Quarterly report pursuant to Section 13 or 15(d)

Net Income per Common Unit

v3.20.1
Net Income per Common Unit
 3 Months Ended
Mar. 31, 2020
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 April 27, 2020, we declared a $0.64 distribution per common unit and subordinated unit and the related distribution to our general partner and IDR holders to be paid on May 15, 2020 to unitholders of record as of May 7, 2020 for the period from January 1, 2020 to March 31, 2020.

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 March 31, 2020
 
 
 
 
 
 
 
 
 
 
Net income
 
$
435

 
 
 
 
 
 
 
 
Declared distributions
 
336

 
223

 
87

 
6

 
20

Assumed allocation of undistributed net income (1)
 
$
99

 
70

 
27

 
2

 
—

Assumed allocation of net income
 
 
 
$
293

 
$
114

 
$
8

 
$
20

 
 
 
 
 
 
 
 
 
 
 
Weighted average units outstanding
 
 
 
348.6

 
135.4

 
 
 
 
Basic and diluted net income per unit
 
 
 
$
0.84

 
$
0.84

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2019
 
 
 
 
 
 
 
 
 
 
Net income
 
$
385

 
 
 
 
 
 
 
 
Declared distributions
 
310

 
210

 
81

 
6

 
13

Assumed allocation of undistributed net income (1)
 
$
75

 
52

 
21

 
2

 
—

Assumed allocation of net income
 
 
 
$
262

 
$
102

 
$
8

 
$
13

 
 
 
 
 
 
 
 
 
 
 
Weighted average units outstanding
 
 
 
348.6

 
135.4

 
 
 
 
Basic and diluted net income per unit
 
 
 
$
0.75

 
$
0.75

 
 
 
 

 
 
(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.