NET EARNINGS PER UNIT
The calculation of net earnings per unit is as follows (in millions, except unit and per unit amounts): | | | | | | | | | | | | | | Years Ended December 31, | | 2015 | | 2014 | | 2013 | Net earnings | $ | 275 |
| | $ | 79 |
| | $ | 24 |
| Net earnings attributable to noncontrolling interest | (20 | ) | | (3 | ) | | — |
| Special allocation of net earnings (“Special Allocation”) (a) | — |
| | 7 |
| | — |
| Net earnings, excluding noncontrolling interest (b) | 255 |
| | 83 |
| | 24 |
| General partner’s distributions | (6 | ) | | (5 | ) | | (2 | ) | General partner’s IDRs (c) | (69 | ) | | (41 | ) | | (11 | ) | Limited partners’ distributions on common units | (259 | ) | | (157 | ) | | (71 | ) | Limited partner’s distributions on subordinated units (d) | — |
| | (14 | ) | | (32 | ) | Distributions greater than earnings | $ | (79 | ) | | $ | (134 | ) | | $ | (92 | ) | General partner’s earnings: | | | | | | Distributions | $ | 6 |
| | $ | 5 |
| | $ | 2 |
| General partners IDRs (c) | 69 |
| | 41 |
| | 11 |
| Allocation of distributions greater than earnings (b) | (18 | ) | | (26 | ) | | (57 | ) | Total general partner’s earnings (loss) | $ | 57 |
| | $ | 20 |
| | $ | (44 | ) | Limited partners’ earnings on common units: | | | | | | Distributions | $ | 259 |
| | $ | 157 |
| | $ | 71 |
| Special Allocation | — |
| | (7 | ) | | — |
| Allocation of distributions greater than earnings | (61 | ) | | (98 | ) | | (23 | ) | Total limited partners’ earnings on common units | $ | 198 |
| | $ | 52 |
| | $ | 48 |
| Limited partner’s earnings on subordinated units (d): | | | | | | Distributions | $ | — |
| | $ | 14 |
| | $ | 32 |
| Allocation of distributions greater than earnings | — |
| | (10 | ) | | (12 | ) | Total limited partner’s earnings on subordinated units | $ | — |
| | $ | 4 |
| | $ | 20 |
| Weighted average limited partner units outstanding: | | | | | | Common units - basic | 84.7 |
| | 54.2 |
| | 31.5 |
| Common unit equivalents | 0.1 |
| | — |
| | 0.1 |
| Common units - diluted | 84.8 |
| | 54.2 |
| | 31.6 |
| Subordinated units - basic and diluted (d) | — |
| | 5.6 |
| | 15.3 |
| Net earnings per limited partner unit: |
|
| | | | | Common - basic | $ | 2.33 |
| | $ | 0.96 |
| | $ | 1.48 |
| Common - diluted | $ | 2.33 |
| | $ | 0.96 |
| | $ | 1.47 |
| Subordinated - basic and diluted | $ | — |
| | $ | 0.62 |
| | $ | 1.35 |
|
________________ | | (a) | Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions fully allocated to the general partner and any special allocations. The adjustment reflects the special allocation to TLLP common unitholders for the premium paid in connection with the redemption of the senior notes during the year ended December 31, 2014. |
| | (b) | In April 2015, the FASB issued ASU 2015-06 concerning historical earnings per unit for master limited partnership drop down transactions. We have revised the historical allocation of general partner earnings to include the Predecessor losses TLLP recognized of $17 million, $23 million, and $56 million during the years ended December 31, 2015, 2014, and 2013. See Note 1 for additional information on the new guidance. |
| | (c) | IDRs entitle the general partner to receive increasing percentages, up to 50%, of quarterly distributions in excess of $0.388125 per unit per quarter. The amount above reflects earnings distributed to our general partner net of $10 million of IDRs for the year ended December 31, 2015, waved by TLGP in connection with the Rockies Natural Gas Business Acquisition. See Note 12 for further discussion related to IDRs. |
| | (d) | On May 16, 2014, the subordinated units were converted into common units on a one-for-one basis and thereafter participate on terms equal with all other common units in distributions of available cash. Distributions and the Partnership’s net earnings were allocated to the subordinated units through May 15, 2014. |
See Note 1 for the method and policies related to the calculation of net earnings per unit. Following payment of the cash distribution for the first quarter of 2014 and the attainment of necessary approvals, the requirements for the conversion of all subordinated units were satisfied under the partnership agreement. The Partnership’s net earnings was allocated to the general partner and the limited partners, including the holders of the subordinated units through May 15, 2014, in accordance with our partnership agreement. The conversion did not impact the amount of the cash distribution paid or the total number of the Partnership’s outstanding units representing limited partner interests. |