Allocation of Net Income (Loss) and Distributions

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Allocation of Net Income (Loss) and Distributions

Note 3 – Allocation of Net Income (Loss) and Distributions

The allocation of net income (loss) among our general partner, limited partners, and noncontrolling interests is as follows:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
	(Millions)
Allocation of net income to general partner:
Net income (loss)	$	(77	)	$	332		$	2		$	444
Net income applicable to pre-merger operations allocated to general partner	—			—			—			(2		)
Net income applicable to noncontrolling interests	(13		)	(32		)	(42		)	(55		)
Costs charged directly to the general partner	—			—			—			20
Income (loss) subject to 2% allocation of general partner interest	(90		)	300			(40		)	407
General partner’s share of net income	2		%	2		%	2		%	2		%
General partner’s allocated share of net income (loss) before items directly allocable to general partner interest	(2		)	6			(1		)	8
Priority allocations, including incentive distributions, paid to general partner	201			211			206			423
Pre-merger net income allocated to general partner interest	—			—			—			2
Costs charged directly to the general partner	—			—			—			(20		)
Net income allocated to general partner’s equity	$	199		$	217		$	205		$	413
Net income (loss)	$	(77	)	$	332		$	2		$	444
Net income allocated to general partner’s equity	199			217			205			413
Net income (loss) allocated to Class B limited partners’ equity	(8		)	2			(7		)	(2		)
Net income allocated to Class D limited partners’ equity (1)	—			—			—			69
Net income allocated to noncontrolling interests	13			32			42			55
Net income (loss) allocated to common limited partners’ equity	$	(281	)	$	81		$	(238	)	$	(91	)
Adjustments to reconcile Net income (loss) allocated to common limited partners’ equity to Allocation of net income (loss) to common units:
Incentive distributions paid (2)	200			211			201			423
Incentive distributions declared (2) (3)	(210		)	(209		)	(410		)	(421		)
Impact of unit issuance timing and other	2			—			10			—
Allocation of net income (loss) to common units	$	(289	)	$	83		$	(437	)	$	(89	)

(1) Includes amortization of the beneficial conversion feature associated with the Pre-merger WPZ Class D units of $68 million for the six months ended June 30, 2015. See following discussion of Class D units.

(2) Incentive distributions paid for the 2016 periods and Incentive distributions declared for the six months ended June 30, 2016, reflect the waiver associated with the Termination Agreement. (See Note 1 – General, Description of Business, and Basis of Presentation.)

(3) The Board of Directors of our general partner declared a cash distribution of $0.85 per common unit on July 26, 2016, to be paid on August 12, 2016, to unitholders of record at the close of business on August 5, 2016.

Class B Units

The Class B units are not entitled to cash distributions. Instead, prior to conversion into common units, the Class B units receive quarterly distributions of additional paid-in-kind Class B units. Effective February 10, 2015, each Class B unit became convertible at the election of either us or the holders of such Class B unit into a common unit on a one-for-one basis. The Board of Directors of our general partner has authorized the issuance of 395,207 Class B units associated with the second-quarter distribution, to be issued on August 12, 2016.

Class D Units

The Pre-merger WPZ Class D units, issued in February 2014 in conjunction with our acquisition of certain Canadian operations, were issued at a discount to the market price of Pre-merger WPZ’s common units, into which they were convertible. The remaining unamortized balance was recognized in the first quarter of 2015 due to the ACMP Merger. All Pre-merger WPZ Class D units were converted into common units in conjunction with the ACMP Merger.