of $0.01 over the Partnership’s minimum quarterly distribution. The distribution will be paid on August 15, 2018 and will total $28.5 million, with $13.0 million being distributed to our non-affiliated common unitholders and $15.5 million being distributed to BP Holdco in respect of its ownership of our common and subordinated units.

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Revolving Credit Facility

On October 30, 2017, the Partnership entered into the $600.0 million unsecured Credit Facility with an affiliate of BP. The Credit Facility terminates on October 30, 2022 and provides for certain covenants, including the requirement to maintain a consolidated leverage ratio, which is calculated as total indebtedness to consolidated EBITDA (as defined in the Credit Facility), not to exceed 5.0 to 1.0, subject to a temporary increase in such ratio to 5.5 to 1.0 in connection with certain material acquisitions. In addition, the limited liability company agreement of our general partner requires the approval of BP Holdco prior to the incurrence of any indebtedness that would cause our leverage ratio to exceed 4.5 to 1.0.

The Credit Facility also contains customary events of default, such as (i) nonpayment of principal when due, (ii) nonpayment of interest, fees or other amounts, (iii) breach of covenants, (iv) misrepresentation, (v) cross-payment default and cross-acceleration (in each case, to indebtedness in excess of $75.0 million) and (vi) insolvency. Additionally, the Credit Facility limits our ability to, among other things: (i) incur or guarantee additional debt, (ii) redeem or repurchase units or make distributions under certain circumstances; and (iii) incur certain liens or permit them to exist. Indebtedness under this facility bears interest at the 3-month London Interbank Offered Rate ("LIBOR") plus 0.85%. This facility includes customary fees, including a commitment fee of 0.10% and a utilization fee of 0.20%.

On May 4, 2018, the Partnership repaid outstanding borrowings under the Credit Facility. This short-term debt had a principal balance of $15.0 million at the time of repayment and the repayment was made using cash on hand. At June 30, 2018, $0 was drawn and outstanding from the Credit Facility.

Cash Flows from Our Operations

Operating Activities. We generated $87.8 million in cash flow from operating activities in the six months ended June 30, 2018, compared to the $20.4 million generated in the six months ended June 30, 2017. The $67.4 million increase in cash flows from operations primarily resulted from $47.8 million distributions from our equity method investments, $15.8 million savings from our tax structure compared to the six months ended June 30, 2017, $5.4 million from increase in collection of accounts receivable, partially offset by $(1.6) million in deferred revenue and other adjustments.

Investing Activities. Our cash flow generated by investing activities was $10.6 million in the six months ended June 30, 2018, compared to $1.8 million used in the six months ended June 30, 2017. The $12.4 million increase in cash flow generated by investing activities is due to the post-IPO distribution of $11.1 million in excess of earnings received from equity method investments and a decrease in capital expenditures on maintenance projects during the six months ended June 30, 2018.

Financing Activities. Our cash flow used in financing activities was $90.6 million in the six months ended June 30, 2018, compared to $18.6 million used in the six months ended June 30, 2017. The increase in the usage of cash for financing activities is due to $46.9 million distributed to public unitholders, $28.7 distributed to non-controlling interest and $15.0 used to repay short-term debt, partially offset by the elimination of transfers to Parent of $18.6 million in the six months ended June 30, 2017.

Capital Expenditures

Our operations can be capital intensive, requiring investment to expand, upgrade or enhance existing operations and to meet environmental and operational regulations. Our capital requirements consist of maintenance capital expenditures and expansion capital expenditures, both as defined in our partnership agreement. We are required to distinguish between maintenance capital expenditures and expansion capital expenditures in accordance with our partnership agreement, even though historically we did not make a distinction between maintenance capital expenditures and expansion capital expenditures in exactly the same way as is required under our partnership agreement.

A summary of our capital expenditures, for the six months ended June 30, 2018 and 2017, is shown in the table below:

	Six Months Ended June 30,
	2018		2017
	(in thousands of dollars)
			Predecessor
Cash spent on maintenance capital expenditures	$	472	$	1,840
Increase/(Decrease) in accrued capital expenditures	$	179	$	(1,351	)
Total capital expenditures incurred	$	651	$	489

30

Our capital expenditures for the six months ended June 30, 2018 were $0.7 million, primarily associated with an upgrade on piping from boosters to mainline pumps for River Rouge. Our capital expenditures for the six months ended June 30, 2017 were $0.5 million, primarily associated with the continuation of leak detection metering upgrades for BP2.

All of our capital expenditures in the six months ended June 30, 2018 and 2017 were maintenance expenditures. We did not incur any expansion capital expenditures during such periods.

Contractual Obligations

There were no material changes to our contractual obligations outside the ordinary course of business since December 31, 2017.

Off-Balance Sheet Arrangements

We have not entered into any transactions, agreements or other contractual arrangements that would result in off-balance sheet liabilities.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies disclosed in Note 2 - Summary of Significant Accounting Policies in our 2017 Annual Report.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information about market risks for the three and six months ended June 30, 2018, does not differ materially from that discussed under Item 7A of our 2017 Annual Report.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2018. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2018.

Changes in Internal Control Over Financial Reporting

There were no changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarterly period ended June 30, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

From time to time, we are party to ongoing legal proceedings in the ordinary course of business. While the outcome of these proceedings cannot be predicted with certainty, we do not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or liquidity.

Item 1A. RISK FACTORS

We are subject to various risks and uncertainties in the course of our business. Risk factors relating to the Partnership are set forth under “Risk Factors” in our 2017 Annual Report. No material changes to such risk factors have occurred as of the date of the Quarterly Report.

Item 5. OTHER INFORMATION

Disclosures Required Pursuant to Section 13(r) of the Securities Exchange Act of 1934

In accordance with our General Business Principles and Code of Conduct, we seek to comply with all applicable international trade laws including applicable sanctions and embargoes.

Under the Iran Threat Reduction and Syria Human Rights Act of 2012, and Section 13(r) of the Exchange Act, we are required to include certain disclosures in our periodic reports if we or any of our “affiliates” (as defined in Rule 12b-2 under the Exchange Act) knowingly engaged in certain specified activities during the period covered by the report. Because the SEC defines the term “affiliate” broadly, it includes any entity controlled by us as well as any person or entity that controls us or is under common control with us.

The disclosure below relates solely to activities conducted by non-U.S. affiliates of BP p.l.c. that may be deemed to be under common control with us. The disclosure does not relate to any activities conducted directly by us (including our subsidiaries and equity investments), or our general partner and does not involve our or the general partner’s management.

For purposes of this disclosure, we refer to BP p.l.c. and its subsidiaries other than us, the general partner and BP Midstream Partners Holdings LLC as the “BP Group.”  References to actions taken by the BP Group mean actions taken by the applicable BP Group company. None of the payments disclosed below were made in U.S. dollars however, for disclosure purposes, all have been converted into U.S. dollars at the appropriate exchange rate. We do not believe that any of the transactions or activities listed below violated U.S. sanctions:

• In the second quarter of 2018, BP recorded gross revenues of $30.1 million related to its interests in the North Sea Rhum field ("Rhum"). BP had a net profit of $2.4 million for the quarter ended June 30, 2018. As previously disclosed, Rhum is owned under a 50:50 unincorporated joint arrangement between BP and Iranian Oil Company (U.K.) Limited ("IOC"). In 2015, the US and the EU implemented temporary, limited and reversible relief of certain sanctions related to Iran pursuant to a Joint Comprehensive Plan of Action (“JCPOA”). On September 29, 2017, BP obtained a specific Office of Foreign Assets Control ("OFAC") License relating to the continued operation of the Rhum field, such license expiring on September 30, 2018.

• On November 21, 2017, BP announced that it has agreed to sell certain of its assets in the North Sea, including its ownership stake, and the transfer of its role as operator, in the Rhum joint arrangement to Serica Energy plc (“Serica”), with the aim to complete the sale and transfer of operatorship in the third quarter of 2018 subject to regulatory and third-party approvals.

• In May 2018, the U.S. government announced its planned withdrawal from the JCPOA, and tasked OFAC with implementing the full re-imposition of both primary and secondary sanctions in respect of Iran by the end of the wind-down period, which, for Rhum, expires on November 4, 2018. BP and Serica are actively engaged in discussions with both UK and US governments with the aim that the Rhum field can continue to operate during this wind-down period and thereafter.

• BP Exploration Operating Company Limited ("BPEOC") made the following offset in relation to sums due to and from the Iranian Oil Company (U.K.) Limited (“IOC”). The amount of $2.3 million was due from BPEOC to IOC in relation to the purchases of IOC’s entitlement to gas from the Rhum field delivered through the Forties Pipeline System (Kinneil Terminal) in respect of prior periods when BPEOC was the owner and operator of the Forties Pipeline System. On June 25, 2018, this was offset against IOC’s share of operating costs incurred by BPEOC as operator of the Rhum field under the Rhum joint

32

operating agreement. BP does not expect to enter into any further arrangements with IOC in relation to the Forties Pipeline System.

• BP Iran Limited leases an office in Tehran. The office is used for administrative activities. In the second quarter of 2018, taxes, including rental tax payments associated with the Tehran office with an aggregate US dollar equivalent value of approximately $3,978, were paid from a BP trust account held with Tadvin Co. to Iranian public entities. No gross revenues or net profits were attributable to these activities. BP intends to continue to maintain an office in Tehran.

• In the second quarter of 2018, certain BP employees visited Iran for the purpose of meetings with Iranian government officials and other Iranian nationals and attending conferences. Payments were made to Iranian public entities for visas and taxes in relation to such visits with an aggregate US dollar equivalent value of approximately $1,593. In addition, certain BP employees met with Iranian government officials and other Iranian nationals outside of Iran. No gross revenues or net profits were attributable to these activities and BP intends to continue visits.

Item 6. EXHIBITS

BP MIDSTREAM PARTNERS LP

INDEX TO EXHIBITS

Exhibit No.	Exhibit Description	Incorporated by Reference				Filed Herewith	Furnished Herewith
		Form	Exhibit	Filing Date	SEC File No.
3.1	Certificate of Limited Partnership of BP Midstream Partners LP	S-1	3.1	9/11/2017	333-220407
3.2	Amended and Restated Agreement of Limited Partnership of BP Midstream Partners LP dated October 30, 2017.	10-Q	3.2	12/6/2017	001-38260
3.3	Certificate of Formation of BP Midstream Partners GP LLC	S-1	3.3	9/11/2017	333-220407
3.4	First Amended and Restated Limited Liability Company Agreement of BP Midstream Partners GP LLC	S-1	3.4	9/11/2017	333-220407
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32*	Certifications pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.						X
101.INS	XBRL Instance Document					X
101.SCH	XBRL Taxonomy Extension Schema Document					X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document					X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document					X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document					X

* Pursuant to SEC Release No. 33-8212, this certification will be treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of such report for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18 of the Exchange Act, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act, except to the extent that the registrant specifically incorporates it by reference.

33

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 9, 2018	BP MIDSTREAM PARTNERS LP
	By:	BP MIDSTREAM PARTNERS GP LLC,
		its general partner
	By:	/s/ Craig W. Coburn
		Craig W. Coburn
		Chief Financial Officer and Director
		(principal financial officer and principal accounting officer)

34

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Robert P. Zinsmeister, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BP Midstream Partners LP;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018	/s/ Robert P. Zinsmeister
	Robert P. Zinsmeister
	Chief Executive Officer and Director
	BP Midstream Partners GP LLC
	(the general partner of BP Midstream Partners LP)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Craig W. Coburn, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BP Midstream Partners LP;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018	/s/ Craig W. Coburn
	Craig W. Coburn
	Chief Financial Officer and Director
	BP Midstream Partners GP LLC
	(the general partner of BP Midstream Partners LP)

EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of BP Midstream Partners LP (the “Partnership”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: August 9, 2018	/s/ Robert P. Zinsmeister
	Robert P. Zinsmeister
	Chief Executive Officer and Director
	BP Midstream Partners GP LLC
	(the general partner of BP Midstream Partners LP)

/s/ Craig W. Coburn

Craig W. Coburn

Chief Financial Officer and Director

BP Midstream Partners GP LLC

(the general partner of BP Midstream Partners LP)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 08, 2018
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	BPMP
Entity Registrant Name	BP Midstream Partners LP
Entity Central Index Key	0001708301
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Common Units
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		52,375,535
Subordinated Units
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		52,375,535

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 40,527	$ 32,694
Accounts receivable – third parties	217	188
Accounts receivable – related parties	9,258	9,481
Prepaid expenses	1,506	1,370
Other current assets	839	1,655
Total current assets	52,347	45,388
Equity method investments (Note 2)	470,074	487,999
Property, plant and equipment, net (Note 3)	68,815	69,488
Other assets	3,263	2,783
Total assets	594,499	605,658
Current liabilities
Short-term debt (Note 5)	0	15,000
Accounts payable – third parties	762	269
Accounts payable – related parties	1,641	2,270
Deferred revenue and credits	2,186	0
Accrued liabilities (Note 4)	3,139	4,481
Total current liabilities	7,728	22,020
Long-term portion of environmental remediation obligations	3,263	2,783
Total liabilities	10,991	24,803
Commitments and contingencies (Note 10)
EQUITY
Total partner's capital	250,021	238,525
Non-controlling interests	333,487	342,330
Total equity	583,508	580,855
Total liabilities and equity	594,499	605,658
Common Units | General Public
EQUITY
Common stock	829,903	824,613
Common Units | BP Holdco
EQUITY
Common stock	(46,640)	(47,141)
Subordinated Units | BP Holdco
EQUITY
Common stock	$ (533,242)	$ (538,947)

XML

CONSOLIDATED BALANCE SHEEETS (Parenthetical) - shares	Jun. 30, 2018	Dec. 31, 2017
General Public | Common Units
Common units outstanding (in shares)	47,794,358	47,794,358
Units issued (in shares)	47,794,358	47,794,358
BP Holdco | Common Units
Common units outstanding (in shares)	4,581,177	4,581,177
Units issued (in shares)	4,581,177	4,581,177
BP Holdco | Subordinated Units
Common units outstanding (in shares)	52,375,535	52,375,535
Units issued (in shares)	52,375,535	52,375,535

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands, shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue
Third parties	$ 766		$ 1,564
Related parties	28,169		53,990
Total revenue	28,935		55,554
Costs and expenses
Operating expenses – third parties	3,032		5,666
Operating expenses – related parties	1,026		1,988
Maintenance expenses – third parties	847		883
Maintenance expenses – related parties	24		44
Gain from disposition of property, plant and equipment	0		0
General and administrative – third parties	415		1,203
General and administrative – related parties	3,442		6,865
Depreciation	662		1,324
Property and other taxes	112		223
Total costs and expenses	9,560		18,196
Operating income	19,375		37,358
Income from equity method investments	20,842		43,681
Other loss	0		0
Interest expense, net	25		139
Income before income taxes	40,192		80,900
Income tax expense	0		0
Net income	40,192		80,900
Less: Net income attributable to non-controlling interests	9,722		19,891
Net income attributable to the Partnership	$ 30,470		$ 61,009
Limited Partners Common Units
Net income attributable to the Partnership per limited partner unit – basic and diluted (in dollars):
Net income per limited partnership unit, basic and diluted (in dollars per share)	$ 0.29		$ 0.58
Distributions declared per limited partner unit (in dollars, Note 7):
Distribution made per limited partner unit (in dollars per share)	0.2725		0.54
Limited Partners Subordinated Units
Net income attributable to the Partnership per limited partner unit – basic and diluted (in dollars):
Net income per limited partnership unit, basic and diluted (in dollars per share)	0.29		0.58
Distributions declared per limited partner unit (in dollars, Note 7):
Distribution made per limited partner unit (in dollars per share)	$ 0.2725		$ 0.54
Common Units Public
Weighted average number of limited partner units outstanding - basic and diluted (in millions):
Weighted average number of limited partner units outstanding (in dollars per share)	47.8		47.8
BP Holdco | Common Units
Weighted average number of limited partner units outstanding - basic and diluted (in millions):
Weighted average number of limited partner units outstanding (in dollars per share)	4.6		4.6
BP Holdco | Subordinated Units
Weighted average number of limited partner units outstanding - basic and diluted (in millions):
Weighted average number of limited partner units outstanding (in dollars per share)	52.4		52.4
Predecessor
Revenue
Third parties		$ 566		$ 1,474
Related parties		26,319		52,054
Total revenue		26,885		53,528
Costs and expenses
Operating expenses – third parties		1,830		3,318
Operating expenses – related parties		1,875		3,867
Maintenance expenses – third parties		729		1,289
Maintenance expenses – related parties		192		192
Gain from disposition of property, plant and equipment		(6)		(6)
General and administrative – third parties		(44)		44
General and administrative – related parties		982		2,361
Depreciation		662		1,332
Property and other taxes		46		154
Total costs and expenses		6,266		12,551
Operating income		20,619		40,977
Income from equity method investments		0		0
Other loss		312		488
Interest expense, net		0		0
Income before income taxes		20,307		40,489
Income tax expense		7,933		15,816
Net income		$ 12,374		$ 24,673

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Non-controlling Interests	Net Parent Investment	Common Units Partnership General Public	Common Units Partnership BP Holdco	Subordinated Units Partnership BP Holdco	General Partner Partnership
Beginning Balance (Predecessor) at Dec. 31, 2016	$ 73,942	$ 0	$ 73,942	$ 0	$ 0	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income | Predecessor	24,673		24,673
Net transfers to Parent | Predecessor	(18,510)		(18,510)
Ending Balance (Predecessor) at Jun. 30, 2017	80,105	0	80,105	0	0	0	0
Beginning Balance at Dec. 31, 2017	580,855	342,330	0	824,613	(47,141)	(538,947)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting change (Note 2)	(2,746)			(1,253)	(120)	(1,373)
Net income	80,900	19,891		27,836	2,669	30,504
Distributions to unitholders	(46,851)			(21,377)	(2,048)	(23,426)
Unit-based compensation	84			84
Distributions to non-controlling interests	(28,734)	(28,734)
Ending Balance at Jun. 30, 2018	$ 583,508	$ 333,487	$ 0	$ 829,903	$ (46,640)	$ (533,242)	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Net income	$ 80,900
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,324
Deferred income taxes	0
Share-based compensation	84
Loss due to changes in fair value of allowance oil receivable	0
Gain from disposition of property, plant and equipment	0
Income from equity method investments	(43,681)
Distributions of earnings received from equity method investments	47,807
Changes in operating assets and liabilities
Accounts receivable – third parties	(29)
Accounts receivable – related parties	223
Allowance oil receivable	0
Prepaid expenses and other current assets	(136)
Accounts payable – third parties	493
Accounts payable – related parties	(629)
Deferred revenue and credits	2,186
Accrued liabilities	(705)
Long-term portion of environmental remediation obligations	0
Other liabilities	0
Net cash provided by operating activities	87,837
Cash flows from investing activities
Capital expenditures	(472)
Distributions in excess of earnings from equity method investments	11,053
Proceeds from disposition of property, plant and equipment	0
Net cash provided by (used in) investing activities	10,581
Cash flows from financing activities
Net transfers to Parent – prior to the IPO	0
Repayment of short-term debt	(15,000)
Distributions to unitholders	(46,851)
Distributions to non-controlling interests	(28,734)
Net cash used in financing activities	(90,585)
Net change in cash and cash equivalents	7,833
Cash and cash equivalents at beginning of the period	32,694
Cash and cash equivalents at end of the period	40,527
Non-cash investing transactions
Accrued capital expenditures	$ 198
Predecessor
Cash flows from operating activities
Net income		$ 24,673
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,332
Deferred income taxes		539
Share-based compensation		104
Loss due to changes in fair value of allowance oil receivable		488
Gain from disposition of property, plant and equipment		(6)
Income from equity method investments		0
Distributions of earnings received from equity method investments		0
Changes in operating assets and liabilities
Accounts receivable – third parties		234
Accounts receivable – related parties		(5,258)
Allowance oil receivable		(761)
Prepaid expenses and other current assets		(71)
Accounts payable – third parties		169
Accounts payable – related parties		46
Deferred revenue and credits		0
Accrued liabilities		(648)
Long-term portion of environmental remediation obligations		(231)
Other liabilities		(162)
Net cash provided by operating activities		20,448
Cash flows from investing activities
Capital expenditures		(1,840)
Distributions in excess of earnings from equity method investments		0
Proceeds from disposition of property, plant and equipment		6
Net cash provided by (used in) investing activities		(1,834)
Cash flows from financing activities
Net transfers to Parent – prior to the IPO		(18,614)
Repayment of short-term debt		0
Distributions to unitholders		0
Distributions to non-controlling interests		0
Net cash used in financing activities		(18,614)
Net change in cash and cash equivalents		0
Cash and cash equivalents at beginning of the period		0
Cash and cash equivalents at end of the period		0
Non-cash investing transactions
Accrued capital expenditures		$ 0

XML

Business and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Basis of Presentation

Business and Basis of Presentation

BP Midstream Partners LP (either individually or together with its subsidiaries, as the context requires, the “Partnership”) is a Delaware limited partnership formed on May 22, 2017 by BP Pipelines (North America) Inc. (“BP Pipelines”), an indirect wholly owned subsidiary of BP p.l.c. (“BP”), a “foreign private issuer” within the meaning of the Securities Exchange Act of 1934, as amended.

On October 30, 2017, the Partnership completed its initial public offering (the "IPO") of common units representing limited partner interests. A total of 47,794,358 common units, including 5,294,358 common units pertaining to the exercise of the underwriters' over-allotment option, were issued to the public unitholders in connection with our IPO. Unless otherwise stated or the context otherwise indicates, all references to “we,” “our,” “us,” “Predecessor,” or similar expressions for time periods prior to the IPO refer to BP Midstream Partners LP Predecessor, which consisted of the historical assets and operations of the Predecessor Assets (as defined below). For time periods subsequent to the IPO, “we,” “our,” “us,” or similar expressions refer to the legal entity BP Midstream Partners LP.

The term “our Parent” refers to BP Pipelines, any entity that wholly owns BP Pipelines, indirectly or directly, including BP and BP America Inc. (“BPA”), an indirect wholly owned subsidiary of BP, and any entity that is wholly owned by the aforementioned entities, excluding BP Midstream Partners LP Predecessor and the Partnership.

Business

We are a fee-based, growth-oriented master limited partnership formed by BP Pipelines to own, operate, develop and acquire pipelines and other midstream assets. Our 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 refinery in Whiting, Indiana (the “Whiting Refinery”) and offshore crude oil and natural gas production to key refining markets and trading and distribution hubs. Certain of our assets deliver refined products and diluent from the Whiting Refinery and other U.S. supply hubs to major demand centers.

Our assets consist of the following:

• BP Two Pipeline Company LLC, which owns the BP#2 crude oil pipeline system (“BP2”).

• BP River Rouge Pipeline Company LLC, which owns the Whiting to River Rouge refined products pipeline system (“River Rouge”).

• BP D-B Pipeline Company LLC, which owns the Diamondback diluent pipeline system (“Diamondback”). BP2, River Rouge, and Diamondback are located in the Midwest region of the United States, and together are referred to as the "Predecessor Assets" or the "Wholly Owned Assets".

• A 28.5% ownership interest in Mars Oil Pipeline Company, LLC (“Mars”), which owns a major corridor crude oil pipeline system in the Gulf of Mexico.

• A 20% managing member interest in Mardi Gras Transportation System Company, LLC (“Mardi Gras”), which holds the following investments in joint ventures located in the Gulf of Mexico:

• A 56% ownership interest in Caesar Oil Pipeline Company, LLC (“Caesar”),

• A 53% ownership interest in Cleopatra Gas Gathering Company, LLC (“Cleopatra”),

• A 65% ownership interest in Proteus Oil Pipeline Company, LLC (“Proteus”), and,

• A 65% ownership interest in Endymion Oil Pipeline Company, LLC (“Endymion”).

• Together Endymion, Caesar, Cleopatra and Proteus are referred to as the “Mardi Gras Joint Ventures.”

We generate the majority of our revenue by charging fees for the transportation of crude oil, refined products and diluent through our pipelines under long-term agreements with minimum volume commitments. We do not engage in the marketing and trading of any commodities. All of our operations are conducted in the United States, and all our long-lived assets are located in the United States. Our operations consist of one reportable segment.

Certain businesses of ours are subject to regulation by various authorities including, but not limited to the Federal Energy Regulatory Commission ("FERC"). Regulatory bodies exercise statutory authority over matters such as common carrier tariffs, construction, rates and ratemaking and agreements with customers.

Basis of Presentation

Our condensed consolidated financial statements have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”). These rules and regulations conform to the accounting principles contained in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification, the single source of accounting principles generally accepted in the United States (“GAAP”).

Certain information and footnote disclosures normally included in the annual consolidated financial statements have been condensed or omitted from these condensed consolidated financial statements. The condensed consolidated financial statements as of June 30, 2018, and for the three and six months ended June 30, 2018 and 2017, included herein, are unaudited. These financial statements include all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of our consolidated financial position, results of operations and cash flows. Unless otherwise specified, all such adjustments are of a normal and recurring nature. The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year. These unaudited condensed consolidated financial statements and other information included in this quarterly report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the "2017 Annual Report").

Prior to the IPO, our financial position, results of operations and cash flows consisted of the Predecessor's operations, which represented a combined reporting entity. Subsequent to the IPO, our financial position, results of operations and cash flows consist of consolidated BP Midstream Partners LP activities and balances. All intercompany accounts and transactions within the financial statements have been eliminated for all periods presented.

Prior to the IPO, our condensed consolidated statements of operations include expense allocations to the Predecessor for certain functions performed by our Parent on our behalf, including allocations of general corporate expenses related to finance, accounting, treasury, legal, information technology, human resources, shared services, government affairs, insurance, health, safety, security, employee benefits, incentives, severance and environmental functional support. The portion of expenses that are specifically identifiable to the Predecessor Assets are directly recorded to the Predecessor, with the remainder allocated on the basis of headcount, throughput volumes, miles of pipe and other measures. Our management believes the assumptions underlying the financial statements, including the assumptions regarding the allocation of general corporate expenses from our Parent, are reasonable. Nevertheless, the financial statements may not include all of the expenses that would have been incurred, had we been a stand-alone entity during the periods prior to the IPO and may not reflect our financial position, results of operations and cash flows, had we been a stand-alone entity during such periods. See Note 6 - Related Party Transactions.

Prior to the IPO, the Predecessor Assets did not own or maintain separate bank accounts. Our Parent used a centralized approach to cash management and historically funded our operating and investing activities as needed within the boundaries of a documented funding agreement. Accordingly, cash held by our Parent at the corporate level was not allocated to us for any of the periods prior to the IPO. During such periods, we reflected the cash generated by our operations and expenses paid by our Parent on our behalf as a component of Net parent investment on our condensed consolidated balance sheets, and as a net distribution to our Parent on our condensed consolidated statements of cash flows. We also did not include any interest income on the net cash transfers to our Parent. In connection with the IPO, we established our own cash accounts for the funding of our operating and investing activities.

All financial information presented for the periods after the IPO represents the condensed consolidated results of operations, financial position and cash flows of the Partnership. Accordingly:

• Our condensed consolidated statements of operations for the three and six months ended June 30, 2018 and condensed consolidated statement cash flows for the six months ended June 30, 2018 consist of the consolidated results of the Partnership. Our condensed consolidated statements of operations for the three and six months ended June 30, 2017 and condensed consolidated statement cash flows for the six months ended June 30, 2017 consist of the combined results of the Predecessor.

• Our condensed consolidated balance sheets at June 30, 2018 and December 31, 2017 consist of the consolidated balances of the Partnership.

• Our condensed consolidated statement of changes in equity for the six months ended June 30, 2018 consist of the consolidated results for the Partnership. Our condensed consolidated statement of changes in equity for the six months ended June 30, 2017 consists of the combined results of the Predecessor.

Summary of Significant Accounting Policies

There have been no significant changes to our accounting policies as disclosed in Note 2 - Summary of Significant Accounting Policies in our 2017 Annual Report.

Recent Accounting Pronouncements

In May2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)". ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 to defer the adoption date for ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period for public business entities and to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019 for all other entities. This ASU is effective as of January 1, 2019 for an emerging growth company ("EGC"). We expect to transition from EGC status to large accelerated as of December 31, 2018, as such we will reflect the adoption in our on Annual Report on Form 10-K for the year ended December 31, 2018. ASU 2014-09 was further amended in March 2016 by the provisions of ASU 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," in April 2016 by the provisions of ASU 2016-10, "Identifying Performance Obligations and Licensing", in May 2016 by the provisions of ASU 2016-12, "Narrow-Scope Improvements and Practical Expedients", in December 2016 by the provisions of ASU 2016-20, "Technical Corrections to Topic 606, Revenue from Contracts with Customers" and in September 2017 by the provisions of ASU 2017-13, "Revenue Recognition (Topic 605) and Revenue from Contracts with Customers (Topic 606)." We have evaluated the impact that the adoption of the provisions under Topic 606 will have on our revenue contracts, consolidated financial statements and the accompanying notes. Based upon our assessment, the new standard may impact the timing of revenue recognition, but we do not expect significant changes to the amounts recognized for each reporting period. We will adopt the new standard under the modified retrospective transition method by December 31, 2018.

In February 2016, the FASB issued ASU 2016-02, "Leases", which improves transparency and comparability among organizations by requiring lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities and for annual reporting periods beginning after December 15, 2019 and interim reporting periods beginning after December 15, 2020 for all other entities. This ASU is effective as of January 1, 2019 for us, as we expect to transition from EGC status to large accelerated as of December 31, 2018. In January 2018, the FASB issued ASU 2018-01, "Leases (Topic 842), Land Easement Practical Expedient for Transition to Topic 842". This ASU permits an entity to continue to apply its current accounting policy for land easements that existed before the effective date of Topic 842. Once an entity adopts Topic 842, it would apply prospectively to all new (or modified) land easements to determine whether the arrangement contains a lease. Topic 842 requires adoption by application of a modified retrospective transition approach and is effective for us on the same effective date as ASU 2016-02. We are currently evaluating the impact the adoption of these standards will have on our consolidated financial statements and the accompanying notes and we will have our assessment completed prior to December 31, 2018.

For additional information on accounting pronouncements issued prior to December 2017, see Note 2 - Summary of Significant Accounting Policies in our 2017 Annual Report.

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Equity Method Investments

6 Months Ended

Jun. 30, 2018

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Equity Method Investments

We account for our ownership interests in Mars and the Mardi Gras Joint Ventures using the equity method for financial reporting purposes. Our financial results include our proportionate share of the Mars’ and Mardi Gras Joint Ventures’ net income, which is reflected in Income from equity method investments on the condensed consolidated statements of operations.

Summarized financial information for each of our equity method investments on a 100% basis is as follows:

	Three Months Ended June 30, 2018
			Mardi Gras Joint Ventures
	Mars		Caesar		Cleopatra		Proteus		Endymion		Total Mardi Gras Joint Ventures		Total
Statement of operations data
Revenues	$	51,867	$	9,832	$	5,222	$	8,305	$	8,992	$	32,351	$	84,218
Operating expenses	21,381		3,548		2,419		2,924		3,486		12,377		33,758
Net income	30,489		6,284		2,803		5,381		5,616		20,084		50,573

	Six Months Ended June 30, 2018
			Mardi Gras Joint Ventures
	Mars		Caesar		Cleopatra		Proteus		Endymion		Total Mardi Gras Joint Ventures		Total
Statement of operations data
Revenues	$	109,042	$	21,435	$	10,983	$	16,905	$	18,428	$	67,751	$	176,793
Operating expenses	43,029		7,427		4,691		6,271		8,228		26,617		69,646
Net income	66,023		14,008		6,292		10,634		10,420		41,354		107,377

The table below summarizes the balances and activities related to each of our equity method investments that we recorded for the three and six months ended June 30, 2018:

	Three Months Ended June 30, 2018
				Mardi Gras Joint Ventures
	Mars			Caesar			Cleopatra			Proteus			Endymion			Total Mardi Gras Joint Ventures			Total
Beginning Balance	$	60,117		$	121,795		$	122,446		$	85,553		$	86,574		$	416,368		$	476,485
Distributions	(10,118		)	(4,480		)	(2,385		)	(5,070		)	(5,200		)	(17,135		)	(27,253		)
Income from equity method investments	8,689			3,519			1,486			3,498			3,650			12,153			20,842
Ending Balance	$	58,688		$	120,834		$	121,547		$	83,981		$	85,024		$	411,386		$	470,074

	Six Months Ended June 30, 2018
				Mardi Gras Joint Ventures
	Mars			Caesar			Cleopatra			Proteus			Endymion			Total Mardi Gras Joint Ventures			Total
Beginning Balance	$	65,561		$	123,586		$	123,512		$	87,144		$	88,196		$	422,438		$	487,999
Cumulative effect of accounting change*	(2,746		)	—			—			—			—			—			(2,746		)
Distributions	(22,943		)	(10,597		)	(5,300		)	(10,075		)	(9,945		)	(35,917		)	(58,860		)
Income from equity method investments	18,816			7,845			3,335			6,912			6,773			24,865			43,681
Ending Balance	$	58,688		$	120,834		$	121,547		$	83,981		$	85,024		$	411,386		$	470,074

* The financial results of Mars reflect the adoption of ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" on January 1, 2018 under the modified retrospective transition method through a cumulative adjustment to equity. Our impact from this accounting change to our Mars investment was $(2,746), offset to partners' capital. The Mardi Gras Joint Ventures will adopt this ASU on January 1, 2019.

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Property, Plant and Equipment

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment consisted of the following:

	June 30,			December 31,
	2018			2017
Land	$	155		$	155
Right-of-way assets	1,380			1,380
Buildings and improvements	12,032			12,032
Pipelines and equipment	92,208			92,083
Other	510			509
Construction in progress	587			67
Property, plant and equipment, gross	106,872			106,226
Less: Accumulated depreciation	(38,057		)	(36,738		)
Property, plant and equipment, net	$	68,815		$	69,488

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Accrued Liabilities

6 Months Ended

Jun. 30, 2018

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30,		December 31,
	2018		2017
Current portion of environmental remediation obligations	$	839	$	1,655
Other accrued liabilities	2,300		2,826
Accrued liabilities	$	3,139	$	4,481

Accrued interest and fees related to our credit facility were $155 and $159 as of June 30, 2018 and December 31, 2017, respectively, included in Other accrued liabilities. See Note 5 - Debt for further discussion of accrued interest and fees on debt with our related party.

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

On October 30, 2017, the Partnership entered into a $600.0 million unsecured revolving credit facility agreement (the “Credit Facility”) with an affiliate of BP. A summary of certain key terms of the Credit Facility is included in Note 7 - Debt in our 2017 Annual Report.

On May 4, 2018, the Partnership repaid outstanding borrowings under the Credit Facility. This short-term debt had a principal balance of $15.0 million at the time of repayment and the repayment was made using cash on hand.

There were $0 of outstanding borrowings under the Credit Facility at June 30, 2018 and $15 million outstanding at December 31, 2017. Interest charges and fees related to the Credit Facility were $0.2 million and $0.4 million for the three and six months ended June 30, 2018 respectively, and $0 for the three and six months ended June 30, 2017.

For the three and six months ended June 30, 2018, the weighted average interest rate for the Credit Facility was 2.2%. This facility includes customary fees, including a commitment fee of 0.10% and a utilization fee of 0.20% per annum.

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Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Related party transactions include transactions with our Parent and our Parent’s affiliates, including those entities in which our Parent has an ownership interest but does not have control. In addition to the fixed loss allowance arrangements discussed in Note 2- Summary of Significant Accounting Policies in our 2017 Annual Report and the Credit Facility discussed above, we have entered into the following transactions with our related parties:

Omnibus Agreement

In connection with the IPO, the Partnership entered into an omnibus agreement with BP Pipelines and certain of its affiliates, including BP Midstream Partners GP LLC (our "general partner"). This agreement addresses, among other things, (i) the Partnership's obligation to pay an annual fee for general and administrative services provided by BP Pipelines and its affiliates, (ii) the Partnership's obligation to reimburse BP Pipelines for personnel and other costs related to the direct operation, management and maintenance of the assets and (iii) the Partnership's obligation to reimburse BP Pipelines for services and certain direct or allocated costs and expenses incurred by BP Pipelines or its affiliates on behalf of the Partnership.

Pursuant to the omnibus agreement, BP Pipelines will indemnify the Partnership and fund the costs of required remedial action for its known historical and legacy spills and releases and other environmental and litigation claims identified in the omnibus agreement. BP Pipelines will also indemnify the Partnership with respect to subsidiaries for which it is the operator for certain title defects and for failures to obtain certain consents and permits necessary to conduct its business for one year following the closing of our IPO.

Further, the omnibus agreement addresses the granting of a license from BPA to the Partnership with respect to use of certain BP trademarks and trade name.

Cash Management Program

Prior to the IPO, we did not have our standalone cash accounts but participated in our Parent’s centralized cash management and funding system. See Note 1 - Business and Basis of Presentation for further discussion.

In connection with the IPO, we established our own cash accounts for the funding of our operating and investing activities but continued to participate in our Parent’s centralized cash management and funding system.

Related Party Revenue

We provide crude oil, refined products and diluent transportation services to related parties and generate revenue through published tariffs. We have commercial arrangements with BP Products North America, Inc. ("BP Products") that include minimum volume commitments. Under these fee-based agreements, we provide transportation services to BP Products and BP Products has committed to pay us for minimum volumes of crude oil, refined products and diluent, regardless of whether such volumes are physically shipped by BP Products through our pipelines during the term of the agreements. See Note 8 - Related Party Transactions in our 2017 Annual Report for further discussion regarding these agreements. We also have a fixed loss allowance (“FLA”) arrangement with BP Products, which provides us with additional income. See Note 8 - Fair Value Measurements for further information.

Our revenue from related parties was $28,169and $53,990 for the three and six months ended June 30, 2018 respectively, and $26,319 and $52,054for the three and six months ended June 30, 2017, respectively.

We did not recognize any deficiency revenue under the throughput and deficiency agreements with BP Products for the three and six months ended June 30, 2018, respectively and for the three and six months ended June 30, 2017, respectively. We recorded $2,186 and $0 inDeferred revenue and credits on our condensed consolidated balance sheets at June 30, 2018 and December 31, 2017, respectively.

Related Party Expenses

All employees performing services on behalf of our operations are employees of our Parent. Our Parent also procures our insurance policies on our behalf and performs certain general corporate functions for us related to finance, accounting, treasury, legal, information technology, human resources, shared services, government affairs, insurance, health, safety, security, employee benefits, incentives, severance and environmental functional support. Personnel and operating costs incurred by our Parent on our behalf are included in either Operating expenses – related parties or General and administrative – related parties in the condensed consolidated statements of operations, depending on the nature of the service provided.

Prior to our IPO, we were allocated operating and indirect general corporate expenses incurred by our Parent. See Note 1 - Business and Basis of Presentation for a summary of the allocation methodology.

Subsequent to the IPO, we pay BP Pipelines an annual fee of $13,300 in the form of monthly installments under the omnibus agreement for general and administrative services provided by BP Pipelines and its affiliates. We also reimburse BP Pipelines for personnel and other costs related to the direct operation, management and maintenance of the assets and services and certain direct or allocated costs and expenses incurred by BP Pipelines or its affiliates on our behalf pursuant to the terms in the omnibus agreement.

For the three and six months ended June 30, 2018 and 2017, we recorded the following amounts for related party expenses, which also included the expenses related to share-based compensation discussed below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
			Predecessor				Predecessor
Operating expenses—related parties	$	1,026	$	1,875	$	1,988	$	3,867
Maintenance expenses—related parties	24		192		44		192
General and administrative—related parties	3,442		982		6,865		2,361
Total costs and expenses—related parties	$	4,492	$	3,049	$	8,897	$	6,420

Share-based Compensation

Certain employees of our Parent supporting our operations were historically granted awards under share option plans and equity-settled employee share plans. Prior to the IPO, these share-based compensation costs were allocated to us as part of the cost allocations from our Parent. These costs were $61 and $104 for the three and six months ended June 30, 2017, respectively, recorded in General and administrative – related parties on the condensed consolidated statements of operations.

Subsequent to the IPO, the share-based compensation related to the employees of our Parent who provide services to us is charged to the Partnership pursuant to the terms of the omnibus agreement. The Partnership also issued its own unit-based compensation under our long term incentive plan. See Note 11 - Unit-Based Compensation.

Non-controlling Interests

We control and consolidate Mardi Gras via an agreement between us and our Parent, under which we have the right to vote 100% of Mardi Gras’ ownership interests in each of the Mardi Gras Joint Ventures. Non-controlling interests consist of the 80% ownership interest in Mardi Gras retained by our Parent upon the completion of the IPO and held at June 30, 2018. Net income attributable to non-controlling interests is the product of the non-controlling interests ownership percentage and the net income of Mardi Gras. We report Non-controlling interests as a separate component of equity on our condensed consolidated balance sheets and Net income attributable to non-controlling interests on our condensed consolidated statements of operations.

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Net Income Per Limited Partner Unit

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Net Income Per Limited Partner Unit

Net Income Per Limited Partner Unit

On February 15, 2018, we paid a prorated quarterly cash distribution of $0.1798 per limited partner unit to unitholders of record on February 1, 2018, for the period from October 30 through December 31, 2017.

On May 15, 2018, we paid a quarterly cash distribution of $0.2675 per limited partner unit to unitholders of record on May 1, 2018, for the period from January 1 through March 31, 2018.

On July 18, 2018, the board of directors of our general partner declared a quarterly cash distribution of $0.2725 per limited partner unit to unitholders of record on August 1, 2018, for the period from April 1 through June 30, 2018. This distribution will be paid on August 15, 2018.

Net income per limited partner unit is only calculated for the three and six months ended June 30, 2018 as no units were outstanding in the same periods of 2017. The following tables show the allocation of net income to arrive at net income per limited partner unit for the three and six months ended June 30, 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018		2018
Net income attributable to the Partnership	$	30,470	$	61,009
Less:
Incentive distribution rights currently held by the General Partner	—		—
Limited partners' distribution declared on common units	14,272		28,282
Limited partners' distribution declared on subordinated units	14,272		28,282
Net income attributable to the Partnership in excess of distributions	$	1,926	$	4,445

	Three Months Ended June 30, 2018
	General Partner		Limited Partners' Common Units		Limited Partners' Subordinated Units		Total
Distributions declared	$	—	$	14,272	$	14,272	$	28,544
Net income attributable to the Partnership in excess of distributions	—		963		963		1,926
Net income attributable to the Partnership	$	—	$	15,235	$	15,235	$	30,470
Weighted average units outstanding:
Basic			52,376		52,376		104,752
Diluted			52,382		52,376		104,758
Net income per limited partner unit (in dollars):
Basic			$	0.29	$	0.29
Diluted			$	0.29	$	0.29

	Six Months Ended June 30, 2018
	General Partner		Limited Partners' Common Units		Limited Partners' Subordinated Units		Total
Distributions declared	$	—	$	28,282	$	28,282	$	56,564
Net income attributable to the Partnership in excess of distributions	$	—	$	2,223	$	2,222	4,445
Net income attributable to the Partnership	$	—	$	30,505	$	30,504	$	61,009
Weighted average units:
Basic			52,376		52,376		104,752
Diluted			52,382		52,376		104,758
Net income per limited partner unit (in dollars):
Basic			$	0.58	$	0.58
Diluted			$	0.58	$	0.58

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Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We measure assets and liabilities requiring fair value presentation and disclose such amounts according to the quality of valuation inputs under the fair value hierarchy. The carrying amounts of our financial instruments included in current assets and current liabilities approximate fair value due to their short-term nature and maturity.

Our tariff for crude oil transportation on BP2 includes a fixed percentage FLA per barrel, which is a separate fee under the applicable crude oil tariff to cover evaporation and other loss in transit. In the periods presented, all our revenue on BP2 was generated from services to our Parent. We recognize FLA income in Revenue - related parties in the condensed consolidated statements of operations during the periods when commodities are transported.

Allowance oil receivable incurred prior to October 1, 2017 contained an embedded derivative, which we recorded at fair value on the condensed consolidated balance sheets together with its host arrangement. We recorded the changes in fair value in Other income (loss) on the condensed consolidated statements of operations. Allowance oil receivable balance incurred prior to October 1, 2017, including the embedded derivative, was classified as Level 2 in the fair value hierarchy. Such balances were entirely settled upon the IPO.

Allowance oil receivable incurred subsequent to October 1, 2017 no longer contains an embedded derivative or results in gain or loss related to the change in its fair value pursuant to the revised settlement price determination in a related party agreement between us and our Parent. We now settle the allowance oil at the end of each period; therefore, the balances are entirely recorded in Accounts receivable - related parties after October 1, 2017.

In the three and six months ended June 30, 2018, we recognized FLA income of$2,860 and $5,000, respectively.In the three and six months ended June 30, 2017, we recognized FLA income of $2,061 and $3,997, respectively, and a loss due to the changes in fair value of $312 and $488, respectively, related to the FLA arrangement with our Parent.

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Prior to our IPO, the Predecessor was a part of BPA and was included in the income tax returns of BPA. Our tax provision prior to the IPO was prepared on a separate return basis, as if the Predecessor was a separate group of companies under common ownership. The Predecessor recorded income tax expense of $7,933 and $15,816 for the three and six months ended June 30, 2017, respectively.

BP Midstream Partners LP is not a taxable entity for U.S. federal and state income tax purposes. Taxes on our net income are generally borne by our partners through the allocation of taxable income. The condensed consolidated financial statements, therefore, do not include a provision for income tax after the IPO.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

From time to time, we are party to ongoing legal proceedings in the ordinary course of business. For each of our outstanding legal matters, if any, we evaluate the merits of the case, our exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. While the outcome of these proceedings cannot be predicted with certainty, we do not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or liquidity.

Indemnification

Under our omnibus agreement, our Parent will indemnify us for certain environmental liabilities, litigation and other matters attributable to the ownership or operation of our assets prior to the closing of the IPO. For the purposes of determining the indemnified amount of any loss suffered or incurred by the Partnership, the Partnership’s ownership of 28.5% in Mars, and 20% in Mardi Gras, and Mardi Gras’ 56% ownership in Caesar, 53% ownership in Cleopatra, 65% ownership in Endymion and 65% ownership in Proteus will be taken into account. Indemnification for certain identified environmental liabilities is subject to a cap of $25.0 million without any deductible. Other matters covered by the omnibus agreement are subject to a cap of $15.0 million and an aggregate deductible of $0.5 million before we are entitled to indemnification. Indemnification for any unknown environmental liabilities is limited to liabilities due to occurrences prior to the closing of the IPO and that are identified before the third anniversary of the closing of the IPO.

Environmental Matters

We are subject to federal, state, and local environmental laws and regulations. We record provisions for environmental liabilities based on management’s best estimates, using all information that is available at the time. In making environmental liability estimations, we consider the material effect of environmental compliance, pending legal actions against us and potential third-party liability claims. Often, as the remediation evaluation and effort progresses, additional information is obtained, requiring revisions to estimated costs. We are indemnified by our Parent under the omnibus agreement against environmental cleanup costs for incidents that occurred prior to the IPO. Subsequent to the IPO, revisions to the estimated environmental liability for conditions that are not indemnified under the omnibus agreement with our Parent are reflected in our condensed consolidated statements of operations in the year in which they are probable and reasonably estimable.

We accrued $4,102 and $4,438 for environmental liabilities at June 30, 2018 and December 31, 2017, respectively. The balances are related to incidents that occurred prior to the IPO and are entirely indemnified by our Parent. As a result, we recorded corresponding indemnification assets of $4,102 and $4,438 on the condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017.

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Unit-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Unit-Based Compensation

Unit-Based Compensation

Long-Term Incentive Plan

Our general partner has adopted the BP Midstream Partners LP 2017 Long Term Incentive Plan (the “LTIP”). Awards under the LTIP are available for eligible officers, directors, employees and consultants of the general partner and its affiliates, who perform services for the Partnership. The LTIP allows the Partnership to grant unit options, unit appreciation rights, restricted units, phantom units, unit awards, cash awards, performance awards, distribution equivalent rights, substitute awards and other unit-based awards. The maximum aggregate number of common units that may be issued pursuant to the awards granted under the LTIP shall not exceed 5,502,271, subject to proportionate adjustment in the event of unit splits and similar events.

Unit-Based Awards under the LTIP

The following is a summary of phantom unit award activities of the Partnership’s common units for the six months ended June 30, 2018:

	Phantom Units
	Number of Units (in units)	Weighted Average Grant Date Fair Value per Unit (in dollars)
Outstanding at December 31, 2017	8,468	$	17.48
Granted	3,737	20.07
Outstanding at June 30, 2018	12,205	$	18.27
Vested at June 30, 2018	—	—

For the three and six months ended June 30, 2018, total compensation expense recognized for phantom unit awards was $45 and $84, respectively. The unrecognized compensation cost related to phantom unit awards was $120 at June 30, 2018, which is expected to be recognized over a weighted average period of 0.5 years. There were no forfeitures for the six months ended June 30, 2018.

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Variable Interest Entity

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entity

Variable Interest Entity

We control and consolidate our variable interest entity Mardi Gras because we are the primary beneficiary. Mardi Gras holds equity interests in the Mardi Gras Joint Ventures and accounts for them as equity method investments. Mardi Gras does not have any other operations or activities. See Note 15 - Variable Interest Entity in our 2017 Annual Report for further discussion.

The financial position of Mardi Gras at June 30, 2018 and December 31, 2017, its financial performance for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017, as reflected in our condensed consolidated financial statements, are as follows:

	June 30, 2018		December 31, 2017
Balance sheet
Equity method investments	$	411,386	$	422,438
Non-controlling interests	333,487		342,330

	Three Months Ended June 30,			Six Months Ended June 30,
	2018		2017	2018		2017
Statement of operations
Income from equity method investments	$	12,153	*	$	24,865	*
Less: Net income attributable to non-controlling interests	9,722		*	19,891		*
Net impact on Net income attributable to the Partnership	$	2,431	*	$	4,974	*

* Information is not applicable as the interest in Mardi Gras was contributed to the Partnership on October 30, 2017.

	Six Months Ended June 30,
	2018			2017
Statement of cash flows
Cash flows from operating activities
Distributions of earnings received from equity method investments	$	24,865		*
Cash flows from investing activities
Distribution in excess of earnings from equity method investments	11,053			*
Cash flows from financing activities
Distributions to non-controlling interests	(28,734		)	*
Net change on BPMP's cash and cash equivalents	$	7,184		*

* Information is not applicable as the interest in Mardi Gras was contributed to the Partnership on October 30, 2017.

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

We have evaluated subsequent events through the issuance of these condensed consolidated financial statements. Based on this evaluation, it was determined that no subsequent events occurred, other than the item noted below, that require recognition or disclosure in the condensed consolidated financial statements.

Cash Distribution

On July 18, 2018, we declared a cash distribution of $0.2725 per limited partner unit to unitholders of record on August 1, 2018, for the three months ended June 30, 2018. The distribution will be paid on August 15, 2018 and will total $28.5 million, with $13.0 million being distributed to our non-affiliated common unitholders and $15.5 million being distributed to BP Midstream Partners Holdings LLC ("BP Holdco") in respect of its ownership of our common and subordinated units.

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Business and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Our condensed consolidated financial statements have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”). These rules and regulations conform to the accounting principles contained in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification, the single source of accounting principles generally accepted in the United States (“GAAP”).

Certain information and footnote disclosures normally included in the annual consolidated financial statements have been condensed or omitted from these condensed consolidated financial statements. The condensed consolidated financial statements as of June 30, 2018, and for the three and six months ended June 30, 2018 and 2017, included herein, are unaudited. These financial statements include all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of our consolidated financial position, results of operations and cash flows. Unless otherwise specified, all such adjustments are of a normal and recurring nature. The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year. These unaudited condensed consolidated financial statements and other information included in this quarterly report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the "2017 Annual Report").

Prior to the IPO, our financial position, results of operations and cash flows consisted of the Predecessor's operations, which represented a combined reporting entity. Subsequent to the IPO, our financial position, results of operations and cash flows consist of consolidated BP Midstream Partners LP activities and balances. All intercompany accounts and transactions within the financial statements have been eliminated for all periods presented.

Prior to the IPO, our condensed consolidated statements of operations include expense allocations to the Predecessor for certain functions performed by our Parent on our behalf, including allocations of general corporate expenses related to finance, accounting, treasury, legal, information technology, human resources, shared services, government affairs, insurance, health, safety, security, employee benefits, incentives, severance and environmental functional support. The portion of expenses that are specifically identifiable to the Predecessor Assets are directly recorded to the Predecessor, with the remainder allocated on the basis of headcount, throughput volumes, miles of pipe and other measures. Our management believes the assumptions underlying the financial statements, including the assumptions regarding the allocation of general corporate expenses from our Parent, are reasonable. Nevertheless, the financial statements may not include all of the expenses that would have been incurred, had we been a stand-alone entity during the periods prior to the IPO and may not reflect our financial position, results of operations and cash flows, had we been a stand-alone entity during such periods. See Note 6 - Related Party Transactions.

Prior to the IPO, the Predecessor Assets did not own or maintain separate bank accounts. Our Parent used a centralized approach to cash management and historically funded our operating and investing activities as needed within the boundaries of a documented funding agreement. Accordingly, cash held by our Parent at the corporate level was not allocated to us for any of the periods prior to the IPO. During such periods, we reflected the cash generated by our operations and expenses paid by our Parent on our behalf as a component of Net parent investment on our condensed consolidated balance sheets, and as a net distribution to our Parent on our condensed consolidated statements of cash flows. We also did not include any interest income on the net cash transfers to our Parent. In connection with the IPO, we established our own cash accounts for the funding of our operating and investing activities.

All financial information presented for the periods after the IPO represents the condensed consolidated results of operations, financial position and cash flows of the Partnership. Accordingly:

• Our condensed consolidated statements of operations for the three and six months ended June 30, 2018 and condensed consolidated statement cash flows for the six months ended June 30, 2018 consist of the consolidated results of the Partnership. Our condensed consolidated statements of operations for the three and six months ended June 30, 2017 and condensed consolidated statement cash flows for the six months ended June 30, 2017 consist of the combined results of the Predecessor.

• Our condensed consolidated balance sheets at June 30, 2018 and December 31, 2017 consist of the consolidated balances of the Partnership.

• Our condensed consolidated statement of changes in equity for the six months ended June 30, 2018 consist of the consolidated results for the Partnership. Our condensed consolidated statement of changes in equity for the six months ended June 30, 2017 consists of the combined results of the Predecessor.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)". ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 to defer the adoption date for ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period for public business entities and to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019 for all other entities. This ASU is effective as of January 1, 2019 for an emerging growth company ("EGC"). We expect to transition from EGC status to large accelerated as of December 31, 2018, as such we will reflect the adoption in our on Annual Report on Form 10-K for the year ended December 31, 2018. ASU 2014-09 was further amended in March 2016 by the provisions of ASU 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," in April 2016 by the provisions of ASU 2016-10, "Identifying Performance Obligations and Licensing", in May 2016 by the provisions of ASU 2016-12, "Narrow-Scope Improvements and Practical Expedients", in December 2016 by the provisions of ASU 2016-20, "Technical Corrections to Topic 606, Revenue from Contracts with Customers" and in September 2017 by the provisions of ASU 2017-13, "Revenue Recognition (Topic 605) and Revenue from Contracts with Customers (Topic 606)." We have evaluated the impact that the adoption of the provisions under Topic 606 will have on our revenue contracts, consolidated financial statements and the accompanying notes. Based upon our assessment, the new standard may impact the timing of revenue recognition, but we do not expect significant changes to the amounts recognized for each reporting period. We will adopt the new standard under the modified retrospective transition method by December 31, 2018.

In February 2016, the FASB issued ASU 2016-02, "Leases", which improves transparency and comparability among organizations by requiring lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities and for annual reporting periods beginning after December 15, 2019 and interim reporting periods beginning after December 15, 2020 for all other entities. This ASU is effective as of January 1, 2019 for us, as we expect to transition from EGC status to large accelerated as of December 31, 2018. In January 2018, the FASB issued ASU 2018-01, "Leases (Topic 842), Land Easement Practical Expedient for Transition to Topic 842". This ASU permits an entity to continue to apply its current accounting policy for land easements that existed before the effective date of Topic 842. Once an entity adopts Topic 842, it would apply prospectively to all new (or modified) land easements to determine whether the arrangement contains a lease. Topic 842 requires adoption by application of a modified retrospective transition approach and is effective for us on the same effective date as ASU 2016-02. We are currently evaluating the impact the adoption of these standards will have on our consolidated financial statements and the accompanying notes and we will have our assessment completed prior to December 31, 2018.

For additional information on accounting pronouncements issued prior to December 2017, see Note 2 - Summary of Significant Accounting Policies in our 2017 Annual Report.

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Equity Method Investments (Tables)

6 Months Ended

Jun. 30, 2018

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investments

Summarized financial information for each of our equity method investments on a 100% basis is as follows:

	Three Months Ended June 30, 2018
			Mardi Gras Joint Ventures
	Mars		Caesar		Cleopatra		Proteus		Endymion		Total Mardi Gras Joint Ventures		Total
Statement of operations data
Revenues	$	51,867	$	9,832	$	5,222	$	8,305	$	8,992	$	32,351	$	84,218
Operating expenses	21,381		3,548		2,419		2,924		3,486		12,377		33,758
Net income	30,489		6,284		2,803		5,381		5,616		20,084		50,573

	Six Months Ended June 30, 2018
			Mardi Gras Joint Ventures
	Mars		Caesar		Cleopatra		Proteus		Endymion		Total Mardi Gras Joint Ventures		Total
Statement of operations data
Revenues	$	109,042	$	21,435	$	10,983	$	16,905	$	18,428	$	67,751	$	176,793
Operating expenses	43,029		7,427		4,691		6,271		8,228		26,617		69,646
Net income	66,023		14,008		6,292		10,634		10,420		41,354		107,377

The table below summarizes the balances and activities related to each of our equity method investments that we recorded for the three and six months ended June 30, 2018:

	Three Months Ended June 30, 2018
				Mardi Gras Joint Ventures
	Mars			Caesar			Cleopatra			Proteus			Endymion			Total Mardi Gras Joint Ventures			Total
Beginning Balance	$	60,117		$	121,795		$	122,446		$	85,553		$	86,574		$	416,368		$	476,485
Distributions	(10,118		)	(4,480		)	(2,385		)	(5,070		)	(5,200		)	(17,135		)	(27,253		)
Income from equity method investments	8,689			3,519			1,486			3,498			3,650			12,153			20,842
Ending Balance	$	58,688		$	120,834		$	121,547		$	83,981		$	85,024		$	411,386		$	470,074

	Six Months Ended June 30, 2018
				Mardi Gras Joint Ventures
	Mars			Caesar			Cleopatra			Proteus			Endymion			Total Mardi Gras Joint Ventures			Total
Beginning Balance	$	65,561		$	123,586		$	123,512		$	87,144		$	88,196		$	422,438		$	487,999
Cumulative effect of accounting change*	(2,746		)	—			—			—			—			—			(2,746		)
Distributions	(22,943		)	(10,597		)	(5,300		)	(10,075		)	(9,945		)	(35,917		)	(58,860		)
Income from equity method investments	18,816			7,845			3,335			6,912			6,773			24,865			43,681
Ending Balance	$	58,688		$	120,834		$	121,547		$	83,981		$	85,024		$	411,386		$	470,074

* The financial results of Mars reflect the adoption of ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" on January 1, 2018 under the modified retrospective transition method through a cumulative adjustment to equity. Our impact from this accounting change to our Mars investment was $(2,746), offset to partners' capital. The Mardi Gras Joint Ventures will adopt this ASU on January 1, 2019.

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Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Components of Property, Plant and Equipment

Property, plant and equipment consisted of the following:

	June 30,			December 31,
	2018			2017
Land	$	155		$	155
Right-of-way assets	1,380			1,380
Buildings and improvements	12,032			12,032
Pipelines and equipment	92,208			92,083
Other	510			509
Construction in progress	587			67
Property, plant and equipment, gross	106,872			106,226
Less: Accumulated depreciation	(38,057		)	(36,738		)
Property, plant and equipment, net	$	68,815		$	69,488

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2018

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30,		December 31,
	2018		2017
Current portion of environmental remediation obligations	$	839	$	1,655
Other accrued liabilities	2,300		2,826
Accrued liabilities	$	3,139	$	4,481

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

For the three and six months ended June 30, 2018 and 2017, we recorded the following amounts for related party expenses, which also included the expenses related to share-based compensation discussed below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
			Predecessor				Predecessor
Operating expenses—related parties	$	1,026	$	1,875	$	1,988	$	3,867
Maintenance expenses—related parties	24		192		44		192
General and administrative—related parties	3,442		982		6,865		2,361
Total costs and expenses—related parties	$	4,492	$	3,049	$	8,897	$	6,420

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Net Income Per Limited Partner Unit (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The following tables show the allocation of net income to arrive at net income per limited partner unit for the three and six months ended June 30, 2018:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018		2018
Net income attributable to the Partnership	$	30,470	$	61,009
Less:
Incentive distribution rights currently held by the General Partner	—		—
Limited partners' distribution declared on common units	14,272		28,282
Limited partners' distribution declared on subordinated units	14,272		28,282
Net income attributable to the Partnership in excess of distributions	$	1,926	$	4,445

	Three Months Ended June 30, 2018
	General Partner		Limited Partners' Common Units		Limited Partners' Subordinated Units		Total
Distributions declared	$	—	$	14,272	$	14,272	$	28,544
Net income attributable to the Partnership in excess of distributions	—		963		963		1,926
Net income attributable to the Partnership	$	—	$	15,235	$	15,235	$	30,470
Weighted average units outstanding:
Basic			52,376		52,376		104,752
Diluted			52,382		52,376		104,758
Net income per limited partner unit (in dollars):
Basic			$	0.29	$	0.29
Diluted			$	0.29	$	0.29

	Six Months Ended June 30, 2018
	General Partner		Limited Partners' Common Units		Limited Partners' Subordinated Units		Total
Distributions declared	$	—	$	28,282	$	28,282	$	56,564
Net income attributable to the Partnership in excess of distributions	$	—	$	2,223	$	2,222	4,445
Net income attributable to the Partnership	$	—	$	30,505	$	30,504	$	61,009
Weighted average units:
Basic			52,376		52,376		104,752
Diluted			52,382		52,376		104,758
Net income per limited partner unit (in dollars):
Basic			$	0.58	$	0.58
Diluted			$	0.58	$	0.58

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Unit-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Phantom Units Activity

The following is a summary of phantom unit award activities of the Partnership’s common units for the six months ended June 30, 2018:

	Phantom Units
	Number of Units (in units)	Weighted Average Grant Date Fair Value per Unit (in dollars)
Outstanding at December 31, 2017	8,468	$	17.48
Granted	3,737	20.07
Outstanding at June 30, 2018	12,205	$	18.27
Vested at June 30, 2018	—	—

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Variable Interest Entity (Tables)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entity

The financial position of Mardi Gras at June 30, 2018 and December 31, 2017, its financial performance for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017, as reflected in our condensed consolidated financial statements, are as follows:

	June 30, 2018		December 31, 2017
Balance sheet
Equity method investments	$	411,386	$	422,438
Non-controlling interests	333,487		342,330

	Three Months Ended June 30,			Six Months Ended June 30,
	2018		2017	2018		2017
Statement of operations
Income from equity method investments	$	12,153	*	$	24,865	*
Less: Net income attributable to non-controlling interests	9,722		*	19,891		*
Net impact on Net income attributable to the Partnership	$	2,431	*	$	4,974	*

* Information is not applicable as the interest in Mardi Gras was contributed to the Partnership on October 30, 2017.

	Six Months Ended June 30,
	2018			2017
Statement of cash flows
Cash flows from operating activities
Distributions of earnings received from equity method investments	$	24,865		*
Cash flows from investing activities
Distribution in excess of earnings from equity method investments	11,053			*
Cash flows from financing activities
Distributions to non-controlling interests	(28,734		)	*
Net change on BPMP's cash and cash equivalents	$	7,184		*

* Information is not applicable as the interest in Mardi Gras was contributed to the Partnership on October 30, 2017.

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Business and Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2018 segment	Oct. 30, 2017 shares
Variable Interest Entity [Line Items]
Units issued (in shares)		47,794,358
Units issued under over-allotment option (in shares)		5,294,358
Number of reportable segments | segment	1
Mars
Variable Interest Entity [Line Items]
Subsidiary of limited partnership, ownership interest	28.50%
Total Mardi Gras Joint Ventures
Variable Interest Entity [Line Items]
Subsidiary of limited partnership, ownership interest	20.00%
Caesar
Variable Interest Entity [Line Items]
Subsidiary of limited partnership, ownership interest	56.00%
Cleopatra
Variable Interest Entity [Line Items]
Subsidiary of limited partnership, ownership interest	53.00%
Proteus
Variable Interest Entity [Line Items]
Subsidiary of limited partnership, ownership interest	65.00%
Endymion
Variable Interest Entity [Line Items]
Subsidiary of limited partnership, ownership interest	65.00%

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Equity Method Investments - Schedule of Equity Method Investments (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Statement of operations data
Revenues	$ 84,218	$ 176,793
Operating expenses	33,758	69,646
Net income	50,573	107,377
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Beginning Balance	476,485	487,999
Cumulative effect of accounting change		(2,746)
Distributions	(27,253)	(58,860)
Income from equity method investments	20,842	43,681
Ending Balance	470,074	470,074
Mars
Statement of operations data
Revenues	51,867	109,042
Operating expenses	21,381	43,029
Net income	30,489	66,023
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Beginning Balance	60,117	65,561
Cumulative effect of accounting change		(2,746)
Distributions	(10,118)	(22,943)
Income from equity method investments	8,689	18,816
Ending Balance	58,688	58,688
Caesar
Statement of operations data
Revenues	9,832	21,435
Operating expenses	3,548	7,427
Net income	6,284	14,008
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Beginning Balance	121,795	123,586
Cumulative effect of accounting change		0
Distributions	(4,480)	(10,597)
Income from equity method investments	3,519	7,845
Ending Balance	120,834	120,834
Cleopatra
Statement of operations data
Revenues	5,222	10,983
Operating expenses	2,419	4,691
Net income	2,803	6,292
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Beginning Balance	122,446	123,512
Cumulative effect of accounting change		0
Distributions	(2,385)	(5,300)
Income from equity method investments	1,486	3,335
Ending Balance	121,547	121,547
Proteus
Statement of operations data
Revenues	8,305	16,905
Operating expenses	2,924	6,271
Net income	5,381	10,634
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Beginning Balance	85,553	87,144
Cumulative effect of accounting change		0
Distributions	(5,070)	(10,075)
Income from equity method investments	3,498	6,912
Ending Balance	83,981	83,981
Endymion
Statement of operations data
Revenues	8,992	18,428
Operating expenses	3,486	8,228
Net income	5,616	10,420
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Beginning Balance	86,574	88,196
Cumulative effect of accounting change		0
Distributions	(5,200)	(9,945)
Income from equity method investments	3,650	6,773
Ending Balance	85,024	85,024
Total Mardi Gras Joint Ventures
Statement of operations data
Revenues	32,351	67,751
Operating expenses	12,377	26,617
Net income	20,084	41,354
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Beginning Balance	416,368	422,438
Cumulative effect of accounting change		0
Distributions	(17,135)	(35,917)
Income from equity method investments	12,153	24,865
Ending Balance	$ 411,386	$ 411,386

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 106,872	$ 106,226
Less: Accumulated depreciation	(38,057)	(36,738)
Property, plant and equipment, net	68,815	69,488
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	155	155
Rights-of-way
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	1,380	1,380
Building and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	12,032	12,032
Pipeline and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	92,208	92,083
Other
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	510	509
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 587	$ 67

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Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Current portion of environmental remediation obligations	$ 839	$ 1,655
Other accrued liabilities	2,300	2,826
Accrued liabilities	3,139	4,481
Accrued interest - related parties	$ 155	$ 159

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Debt (Details) - Revolving Credit Facility - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	May 04, 2018	Dec. 31, 2017	Oct. 30, 2017
Line of Credit Facility [Line Items]
Weighted average interest rate	0.00%
Predecessor
Line of Credit Facility [Line Items]
Interest expense				$ 0
Line of Credit
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity							$ 600,000,000
Outstanding borrowing	$ 0		$ 0		$ 15,000,000	$ 15,000,000
Interest expense	$ 200,000		$ 400,000
Weighted average interest rate	2.20%
Commitment fee percentage			0.10%
Utilization fee percentage			0.20%
Line of Credit | Predecessor
Line of Credit Facility [Line Items]
Interest expense		$ 0

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Related Party Transactions - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Revenue from related parties	$ 28,169,000		$ 53,990,000
Total Mardi Gras Joint Ventures
Related Party Transaction [Line Items]
Noncontrolling interest, ownership percentage by Parent	80.00%		80.00%
BP Products
Related Party Transaction [Line Items]
Revenue from related parties	$ 0		$ 0
Related party deferred revenue	$ 2,186,000		2,186,000		$ 0
BP Pipelines
Related Party Transaction [Line Items]
Annual fee paid to related party			$ 13,300,000
Predecessor
Related Party Transaction [Line Items]
Revenue from related parties		$ 26,319,000		$ 52,054,000
Share-based compensation		61,000		104,000
Predecessor | BP Products
Related Party Transaction [Line Items]
Revenue from related parties		$ 0		$ 0

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Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Related Party Transaction [Line Items]
Operating expenses—related parties	$ 1,026		$ 1,988
Maintenance expenses—related parties	24		44
General and administrative—related parties	3,442		6,865
Total costs and expenses—related parties	$ 4,492		$ 8,897
Predecessor
Related Party Transaction [Line Items]
Operating expenses—related parties		$ 1,875		$ 3,867
Maintenance expenses—related parties		192		192
General and administrative—related parties		982		2,361
Total costs and expenses—related parties		$ 3,049		$ 6,420

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Net Income Per Limited Partner Unit - Narrative (Details) - $ / shares	Jul. 18, 2018	May 15, 2018	Feb. 15, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dividends paid per share (in dollars per share)		$ 0.2675	$ 0.1798
Subsequent Event
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dividends declared per share (in dollars per share)	$ 0.2725
Predecessor
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Units outstanding (in shares)				0

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Net Income Per Limited Partner Unit - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income attributable to the Partnership	$ 30,470	$ 61,009
Partner distributions declared	28,544	56,564
Net income attributable to the Partnership in excess of distributions	1,926	4,445
Net Income Subsequent To IPO	$ 30,470	$ 61,009
Weighted average units outstanding:
Basic (in shares)	104,752	104,752
Diluted (in shares)	104,758	104,758
Incentive distribution rights currently held by the General Partner
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Partner distributions declared	$ 0	$ 0
Net income attributable to the Partnership in excess of distributions	0	0
Net Income Subsequent To IPO	0	0
Limited partners' distribution declared on common units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Partner distributions declared	14,272	28,282
Net income attributable to the Partnership in excess of distributions	963	2,223
Net Income Subsequent To IPO	$ 15,235	$ 30,505
Weighted average units outstanding:
Basic (in shares)	52,376	52,376
Diluted (in shares)	52,382	52,382
Net income per limited partner unit (in dollars):
Basic (in dollars per share)	$ 0.29	$ 0.58
Diluted (in dollars per share)	$ 0.29	$ 0.58
Limited partners' distribution declared on subordinated units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Partner distributions declared	$ 14,272	$ 28,282
Net income attributable to the Partnership in excess of distributions	963	2,222
Net Income Subsequent To IPO	$ 15,235	$ 30,504
Weighted average units outstanding:
Basic (in shares)	52,376	52,376
Diluted (in shares)	52,376	52,376
Net income per limited partner unit (in dollars):
Basic (in dollars per share)	$ 0.29	$ 0.58
Diluted (in dollars per share)	$ 0.29	$ 0.58

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Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Revenues, fixed loss allowance	$ 2,860		$ 5,000
Predecessor
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Revenues, fixed loss allowance		$ 2,061		$ 3,997
Loss due to change in fair value of fixed loss allowance		$ 312		$ 488

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Income Taxes - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Tax Contingency [Line Items]
Income tax expense	$ 0		$ 0
Predecessor
Income Tax Contingency [Line Items]
Income tax expense		$ 7,933		$ 15,816

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Commitments and Contingencies - Narrative (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Site Contingency [Line Items]
Environmental liability indemnification cap	$ 25,000,000
Other matters indemnification cap	15,000,000
Aggregate deductible	500,000.0
Accrual for environmental loss contingencies	4,102,000	$ 4,438,000
Indemnification asset for environmental loss contingencies	$ 4,102,000	$ 4,438,000
Mars
Site Contingency [Line Items]
Subsidiary of limited partnership, ownership interest	28.50%
Total Mardi Gras Joint Ventures
Site Contingency [Line Items]
Subsidiary of limited partnership, ownership interest	20.00%
Caesar
Site Contingency [Line Items]
Subsidiary of limited partnership, ownership interest	56.00%
Cleopatra
Site Contingency [Line Items]
Subsidiary of limited partnership, ownership interest	53.00%
Endymion
Site Contingency [Line Items]
Subsidiary of limited partnership, ownership interest	65.00%
Proteus
Site Contingency [Line Items]
Subsidiary of limited partnership, ownership interest	65.00%

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Unit-Based Compensation - Narrative (Details) - Phantom Share Units (PSUs) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 45	$ 84
Unrecognized compensation cost related to phantom unit awards	$ 120	$ 120
Weighted average recognition period		5 months 24 days
Forfeited (in shares)		0
BP Midstream Partners LP 2017 Long Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of common units that may be issued (in shares)			5,502,271

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Unit-Based Compensation - Phantom Units Activity (Details) - Phantom Share Units (PSUs)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Number of Units (in units)
Beginning balance outstanding (shares) | shares	8,468
Granted (in shares) | shares	3,737
Ending balance outstanding (shares) | shares	12,205
Vested (in shares) | shares	0
Weighted Average Grant Date Fair Value per Unit (in dollars)
Beginning balance outstanding (in dollars per share) | $ / shares	$ 17.48
Granted (in dollars per share) | $ / shares	20.07
Ending balance outstanding (in dollars per share) | $ / shares	18.27
Vested (in dollars per share) | $ / shares	$ 0.00

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Variable Interest Entity - Schedule of Variable Interest Entity (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Balance sheet
Equity method investments	$ 470,074	$ 470,074	$ 476,485	$ 487,999
Non-controlling interests	333,487	333,487		342,330
Statement of operations
Income from equity method investments	20,842	43,681
Less: Net income attributable to non-controlling interests	9,722	19,891
Net impact on Net income attributable to the Partnership	30,470	61,009
Cash flows from operating activities
Distributions of earnings received from equity method investments		47,807
Cash flows from financing activities
Distributions to non-controlling interests		(28,734)
Net change in cash and cash equivalents		7,833
Mardi Gras Transportation System Company LLC | Variable Interest Entity, Primary Beneficiary
Balance sheet
Equity method investments	411,386	411,386		422,438
Non-controlling interests	333,487	333,487		$ 342,330
Statement of operations
Income from equity method investments	12,153	24,865
Less: Net income attributable to non-controlling interests	9,722	19,891
Net impact on Net income attributable to the Partnership	$ 2,431	4,974
Cash flows from operating activities
Distributions of earnings received from equity method investments		24,865
Cash flows from investing activities
Distribution in excess of earnings from equity method investments		11,053
Cash flows from financing activities
Distributions to non-controlling interests		(28,734)
Net change in cash and cash equivalents		$ 7,184

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions	Aug. 15, 2018	Jul. 18, 2018
Scenario, Forecast
Subsequent Event [Line Items]
Total distribution paid	$ 28.5
Dividends paid to non-affiliated common unitholders	13.0
Net transfers to Parent	$ 15.5
Subsequent Event
Subsequent Event [Line Items]
Dividends declared per share (in dollars per share)		$ 0.2725