us-gaap:PartnersCapitalNotesDisclosureTextBlock

Line Company Text Block
1 Boardwalk Pipeline Partners, LP Cash Distributions The Partnerships cash distribution policy requires that the Partnership distribute to its various ownership interests on a quarterly basis all of its available cash, as defined in its partnership agreement. IDRs, which represent a limited partner ownership interest and are currently held by the Partnerships general partner, represent the contractual right to receive an increasing percentage of quarterly distributions of available cash as follows: Total Quarterly Distribution Marginal Percentage Interest inDistributions Target Amount Limited PartnerUnitholders(1) General Partnerand IDRsFirst Target Distribution up to $0.4025 98% 2%Second Target Distribution above $0.4025 up to $0.4375 85% 15%Third Target Distribution above $0.4375 up to $0.5250 75% 25%Thereafter above $0.5250 50% 50% (1) The class B unitholders participate in distributions on a pari passu basis with the Partnerships common units up to $0.30 per unit per quarter. The class B units do not participate in quarterly distributions above $0.30 per unit. The class B units began sharing in income allocations and distributions with respect to the third quarter 2008. In the third quarter 2009, the Partnership paid quarterly distributions to its common unitholders of record of $0.49 per common unit, $0.30 per class B unit to the holder of the class B units and amounts to the general partner on behalf of its 2% general partner interest and as holder of the IDRs. In the third quarter 2008, the Partnership paid quarterly distributions to unitholders of record, including common and subordinated units, of $0.475 per common unit and amounts to the general partner on behalf of its 2% general partner interest and as holder of the IDRs. In October 2009, the Partnership declared a quarterly cash distribution to unitholders of record of $0.495 per common unit. Net Income per Unit For purposes of calculating net income per unit, net income for the current period is reduced by the amount of available cash that will be distributed with respect to that period. Any residual amount representing undistributed net income (or loss) is assumed to be allocated to the various ownership interests in accordance with the contractual provisions of the partnership agreement. Under the Partnerships partnership agreement, for any quarterly period, the IDRs participate in net income only to the extent of the amount of cash distributions actually declared, thereby excluding the IDRs from participating in undistributed net income or losses. Accordingly, undistributed net income is assumed to be allocated to the other ownership interests on a pro rata basis, except that the class B units participation in net income is limited to $0.30 per unit per quarter. Payments made on account of the Partnerships various ownership interests are determined in relation to actual declared distributions, and are not based on the assumed allocations required under generally accepted accounting principles. The following table provides a reconciliation of net income and the assumed allocation of net income to the common and class B units for purposes of computing net income per unit for the three months ended September 30, 2009 (in millions, except per unit data): Total Common Units Class B Units General Partner and IDRsNet income $ 18.8 Declared distribution 96.7 $ 84.0 $ 6.9 $ 5.8Assumed allocation of undistributed net loss (77.9) (67.1) (9.2) (1.6) Assumed allocation of net income $ 18.8 $ 16.9 $ (2.3) $ 4.2Weighted average units outstanding 166.2 22.9 Net income per unit $ 0.10 $ (0.10) The following table provides a reconciliation of net income and the assumed allocation of net income to the common and class B units for purposes of computing net income per unit for the nine months ended September 30, 2009 (in millions, except per unit data): Total Common Units Class B Units General Partner and IDRsNet income $ 91.1 Declared distribution 274.9 $ 238.3 $ 20.6 $ 16.0Assumed allocation of undistributed net loss (183.8) (157.4) (22.7) (3.7) Assumed allocation of net income $ 91.1 $ 80.9 $ (2.1) $ 12.3Weighted average units outstanding 158.9 22.9 Net income per unit $ 0.51 $ (0.09) In the first quarter 2009, the Partnership changed the method used in computing its net income per unit due to changes in generally accepted accounting principles. As a result, net income per unit for the three and nine months ended September 30, 2008, has been retrospectively adjusted from $0.47 and $1.58 per common and subordinated unit, as originally reported, to $0.47 and $1.65 per common unit and $0.47 and $1.61 per subordinated unit. The following table provides a reconciliation of net income and the assumed allocation of net income to the common and subordinated units for purposes of computing net income per unit for the three months ended September 30, 2008 (in millions, except per unit data): Total Common Units Class B Units (a) Subordinated Units General Partner And IDRsNet income $ 73.6 Declared distribution 74.1 $ 47.8 $ 6.9 $ 15.7 $ 3.7Assumed allocation of undistributed net loss (0.5) (0.3) (0.1) (0.1) -Assumed allocation of net income $ 73.6 $ 47.5 $ 6.8 $ 15.6 $ 3.7Weighted average units outstanding 100.7 22.9 33.1 Net income per unit $ 0.47 $ 0.30 $ 0.47 (a) Number of units shown is weighted from July 1, 2008, which is the date the class B units became eligible to participate in income allocations. The following table provides a reconciliation of net income and the assumed allocation of net income to the common and subordinated units for purposes of computing net income per unit for the nine months ended September 30, 2008 (in millions, except per unit data): Total Common Units Class B Units (a) Subordinated Units General Partner And IDRsNet income $ 226.4 Declared distribution 200.8 $ 137.3 $ 6.9 $ 46.6 $ 10.0Assumed allocation of undistributed net loss 25.6 18.6 - 6.5 0.5Assumed allocation of net income $ 226.4 $ 155.9 $ 6.9 $ 53.1 $ 10.5Weighted average units outstanding 94.6 22.9 33.1 Net income per unit $ 1.65 $ 0.30 $ 1.61 (a) Number of units shown is weighted from July 1, 2008, which is the date the class B units became eligible to participate in income allocations.
2 BOSTON PROPERTIES LTD PARTNERSHIP

9. Partners’ Capital

As of September 30, 2009, Boston Properties, Inc. owned 1,600,013 general partnership units and 137,102,361 limited partnership units.

On June 10, 2009, Boston Properties, Inc. completed a public offering of 17,250,000 shares of its Common Stock (including 2,250,000 shares issued as a result of the exercise of an overallotment option by the underwriters) at a price to the public of $50.00 per share. The proceeds from this public offering, net of underwriters’ discounts and offering costs, totaled approximately $841.9 million, which was contributed by Boston Properties, Inc. to the Company in exchange for 17,250,000 OP Units.

During the nine months ended September 30, 2009, the Company issued 133,087 OP Units to Boston Properties, Inc. in connection with the exercise by employees of options to purchase Common Stock of Boston Properties, Inc.

During the nine months ended September 30, 2009, Boston Properties, Inc. acquired 70,563 OP Units in connection with the redemption of an equal number of redeemable OP Units from third parties.

On January 30, 2009, the Company paid a distribution in the amount of $0.68 per OP Unit to unitholders of record as of the close of business on December 31, 2008. On April 30, 2009, the Company paid a distribution in the amount of $0.68 per OP Unit to unitholders of record as of the close of business on March 31, 2009. On July 31, 2009, the Company paid a distribution in the amount of $0.50 per OP Unit to unitholders of record as of the close of business on June 30, 2009. On September 17, 2009, Boston Properties, Inc., as general partner of the Company, declared a distribution in the amount of $0.50 per OP Unit payable on October 30, 2009 to unitholders of record as of the close of business on September 30, 2009.

3 ERP OPERATING LTD PARTNERSHIP
3.

Capital and Redeemable Limited Partners

The following tables present the changes in the Operating Partnership’s issued and outstanding “Units” (which includes OP Units and Long-Term Incentive Plan (“LTIP”) Units) and in the limited partners’ Units for the nine months ended September 30, 2009:

 

     2009  

General and Limited Partner Units

  

General and Limited Partner Units outstanding at January 1,

     289,466,537   

Issued to General Partner:

  

Conversion of Series E Preference Units

     612   

Exercise of EQR options

     352,222   

Employee Share Purchase Plan

     300,471   

Restricted EQR share grants, net

     313,776   

Issued to Limited Partners:

  

LTIP Units, net

     154,616   

OP Units issued through consolidations

     32,061   

Conversion of Series B Junior Preference Units

     7,517   

OP Units Other:

  

Repurchased and retired

     (47,450
        

General and Limited Partner Units outstanding at September 30,

     290,580,362   
        

Limited Partner Units

  

Limited Partner Units outstanding at January 1,

     16,679,777   

Limited Partner LTIP Units, net

     154,616   

Limited Partner OP Units issued through consolidations

     32,061   

Conversion of Series B Junior Preference Units

     7,517   

Conversion of Limited Partner OP Units to EQR Common Shares

     (2,441,029
        

Limited Partner Units outstanding at September 30,

     14,432,942   
        

Limited Partner Units Ownership Interest in Operating Partnership

     5.0

Limited Partner LTIP Units Issued:

  

Issuance – per unit

   $ 0.50   

Issuance – contribution valuation

   $ 0.1 million   

Limited Partner OP Units Issued:

  

Consolidations – per unit

   $ 26.50   

Consolidations – valuation

   $ 0.8 million   

Conversion of Series B Junior Preference Units – per unit

   $ 24.50   

Conversion of Series B Junior Preference Units – valuation

   $ 0.2 million   

 

In September 2009, EQR announced the creation of an At-The-Market (“ATM”) share offering program which would allow EQR to sell up to 17.0 million Common Shares from time to time over the next three years into the existing trading market at current market prices as well as through negotiated transactions. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds from all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis). During the nine months ended September 30, 2009, no shares were issued through the ATM program.

During the nine months ended September 30, 2009, EQR repurchased 47,450 of its Common Shares at an average price of $23.69 per share for total consideration of $1.1 million. These shares were retired subsequent to the repurchases. Concurrent with these transactions, the Operating Partnership repurchased and retired 47,450 OP Units previously issued to EQR. All of the shares repurchased during the nine months ended September 30, 2009 were repurchased from employees at the then current market prices to cover the minimum statutory tax withholding obligations related to the vesting of employees’ restricted shares. EQR has authorization to repurchase an additional $466.5 million of its shares as of September 30, 2009.

The Limited Partners of the Operating Partnership as of September 30, 2009 include various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of LTIP Units. Subject to certain exceptions (including the “book-up” requirements of LTIP Units), the Limited Partners may exchange their Units with EQR for EQR Common Shares on a one-for-one basis. The carrying value of the Limited Partner Units is based on the proportional relationship between the carrying values of equity associated with General Partner Units relative to that of the Limited Partner Units. Net income is allocated to the Limited Partner Units based on the weighted average ownership percentage during the period.

As of September 30, 2009, the Operating Partnership evaluated the requirements for classifying and measuring redeemable securities with respect to the presentation within the equity section of the balance sheets with respect to Limited Partner Units. Although the Operating Partnership had classified all Limited Partner Units within “Partners’ Capital” in all of the Operating Partnership’s previously issued consolidated financial statements, the Operating Partnership has concluded that it is required to present a portion of these securities at the greater of carrying value or their fair market value at each balance sheet date outside of “Partners’ Capital” in the mezzanine section of the balance sheet. This immaterial error affects only the balance sheet presentation of the Operating Partnership’s equity accounts and has no impact on net income, earnings per Unit or cash flows for any period presented. Although the Operating Partnership believes that the effects of these adjustments are not material to its previously issued consolidated financial statements, the Operating Partnership has, and will in all future filings of its financial statements, adjust prior periods presented in the consolidated financial statements for comparability purposes and to conform to the Operating Partnership’s retrospective application of classifying and measuring redeemable securities.

A portion of the Limited Partners’ Units are classified as mezzanine equity as they do not meet the requirements for permanent equity classification. The Operating Partnership has the right but not the obligation to make a cash payment to any and all holders of Limited Partner Units requesting an exchange from EQR. Once the Operating Partnership elects not to redeem the Limited Partner Units for cash, EQR is obligated to deliver EQR Common Shares to the exchanging limited partner. If EQR is required, either by contract or securities law, to deliver registered EQR Common Shares, such Limited Partner Units are referred to as “Redeemable Limited Partner Units”. Instruments that require settlement in registered shares can not be classified in permanent equity as it is not always completely within an issuer’s control to deliver registered shares. Therefore, settlement in cash is assumed and that responsibility for settlement in cash is deemed to fall to the Operating Partnership as the primary source of cash for EQR, resulting in presentation in the mezzanine section of the balance sheet. The Redeemable Limited Partner Units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. EQR has the ability to deliver unregistered EQR Common Shares for the remaining portion of the Limited Partner Units that are classified in permanent equity at September 30, 2009 and December 31, 2008.

The carrying value of the Redeemable Limited Partner Units is allocated based on the number of Redeemable Limited Partner Units in proportion to the number of Limited Partner Units in total. Such percentage of the total carrying value of Limited Partner Units which is ascribed to the Redeemable Limited Partner Units is then adjusted to the greater of carrying value or fair market value as described above. As of September 30, 2009, the Redeemable Limited Partner Units have a redemption value of approximately $236.3 million, which represents the value of EQR Common Shares that would be issued in exchange with the limited partners of the Operating Partnership for Redeemable Limited Partner Units.

 

The following table presents the change in the redemption value of the Redeemable Limited Partners for the nine months ended September 30, 2009 (amounts in thousands):

 

     2009  

Balance at January 1,

   $ 264,394   

Change in market value

     (7,168

Change in carrying value

     (20,893
        

Balance at September 30,

   $ 236,333   
        

EQR contributes all net proceeds from its various equity offerings (including proceeds from exercise of options for EQR Common Shares) to the Operating Partnership. In return for those contributions, EQR receives a number of OP Units in ERPOP equal to the number of Common Shares it has issued in the equity offering (or in the case of a preferred equity offering, a number of preference units in ERPOP equal in number and having the same terms as the preferred shares issued in the equity offering).

The following table presents the Operating Partnership’s issued and outstanding “Preference Units” as of September 30, 2009 and December 31, 2008:

 

                    Amounts in thousands
               Annual
Dividend per
Unit (3)
   September 30,
2009
   December 31,
2008
     Redemption
Date (1) (2)
   Conversion
Rate (2)
        

Preference Units:

              

7.00% Series E Cumulative Convertible Preference Units; liquidation value $25 per unit; 328,466 and 329,016 units issued and outstanding at September 30, 2009 and December 31, 2008, respectively

   11/1/98    1.1128    $  1.75      $ 8,212    $ 8,225

7.00% Series H Cumulative Convertible Preference Units; liquidation value $25 per unit; 22,459 units issued and outstanding at September 30, 2009 and December 31, 2008

   6/30/98    1.4480    $  1.75        561      561

8.29% Series K Cumulative Redeemable Preference Units; liquidation value $50 per unit; 1,000,000 units issued and outstanding at September 30, 2009 and December 31, 2008

   12/10/26    N/A    $  4.145      50,000      50,000

6.48% Series N Cumulative Redeemable Preference Units; liquidation value $250 per unit; 600,000 units issued and outstanding at September 30, 2009 and December 31, 2008 (4)

   6/19/08    N/A    $16.20        150,000      150,000
                      
            $ 208,773    $ 208,786
                      

 

(1)

On or after the redemption date, redeemable preference units (Series K and N) may be redeemed for cash at the option of the Operating Partnership, in whole or in part, at a redemption price equal to the liquidation price per unit, plus accrued and unpaid distributions, if any, in conjunction with the concurrent redemption of the corresponding EQR Preferred Shares.

(2)

On or after the redemption date, convertible preference units (Series E & H) may be redeemed under certain circumstances at the option of the Operating Partnership for cash (in the case of Series E) or OP Units (in the case of Series H), in whole or in part, at various redemption prices per unit based upon the contractual conversion rate, plus accrued and unpaid distributions, if any, in conjunction with the concurrent redemption/conversion of the corresponding EQR Preferred Shares.

(3)

Dividends on all series of Preference Units are payable quarterly at various pay dates. The dividend listed for Series N is a Preference Unit rate and the equivalent depositary unit annual dividend is $1.62 per unit.

(4)

The Series N Preference Units have a corresponding depositary unit that consists of ten times the number of units and one-tenth the liquidation value and dividend per unit.

 

The following table presents the Operating Partnership’s issued and outstanding Junior Convertible Preference Units (the “Junior Preference Units”) as of September 30, 2009 and December 31, 2008:

 

    Redemption
Date
  Conversion
Rate
      Amounts in thousands
        Annual
Dividend
per Unit (1)
  September 30,
2009
  December 31,
2008
           

Junior Preference Units:

         

Series B Junior Convertible Preference Units; liquidation value $25 per unit; 0 and 7,367 units issued and outstanding at September 30, 2009 and December 31, 2008, respectively

  7/29/09   1.020408   $2.00 (2)   $ -   $ 184
                 
        $ -   $ 184
                 

 

(1)

Dividends on the Junior Preference Units are payable quarterly at various pay dates.

(2)

On July 30, 2009, the Operating Partnership elected to convert all 7,367 Series B Junior Preference Units into 7,517 OP Units. The actual preference unit dividends declared for the period outstanding in 2009 was $1.17 per unit.

During the nine months ended September 30, 2009, the Operating Partnership acquired all of its partners’ interests in five partially owned properties consisting of 1,587 units for $9.2 million. In addition, the Operating Partnership also acquired a portion of the outside partner interests in two partially owned properties, one funded using cash of $2.1 million and the other funded through the issuance of 32,061 OP Units valued at $0.8 million. In conjunction with these transactions, the Operating Partnership reduced paid in capital (included in general partner’s capital) by $1.5 million and Noncontrolling Interests – Partially Owned Properties by $11.7 million.

 

4 KINDER MORGAN ENERGY PARTNERS L P

5.    Partners’ Capital

Limited Partner Units

As of September 30, 2009 and December 31, 2008, our partners’ capital included the following limited partner units:

   
September 30,
2009
   
December 31,
2008
 
Common units
    199,876,437       182,969,427  
Class B units
    5,313,400       5,313,400  
i-units
    83,754,953       77,997,906  
Total limited partner units
    288,944,790       266,280,733  

The total limited partner units represent our limited partners’ interest and an effective 98% ownership interest in us, exclusive of our general partner’s incentive distribution rights.  Our general partner has an effective 2% ownership interest in us, excluding its incentive distribution rights.

As of September 30, 2009, our total common units consisted of 183,506,009 units held by third parties, 14,646,428 units held by KMI and its consolidated affiliates (excluding our general partner), and 1,724,000 units held by our general partner.  As of December 31, 2008, our common unit total consisted of 166,598,999 units held by third parties, 14,646,428 units held by KMI and its consolidated affiliates (excluding our general partner) and 1,724,000 units held by our general partner.

As of both September 30, 2009 and December 31, 2008, all of our 5,313,400 Class B units were held by a wholly-owned subsidiary of KMI.  The Class B units are similar to our common units except that they are not eligible for trading on the New York Stock Exchange.  All of our Class B units were issued to a wholly-owned subsidiary of KMI in December 2000.

As of both September 30, 2009 and December 31, 2008, all of our i-units were held by KMR.  Our i-units are a separate class of limited partner interests in us and are not publicly traded.  The number of i-units we distribute to KMR is based upon the amount of cash we distribute to the owners of our common units.  When cash is paid to the holders of our common units, we issue additional i-units to KMR.  The fraction of an i-unit paid per i-unit owned by KMR will have a value based on the cash payment on the common units.

Changes in Partners’ Capital

For each of the three and nine month periods ended September 30, 2009 and 2008, changes in the carrying amounts of our Partners’ Capital attributable to both us and our noncontrolling interests, including our comprehensive income (loss) are summarized as follows (in millions):

   
Three Months Ended September 30,
 
   
2009
   
2008
 
   
KMP
   
Noncontrolling interests
   
Total
   
KMP
   
Noncontrolling interests
   
Total
 
                                     
Beginning Balance
  $ 6,267.7     $ 74.3     $ 6,342.0     $ 3,185.7     $ 42.5     $ 3,228.2  
                                                 
Units issued as consideration in the acquisition of assets
    -       -       -       116.0       -       116.0  
Units issued for cash
    145.9       -       145.9       (0.2 )     -       (0.2 )
Distributions paid in cash
    (448.1 )     (5.5 )     (453.6 )     (377.2 )     (5.0 )     (382.2 )
Express/Jet Fuel Pipelines acquisition
    -       -       -       77.7       2.0       79.7  
KMI going-private transaction expenses
    1.5       -       1.5       7.2       -       7.2  
Cash contributions
    -       2.4       2.4       -       0.8       0.8  
                                                 
Comprehensive income (loss):
                                               
Net Income
    359.5       4.2       363.7       329.8       3.1       332.9  
Other comprehensive loss:
                                               
Change in fair value of derivatives utilized for hedging purposes
    34.7       0.3       35.0       1,291.0       13.2       1,304.2  
Reclassification of change in fair value of derivatives to  net income
    20.8       0.2       21.0       201.7       2.0       203.7  
Foreign currency translation adjustments
    143.0       1.5       144.5       (69.6 )     (0.6 )     (70.2 )
Adjustments to pension and other postretirement benefit plan liabilities
    0.4       -       0.4       0.7       (0.1 )     0.6  
Total other comprehensive
    198.9       2.0       200.9       1,423.8       14.5       1,438.3  
Comprehensive income
    558.4       6.2       564.6       1,753.6       17.6       1,771.2  
                                                 
Ending Balance
  $ 6,525.4     $ 77.4     $ 6,602.8     $ 4,762.8     $ 57.9     $ 4,820.7  
____________
 
 
   
Nine Months Ended September 30,
 
   
2009
   
2008
 
   
KMP
   
Noncontrolling
interests
   
Total
   
KMP
   
Noncontrolling interests
   
Total
 
                                     
Beginning Balance
  $ 6,045.6     $ 70.7     $ 6,116.3     $ 4,435.7     $ 54.2     $ 4,489.9  
                                                 
Units issued as consideration pursuant to common unit compensation plan for non-employee directors
    0.2       -       0.2       0.3       -       0.3  
Units issued as consideration in the acquisition of assets
    5.0       -       5.0       116.0       -       116.0  
Units issued for cash
    815.1       -       815.1       383.8       -       383.8  
Distributions paid in cash
    (1,296.2 )     (16.3 )     (1,312.5 )     (1,074.7 )     (13.9 )     (1,088.6 )
Trans Mountain Pipeline acquisition
    25.7       0.3       26.0       23.2       0.2       23.4  
Express/Jet Fuel Pipelines acquisition
    (1.9 )     -       (1.9 )     77.7       2.0       79.7  
Kinder Morgan North 40 terminal land acquisition
    (0.9 )     -       (0.9 )     -       -       -  
KMI going-private transaction expenses
    4.3       -       4.3       7.2       -       7.2  
Cash contributions
    -       11.0       11.0       -       6.7       6.7  
Other adjustments
    (0.2 )     -       (0.2 )     -       -       -  
                                                 
Comprehensive income (loss):
                                               
Net Income
    947.2       11.9       959.1       1,038.7       11.2       1,049.9  
Other comprehensive loss:
                                               
Change in fair value of derivatives utilized for hedging purposes
    (265.9 )     (2.7 )     (268.6 )     (760.5 )     (7.8 )     (768.3 )
Reclassification of change in fair value of derivatives to  net income
    34.0       0.3       34.3       624.3       6.4       630.7  
Foreign currency translation adjustments
    215.9       2.2       218.1       (113.0 )     (1.1 )     (114.1 )
Adjustments to pension and other postretirement benefit plan liabilities
    (2.5 )     -       (2.5 )     4.1       -       4.1  
Total other comprehensive loss
    (18.5 )     (0.2 )     (18.7 )     (245.1 )     (2.5 )     (247.6 )
Comprehensive income
    928.7       11.7       940.4       793.6       8.7       802.3  
                                                 
Ending Balance
  $ 6,525.4     $ 77.4     $ 6,602.8     $ 4,762.8     $ 57.9     $ 4,820.7  

During the first nine months of both 2009 and 2008, there were no material changes in our ownership interests in subsidiaries in which we retained a controlling financial interest.

Equity Issuances

On January 16, 2009, we entered into an equity distribution agreement with UBS Securities LLC, referred to in this report as UBS.  According to the provisions of this agreement, we may offer and sell from time to time common units having an aggregate offering value of up to $300 million through UBS, as sales agent.  Sales of the units will be made by means of ordinary brokers’ transactions on the New York Stock Exchange at market prices, in block transactions or as otherwise agreed between us and UBS.  Under the terms of this agreement, we also may sell common units to UBS as principal for its own account at a price agreed upon at the time of the sale.  Any sale of common units to UBS as principal would be pursuant to the terms of a separate agreement between us and UBS.

This equity distribution agreement provides us the right, but not the obligation, to sell common units in the future, at prices we deem appropriate.  We retain at all times complete control over the amount and the timing of each sale, and we will designate the maximum number of common units to be sold through UBS, on a daily basis or otherwise as we and UBS agree.  UBS will then use its reasonable efforts to sell, as our sales agent and on our behalf, all of the designated common units.  We may instruct UBS not to sell common units if the sales cannot be effected at or above the price designated by us in any such instruction.  Either we or UBS may suspend the offering of common units pursuant to the agreement by notifying the other party.  During the three and nine months ended September 30, 2009, we issued 1,962,811 and 4,519,558, respectively, of our common units pursuant to this agreement.  After commissions of $1.3 million and $3.6 million, respectively, for the three and nine month periods, we received net proceeds from the issuance of these common units of approximately $103.0 million and $227.6 million.  We used the proceeds to reduce the borrowings under our bank credit facility.  For more information concerning offerings subsequent to September 30, 2009, see "—Subsequent Event" below.

We also completed two separate underwritten public offerings of our common units in the first nine months of 2009, discussed following, and in April 2009, we issued 105,752 common units—valued at $5.0 million—as the purchase price for additional ownership interests in certain oil and gas properties.

In our first 2009 public offering, completed in March, we issued 5,666,000 of our common units at a price of $46.95 per unit, less underwriting commissions and expenses.  We received net proceeds of $258.0 million for the issuance of these common units.  In our second offering, completed in July, we issued 6,612,500 common units at a price of $51.50 per unit, less underwriting commissions and expenses, and we received net proceeds of $329.9 million for the issuance of these common units.  We used the proceeds from each of these two public offerings to reduce the borrowings under our bank credit facility.

Income Allocation and Declared Distributions

For the purposes of maintaining partner capital accounts, our partnership agreement specifies that items of income and loss shall be allocated among the partners, other than owners of i-units, in accordance with their percentage interests.  Normal allocations according to percentage interests are made, however, only after giving effect to any priority income allocations in an amount equal to the incentive distributions that are allocated 100% to our general partner.  Incentive distributions are generally defined as all cash distributions paid to our general partner that are in excess of 2% of the aggregate value of cash and i-units being distributed.

On August 14, 2009, we paid a cash distribution of $1.05 per unit to our common unitholders and our Class B unitholders for the quarterly period ended June 30, 2009.  KMR, our sole i-unitholder, received a distribution of 1,814,650 i-units from us on August 14, 2009, based on the preceding discussion of our i-units and the $1.05 per unit distributed to our common unitholders on that date.  The distributions were declared on July 15, 2009, payable to unitholders of record as of July 31, 2009.

On October 21, 2009, we declared a cash distribution of $1.05 per unit for the quarterly period ended September 30, 2009.  The distribution will be paid on November 13, 2009, to unitholders of record as of October 30, 2009.  Our common unitholders and Class B unitholders will receive cash.  KMR will receive a distribution of 1,783,310 additional i-units based on the $1.05 distribution per common unit.  For each outstanding i-unit that KMR holds, a fraction of an i-unit (0.021292) will be issued.  This fraction was determined by dividing:

▪ $1.05, the cash amount distributed per common unit

by

▪ $49.315, the average of KMR’s shares’ closing market prices from October 14-27, 2009, the ten consecutive trading days preceding the date on which the shares began to trade ex-dividend under the rules of the New York Stock Exchange.

Incentive distributions allocated to our general partner are determined by the amount quarterly distributions to unitholders exceed certain specified target levels.  Our distribution of $1.05 per unit paid on August 14, 2009 for the second quarter of 2009 required an incentive distribution to our general partner of $231.8 million.  Our distribution of $0.99 per unit paid on August 14, 2008 for the second quarter of 2008 resulted in an incentive distribution payment to our general partner in the amount of $194.2 million.  The increased incentive distribution to our general partner paid for the second quarter of 2009 over the incentive distribution paid for the second quarter of 2008 reflects the increase in the amount distributed per unit as well as the issuance of additional units.

Our declared distribution for the third quarter of 2009 of $1.05 per unit will result in an incentive distribution to our general partner of $235.0 million.  This compares to our distribution of $1.02 per unit and incentive distribution to our general partner of $204.3 million for the third quarter of 2008.

Subsequent Event

On October 1, 2009, we amended and restated our equity distribution agreement with UBS (discussed above in “—Equity Issuances”) to allow for the offer and sale from time to time of common units having an aggregate offering value of up to $600 million through UBS, as sales agent.  After September 30, 2009, and through October 30, 2009 (the date we evaluated subsequent events and issued our accompanying interim consolidated financial statements), we issued 124,768 of our common units pursuant to settlement of sales made before September 30, 2009 pursuant to our equity distribution agreement.  After commissions of $0.1 million, we received net proceeds of $6.7 million for the issuance of these 124,768 common units, and we used the proceeds to reduce the borrowings under our bank credit facility.
5 ONEOK Partners LP
E.           PARTNERS’ EQUITY

Equity Issuance - In June 2009, we completed an underwritten public offering of 5,000,000 common units at $45.81 per common unit, generating net proceeds of approximately $219.9 million after deducting underwriting discounts but before offering expenses.

In July 2009, we sold an additional 486,690 common units at $45.81 per common unit to the underwriters of the public offering upon the partial exercise of their option to purchase additional common units to cover over-allotments.  We received net proceeds of approximately $21.4 million from the sale of the common units after deducting underwriting discounts but before offering expenses.

In conjunction with the public offering and partial exercise by the underwriters of their overallotment option, ONEOK Partners GP contributed an aggregate of $5.1 million in order to maintain its 2 percent general partner interest in us.  As a result of these transactions, ONEOK and its subsidiaries now hold an aggregate 45.1 percent interest in us.

We used the proceeds from the sale of common units and the general partner contributions to repay borrowings under our Partnership Credit Agreement and for general partnership purposes.

Cash Distributions Paid - For the nine months ended September 30, 2009, cash distributions included $69.6 million paid to our general partner, of which $62.2 million was related to incentive distributions.  The quarterly distributions paid to our limited partners in each of the first, second and third quarters of 2009 were $1.08 per unit.  These distributions pertained to the fourth quarter of 2008, first quarter of 2009 and second quarter of 2009.

Cash Distributions Declared - In October 2009, we declared a cash distribution of $1.09 per unit ($4.36 per unit on an annualized basis) for the third quarter of 2009, an increase of $0.01 from the previous quarter.  The distribution will be paid on November 13, 2009, to unitholders of record at the close of business on October 30, 2009.
6 PLAINS ALL AMERICAN PIPELINE LP

Note 8—Partners’ Capital and Distributions

 

Equity Offerings

 

During the nine months ended September 30, 2009 and 2008, we completed the following equity offerings of our common units (in millions, except per unit data):

 

 

 

 

 

 

 

 

 

General

 

 

 

 

 

 

 

 

 

Gross

 

Proceeds

 

Partner

 

 

 

Net

 

Period

 

Units Issued

 

Unit Price

 

from Sale

 

Contribution

 

Costs (1)

 

Proceeds

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

September 2009

 

5,290,000

 

$

46.70

 

$

247

 

$

5

 

$

(6

)

$

246

 

March 2009

 

5,750,000

 

$

36.90

 

212

 

4

 

(6

)

210

 

 

 

11,040,000

 

 

 

$

459

 

$

9

 

$

(12

)

$

456

 

2008

 

 

 

 

 

 

 

 

 

 

 

 

 

April 2008

 

6,900,000

 

$

46.31

 

$

320

 

$

6

 

$

(11

)

$

315

 

 


(1)             Costs include the gross spread paid to underwriters.

 

PNGS Acquisition

 

In September 2009, we issued 1,907,305 common units valued at approximately $91 million in order to satisfy a portion of the PNGS Acquisition purchase price. In conjunction with the issuance, we received a contribution from our general partner of approximately $2 million.  See Note 4 for further discussion.

 

LTIP Vesting

 

In May 2009, in connection with the settlement of vested LTIP awards, we issued 277,038 common units at a price of $41.23, for a fair value of approximately $12 million.

 

Distributions

 

The following table details the distributions pertaining to the first nine months of 2009 and 2008, net of reductions to the general partner’s incentive distributions (in millions, except per unit amounts):

 

 

 

 

 

Distributions Paid

 

Distributions

 

 

 

 

 

Common

 

General Partner

 

 

 

per limited

 

Date Declared

 

Date Paid or To Be Paid

 

Units Holders

 

Incentive

 

2%

 

Total

 

partner unit

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

October 19, 2009

 

November 13, 2009 (1)

 

$

125

 

$

35

 

$

3

 

$

163

 

$

0.9200

 

July 15, 2009

 

August 14, 2009

 

$

117

 

$

32

 

$

2

 

$

151

 

$

0.9050

 

April 8, 2009

 

May 15, 2009

 

$

117

 

$

32

 

$

2

 

$

151

 

$

0.9050

 

January 14, 2009

 

February 13, 2009

 

$

110

 

$

28

 

$

2

 

$

140

 

$

0.8925

 

2008

 

 

 

 

 

 

 

 

 

 

 

 

 

October 22, 2008

 

November 14, 2008

 

$

110

 

$

28

 

$

2

 

$

140

 

$

0.8925

 

July 14, 2008

 

August 14, 2008

 

$

109

 

$

30

 

$

2

 

$

141

 

$

0.8875

 

April 17, 2008

 

May 15, 2008

 

$

100

 

$

25

 

$

2

 

$

127

 

$

0.8650

 

January 16, 2008

 

February 14, 2008

 

$

99

 

$

23

 

$

2

 

$

124

 

$

0.8500

 

 


(1)             Payable to unitholders of record on November 3, 2009, for the period July 1, 2009 through September 30, 2009.

 

Upon closing of the Pacific acquisition in November 2006 and the Rainbow acquisition in May 2008, our general partner agreed to reduce the amounts due it as incentive distributions. Additionally, in order to enhance our distribution coverage ratio over the next 24 months in connection with the PNGS Acquisition, our general partner has agreed to further reduce its incentive distributions by an aggregate of $8 million over the next two years - $1.25 million per quarter for the first four quarters and $0.75 million per quarter for the next four quarters. This incentive distribution reduction will become effective upon payment of our November 2009 quarterly distribution of $0.9200 per limited partner unit. The total reduction in incentive distributions related to the Pacific, Rainbow and PNGS acquisitions is $83 million. Following the distribution in November 2009, the aggregate incentive distribution reductions remaining will be approximately $23 million.

7 PLUM CREEK TIMBER CO INC

Note 9. Partners’ Capital

The changes in the Operating Partnership’s capital accounts were as follows during 2009 (in millions):

 

     Preferred
Partnership
Interest
    Partners’
Capital
    Accumulated
Other
Comprehensive
Income (Loss)
    Total
Partnership
Capital
 

January 1, 2009

   $ 790      $ 1,603      $ (31   $ 2,362   

Net Income before Allocation to Series T-1 Preferred Interest and Partners

     —          171        —          171   

Other Comprehensive Income (Loss), net of tax

     —          —          (2     (2
              

Total Comprehensive Income

           169   
              

Net Income Allocation to Series T-1 Preferred Interest

     14        (14     —          —     

Distributions to Partners (Common Limited Partnership Interests)

     —          (156     —          (156

Distributions for Series T-1 Preferred Interest

     (18     —          —          (18

Capital Contributions from Parent

     —          3        —          3   
                                

March 31, 2009

     786        1,607        (33     2,360   

Net Income before Allocation to Series T-1 Preferred Interest and Partners

     —          47        —          47   

Other Comprehensive Income (Loss), net of tax

     —          —          3        3   
              

Total Comprehensive Income

           50   
              

Net Income Allocation to Series T-1 Preferred Interest

     15        (15     —          —     

Distributions to Partners (Common Limited Partnership Interests)

     —          (69     —          (69

Distributions for Series T-1 Preferred Interest

     (11     —          —          (11

Capital Contributions from Parent

     —          2        —          2   
                                

June 30, 2009

     790        1,572        (30     2,332   

Net Income before Allocation to Series T-1 Preferred Interest and Partners

     —          33        —          33   

Other Comprehensive Income (Loss), net of tax

     —          —          2        2   
              

Total Comprehensive Income

           35   
              

Net Income Allocation to Series T-1 Preferred Interest

     14        (14     —          —     

Distributions to Partners (Common Limited Partnership Interests)

     —          (69     —          (69

Distributions for Series T-1 Preferred Interest

     (14     —          —          (14

Capital Contributions from Parent

     —          2        —          2   
                                

September 30, 2009

   $ 790      $ 1,524      $ (28   $ 2,286   
                                

 

Comprehensive Income

Comprehensive income includes net income, actuarial gains and losses associated with our defined benefit pension plans and unrealized gains and losses on available-for-sale securities. Comprehensive income was as follows for the quarter and nine-month periods ended September 30 (in millions):

 

     Pretax Amount     Tax Expense
(Benefit)
    After-Tax
Amount
 

Quarter Ended September 30, 2009

      

Net Income before Allocation to Series T-1 Preferred Interest and Partners

       $ 33   

Unrealized Holding Gains (Losses)

   $ 2      $ —          2   

Defined Benefit Plans:

      

Actuarial Loss

     (3     (1     (2

Less: Reclassification to Net Income

     4        2        2   
            

Total Comprehensive Income

       $ 35   
            

 

     Pretax Amount     Tax Expense
(Benefit)
   After-Tax
Amount
 

Quarter Ended September 30, 2008

       

Net Income before Allocation to Series T-1 Preferred Interest and Partners

        $ 69   

Unrealized Holding Gains (Losses)

   $ (1   $ —        (1
             

Total Comprehensive Income

        $ 68   
             

 

     Pretax Amount     Tax Expense
(Benefit)
    After-Tax
Amount
 

Nine Months Ended September 30, 2009

      

Net Income before Allocation to Series T-1 Preferred Interest and Partners

       $ 251   

Unrealized Holding Gains (Losses)

   $ 3      $ —          3   

Defined Benefit Plans:

      

Actuarial Loss

     (3     (1     (2

Less: Reclassification to Net Income

     4        2        2   
            

Total Comprehensive Income

       $ 254   
            

 

     Pretax Amount     Tax Expense
(Benefit)
   After-Tax
Amount
 

Nine Months Ended September 30, 2008

       

Net Income before Allocation to Series T-1 Preferred Interest and Partners

        $ 138   

Unrealized Holding Gains (Losses)

   $ (2   $ —        (2
             

Total Comprehensive Income

        $ 136   
             

The actuarial loss of $3 million for the quarter and nine-months ended September 30, 2009, is due to the re-measurement of our benefit obligation and plan assets for our defined benefit pension as of September 1, 2009, in connection with lump-sum settlements. See Note 11 of the Notes to Consolidated Financial Statements. The reclassification of the net actuarial loss included in accumulated other comprehensive income of $4 million for the quarter and nine-months ended September 30, 2009, represents the portion of the net actuarial loss recognized in Net Income as a result of the lump-sum pension settlements.

The components of accumulated other comprehensive income, net of tax, were as follows (in millions):

 

     September 30, 2009     December 31, 2008  

Net Unrealized Holding Gains (Losses)

   $ 3      $ —     

Defined Benefit Plans:

    

Net Loss

     (31     (31
                
   $ (28   $ (31