Net Income Per Limited Partner Unit

3 Months Ended

Mar. 31, 2022

Note 15. NET INCOME PER LIMITED PARTNER UNIT

We 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 by the weighted-average number of outstanding common units.

We applied the if-converted method to the preferred membership interests in accordance with Accounting Standards Update No. 2020-06 for purposes of computing diluted earnings per unit. The impact on diluted earnings per unit for the first quarter of 2022 was insignificant given the timing of the issuance of the preferred membership interests.

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):


	Three Months Ended March 31,
	2022			2021
Numerator:
Distributions paid	$	19,942		$	19,912
Allocation of distributions in excess of net income		(14,895	)		(23,879	)
Limited partners’ interest in net income - basic and diluted	$	5,047		$	(3,967	)
Denominator:
Weighted-average common units outstanding - basic		37,900,146			37,869,259
Adjustment for phantom and phantom performance units		35,893			—
Adjustment for preferred membership interests		23,402			—
Weighted-average common units outstanding - diluted		37,959,441			37,869,259
Net income per common unit - basic and diluted	$	0.13		$	(0.10	)

Distributions paid per common unit	$	0.5250		$	0.5250
Distributions declared (with respect to each respective period) per common unit	$	0.5250		$	0.5250

Distributions

Distribution activity for 2022 is as follows:

Quarter Ended

Record Date

Payment Date

Cash
Distribution
(per unit)

Cash
Distribution
(in thousands)

December 31, 2021

February 3, 2022

February 10, 2022

0.5250

19,942

March 31, 2022

May 3, 2022

May 11, 2022

0.5250

19,951

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.