Columbia Pipeline Partners LP - 10-K filing on 2016-02-18

Partners' Equity and Cash Distributions

12 Months Ended

Dec. 31, 2015

Partners' Equity and Cash Distributions

Common Unit. As described below, the common unitholders have preference over subordinated unitholders on receipt of distributions, including, in certain circumstances, cash distributions upon liquidation, as set out in the Partnership's Second Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement"). The common unitholders have limited rights on matters affecting Partnership's business, limited voting rights and are not entitled to elect the general partner or its directors.

Subordinated Unit. The subordinated unitholders have similar rights as the common unitholders. However, during the subordination period, the subordinated unitholders are not entitled to receive quarterly distributions from operating surplus until the common unitholders have received the minimum quarterly distribution from operating surplus and, among other things, in certain circumstances, are subordinated in the receipt of cash distributions upon liquidation. The subordination period will end on the first business day after the Partnership has earned and paid an aggregate amount of at least the minimum quarterly distribution multiplied by the total number of outstanding common and subordinated units for each of three consecutive, non-overlapping four-quarter periods ending on or after March 31, 2018 and there are no outstanding arrearages on the Partnership's common units. Notwithstanding the foregoing, the subordination period will end on the first business day after the Partnership has paid an aggregate amount of at least 150.0% of the minimum quarterly distribution on an annualized basis multiplied by the total number of outstanding common and subordinated units and have earned that amount plus the related distribution on the incentive distribution rights, for any four-quarter period ending on or after March 31, 2016 and there are no outstanding arrearages on the Partnership's common units.

Incentive Distribution Rights. The Partnership Agreement generally provides that the Partnership will distribute cash each quarter during the subordination period in the following manner: first, to the holders of common units, until each common unit has received the minimum quarterly distribution of $0.192625, plus any arrearages from prior quarters; second, 85.0% to the holders of common and subordinated units, pro rata, and 15.0% to CEG as the holder of the incentive distribution rights, until each unitholder has received the minimum quarterly distribution of $0.209375; and third, 75.0% to the holders of common and subordinated units, pro rata, and 25.0% to CEG as the holder of the incentive distribution rights, until each unitholder has received a distribution of $0.251250. If cash distributions to the Partnership's unitholders exceed $0.251250 per common unit and subordinated unit in any quarter, the Partnership will distribute 50.0% to the holders of common and subordinated units, pro rata, and 50.0% to CEG as the holder of the incentive distribution rights.

The Partnership has paid or has authorized payment of the following quarterly cash distributions under the Partnership Agreement during 2015:



(in millions, except per unit amounts)
Quarter Ended	Record Date	Payment Date	Per Unit Distribution		Total Cash Distribution
March 31, 2015⁽¹⁾	May 13, 2015	May 20, 2015	$	0.0912	$	9.2
June 30, 2015	August 13, 2015	August 20, 2015	0.1675		16.9
September 30, 2015	November 13, 2015	November 20, 2015	0.1725		17.4
December 31, 2015	February 11, 2016	February 19, 2016	0.1800		18.1

⁽¹⁾ The quarterly distribution for three months ended March 31, 2015 was prorated for the period beginning immediately after the closing of the IPO, February 11, 2015 through March 31, 2015.