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Net Income per Unit
 12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Net Income per Unit Net Income per Unit
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 and preferred units.
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 common limited partners is computed by dividing limited partners’ interest in net income allocated to participating securities by the weighted-average number of outstanding common units. Undistributed earnings are allocated to our preferred unitholders and limited partners based on their respective ownership interests. During a period of net loss or negative undistributed earnings, the two-class method is not applicable.
Diluted net income per unit applicable to common limited partners includes the effects of potentially dilutive units on our common units. As of December 31, 2024, 2023 and 2022, the only potentially dilutive units outstanding consist of unvested phantom units.
The calculation of net income per unit is as follows (in thousands, except unit and per unit amounts):
Year Ended December 31,
202420232022
Net income$142,685 $126,236 $159,052 
Less:
Limited partners' distribution declared on common units204,407 179,774 170,877 
Distributions declared on preferred units768 — — 
Undistributed net loss$(62,490)$(53,538)$(11,825)
Limited partners' earnings on common units:
Distributions$204,407 $179,774 $170,877 
Allocation of undistributed net loss(62,490)(53,538)(11,825)
Total limited partners' earnings on common units$141,917 $126,236 $159,052 
Weighted average limited partner units outstanding, basic47,452,138 43,583,938 43,487,910 
Dilutive effect of unvested phantom units27,110 27,376 23,740 
Weighted average limited partner units outstanding, diluted47,479,248 43,611,314 43,511,650 
Net income per limited partner unit:
Basic$2.99 $2.90 $3.66 
Diluted (1)
$2.99 $2.89 $3.66 
(1) There were 18,945, 41,790 and 7,511 anti-dilutive common unit equivalents excluded from the diluted earnings per unit calculation during the years ended December 31, 2024, 2023 and 2022, respectively.