Net Income Per Limited Partner Unit

12 Months Ended

Dec. 31, 2021

Note 21. NET INCOME 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.

Since February 6, 2020, our common units are the only participating securities. See “Equity Restructuring” below for additional information.

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,
	2021			2020		2019
Numerator:
Distributions paid	$	79,693		$	77,791	$	72,427
Allocation of distributions in excess of net income		(58,039	)		29,532		(54,884	)
Limited partners’ interest in net income - basic and diluted	$	21,654		$	107,323	$	17,543
Denominator:
Weighted average limited partnership units outstanding - basic		37,880,910			37,369,487		34,454,369
Adjustment for phantom units^(a)		3,214			—		30,432
Weighted average limited partnership units outstanding - diluted		37,884,124			37,369,487		34,484,801
Net income per limited partnership unit - basic and diluted	$	0.57		$	2.87	$	0.51

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

(a)	Excludes 13,364 potentially dilutive securities from the calculation of diluted earnings per common unit because to do so would be antidilutive for 2020.

Distributions

Quarterly distribution activity to common unitholders for 2021 was as follows:

Quarter Ended

Record Date

Payment Date

Cash

Distribution

(per unit)

Cash

Distribution

(in thousands)

December 31, 2020

February 2, 2021

February 9, 2021

0.5250

19,912

March 31, 2021

May 4, 2021

May 11, 2021

0.5250

19,916

June 30, 2021

August 3, 2021

August 10, 2021

0.5250

19,924

September 30, 2021

November 3, 2021

November 10, 2021

0.5250

19,941

December 31, 2021

February 3, 2022

February 10, 2022

0.5250

19,942

The amount of any distribution is subject to the discretion of the Board, which may modify or revoke our cash distribution policy at any time. Our Partnership Agreement does not require us to pay any distributions. As such, there can be no assurance we will continue to pay distributions in the future.

Equity Restructuring

On January 15, 2020, the Partnership entered into an Equity Restructuring Agreement (the “Equity Restructuring Agreement”) with the General Partner and Dunne Manning CAP Holdings II LLC (“DM CAP Holdings”), a wholly owned subsidiary of DMP.

Pursuant to the Equity Restructuring Agreement, all of the outstanding IDRs of the Partnership, all of which were held by DM CAP Holdings, were cancelled and converted into 2,528,673 newly-issued common units representing limited partner interests in the Partnership based on a value of $45 million and calculated using the volume weighted average trading price of $17.80 per common unit for the 20-day period ended on January 8, 2020, five business days prior to the execution of the Equity Restructuring Agreement (the “20-day VWAP”).

This transaction closed on February 6, 2020, after the record date for the distribution payable on the Partnership’s common units with respect to the fourth quarter of 2019.

The terms of the Equity Restructuring Agreement were approved by the independent conflicts committee of the Board.