Cash Distributions and Net Income Per Unit | 3. Cash Distributions and Net Income Per Unit Cash Distributions Our partnership agreement generally provides that we will make cash distributions, if any, each quarter in the following manner: • first , 98 percent to the holders of common units and 2 percent to our general partner, until each common unit has received the minimum quarterly distribution of $0.412500 plus any arrearages from prior quarters and • second, 98 percent to all unitholders, pro rata, and 2 percent to our general partner, until each unit has received a distribution of $0.474375 . If cash distributions to our unitholders exceed $0.474375 per unit in any quarter, our unitholders and our general partner will receive distributions according to the following percentage allocations: Total Quarterly Distribution Per Unit Target Amount Marginal Percentage Interest in Distributions Unitholders General Partner Minimum Quarterly Distribution $0.412500 98% 2% First Target Distribution above $0.412500 up to $0.474375 98% 2% Second Target Distribution above $0.474375 up to $0.515625 85% 15% Third Target Distribution above $0.515625 up to $0.618750 75% 25% Thereafter above $0.618750 50% 50% Our distributions are declared subsequent to quarter end. The table below represents total cash distributions applicable to the period in which the distributions were earned: Earned in Quarter Ended Total Quarterly Distribution Per Unit Total Cash Distribution including general partners IDRs Date of Distribution Unitholders Record Date (Dollars in millions) June 30, 2016 $ 0.5940 $ 29.5 September 1, 2016 August 15, 2016 September 30, 2016 $ 0.5940 $ 29.5 December 1, 2016 November 15, 2016 December 31, 2016 $ 0.5940 $ 29.5 March 1, 2017 February 15, 2017 March 31, 2017 $ 0.5940 $ 29.5 June 1, 2017 May 15, 2017 June 30, 2017 $ 0.5940 $ 29.5 September 1, 2017 August 15, 2017 September 30, 2017 (1) $ 0.5940 $ 29.5 December 1, 2017 November 15, 2017 (1) On October 17, 2017 , our Board of Directors declared a cash distribution of $0.5940 per unit, which will be paid on December 1, 2017 , to unitholders of record on November 15, 2017 . Allocation of Net Income Our partnership agreement contains provisions for the allocation of net income to the unitholders and the general partner. For purposes of maintaining partner capital accounts, the partnership agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions allocated 100 percent to the general partner. The calculation of net income allocated to the general and limited partners was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Net income (loss) attributable to SunCoke Energy L.P. $ 22.6 $ 21.3 $ (119.6 ) $ 73.2 Less: Expenses allocated to Common - SunCoke (1) — — — (7.0 ) Net income (loss) attributable to all partners 22.6 21.3 (119.6 ) 80.2 General partner's incentive distribution rights 1.4 1.4 4.2 12.2 Net income (loss) attributable to partners, excluding incentive distribution rights 21.2 19.9 (123.8 ) 68.0 General partner's ownership interest: 2.0 % 2.0 % 2.0 % 2.0 % General partner's allocated interest in net income (loss) (2) 0.5 0.4 (2.4 ) 1.4 General partner's incentive distribution rights 1.4 1.4 4.2 12.2 Total general partner's interest in net income (loss) $ 1.9 $ 1.8 $ 1.8 $ 13.6 Common - public unitholder's interest in net income (loss) $ 8.6 $ 8.8 $ (55.2 ) $ 29.9 Common - SunCoke interest in net income (loss): Common - SunCoke interest in net income (loss) 12.1 10.7 (66.2 ) 36.7 Expenses allocated to Common - SunCoke (1) — — — (7.0 ) Total common - SunCoke interest in net income (loss) 12.1 10.7 (66.2 ) 29.7 Total limited partners' interest in net income (loss) $ 20.7 $ 19.5 $ (121.4 ) $ 59.6 (1) Per the amended partnership agreement, expenses paid on behalf of the Partnership are to be allocated entirely to the partner who paid them. During the first quarter of 2016, SunCoke paid $7.0 million of allocated corporate costs on behalf of the Partnership and will not seek reimbursement for those costs. These expenses are recorded as a direct reduction to SunCoke's interest in net income for the nine months ended September 30, 2016. (2) Our net income is allocated to the general partner and limited partners in accordance with their respective partnership percentages, after giving effect to priority income allocations for incentive distributions, if any, to our general partner, pursuant to our partnership agreement. The table above represents a simplified presentation of the calculation, and therefore, amounts may not recalculate precisely. Earnings Per Unit Our net income is allocated to the general partner and limited partners in accordance with their respective partnership percentages, after giving effect to priority income allocations for incentive distributions, if any, to our general partner, pursuant to our partnership agreement. Distributions less than or greater than earnings are allocated in accordance with our partnership agreement. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit. In addition to the common, we also have identified the general partner interest and IDRs as participating securities and we use the two-class method when calculating the net income per unit applicable to limited partners, which is based on the weighted-average number of common units outstanding during the period. Basic and diluted net income per unit applicable to limited partners are the same because we do not have any potentially dilutive units outstanding. The calculation of earnings per unit is as follows: Three Months Ended September 30, Nine months ended September 30, 2017 2016 2017 2016 (Dollars and units in millions, except per unit amounts) Net income (loss) attributable to SunCoke Energy L.P. $ 22.6 $ 21.3 $ (119.6 ) $ 73.2 Less: Expenses allocated to Common - SunCoke — — — (7.0 ) Net income (loss) attributable to all partners 22.6 21.3 (119.6 ) 80.2 General partner's distributions (including $1.4 million, $1.4 million, $4.2 million and $4.2 million of cash incentive distribution rights declared, respectively) 2.0 2.0 6.0 6.0 Limited partners' distributions on common units 27.5 27.5 82.5 82.4 Distributions greater than earnings/loss (6.9 ) (8.2 ) (208.1 ) (8.2 ) General partner's earnings: Distributions (including $1.4 million, $1.4 million, $4.2 million and $4.2 million of cash incentive distribution rights declared, respectively) 2.0 2.0 6.0 6.0 Allocation of distributions (greater than) less than earnings/loss (0.1 ) (0.2 ) (4.2 ) 7.6 Total general partner's earnings 1.9 1.8 1.8 13.6 Limited partners' earnings (loss) on common units: Distributions 27.5 27.5 82.5 82.4 Expenses allocated to Common - SunCoke — — — (7.0 ) Allocation of distributions greater than earnings/loss (6.8 ) (8.0 ) (203.9 ) (15.8 ) Total limited partners' earnings (loss) on common units 20.7 19.5 (121.4 ) 59.6 Weighted average limited partner units outstanding: Common - basic and diluted 46.2 46.2 46.2 46.2 Net income (loss) per limited partner unit: Common - basic and diluted $ 0.45 $ 0.42 $ (2.63 ) $ 1.29 Unit Activity Unit activity for the nine months ended September 30, 2017 : Common - Public Common - SunCoke Total Common At December 31, 2016 20,800,181 25,415,696 46,215,877 Units issued to directors 10,022 — 10,022 Public units acquired by SunCoke (1,980,977 ) 1,980,977 — At September 30, 2017 18,829,226 27,396,673 46,225,899 |