Net Income Per Limited Partner Unit

12 Months Ended

Dec. 31, 2019

Note 20. NET INCOME PER LIMITED PARTNER UNIT

Under the Partnership Agreement, the holders of our IDRs had an interest in distributions from us that are increasing percentages starting at 15% of quarterly distributions out of the operating surplus (as defined in our Partnership Agreement) in excess of $0.5031 per limited partner unit.

In addition to the common units, we have identified the IDRs as participating securities and compute income per unit using the two-class method under which any excess of distributions declared over net income shall be allocated to the partners based on their respective sharing of income as specified in the Partnership Agreement. Net income per unit applicable to limited partners is computed by dividing the limited partners’ interest in net income, after deducting the IDRs, by the weighted-average number of outstanding common units.

See Note 25 for disclosure regarding the elimination of the IDRs, which closed on February 6, 2020.

The following table provides a reconciliation of net income and weighted-average units used in computing basic and diluted net income per limited partner unit for the following periods (in thousands, except unit and per unit amounts):

	Years Ended December 31,
	2019			2018			2017
Numerator:
Distributions paid	$	72,427		$	75,599		$	83,786
Allocation of distributions in excess of net income		(54,884	)		(71,927	)		(64,965	)
Limited partners’ interest in net income - basic and diluted	$	17,543		$	3,672		$	18,821
Denominator:
Weighted average limited partnership units outstanding - basic		34,454,369			34,345,298			33,844,823
Adjustment for phantom units^(a)		30,432			—			10,522
Weighted average limited partnership units outstanding - diluted		34,484,801			34,345,298			33,855,345
Net income per limited partnership unit - basic and diluted	$	0.51		$	0.11		$	0.56

Distributions paid per common unit	$	2.1000		$	2.2025		$	2.4800
Distributions declared (with respect to each respective period) per common unit	$	2.1000		$	2.1000		$	2.4950

(a)	Excludes 19,075 potentially dilutive securities from the calculation of diluted earnings per common unit because to do so would be antidilutive for 2018.