Net Income per Unit

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 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 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 as there were no potentially dilutive subordinated units outstanding.

A reconciliation of the numerators and denominators of the basic and diluted per unit computations is as follows:



	Year Ended December 31, 2017			Year Ended December 31, 2016			Year Ended December 31, 2015
	(in millions, except units and per unit amounts)
Income from continuing operations	$	326		$	56		$	156
Less: Net income and comprehensive income attributable to noncontrolling interest	—			—			4
Less: Preacquisition income allocated to general partner	—			—			75
Income from continuing operations attributable to partners	326			56			77
Less:
Series A Preferred units	23			—			—
Incentive distribution rights	85			81			30
Distributions on nonvested phantom unit awards	6			5			2
Limited partners' interest in net income (loss) from continuing operations	$	212		$	(30	)	$	45

Income (loss) from discontinued operations	$	(177	)	$	(462	)	$	38
Less: Preacquisition income allocated to general partner	—			—			28
Limited partners' interest in net income (loss) from discontinued operations	$	(177	)	$	(462	)	$	10
Weighted average limited partner units outstanding:
Common - basic	99,270,120			93,575,530			40,253,913
Common - equivalents	458,234			28,305			21,738
Common - diluted	99,728,354			93,603,835			40,275,651
Subordinated - (basic and diluted)	—			—			10,010,333
Income (loss) from continuing operations per limited partner unit:
Common - basic	$	2.13		$	(0.32	)	$	0.91
Common - diluted	$	2.12		$	(0.32	)	$	0.91
Subordinated - basic and diluted (1)	$	—		$	—		$	1.17
Income (loss) from discontinued operations per limited partner unit:
Common - basic	$	(1.78	)	$	(4.94	)	$	0.20
Common - diluted	$	(1.78	)	$	(4.94	)	$	0.20
Subordinated - basic and diluted (1)	$	—		$	—		$	0.23

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(1)	The subordination period ended on November 30, 2015, at which time outstanding subordinated units were converted to common units. Distributions and the partners' interest in net income were allocated to the subordinated units through November 30, 2015.