Note 4. Earnings (Loss) Per Unit

Partnership uses the two-class method in the computation of earnings per unit. Pursuant to the terms of the partnership agreement, RBI, as the holder of Partnership’s Class A common units (“Class A common units”) is entitled to receive distributions from Partnership in an amount per Class A common unit equal to the aggregate dividends payable by RBI to holders of RBI common shares, and the holders of Partnership’s Class B exchangeable limited partnership units (“Partnership exchangeable units”) are entitled to receive distributions from Partnership in an amount per Partnership exchangeable unit equal to the dividends payable by RBI on each RBI common share. Partnership’s net income available to common unitholders is allocated between the Class A common units and Partnership exchangeable units on a fully-distributed basis and reflects residual net income after noncontrolling interests and Partnership preferred unit distributions. Basic and diluted earnings per Class A common unit is determined by dividing net income allocated to Class A common unitholders by the weighted average number of Class A common units outstanding for the period. Basic and diluted earnings per Partnership exchangeable unit is determined by dividing net income allocated to the Partnership exchangeable units by the weighted average number of Partnership exchangeable units outstanding during the period.

The holders of Partnership exchangeable units each have the right to require Partnership to exchange all or any portion of such holder’s Partnership exchangeable units on a one-for-one basis for RBI common shares, subject to RBI’s right as the general partner of Partnership, at RBI’s sole discretion, to deliver a cash payment in lieu of RBI common shares. The allocation of net income attributable to common unitholders between Class A common units and Partnership exchangeable units is affected by the exchange of Partnership exchangeable units.

Since all stock options were issued by RBI, there are no dilutive securities for Partnership as the exercise of stock options will not affect the number of Class A common units or Partnership exchangeable units outstanding. However, the issuance of shares by RBI in future periods will affect the allocation of net income attributable to common unitholders between Class A common units and Partnership exchangeable units.

The following table summarizes the basic and diluted earnings per unit calculations (in millions, except per unit amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Allocation of net income among partner interests:
Net income allocated to Class A common unitholders	$	86.3	$	49.6	$	227.2	$	52.2
Net income allocated to Partnership exchangeable unitholders		83.8		64.9		222.0		68.4

Net income attributable to common unitholders	$	170.1	$	114.5	$	449.2	$	120.6

Basic and diluted partnership units:
Weighted average Class A common units		202.0		202.0		202.0		202.0
Weighted average Partnership exchangeable units		227.1		265.0		228.0		265.0

Total weighted average basic and diluted units outstanding		429.1		467.0		430.0		467.0

Earnings per unit - basic and diluted:
Class A common units	$	0.43	$	0.25	$	1.12	$	0.26
Partnership exchangeable units	$	0.37	$	0.25	$	0.97	$	0.26