Quarterly report pursuant to Section 13 or 15(d)

Net Income per Common Unit

v3.21.2
Net Income per Common Unit
 6 Months Ended
Jun. 30, 2021
Earnings Per Share [Abstract]  
Net Income per Common Unit NET INCOME PER COMMON UNIT
 
Net income per common unit for a given period is based on the distributions that will be made to the unitholders with respect to the period plus an allocation of undistributed net income based on provisions of the partnership agreement, divided by the weighted average number of common units outstanding. Distributions paid by us are presented on the Consolidated Statements of Partners’ Equity. On July 27, 2021, we declared a $0.665 distribution per common unit and the related distribution to our general partner and IDR holders that will be paid on August 13, 2021 to unitholders of record as of August 6, 2021 for the period from April 1, 2021 to June 30, 2021.

The two-class method dictates that net income for a period be reduced by the amount of available cash that will be distributed with respect to that period and that any residual amount representing undistributed net income to be allocated to common unitholders and other participating unitholders to the extent that each unit may share in net income as if all of the net income for the period had been distributed in accordance with the partnership agreement. Undistributed income is allocated to participating securities based on the distribution waterfall for available cash specified in the partnership agreement. Undistributed losses (including those resulting from distributions in excess of net income) are allocated to common units and other participating securities on a pro rata basis based on provisions of the partnership agreement. Distributions are treated as distributed earnings in the computation of earnings per common unit even though cash distributions are not necessarily derived from current or prior period earnings.
The following table provides a reconciliation of net income and the allocation of net income to the common units, the subordinated units, the general partner units and IDRs for purposes of computing basic and diluted net income per unit (in millions, except per unit data).
  Limited Partner Units
  Total Common Units Subordinated Units General Partner Units IDR
Three Months Ended June 30, 2021
Net income $ 395 
Declared distributions 361  322  —  7  32 
Assumed allocation of undistributed net income (1) $ 34  33  —  1  — 
Assumed allocation of net income $ 355  $ —  $ 8  $ 32 
Weighted average units outstanding 484.0  — 
Basic and diluted net income per unit $ 0.73  $ — 
Three Months Ended June 30, 2020
Net income $ 406 
Declared distributions 341  225  87  7  22 
Assumed allocation of undistributed net income (1) $ 65  46  18  1  — 
Assumed allocation of net income $ 271  $ 105  $ 8  $ 22 
Weighted average units outstanding 348.6  135.4 
Basic and diluted net income per unit $ 0.78  $ 0.78 
Six Months Ended June 30, 2021
Net income $ 742 
Declared distributions 716  641  —  14  61 
Assumed allocation of undistributed net income (1) $ 26  25  —  1  — 
Assumed allocation of net income $ 666  $ —  $ 15  $ 61 
Weighted average units outstanding 484.0  — 
Basic and diluted net income per unit $ 1.38  $ — 
Six Months Ended June 30, 2020
Net income $ 841 
Declared distributions 678  448  174  14  42 
Assumed allocation of undistributed net income (1) $ 163  115  45  3  — 
Assumed allocation of net income $ 563  $ 219  $ 17  $ 42 
Weighted average units outstanding 348.6  135.4 
Basic and diluted net income per unit $ 1.62  $ 1.62 
(1)Under our partnership agreement, the IDRs participate in net income only to the extent of the amount of cash distributions actually declared, thereby excluding the IDRs from participating in undistributed net income.