Net Income per Unit

9 Months Ended

Sep. 30, 2016

Net income per unit applicable to limited partners (including subordinated unitholders prior to the conversion of our subordinated units on November 30, 2015) is computed by dividing limited partners’ interest in net income by the weighted-average number of outstanding common and subordinated units. Our net income is allocated to the limited partners in accordance with their respective partnership percentages, after giving effect to any priority income allocations for incentive distributions and distributions on employee unit awards. Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit.

In addition to the common and subordinated units, we identify the IDRs as participating securities and use the two-class method when calculating net income per unit applicable to limited partners, which is based on the weighted-average number of common units outstanding during the period. Diluted net income per unit includes the effects of potentially dilutive units on our common units, consisting of unvested phantom units. Basic and diluted net income per unit applicable to subordinated limited partners are the same because there are no potentially dilutive subordinated units outstanding.

A reconciliation of the numerators and denominators of the basic and diluted per unit computations is as follows (in thousands, except units and per unit amounts):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2016		2015		2016		2015
Net income and comprehensive income	$	44,551	$	34,711	$	178,697	$	177,551
Less: Net income and comprehensive income attributable to noncontrolling interest	—		852		—		2,545
Less: Preacquisition income allocated to general partner	—		6,315		—		117,728
Net income and comprehensive income attributable to partners	44,551		27,544		178,697		57,278
Less: Incentive distribution rights	20,396		8,441		60,311		13,252
Less: Distributions on nonvested phantom unit awards	906		349		2,760		971
Limited partners’ interest in net income	$	23,249	$	18,754	$	115,626	$	43,055
Weighted average limited partner units outstanding:
Common - basic	95,339,786		43,772,026		92,720,563		30,994,016
Common - equivalents	74,658		116		74,658		116
Common - diluted	95,414,444		43,772,142		92,795,221		30,994,132

Subordinated - basic and diluted	—		10,939,436		—		10,939,436
Net income per limited partner unit:
Common - basic and diluted	$	0.24	$	0.30	$	1.25	$	0.96
Subordinated - basic and diluted	$	—	$	0.52	$	—	$	1.21