Net Income Per Limited Partner Unit

9 Months Ended

Sep. 30, 2021

Net income per unit applicable to common limited partner units is computed by dividing the respective limited partners’ interest in net income attributable to the Partnership for the period by the weighted average number of common units outstanding for the period. Prior to April 1, 2020, the classes of participating securities included common units, general partner units and IDRs. Because we had more than one class of participating securities, we used the two-class method when calculating the net income per unit applicable to limited partners. Effective April 1, 2020, the classes of participating securities included only common units, as the general partner units and the IDRs were eliminated and the Series A Preferred Units are not considered a participating security. See Note 8 – (Deficit) Equity for a discussion of the elimination of our general partner’s IDRs and 2% economic interest effective April 1, 2020. For the three and nine months ended September 30, 2021 and September 30, 2020, our Series A Preferred Units were dilutive to net income per limited partner unit.

Net income earned by the Partnership is allocated between the classes of participating securities in accordance with the terms of our partnership agreement as in effect on the date such calculation is performed, after giving effect to priority income allocations to the holders of the Series A Preferred Units, if applicable. Earnings are allocated based on actual cash distributions declared to our unitholders, including those attributable to the IDRs prior to the second quarter of 2020, if applicable. To the extent net income attributable to the Partnership exceeds or is less than cash distributions, this difference is allocated based on the unitholders’ respective ownership percentages. For the diluted net income per limited partner unit calculation under the Second Amended and Restated Partnership Agreement, the Series A Preferred Units are assumed to be converted at the beginning of the period into common limited partner units on a one-for-one basis, and the distribution formula for available cash is recalculated using the available cash amount increased only for the preferred distributions, which would have been attributable to the common units after conversion.

The following tables show the allocation of net income attributable to the Partnership to arrive at net income per limited partner unit:

Three Months Ended September 30,

Nine Months Ended
September 30,

2021 (1)

2020 (1)

2021 (1)

2020

Net income

423

Less:

Net income attributable to noncontrolling interests

Net income attributable to the Partnership

414

Less:

General partner’s distribution declared

Preferred unitholder’s interest in net income

Limited partners’ distribution declared on common units

429

Distributions in excess of income

(94)

(1) Effective April 1, 2020, the classes of participating securities included only common units, as the general partner units and the IDRs were eliminated and the Series A Preferred Units are not considered a participating security. Therefore, the allocation of net income attributable to the Partnership to arrive at net income per limited partner unit is not applicable for the three and nine months ended September 30, 2021, nor to the three months ended September 30, 2020.


	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
	Limited Partners’ Common Units
	(in millions of dollars, except per unit data)
Net income attributable to the Partnership’s common unitholders (basic)	$	115	$	416
Dilutive effect of preferred units	12		36
Net income attributable to the Partnership’s common unitholders (diluted)	$	127	$	452

Weighted average units outstanding - Basic	393.3		393.3
Dilutive effect of preferred units	50.8		50.8
Weighted average units outstanding - Diluted	444.1		444.1
Net income per limited partner unit:
Basic	$	0.29	$	1.06
Diluted	$	0.29	$	1.02


	Three Months Ended September 30, 2020
	Limited Partners’ Common Units
	(in millions of dollars, except per unit data)
Net income attributable to the Partnership’s common unitholders (basic)	$	123
Dilutive effect of preferred units	12
Net income attributable to the Partnership’s common unitholders (diluted)	$	135

Weighted average units outstanding - Basic	393.3
Dilutive effect of preferred units	50.8
Weighted average units outstanding - Diluted	444.1
Net income per limited partner unit:
Basic	$	0.31
Diluted	$	0.30


	Nine Months Ended September 30, 2020
	General Partner		Limited Partners’ Common Units		Total

	(in millions of dollars, except per unit data)
Distributions declared	$	55	$	429	$	484
Distributions in excess of income	—		(94)		(94)
Net income attributable to the Partnership's common unitholders (basic)	$	55	$	335	$	390
Dilutive effect of preferred units			24
Net income attributable to the Partnership's common unitholders (dilutive)			$	359

Weighted average units outstanding - Basic			340.1
Dilutive effect of preferred units			33.9
Weighted average units outstanding - Diluted			374.0
Net income per limited partner unit:
Basic			$	0.98
Diluted			$	0.96