NET (LOSS) INCOME PER LIMITED PARTNER UNIT AND DISTRIBUTIONS | 9 Months Ended |
Sep. 30, 2014 |
Earnings Per Share [Abstract] | ' |
NET LOSS PER LIMITED PARTNER UNIT AND DISTRIBUTIONS | ' |
NET INCOME/LOSS PER LIMITED PARTNER UNIT AND DISTRIBUTIONS |
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Net Income/Loss Per Limited Partner Unit |
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The following is a reconciliation of the net loss attributable to our limited partners and our limited partner units and the basic and diluted earnings per unit calculations for the three and nine months ended September 30, 2014 and 2013 (in thousands, except unit and per unit data): |
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| | Three Months Ended September 30, | | Nine Months Ended September 30, | | | | | | |
| | 2014 | | 2013 | | 2014 | | 2013 | | | | | | |
Net loss | | $ | (24,778 | ) | | $ | (4,069 | ) | | $ | (29,026 | ) | | $ | (16,645 | ) | | | | | | |
Series A Preferred Unit fair value adjustment (1) | | 424 | | | 4,667 | | | (4,596 | ) | | — | | | | | | | |
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Series A Preferred Unit in-kind distribution | | $ | — | | | $ | (696 | ) | | $ | (534 | ) | | $ | (1,255 | ) | | | | | | |
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General partner Unit in-kind distribution | | $ | (112 | ) | | $ | — | | | $ | (123 | ) | | $ | — | | | | | | | |
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Net loss attributable to partners | | $ | (24,466 | ) | | $ | (98 | ) | | $ | (34,279 | ) | | $ | (17,900 | ) | | | | | | |
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General partner's interest (2) | | $ | (523 | ) | | $ | (81 | ) | | $ | (622 | ) | | $ | (334 | ) | | | | | | |
Class B Convertible interest (2) | | (6,778 | ) | | — | | | (6,778 | ) | | — | | | | | | | |
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Limited partners' interest (2) | | | | | | | | | | | | | | |
Common | | $ | (11,156 | ) | | $ | 2,323 | | | $ | (19,084 | ) | | $ | (8,784 | ) | | | | | | |
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Subordinated | | $ | (6,009 | ) | | $ | (2,340 | ) | | $ | (7,795 | ) | | $ | (8,782 | ) | | | | | | |
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(1) The valuation adjustment to maximum redemption value of the Series A Preferred Unit in-kind distribution decreased the net loss attributable to partners for the three months ended September 30, 2014 and 2013 and increased the net loss attributable to partners for the nine months ended September 30, 2014 in the calculation of earnings per unit (see Note 9). |
(2) General Partner's and limited partners’ interests are calculated based on the allocation of net losses for the period, net of the allocation of Series A Preferred Unit in-kind distributions, Series A Preferred Unit fair value adjustments and General Partner unit in-kind distributions. Class B Convertible interest is calculated based on the allocation of only net losses for the period. |
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| | Three Months Ended September 30, | | Nine Months Ended September 30, | | | | | | |
Common Units | | 2014 | | 2013 | | 2014 | | 2013 | | | | | | |
Interest in net income (loss) | | $ | (11,156 | ) | | $ | 2,323 | | | $ | (19,084 | ) | | $ | (8,784 | ) | | | | | | |
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Effect of dilutive units - numerator (1) | | — | | | (4,326 | ) | | — | | | — | | | | | | | |
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Dilutive interest in net loss | | $ | (11,156 | ) | | $ | (2,003 | ) | | $ | (19,084 | ) | | $ | (8,784 | ) | | | | | | |
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Weighted-average units - basic | | 22,925,979 | | | 12,222,692 | | | 20,911,472 | | | 12,219,699 | | | | | | | |
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Effect of dilutive units - denominator (2) | | — | | | 1,767,445 | | | — | | | — | | | | | | | |
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Weighted-average units - dilutive | | 22,925,979 | | | 13,990,137 | | | 20,911,472 | | | 12,219,699 | | | | | | | |
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Basic net income (loss) per common unit | | $ | (0.49 | ) | | $ | 0.19 | | | $ | (0.91 | ) | | $ | (0.72 | ) | | | | | | |
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Diluted net loss per common unit | | $ | (0.49 | ) | | $ | (0.14 | ) | | $ | (0.91 | ) | | $ | (0.72 | ) | | | | | | |
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| | Three Months Ended September 30, | | Nine Months Ended September 30, | | | | | | |
Subordinated Units | | 2014 | | 2013 | | 2014 | | 2013 | | | | | | |
Interest in net loss | | $ | (6,009 | ) | | $ | (2,340 | ) | | $ | (7,795 | ) | | $ | (8,782 | ) | | | | | | |
Effect of dilutive units - numerator(1) | | — | | | — | | | — | | | — | | | | | | | |
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Dilutive interest in net loss | | $ | (6,009 | ) | | $ | (2,340 | ) | | $ | (7,795 | ) | | $ | (8,782 | ) | | | | | | |
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Weighted-average units - basic | | 12,213,713 | | | 12,213,713 | | | 12,213,713 | | | 12,213,713 | | | | | | | |
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Effect of dilutive units - denominator(1) | | — | | | — | | | — | | | — | | | | | | | |
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Weighted-average units - dilutive | | 12,213,713 | | | 12,213,713 | | | 12,213,713 | | | 12,213,713 | | | | | | | |
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Basic and diluted net loss per subordinated unit | | $ | (0.49 | ) | | $ | (0.19 | ) | | $ | (0.64 | ) | | $ | (0.72 | ) | | | | | | |
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(1) Because we had a net loss for the three and nine months ended September 30, 2014 and nine months ended September 30, 2013 for the common units, and for the three and nine months ended September 30, 2014 and the three and nine months ended September 30, 2013 for the subordinated units, the effect of the dilutive units would be anti-dilutive to the per unit calculation. Therefore, the weighted average units outstanding are the same for basic and dilutive net loss per unit for those periods. The weighted average units that would be included in the computation of diluted per unit amounts in accordance with the treasury stock method were 32,757,204 and 25,447,215 for the three and nine months ended September 30, 2014, respectively. |
(2) The weighted average units included in the computation of diluted per unit amounts were 27,972 unvested awards granted under our long-term incentive plan and 1,739,473 Series A Preferred Units for the three months ended September 30, 2013. The weighted average units that were not included in the computation of diluted per unit amounts were 20,221 unvested awards granted under our long-term incentive plan and 1,052,329 Series A Preferred Units for the nine months ended September 30, 2013. Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the LTIP (as defined in Note 12), were exercised, settled or converted into common units. When it is determined that potential common units resulting from an award should be included in the diluted net income per limited partner unit calculation, the impact is reflected by applying the treasury stock method. |
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Our calculation of the number of weighted-average units outstanding includes the common units that have been awarded to our directors that are deferred under our Non-Employee Director Deferred Compensation Plan. |
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All of our Series A Preferred Units were converted into common units on August 4, 2014 (see Note 9). Prior to conversion, our Series A Preferred Units were considered participating securities for purposes of the basic earnings per unit calculation during periods in which they received cash distributions. We were required to pay in-kind distributions to the Series A Preferred Units for the first four full quarters beginning the second quarter of 2013, and continued to pay these distributions until the Series A Preferred Units were converted into common units. Because the Series A Preferred Units received in-kind distributions, they have been excluded from the basic earnings per unit calculation for the three and nine months ended September 30, 2014. |
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Distributions |
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Our agreement of limited partnership, which was amended and restated for the third time on August 4, 2014 in order to establish the Class B Convertible Units (as amended and restated, the “Partnership Agreement”), requires that within 45 days after the end of each quarter, we distribute all of our available cash to unitholders of record on the applicable record date, as determined by our General Partner. We intend to make a minimum quarterly distribution to the holders of our common units and subordinated units of $0.40 per unit to the extent we have sufficient cash from our operations after the establishment of cash reserves and the payment of costs and expenses, including reimbursements of expenses to our General Partner. However, there is no guarantee that we will pay the minimum quarterly distribution on our units in any quarter. Beginning with the third quarter of 2014, until such time that we have a distributable cash flow divided by cash distributions ratio (“Distributable Cash Flow Ratio”) of at least 1.0, Holdings, the holder of all of our subordinated units, has waived the right to receive distributions on any subordinated units that would cause the Distributable Cash Flow Ratio to be less than 1.0. |
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Paid In-Kind Distributions |
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Series A Preferred Units. During the second quarter of 2013, we raised $40.0 million of equity through issuances of 1,715,000 Series A Preferred Units and an additional General Partner contribution to satisfy the requirements of our Previous Credit Facility (as defined in Note 7) (see Notes 7 and 9). Under the terms of our Partnership Agreement, we were required to pay the holders of our Series A Preferred Units quarterly distributions of in-kind Series A Preferred Units for the first four full quarters following the issuance of the units and continuing thereafter until the board of directors of our General Partner determined to begin paying quarterly distributions in cash. In-kind distributions were in the form of Series A Preferred Units at a rate of $0.40 per outstanding Series A Preferred Unit per quarter (or 7% per year of the per unit purchase price). Cash distributions were required to equal the greater of $0.40 per unit per quarter or the quarterly distribution paid with respect to each common unit. In accordance with the Partnership Agreement, our General Partner received a corresponding distribution of in-kind general partner units to maintain its 2.0% interest in us. In connection with the Holdings Transaction (see Notes 1 and 2), all holders of the Series A Preferred Units elected to convert their Series A Preferred Units into 2,015,638 common units based on a 110% exchange ratio. |
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The following table represents the paid in-kind (“PIK”) distribution from the date of our initial public offering through August 4, 2014, the date on which all outstanding Series A Preferred Units were converted to common units (in thousands, except per unit and in-kind distribution units): |
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Payment Date | | Attributable to the Quarter Ended(1) | | Per Unit Distribution | | In-Kind Series A | | In-Kind | | In-Kind | | In-Kind General Partner Distribution Value(2) | |
Preferred Unit | Series A | Unit | |
Distributions to Series A Preferred Holders | Preferred | Distribution | |
| Distributions | to General | |
| Value(2) | Partner | |
2014 | | | | | | | | | | | | | | |
May 15, 2014 | | March 31, 2014 | | $ | 0.4 | | | | 31,513 | | | $ | 534 | | | 643 | | | $ | 11 | | |
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2013 | | | | | | | | | | | | | | |
February 14, 2014 | | December 31, 2013 | | 0.4 | | | | 30,971 | | | 558 | | | 632 | | | 11 | | |
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November 14, 2013 | | September 30, 2013 | | 0.4 | | | | 30,439 | | | 511 | | | 621 | | | 10 | | |
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August 14, 2013 | | June 30, 2013 | | 0.35 | | (3) | | 22,276 | | | 512 | | | 454 | | | 10 | | |
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14-Aug-13 | | 30-Jun-13 | | 0.2 | | (4) | | 2,199 | | | 51 | | | 45 | | | 1 | | |
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(1) As a result of the conversion, the Series A Preferred Unit holders (and the corresponding General Partner units) did not receive a PIK distribution for the quarters ended June 30, 2014 or September 30, 2014, but received a cash distribution on the converted common units. |
(2) The fair value was calculated as required, based on the common unit price at the quarter end date for the period attributable to the distribution, multiplied by the number of units distributed. |
(3) Per unit distribution of $0.35 corresponds to the minimum quarterly distribution of $0.40 per unit, or $1.60 on an annualized basis, pro-rated for the portion of the quarter following the issuance of 1,466,325 Series A Preferred Units and 29,925 General partner units on April 12, 2013. |
(4) Per unit distribution of $0.20 corresponds to the minimum quarterly distribution of $0.40 per unit, or $1.60 on an annualized basis, pro-rated for the portion of the quarter following the issuance of 248,675 Series A Preferred Units and 5,075 General partner units on May 15, 2013. |
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Class B Convertible Units. On August 4, 2014, we established our Class B Convertible Units. The Class B Convertible Units consist of 14,633,000 of such units plus any additional Class B Convertible Units issued in-kind as a distribution (“Class B PIK Units”). Commencing with the quarter ended September 30, 2014 and until converted, as long as certain requirements are met, the holders of the Class B Convertible Units will receive quarterly distributions in an amount equal to $0.3257 per unit. These distributions will be paid quarterly in Class B PIK Units within 45 days after the end of each quarter. Our General Partner was entitled, and has exercised its right, to retain its 2.0% general partner interest in us in connection with the original issuance of Class B Convertible Units. In connection with future distributions of Class B PIK Units, the General Partner is entitled to a corresponding distribution to maintain its 2.0% general partner interest in us. The Class B Convertible Units have the same rights, preferences and privileges, and are subject to the same duties and obligations, as our common units, with certain exceptions. See Note 10. |
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The following table represents the PIK distribution earned on the Class B Convertible Units for periods after August 4, 2014 and ended September 30, 2014 (in thousands, except per unit and in-kind distribution units): |
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Payment Date | | Attributable to the Quarter Ended | | Per Unit Distribution | | In-Kind Class B Convertible Unit | | In-Kind | | In-Kind | | In-Kind General Partner Distribution Value(1) | |
Distributions to Class B Convertible Holders | Class B Convertible Distributions | Unit | |
| Value(1) | Distribution | |
| | to General | |
| | Partner | |
November 14, 2014 | | September 30, 2014 | | $ | 0.3257 | | | | 256,078 | | | $ | 5,467 | | | 5,226 | | | $ | 112 | | |
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(1) The fair value was calculated as required, based on the common unit price at the quarter end date for the period attributable to the distribution, multiplied by the number of units distributed. |
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Cash Distributions |
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The following table represents our distributions declared for the quarterly periods from the date of our initial public offering (in thousands, except per unit data): |
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| | Attributable to the | | Per Unit | | Limited Partners | | | | |
Payment Date | | Quarter Ended | | Distribution | | Common | | Subordinated | | General Partner | | Total |
2014 | | | | | | | | | | | | |
November 14, 2014 | | September 30, 2014 | | $ | 0.4 | | (1) | $ | 9,520 | | | $ | — | | | $ | 413 | | | $ | 9,933 | |
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August 14, 2014 | | June 30, 2014 | | 0.4 | | (1) | 9,399 | | | 4,886 | | | 290 | | | 14,575 | |
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15-May-14 | | March 31, 2014 | | 0.4 | | | 8,586 | | | 4,886 | | | 290 | | | 13,762 | |
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2013 | | | | | | | | | | | | |
February 14, 2014 | | December 31, 2013 | | 0.4 | | | 8,581 | | | 4,885 | | | 289 | | | 13,755 | |
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November 14, 2013 | | September 30, 2013 | | 0.4 | | | 4,888 | | | 4,885 | | | 214 | | | 9,987 | |
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August 14, 2013 | | June 30, 2013 | | 0.4 | | | 4,890 | | | 4,886 | | | 210 | | | 9,986 | |
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15-May-13 | | March 31, 2013 | | 0.4 | | | 4,888 | | | 4,886 | | | 199 | | | 9,973 | |
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2012 | | | | | | | | | | | | |
February 14, 2013 | | December 31, 2012 | | 0.24 | | (2) | 2,931 | | | 2,931 | | | 120 | | | 5,982 | |
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(1) The common unit distribution in the table above includes the distribution payment to the Series A Preferred unitholders for their Series A Preferred Units converted into common units or to the units that vested as part of our LTIP (as defined in Note 12) as a result of the Holdings Transaction (see Notes 1, 9 and 12). |
(2) Per unit distribution of $0.24 corresponds to the minimum quarterly distribution of $0.40 per unit, or $1.60 on an annualized basis, pro-rated for the portion of the quarter following the closing of our initial public offering on November 7, 2012. |