NET INCOME PER COMMON UNIT

3 Months Ended

Mar. 31, 2017

NOTE 7 NET INCOME PER COMMON UNIT

Net income per common unit is computed by dividing net income attributable to controlling interests, after deduction of amounts attributable to the General Partner and Class B units by the weighted average number of common units outstanding.

The amounts allocable to the General Partner equals an amount based upon the General Partner’s effective two percent general partner interest, plus an amount equal to incentive distributions. Incentive distributions are paid to the General Partner if quarterly cash distributions on the common units exceed levels specified in the Partnership Agreement.

The amount allocable to the Class B units in 2017 equals 30 percent of GTN’s distributable cash flow during the year ended December 31, 2017 less $20 million (December 31, 2016 —$20 million). During the three months ended March 31, 2017 and 2016, no amounts were allocated to the Class B units as the annual threshold of $20 million has not been exceeded.

Net income per common unit was determined as follows:

(unaudited)	Three months ended March 31,
(millions of dollars, except per common unit amounts)	2017			2016

Net income attributable to controlling interests	75			73
Net income attributable to the General Partner	(1		)	(1		)
Incentive distributions attributable to the General Partner (a)	(2		)	(1		)

Net income attributable to common units	72			71

Weighted average common units outstanding (millions) — basic and diluted (b)	68.3			64.4
Net income per common unit — basic and diluted	$	1.05		$	1.10

(a)

Under the terms of the Partnership Agreement, for any quarterly period, the participation of the incentive distribution rights (IDRs) is limited to the available cash distributions declared. Accordingly, incentive distributions allocated to the General Partner are based on the Partnership’s available cash during the current reporting period, but declared and paid in the subsequent reporting period.

(b)

Includes the common units subject to rescission. These units are treated as outstanding for financial reporting purposes. Refer to Note 6.