PARTNERS' EQUITY

6 Months Ended

Jun. 30, 2019

PARTNERS' EQUITY

PARTNERS' EQUITY

NOTE 8     PARTNERS’ EQUITY

ATM equity issuance program (ATM program)

During the six months ended June 30, 2019, no common units were issued under this program.

Class B units issued to TC Energy

The Class B units entitle TC Energy to an annual distribution based on 30 percent of GTN’s annual distributions as follows: (i) 100 percent of distributions above $20 million for the year ending December 31, 2019; (ii) 43.75 percent of distributions above $20 million for the year ending December 31, 2020; and (iii) 25 percent of distributions above $20 million thereafter (Class B Distribution). Additionally, the Class B Distribution will be further reduced by 35 percent, which is equivalent to the percentage by which distributions payable to the common units were reduced in 2018 (Class B Reduction). The Class B Reduction was implemented during the first quarter of 2018 following the Partnership’s common unit distribution reduction of 35 percent. The Class B Reduction will continue to apply to any particular calendar year until distributions payable in respect of common units for such calendar year equal or exceed $3.94 per common unit.

For the year ended December 31, 2019, the Class B units’ equity account will be increased by the Class B Distribution, less the Class B Reduction, until such amount is declared for distribution and paid in the first quarter of 2020. During the six months ended June 30, 2019, the Class B threshold was not exceeded.

For the year ended December 31, 2018, the Class B distribution was $13 million and was declared and paid in the first quarter of 2019.