Note 4. Earnings (Loss) Per Unit

As a result of the reorganization of Burger King Worldwide into Partnership following the Transactions, Partnership uses the two-class method in the computation of earnings per unit. Pursuant to the terms of the partnership agreement, RBI, as the holder of Partnership’s Class A common units (“Class A common units”) is entitled to receive distributions from Partnership in an amount per unit equal to the aggregate dividends payable by RBI to holders of RBI common shares, and the holders of Class B exchangeable limited partnership units of Partnership (“Partnership exchangeable units”) are entitled to receive distributions from Partnership in an amount per unit equal to the dividends payable by RBI on each RBI common share. Partnership’s net income available to common unitholders is allocated between the Class A common units and Partnership exchangeable units on a fully-distributed basis and reflects residual net income after noncontrolling interests and Partnership preferred unit distributions. Basic and diluted earnings per Class A common unit is determined by dividing net income allocated to Class A common unitholders by the weighted average number of Class A common units outstanding for the period. Basic and diluted earnings per Partnership exchangeable unit is determined by dividing net income allocated to the Partnership exchangeable units by the weighted average number of Partnership exchangeable units outstanding during the period.

During the three months ended March 31, 2016, net income (loss) allocated to Partnership exchangeable units was calculated as 50.0% of net income (loss) attributable to common unitholders.

Since December 12, 2015, the one year anniversary of the effective date of the Transactions, the holders of Partnership exchangeable units each have the right to require Partnership to exchange all or any portion of such holder’s Partnership exchangeable units on a one-for-one basis for RBI common shares, subject to RBI’s right as the general partner of Partnership, at RBI’s sole discretion, to deliver a cash payment in lieu of RBI common shares. The allocation of net income attributable to common unitholders between Class A common units and Partnership exchangeable units is affected by the exchange of Partnership exchangeable units.

Since all stock options were issued by RBI, there are no dilutive securities for Partnership as the exercise of stock options will not affect the number of Class A common units or Partnership exchangeable units outstanding. However, the issuance of shares by RBI in future periods will affect the allocation of net income attributable to common unitholders between Class A common units and Partnership exchangeable units.

The following table summarizes the basic and diluted earnings per unit calculations (in millions, except per unit amounts):


	Three Months Ended March 31,
	2016		2015
Numerator - Basic and Diluted:
Net income (loss) attributable to common unitholders	$	99.9	$	(19.1	)

Allocation of net income (loss) among partner interests:
Net income (loss) allocated to Class A common unitholders	$	50.0	$	(8.2	)
Net income (loss) allocated to Partnership exchangeable unitholders		49.9		(10.9	)

Net income (loss) attributable to common unitholders	$	99.9	$	(19.1	)

Denominator - Basic and Diluted partnership units:
Weighted average Class A common units		202.0		202.0
Weighted average Partnership exchangeable units		229.8		265.0

Total weighted average basic and diluted units outstanding		431.8		467.0

Earnings (loss) per unit - basic:
Class A common units	$	0.25	$	(0.04	)
Partnership exchangeable units	$	0.22	$	(0.04	)
Earnings (loss) per unit - diluted:
Class A common units	$	0.25	$	(0.04	)
Partnership exchangeable units	$	0.22	$	(0.04	)