Net Income Per Limited Partner Unit

6 Months Ended

Jun. 30, 2023

Note 13. 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 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 June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Numerator:
Distributions paid	$	19,925		$	19,904		$	39,843		$	39,800
Allocation of distributions in excess of net income		(6,004	)		(6,501	)		(27,502	)		(21,350	)
Limited partners’ interest in net income - basic and diluted	$	13,921		$	13,403		$	12,341		$	18,450
Denominator:
Weighted-average common units outstanding - basic		37,952,950			37,912,710			37,946,676			37,906,463
Adjustment for phantom and phantom performance units (a)		197,286			44,724			197,021			45,003
Weighted-average common units outstanding - diluted		38,150,236			37,957,434			38,143,697			37,951,466
Net income per common unit - basic	$	0.37		$	0.35		$	0.33		$	0.49
Net income per common unit - diluted	$	0.36		$	0.35		$	0.32		$	0.49

Distributions paid per common unit	$	0.5250		$	0.5250		$	1.0500		$	1.0500
Distributions declared (with respect to each respective period) per common unit	$	0.5250		$	0.5250		$	1.0500		$	1.0500

(a)

For the three and six months ended June 30, 2023, 1,151,099 potentially dilutive units related to the preferred membership interests were excluded from the calculation of diluted earnings per unit because including them would have been antidilutive. For the three and six months ended June 30, 2022, 1,076,769 and 553,257 potentially dilutive units related to the preferred membership interests were excluded from the calculation of diluted earnings per unit because including them would have been antidilutive.

Distributions

Distribution activity for 2023 is as follows:


Quarter Ended	Record Date	Payment Date	Cash Distribution (per unit)		Cash Distribution (in thousands)
December 31, 2022	February 3, 2023	February 10, 2023	$	0.5250	$	19,918
March 31, 2023	May 3, 2023	May 10, 2023	$	0.5250	$	19,925
June 30, 2023	August 4, 2023	August 11, 2023	$	0.5250	$	19,935

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.