NET (LOSS) INCOME PER LIMITED PARTNER UNIT AND DISTRIBUTIONS

Net (Loss) Income Per Limited Partner Unit

The following is a reconciliation of the net loss attributable to our limited partners and our limited partner units and the basic and diluted earnings per unit calculations for the three months ended March 31, 2014 and 2013 (in thousands, except unit and per unit data):



	Three Months Ended March 31, 2014			Three Months Ended March 31, 2013
Net loss	$	(1,289	)	$	(6,382	)
Series A Preferred Unit in-kind distribution and fair value adjustment (1)	(501		)	—
Net loss attributable to partners	$	(1,790	)	$	(6,382	)

General partner's interest (2)	$	(26	)	$	(128	)
Limited partners' interest (2)
Common	$	(1,045	)	$	(3,127	)
Subordinated	$	(719	)	$	(3,127	)

(1) The Series A Preferred Unit in-kind distribution increased the net loss attributable to partners as of March 31, 2014 in the calculation of earnings per unit (See Note 9) for the three months ended March 31, 2014. The valuation adjustment to maximum redemption value of the Series A Preferred Units as of March 31, 2014 decreased the net loss available to common units in the calculation of earnings per unit (See Note 9) for the three months ended March 31, 2014. There is no in-kind distribution or valuation adjustment to maximum redemption value for the Series A Preferred Units as of March 31, 2013 in the calculation of earnings per unit (See Note 9) for the three months ended March 31, 2013.

(2) General Partner's and Limited Partners’ interest are calculated based on the allocation of net losses for the period net of the allocation of Series A Preferred Unit in-kind distributions, Series A Preferred Unit fair value adjustments and General Partner unit in-kind distributions.



Common Units	Three Months Ended March 31, 2014			Three Months Ended March 31, 2013
Interest in net loss	$	(1,045	)	$	(3,127	)
Effect of dilutive units - numerator (1)	—			—
Dilutive interest in net loss	$	(1,045	)	$	(3,127	)

Weighted-average units - basic	18,285,220			12,213,713
Effect of dilutive units - denominator (1)	—			—
Weighted-average units - dilutive	18,285,220			12,213,713

Basic and diluted net loss per common unit	$	(0.06	)	$	(0.26	)



Subordinated Units	Three Months Ended March 31, 2014			Three Months Ended March 31, 2013
Interest in net loss	$	(719	)	$	(3,127	)
Effect of dilutive units - numerator (1)	—			—
Dilutive interest in net loss	$	(719	)	$	(3,127	)

Weighted-average units - basic	12,213,713			12,213,713
Effect of dilutive units - denominator (1)	—			—
Weighted-average units - dilutive	12,213,713			12,213,713

Basic and diluted net loss per subordinated unit	$	(0.06	)	$	(0.26	)

(1) Because we had a net loss for the three months ended March 31, 2014 and 2013, the effect of the dilutive units would be anti-dilutive to the per unit calculation. Therefore, the weighted average units outstanding are the same for basic and dilutive net loss per unit. The weighted average units that would be included in the computation of diluted per unit amounts in accordance with the treasury stock method were 4,779 unvested awards granted under our long-term incentive plan (See Note 11) and 1,800,886 Series A Preferred Units (See Note 9) for the three months ended March 31, 2014. The amount of unvested common units that were not included in the computation of diluted per unit amounts were 140,100 unvested awards granted under our long-term incentive plan for the three months ended March 31, 2013. Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the long-term incentive plan, were exercised, settled or converted into common units. When it is determined that potential common units resulting from an award should be included in the diluted net income per limited partner unit calculation, the impact is reflected by applying the treasury stock method.

Our calculation of the number of weighted-average units outstanding include the common units that have been awarded to our directors that are deferred under our Non-Employee Director Deferred Compensation Plan.

The Series A Preferred Units are considered participating securities for purposes of the basic earnings per unit calculation during periods in which they receive cash distributions. We are required to pay in-kind distributions to the Series A Preferred Units for the first four full quarters beginning the quarter ended June 30, 2013, and continuing until the Series A Preferred Units have been converted into common units (See Note 9). Because the Series A Preferred Units have received in-kind distributions, they have been excluded from the basic earnings per unit calculation for the three months ended March 31, 2014.

Distributions

Our Second Amended and Restated Agreement of Limited Partnership (“Partnership Agreement”) requires that, within 45 days after the end of each quarter, we distribute all of our available cash to unitholders of record on the applicable record date, as determined by our General Partner. We intend to make a minimum quarterly distribution to the holders of our common units and subordinated units of $0.40 per unit to the extent we have sufficient cash from our operations after the establishment of cash reserves and the payment of costs and expenses, including reimbursements of expenses to our General Partner. However, there is no guarantee that we will pay the minimum quarterly distribution on our units in any quarter.

Paid In-Kind Distributions

During the second quarter of 2013, we raised $40.0 million of equity through issuances of 1,715,000 Series A Preferred Units and an additional General Partner contribution to satisfy the requirements of the second amendment to our $350.0 million Second Amended and Restated Credit Agreement with Wells Fargo Bank, N.A., as administrative agent, and a syndicate of lenders (as amended, our “Credit Facility”) (See Note 6 and Note 9). Under the terms of our Partnership Agreement, we are required to pay the holders of our Series A Preferred Units quarterly distributions of in-kind Series A Preferred Units for the first four full quarters following the issuance of the units and continuing thereafter until the board of directors of our General Partner determines to begin paying quarterly distributions in cash. In-kind distributions will be in the form of Series A Preferred Units at a rate of $0.40 per outstanding Series A Preferred Unit per quarter (or 7% per year of the per unit purchase price) or, beginning after four full quarters, such higher per unit rate as is paid in respect to our common units. Cash distributions will equal the greater of $0.40 per unit per quarter or the quarterly distribution paid with respect to each common unit. In accordance with the Partnership Agreement, our General Partner receives a corresponding distribution of in-kind general partner units to maintain its 2.0% interest in us.

The following table represents the paid in-kind (“PIK”) distribution earned for the period ended March 31, 2014 and the PIK distribution for the previous periods (in thousands, except per unit and in-kind distribution units):



Payment Date	Attributable to the Quarter Ended	Per Unit Distribution			In-Kind Series A Preferred Unit Distributions to Series A Preferred Holders	In-Kind Series A Preferred Distributions Value(3)		In-Kind Unit Distribution to General Partner	In-Kind General Partner Distribution Value(3)
2014
May 15, 2014	March 31, 2014	$	0.40		31,513	$	534	643	$	11
2013
February 14, 2014	December 31, 2013	0.40			30,971	558		632	11
November 14, 2013	September 30, 2013	0.40			30,439	511		621	10
August 14, 2013	June 30, 2013	0.35		⁽¹⁾	22,276	512		454	10
August 14, 2013	June 30, 2013	0.20		⁽²⁾	2,199	51		45	1

(1) Per unit distribution of $0.35 corresponds to the minimum quarterly distribution of $0.40 per unit, or $1.60 on an annualized basis, pro-rated for the portion of the quarter following the issuance of 1,466,325 Series A Preferred Units and 29,925 general partner units on April 12, 2013.

(2) Per unit distribution of $0.20 corresponds to the minimum quarterly distribution of $0.40 per unit, or $1.60 on an annualized basis, pro-rated for the portion of the quarter following the issuance of 248,675 Series A Preferred Units and 5,075 general partner units on May 15, 2013.

(3) The fair value was calculated as required, based on the common unit price at the quarter end date for the period attributable to the distribution, multiplied by the number of units distributed.

Cash Distributions

The following table represents our distribution declared for the period ended March 31, 2014 and distributions paid for the prior periods (in thousands, except per unit data):



					Distributions
	Attributable to the	Per Unit			Limited Partners
Payment Date	Quarter Ended	Distribution			Common		Subordinated		General Partner		Total
2014
May 15, 2014	March 31, 2014	$	0.40		$	8,586	$	4,885	$	290	$	13,761
2013
February 14, 2014	December 31, 2013	0.40			8,581		4,885		289		13,755
November 14, 2013	September 30, 2013	0.40			4,888		4,885		214		9,987
August 14, 2013	June 30, 2013	0.40			4,890		4,886		210		9,986
May 15, 2013	March 31, 2013	0.40			4,888		4,886		199		9,973
2012
February 14, 2013	December 31, 2012	0.24		⁽¹⁾	2,931		2,931		120		5,982

(1) Per unit distribution of $0.24 corresponds to the minimum quarterly distribution of $0.40 per unit, or $1.60 on an annualized basis, pro-rated for the portion of the quarter following the closing of our initial public offering on November 7, 2012.

Also, in accordance with our long-term incentive plan, we pay distribution equivalent rights to holders of units granted under that plan that vest during the year (See Note 11).