NET INCOME PER COMMON UNIT

3 Months Ended

Mar. 31, 2024

Basic and diluted net income per common unit is determined pursuant to the two-class method. Under this method, all earnings are allocated to our limited partners and participating securities based on their respective rights to receive distributions earned during the period. Participating securities include restricted units awarded under our long-term incentive plans. We compute basic net income per common unit by dividing net income attributable to our common limited partners by the weighted-average number of common units outstanding during the period. We compute diluted net income per common unit by dividing net income attributable to our common limited partners by the sum of (i) the weighted average number of common units outstanding during the period and (ii) the effect of dilutive potential common units outstanding during the period.

The Series D Preferred Units contained certain unitholder conversion and redemption features, and we used the if-converted method to calculate the dilutive effect of the conversion or redemption feature that would have been most advantageous to the Series D preferred unitholders. The effect of the assumed conversion or redemption of the Series D Preferred Units outstanding, prior to their redemption, was antidilutive for the three months ended March 31, 2023; therefore, we did not include such conversion in the computation of diluted net income per common unit.

The following table details the calculation of basic and diluted net income per common unit:


	Three Months Ended March 31,
	2024		2023
	(Thousands of Dollars, Except Unit and Per Unit Data)
Net income	$	42,742	$	105,936
Distributions to preferred limited partners	(23,266)		(32,733)
Distributions to common limited partners (a)	(50,621)		(44,396)
Distribution equivalent rights to restricted units	(684)		(672)
Distributions (in excess of) less than income	$	(31,829)	$	28,135

Distributions to common limited partners	$	50,621	$	44,396
Allocation of distributions (in excess of) less than income to common limited partners	(31,829)		27,396
Series D Preferred Unit accretion	—		(3,671)

Net income attributable to common units	$	18,792	$	68,121


Basic and diluted weighted-average common units outstanding	126,533,909		110,880,981



Basic and diluted net income per common unit	$	0.15	$	0.61

(a) Distributions to common limited partners were estimated using $0.40 per common unit for the quarter ended March 31, 2024.

NuStar Energy L.P. 10-Q