EARNINGS PER COMMON AND SUBORDINATED UNIT

The computations of earnings per common are based on the weighted average number of common outstanding during the applicable full-year period. Basic earnings per common is determined by dividing net income (loss) allocated to the common units after deducting the amount allocated to our General Partner (including distributions to our General Partner on its incentive distribution rights), by the weighted average number of outstanding common during the period.

When computing earnings per common under the two-class method in periods when distributions are greater than earnings, the amount of the distributions is deducted from net income and the excess of distributions over earnings is allocated between the General Partner, and common units based on how our partnership agreement allocates net losses.

When earnings are greater than distributions, we determine cash distributions based on available cash and determine the actual incentive distributions allocable to our General Partner based on actual distributions. When computing earnings per common unit, the amount of the assumed incentive distribution rights, if any, is deducted from net income and allocated to our General Partner for the period to which the calculation relates. The remaining amount of net income, after deducting the assumed incentive distribution rights, is allocated between the General Partner, and common units based on how our Partnership Agreement allocates net earnings.

The following is a reconciliation of the weighted average number of common units outstanding to the number of common units used in the computations of net income per common unit.



	Year Ended December 31,
	2017	2016	2015
	Common Units	Common Units	Common Units
Number of weighted average units outstanding	35,035,428	33,262,376	33,169,413
Unit awards outstanding	—	—	—
Average diluted units outstanding	35,035,428	33,262,376	33,169,413

Diluted earnings per unit are computed using the treasury stock method, which considers the potential future issuance of limited partner common units. Unvested phantom units are not included in basic earnings per common unit, as they are not considered to be participating securities, but are included in the calculation of diluted earnings per common unit. As of December 31, 2017, 2016, and 2015 approximately 90,594, 9,707, and 29,372 incremental units, respectively, were excluded from the calculation of diluted units because the impact was anti-dilutive. Following the issuance of the Preferred Units, diluted earnings per common unit are computed using the "if converted" method, whereby the amount of net income (loss) and the number of common units issuable are each adjusted as if the Preferred Units had been converted as of the date of issuance or as of the beginning of the period. The number of common units that may be issued upon future conversion of the Preferred Units is excluded from the calculation of diluted common units, as the impact would be antidilutive due to the net loss recorded during the years ended December 31, 2017 and 2016.