NET INCOME (LOSS) PER COMMON UNIT

12 Months Ended

Dec. 31, 2016

NET INCOME (LOSS) PER COMMON UNIT

NET INCOME (LOSS) PER COMMON UNIT

NOTE 12    NET INCOME (LOSS) PER COMMON UNIT

Net income (loss) per common unit is computed by dividing net income attributable to controlling interests, after deduction of amounts attributable to the General Partner and Class B units, by the weighted average number of common units outstanding.

The amounts allocable to the General Partner equals an amount based upon the General Partner's effective two percent general partner interest, plus an amount equal to incentive distributions. Incentive distributions are paid to the General Partner if quarterly cash distributions on the common units exceed levels specified in the Partnership Agreement (refer to Note 13).

The amount allocable to the Class B units in 2016 equals an amount based upon 30 percent of GTN's distributable cash flow during the year ended December 31, 2016 less $20 million (2015 – $15 million).

Net income (loss) per common unit was determined as follows:

(millions of dollars, except per common unit amounts)	2016		2015		2014
Net income attributable to controlling interests	244		13		172
Net income attributable to General Partner	(4	)	–		(3	)
Incentive distributions attributable to the General Partner(a)	(7	)	(3	)	(1	)
Net income attributable to the Class B units(b)	(22	)	(12	)	–
Net income (loss) attributable to common units	211		(2	)	168
Weighted average common units outstanding(millions) – basic and diluted	65.7	(c)	63.9		62.7
Net income (loss) per common unit – basic and diluted	$ 3.21		$ (0.03	)	$ 2.67

(a)	Under the terms of the Partnership Agreement, for any quarterly period, the participation of the incentive distribution rights (IDRs) is limited to the available cash distributions declared. Accordingly, incentive distributions allocated to the General Partner are based on the Partnership's available cash during the current reporting period, but declared and paid in the subsequent reporting period.
(b)	As discussed in Note 9, the Class B units entitle TransCanada to a distribution which is an amount based on 30 percent of GTN's distributions after exceeding certain annual thresholds. The distribution will be payable in the first quarter with respect to the prior year's distributions. Consistent with the application of Accounting Standards Codification (ASC) Topic 260 – "Earnings per share", the Partnership allocated a portion of net income attributable to controlling interests to the Class B units in an amount equal to 30 percent of GTN's total distributable cash flows during the year ended December 31, 2016 less the threshold level of $20 million (2015 – less $15 million). During the year ended December 31, 2016, 30 percent of GTN's total distributable cash flow was $42 million. As a result of exceeding the threshold level of $20 million, $22 million of net income attributable to controlling interests was allocated to the Class B units at December 31, 2016 (2015 – $12 million). Refer to Note 9.
(c)	Includes the common units subject to rescission. These units are treated as outstanding for financial reporting purposes. Refer to Note 9.