Net Income Per Unit

9 Months Ended

Sep. 30, 2019

We use the two-class method when calculating the net income per unit applicable to limited partners because we have more than one participating class of securities. Our participating securities consist of common units, general partner units and IDRs. The two-class method is based on the weighted-average number of common units outstanding during the period. Basic net income per unit applicable to limited partners is computed by dividing limited partners’ interest in net income, after deducting our general partner’s 2% interest and IDRs, by the weighted-average number of outstanding common units. Our net income is allocated to our general partner and limited partners in accordance with their respective partnership percentages after giving effect to priority income allocations for IDRs, which are held by our general partner pursuant to our Partnership Agreement. The IDRs are paid following the close of each quarter.

Earnings in excess of distributions are allocated to our general partner and 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.

Diluted net income per unit applicable to common limited partners includes the effects of potentially dilutive units on our common units. As of September 30, 2019, the only potentially dilutive units outstanding consist of unvested phantom units.

Our distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below represents total cash distributions applicable to the period in which the distributions are earned. The expected date of distribution for the distributions earned during the period ended September 30, 2019 is November 12, 2019. The calculation of net income per unit is as follows (dollars in thousands, except units and per unit amounts):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019			2018
Net income attributable to partners	$	30,530	$	23,326		$	75,112		$	68,903
Less: General partner's distribution (including IDRs) ⁽¹⁾	8,892		6,688			24,475			18,598
Less: Limited partners' distribution	21,487		19,272			62,256			56,343
Earnings in excess of (less than) distributions	$	151	$	(2,634	)	$	(11,619	)	$	(6,038	)

General partner's earnings:
Distributions (including IDRs) ⁽¹⁾	$	8,892	$	6,688		$	24,475		$	18,598
Earnings in excess of (less than) distributions	3		(52		)	(231		)	(120		)
Total general partner's earnings	$	8,895	$	6,636		$	24,244		$	18,478

Limited partners' earnings on common units:
Distributions	$	21,487	$	19,272		$	62,256		$	56,343
Earnings in excess of (less than) distributions	148		(2,582		)	(11,388		)	(5,918		)
Total limited partners' earnings on common units	$	21,635	$	16,690		$	50,868		$	50,425

Weighted average limited partner units outstanding:
Common units - basic	24,417,285		24,395,183			24,411,308			24,387,995
Common units - diluted	24,420,582		24,401,908			24,417,466			24,395,880

Net income per limited partner unit:
Common units - basic	$	0.89	$	0.68		$	2.08		$	2.07
Common units - diluted ⁽²⁾	$	0.89	$	0.68		$	2.08		$	2.07

⁽¹⁾General partner distributions (including IDRs) consist of the 2.0% general partner interest and IDRs, which represent the right of the general partner to receive increasing percentages of quarterly distributions of available cash from operating surplus in excess of 0.43125 per unit per quarter. See Note 8 for further discussion related to IDRs.

⁽²⁾ There were no outstanding common units excluded from the diluted earnings per unit calculation for the three and nine months ended September 30, 2019 and 2018.