Earnings per Share/Limited Partner Unit

12 Months Ended

Dec. 31, 2021

Note 11. Earnings per Share/Limited Partner Unit

Earnings per limited partner unit prior to the Restructuring on December 16, 2019, were computed by dividing the respective limited partners’ interest in net income attributable to Hess Midstream Partners LP by the weighted average number of common and subordinated units outstanding. Because we had more than one class of participating securities, we used the two‑class method when calculating earnings per limited partner unit. The classes of participating securities included common units, subordinated units, general partner interest and incentive distribution rights. Our net income includes earnings related to businesses acquired through transactions between entities under common control for periods prior to their acquisition by us. We have allocated these pre-acquisition earnings to Net income attributable to net parent investment.

Subsequent to the Restructuring, we calculate earnings per Class A Share as we do not have any other participating securities. Substantially all of income tax expense is attributed to earnings of Class A Shares reflective of our organizational structure. Class B Units of the Partnership together with the equal number of Class B Shares of the Company are convertible to Class A Shares of the Company on a one-for-one basis. In addition, our restricted equity-based awards may have a dilutive effect on our earnings per share. Diluted earnings per Class A Share are calculated using the “treasury stock method” or “if-converted method”, whichever is more dilutive.


	Year Ended December 31,
(in millions, except per share amounts)	2021		2020		2019
Net income		617.8		484.9		317.7
Less: Net income attributable to net parent investment		-		-		(55.0	)
Less: Net income attributable to noncontrolling interest		571.4		460.9		302.6
Net income attributable to Hess Midstream LP		46.4		24.0		70.1
Less: General partners' interest in net income prior to the Restructuring		-		-		3.4
Limited partners' interest in net income	$	46.4	$	24.0	$	66.7
Net income attributable to Hess Midstream LP per Class A share/limited partner unit*:
Basic:	$	1.81	$	1.33	$	1.21
Diluted:	$	1.76	$	1.31	$	1.20
Weighted average Class A shares outstanding:
Basic:		25.6		18.0		18.0
Diluted:		25.7		18.1		18.0
Weighted average limited partner units outstanding prior to the Restructuring:
Basic:
Common						27.3
Subordinated						27.3
Diluted:
Common						27.5
Subordinated						27.3

*Net income attributable to Hess Midstream LP per Class A Share/limited partner unit for 2019 was calculated by combining net income per limited partner unit (common and subordinated) for the period prior to the Restructuring on December 16, 2019, and net income per Class A Share for the period subsequent to the Restructuring.

For the year ended December 31, 2021, the weighted average number of Class A Shares outstanding included 103,672 dilutive restricted shares (2020: 88,013 shares). For the year ended December 31, 2019, the weighted average number of common units outstanding included 135,712 dilutive restricted units.

In computing the dilutive effect, if any, of an exchange of Class B Units of the Partnership together with the equal number of Class B Shares of the Company to Class A Shares of the Company, net income attributable to Class A shareholders is adjusted, including for additional income tax expense, due to elimination of the noncontrolling interest associated with Class B Units of the Partnership. For the year ended December 31, 2021, the “if-converted” method was more dilutive. A reconciliation of the numerator and the denominator of the diluted earnings per Class A Share calculation under the “if-converted” method for the year ended December 31, 2021, is presented below:


	Year Ended December 31,
	2021
(in millions, except per share data)
Diluted net income per share
Numerator:
Net income attributable to Hess Midstream LP	$	46.4
Effect of exchange of Class B Units of the Partnership and the equal number of Class B Shares of the Company to Class A Shares of the Company		571.4
Effect of income tax expense on additional income attributable to Hess Midstream LP(1)		(139.4	)
Diluted net income attributable to Hess Midstream LP	$	478.4
Denominator:
Basic weighted average Class A Shares outstanding		25.6
Effect of dilutive securities:
Weighted average Class B Units/Shares		246.7
Restricted equity-based awards		0.1
Diluted weighted average shares outstanding		272.4
Diluted net income attributable to Hess Midstream LP per Class A Share	$	1.76

(1) Income tax effect is calculated assuming 24.39% blended U.S. federal and state income tax rate.