Net Income Per Limited Partner Unit

9 Months Ended

Sep. 30, 2018

Note 11. Net Income Per Limited Partner Unit

Our net income is attributed to limited partners, in accordance with their respective ownership percentages, and when applicable, giving effect to incentive distributions paid to Noble, the holder of our IDRs. The Common and Subordinated unitholders represent an aggregate 100% limited partner interest in us. Pursuant to our partnership agreement, to the extent that the quarterly distributions exceed certain target levels, Noble, as the holder of our IDRs, is entitled to receive certain incentive distributions that will result in more net income proportionately being allocated to Noble than to the holders of Common Units and Subordinated Units.

Because we have more than one class of participating securities, we use the two-class method when calculating the net income per unit applicable to limited partners. The classes of participating securities include Common Units, Subordinated Units and IDRs.

Basic and diluted net income per limited partner Common Unit and Subordinated Unit is computed by dividing the respective limited partners’ interest in net income for the period by the weighted-average number of Common Units and Subordinated Units outstanding for the period. Diluted net income per limited partner Common Unit and Subordinated Unit reflects the potential dilution that could occur if agreements to issue Common Units, such as awards under the LTIP, were 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 Common and Subordinated Unit calculation, the impact is reflected by applying the treasury stock method.

Our calculation of net income per limited partner Common and Subordinated Unit is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per unit amounts)	2018		2017		2018		2017
Net Income Attributable to Noble Midstream Partners LP	$	44,617	$	41,670	$	120,562	$	97,604
Less: Net Income Attributable to Incentive Distribution Rights	1,462		223		3,415		315
Net Income Attributable to Limited Partners	$	43,155	$	41,447	$	117,147	$	97,289

Net Income Attributable to Common Units	$	25,825	$	23,084	$	70,093	$	51,117
Net Income Attributable to Subordinated Units	17,330		18,363		47,054		46,172
Net Income Attributable to Limited Partners	$	43,155	$	41,447	$	117,147	$	97,289

Net Income Attributable to Limited Partners Per Limited Partner Common and Subordinated Unit
Basic	$	1.09	$	1.15	$	2.96	$	2.93
Diluted	$	1.09	$	1.15	$	2.96	$	2.92

Weighted Average Limited Partner Units Outstanding — Basic
Common Units	23,688		19,990		23,686		17,354
Subordinated Units	15,903		15,903		15,903		15,903

Weighted Average Limited Partner Units Outstanding — Diluted
Common Units	23,704		20,005		23,701		17,365
Subordinated Units	15,903		15,903		15,903		15,903

Antidilutive Restricted Units	21		4		22		6