4. NET INCOME PER LIMITED PARTNER UNIT

We allocate our net income among our Series 1 Preferred Units, or Preferred Units, our General Partner interest, and our limited partner units using the two-class method. Under the two-class method, we allocate our net income attributable to our General Partner and our limited partners according to the distribution formula for available cash as set forth in our partnership agreement. We allocate our net income to our limited partners owning Class D units and Class E units equal to the distributions that they receive. We also allocate any earnings in excess of distributions to our General Partner and limited partners owning Class A and B common units and i-units utilizing the distribution formula for available cash specified in our partnership agreement. We allocate any distributions in excess of earnings for the period to our General Partner and limited partners owning Class A and B common units and i-units based on their sharing of losses of 2% and 98%, respectively, as set forth in our partnership agreement. We allocate distributions to the General Partner and limited partners based upon the distribution rates and percentages set forth in the following table:

	Portion of Quarterly	Percentage Distributed to			Percentage Distributed to
Distribution Targets	Distribution Per Unit	General Partner and IDUs⁽¹⁾			Limited partners
Minimum Quarterly Distribution	Up to $0.5435		2	%		98	%
First Target Distribution	> $0.5435		25	%		75	%

⁽¹⁾

For distributions in excess of the Minimum Quarterly Distribution, this percentage includes both the General Partner’s distributions of 2% and the distribution to the Incentive Distribution Unit holder, a wholly-owned subsidiary of our General Partner.

Equity Restructuring Transaction

On July 1, 2014, we entered into an equity restructuring transaction, or Equity Restructuring, with the General Partner in which the General Partner irrevocably waived its right to receive cash distributions and allocations of items of income, gain, deduction, and loss in excess of 2% in respect of its general partner interest in the incentive distribution rights, or Previous IDRs, in exchange for the issuance to a wholly-owned subsidiary of the General Partner of (i) 66.1 million units of a new class of limited partner interests designated as Class D units, and (ii) 1,000 units of a new class of limited partner interests designated as Incentive Distribution Units, or IDUs. For more information, refer to Note 20. Partners’ Capital. Prior to this transaction, we allocated distributions to the General Partner and limited partners as follows:

	Portion of Quarterly	Percentage Distributed to			Percentage Distributed to
Distribution Targets	Distribution Per Unit	General Partner			Limited partners
Minimum Quarterly Distribution	Up to $0.295		2	%		98	%
First Target Distribution	> $0.295 to $0.35		15	%		85	%
Second Target Distribution	> $0.35 to $0.495		25	%		75	%
Over Second Target Distribution	In excess of $0.495		50	%		50	%

Alberta Clipper Drop Down

On January 2, 2015, we completed a transaction to acquire from our General Partner the remaining 66.7% interest in the U.S. portion of the Alberta Clipper Pipeline. The consideration consisted of issuance to the General Partner of 18,114,975 units of a new class of limited partner interests designated as Class E units. For more information, refer to Note 20. Partners’ Capital.

We determined basic and diluted net income (loss) per common unit and i-unit as follows:

	For the year ended December 31,
	2016		2015		2014

	(in millions, except per unit amounts)
Net income (loss)	$	(41.3)	$	454.3	$	740.0
Less: Net income attributable to:
Noncontrolling interest		26.4		221.1		263.3
Series 1 preferred unit distributions		90.0		90.0		90.0
Accretion of discount on Series 1 preferred units		4.7		11.2		14.9
Net income (loss) attributable to general and limited partner interests in Enbridge Energy Partners, L.P.		(162.4)		132.0		371.8
Distributions:
Incentive distributions		(21.0)		(18.9)		(39.1)
Distributed earnings attributed to our General Partner		(21.0)		(20.5)		(17.3)
Distributed earnings attributed to Class D and Class E units		(196.4)		(195.3)		(107.5)
Total distributed earnings to our General Partner, Class D and Class E units and IDUs		(238.4)		(234.7)		(163.9)
Total distributed earnings attributed to our common units and i-units		(813.8)		(791.4)		(731.0)
Total distributed earnings		(1,052.2)		(1,026.1)		(894.9)
Overdistributed earnings	$	(1,214.6)	$	(894.1)	$	(523.1)
Weighted average common units and i-units outstanding		348.0		339.1		328.2

Basic and diluted earnings per unit:
Distributed earnings per common unit and i-unit⁽¹⁾	$	2.34	$	2.33	$	2.23
Overdistributed earnings per common unit and i-unit⁽²⁾		(3.42)		(2.58)		(1.56)
Net income (loss) per common unit and i-unit (basic and diluted)⁽³⁾	$	(1.08)	$	(0.25)	$	0.67

	⁽¹⁾	Represents the total distributed earnings to common units and i-units divided by the weighted average number of common units and i-units outstanding for the period.
	⁽²⁾	Represents the common units’ and i-unit’s share (98%) of distributions in excess of earnings divided by the weighted average number of common units and i-units outstanding for the period and overdistributed earnings allocated to the common units and i-units based on the distribution waterfall that is outlined in our partnership agreement.
	⁽³⁾	For the years ended December 31, 2016, 2015 and 2014, 43,201,310 anti-dilutive Preferred Units and 66,100,000 anti-dilutive Class D units were excluded from the if-converted method of calculating diluted earnings per unit. For the years ended December 31, 2016 and 2015, 18,114,975 anti-dilutive Class E units were excluded from the if-converted method of calculating diluted earnings per unit.