Net Income Per Common Unit

6 Months Ended

Jun. 30, 2022

Basic net income per common unit is computed by dividing net income, after considering income attributable to 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, warrants, and unvested unit-based awards 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 calculation of diluted net income per common unit for the three months ended June 30, 2022 and 2021 and the six months ended June 30, 2022 includes the assumed conversion of the preferred units. The calculation of diluted net income per common unit for the six months ended June 30, 2021 does not include the assumed conversion of the preferred units because the impact would have been anti-dilutive.

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 diluted net income per common unit for the three and six months ended June 30, 2022 includes the net settlement of warrants to purchase 0.75 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 whereas the calculation of diluted net income per common unit for the three and six months ended June 30, 2021 does not include the net settlement of warrants to purchase 1.75 million common units at a strike price of $22.81 or 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 following tables reconcile 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:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands, except per unit data)	2022		2021		2022		2021
Allocation of net income











Net income	$	66,820	$	15,382	$	130,719	$	23,763

Less: income attributable to preferred unitholders	(7,500)		(7,842)		(15,000)		(15,569)
Net income attributable to common unitholders and the general partner	$	59,320	$	7,540	$	115,719	$	8,194
Less: net income attributable to the general partner	(1,186)		(151)		(2,314)		(164)
Net income attributable to common unitholders	$	58,134	$	7,389	$	113,405	$	8,030

Basic net income per common unit
Weighted average common units—basic	12,506		12,351		12,461		12,322


Basic net income per common unit	$	4.65	$	0.60	$	9.10	$	0.65



Diluted net income per common unit
Weighted average common units—basic	12,506		12,351		12,461		12,322
Plus: dilutive effect of preferred units	6,292		14,351		6,292		—
Plus: dilutive effect of warrants	937		—		734		—
Plus: dilutive effect of unvested unit-based awards	178		119		209		117
Weighted average common units—diluted	19,913		26,821		19,696		12,439









Net income	$	66,820	$	15,382	$	130,719	$	23,763
Less: income attributable to preferred unitholders	—		—		—		(15,569)
Diluted net income attributable to common unitholders and the general partner	$	66,820	$	15,382	$	130,719	$	8,194
Less: diluted net income attributable to the general partner	(1,336)		(308)		(2,614)		(164)
Diluted net income attributable to common unitholders	$	65,484	$	15,074	$	128,105	$	8,030



Diluted net income per common unit	$	3.29	$	0.56	$	6.50	$	0.65