Equity-Based Compensation |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-Based Compensation |
Previous Equity Awards On March 31, 2014, the board of directors of the General Partner granted 49,871 awards under the 2013 LTIP to certain directors and employees of the Partnership. Of these total awards, 26,186 (estimated grant date fair value of $0.5 million) were granted as vested common units. In connection with these vested awards, the Partnership reacquired from the recipients 6,768 units (estimated fair value of $0.1 million) to satisfy minimum tax withholding obligations. The remaining 23,685 awards (estimated grant date fair value of $0.5 million), consisted of phantom units issued to employees vest as follows: 13,766 units on March 31, 2015 and 9,919 on March 31, 2016. The grant date fair value of these awards is equal to the market price of the Partnership’s common unit on that date. Recipients have distribution rights on any unvested phantom units. Bonus Program - Equity Awards On July 11, 2014, as part of the annual bonus program the Board of Directors of the General Partner determined that bonuses for the majority of participants would be settled in cash with others receiving a combination of cash and common units issued under the 2013 LTIP. The Partnership records the expected bonus payment as a liability until a grant date has been established and awards finalized, which occurs in the first quarter of the year following the year for which the bonus is earned. $4.9 million of the annual bonus accrual as of December 31, 2014 was settled by issuing 200,775 common units in 2015 and the Partnership withheld from the recipients 67,141 common units (market value of $1.7 million) to satisfy minimum tax withholding obligations. The Partnership estimates that $5.0 million of the annual bonus expense recorded during the year ended December 31, 2015 will be settled in common units in 2016. Director Awards During the years ended December 31, 2015 and 2014, the board of directors of the General Partner issued a total of 7,464 and 7,993 fully vested unit awards, respectively, (estimated grant date fair value of $0.2 million and $0.2 million, respectively) to certain directors under the 2013 LTIP. Performance-Based Phantom Units The Board of Directors of the General Partner grants performance-based phantom unit awards under the 2013 LTIP to key employees that vest if certain performance criteria are met for the applicable performance period. Upon vesting, a holder of performance-based phantom units is entitled to receive a number of common units of the Partnership equal to a percentage (0 percent to 200 percent) of the target phantom units granted, based on the Partnership’s total unitholder return over the performance period, compared with the total unitholder return of a peer group of other master limited partnership energy companies over the same period. The Partnership’s performance-based phantom unit awards are equity awards with both service and market-based conditions, which results in the compensation cost for these awards being recognized over the requisite service period, provided that the requisite service period is fulfilled, regardless of when, if ever, the market based conditions are satisfied. The fair value of the performance-based phantom units granted is estimated based on a Monte Carlo model that performs 100,000 simulations to estimate the most likely performance outcome based on the terms of the award. The key inputs in the model include the market price of the Partnership’s common units as of the valuation date, the historical volatility of the market price of the Partnership’s common units, the historical volatility of the market price of the common units or common stock of the peer companies and the correlation between changes in the market price of the Partnership’s common units and those of the peer companies. The fair value of performance-based phantom units granted on March 5, 2015 was estimated to be $4.5 million (or a weighted average of $31.58 per unit) based on a Monte Carlo simulation performed using a weighted average volatility of 32.9%, and a weighted average risk free rate of 0.98%. The fair value of performance-based phantom units granted on July 11, 2014 was estimated to be $5.5 million (or a weighted average of $36.88 per unit) based on a Monte Carlo simulation performed using a weighted average volatility of 26.4%, and a weighted average risk free rate of 0.43%. Based on the total unitholder return calculation, the performance-based phantom units with a performance period ending as of December 31, 2014 were exchanged using a 200% achievement threshold and as a result 74,048 common units (vested market value of $1.8 million) were issued during January 2015. In connection with these vested awards, the Partnership withheld from the recipients 24,605 units (vested market value of $0.6 million) to satisfy minimum tax withholding obligations. Units issued under the Partnership’s incentive plans are newly issued. The Partnership has determined that the performance-based phantom units vesting as of December 31, 2015 will be exchanged into common units using a 200% achievement threshold and as a result, 74,048 common units will be issued during the three months ended March 31, 2016. Total unrecognized compensation cost related to the performance-based phantom units totaled $3.6 million as of December 31, 2015, which is expected to be recognized over a period of 24 months. Performance-based phantom units accrue distribution equivalents which are recorded as liabilities over the requisite service period and are paid in cash upon vesting of the underlying performance-based phantom unit. The following table presents a summary of the status of the Partnership’s unit awards subject to vesting:
Unit-based compensation recorded in unitholders’ equity for the year ended December 31, 2015 and 2014 was $3.0 million and $3.6 million, respectively, and is included in selling, general and administrative expenses. Units issued under the Partnership’s 2013 LTIP are newly issued. The following table provides information with respect to changes in the Partnership’s units:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||