Net Income Per Common Unit

Basic net income per common unit is computed by dividing net income, after considering income attributable to non-controlling interest, preferred unitholders and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income per common unit includes the effect of NRP's Preferred Units and Warrants, if the inclusion of these items is dilutive.

The dilutive effect of the Preferred Units is calculated using the if-converted method. Under the if-converted method, the Preferred Units are assumed to be converted at the beginning of the period, and the resulting common units are included in the denominator of the diluted net income per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the Preferred Units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation.

The dilutive effect of the Warrants is calculated using the treasury stock method, which assumes that the proceeds from the exercise of these instruments are used to purchase common units at the average market price for the period. The calculation of the dilutive effect of the Warrants for the three months ended March 31, 2018 includes the net settlement of Warrants to purchase 1.75 million common units with a strike price of $22.81 but did not include the net settlement of Warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive. The calculation of the dilutive effect of the warrants for the three months ended March 31, 2019, includes both the net settlement of warrants to purchase 1.75 million common units at a strike price of $22.81 and the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00.

The following table reconciles the numerator and denominator of the basic and diluted net income per common unit computations and calculates basic and diluted net income per common unit:



	Three Months Ended March 31,
(In thousands, except per unit data)	2019			2018
Allocation of net income
Net income from continuing operations	$	35,765		$	26,286
Less: income attributable to preferred unitholders	(7,500		)	(7,500		)
Net income from continuing operations attributable to common unitholders and general partner	$	28,265		$	18,786
Less: net income from continuing operations attributable to the general partner	(565		)	(376		)
Net income from continuing operations attributable to common unitholders	$	27,700		$	18,410

Net loss from discontinued operations	$	(46	)	$	(1,948	)
Less: net loss from discontinued operations attributable to the general partner	1			39
Net loss from discontinued operations attributable to common unitholders	$	(45	)	$	(1,909	)

Net income	$	35,719		$	24,338
Less: income attributable to preferred unitholders	(7,500		)	(7,500		)
Net income attributable to common unitholders and general partner	$	28,219		$	16,838
Less: net income attributable to the general partner	(564		)	(337		)
Net income attributable to common unitholders	$	27,655		$	16,501

Basic net income (loss) per common unit
Weighted average common units—basic	12,255			12,238
Basic net income from continuing operations per common unit	$	2.26		$	1.50
Basic net loss from discontinued operations per common unit	$	—		$	(0.16	)
Basic net income per common unit	$	2.26		$	1.35



	Three Months Ended March 31,
(In thousands, except per unit data)	2019			2018
Diluted income per common unit
Weighted average common units—basic	12,255			12,238
Plus: dilutive effect of Warrants	1,096			424
Plus: dilutive effect of Preferred Units	6,664			9,463
Weighted average common units—diluted	20,015			22,125

Net income from continuing operations	$	35,765		$	26,286
Less: diluted net income from continuing operations attributable to the general partner	(715		)	(526		)
Diluted net income from continuing operations attributable to common unitholders	$	35,050		$	25,760

Diluted net loss from discontinued operations attributable to common unitholders	$	(45	)	$	(1,909	)

Net income	$	35,719		$	24,338
Less: diluted net income attributable to the general partner	(714		)	(487		)
Diluted net income attributable to common unitholders	$	35,005		$	23,851

Diluted net income from continuing operations per common unit	$	1.75		$	1.16
Diluted net loss from discontinued operations per common unit	$	—		$	(0.09	)
Diluted net income per common unit	$	1.75		$	1.08