Equity and Equity-Based Compensation |
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity and Equity-Based Compensation |
Equity Awards - Annual Bonus Program The board of directors of the General Partner has approved an annual bonus program which is provided to substantially all employees. Under this program bonuses for the majority of participants will be settled in cash with others receiving a combination of cash and common units. 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. The Partnership estimates that $0.4 million of the annual bonus accrued as of December 31, 2016 will be settled in common units. Of the annual bonus accrued as of December 31, 2015, approximately $5.0 million was subsequently settled by issuing 239,641 common units in 2016 (market value at settlement of $4.1 million). The Partnership withheld from the recipients 78,623 common units to satisfy tax withholding obligations. Of the annual bonus accrued as of December 31, 2014, approximately $4.9 million was subsequently settled by issuing 200,775 common units in 2015 (market value at settlement of $4.9 million). The Partnership withheld from the recipients 67,141 common units to satisfy tax withholding obligations. Equity Awards - Director Compensation During the years ended December 31, 2016, 2015, and 2014 the board of directors of the General Partner issued 9,824, 7,464 and 7,993 vested units as compensation to certain of its directors, respectively, with estimated grant date fair values of $0.2 million for each period. Equity Awards - Performance-based Phantom Units The board of directors of the General Partner grants performance-based phantom unit awards to key employees that vest over a period of time (usually three years). 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 (between 0 and 200%) of the phantom units granted, based on the Partnership’s achieving pre-determined performance criteria. The Partnership uses authorized but unissued units to satisfy its unit-based obligations. TUR-based Phantom Units Phantom unit awards granted during the years ended December 31, 2015 and 2014, include a market condition criteria that considers the Partnership's total unitholder return ("TUR") over the three year vesting period, compared with the total unitholder return of a peer group of other master limited partnership energy companies over the same period. These awards are equity awards with both service and market-based conditions, which results in compensation cost 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 TUR based phantom units was estimated at the date of grant based on a Monte Carlo model that estimates 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 TUR-based phantom units granted on March 5, 2015 was estimated to be $4.5 million (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 TUR-based phantom units granted on July 11, 2014 was estimated to be $5.5 million (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%. TUR-based phantom units have vested as follows: •The Partnership has determined that the TUR-based phantom units with a performance period ending as of December 31, 2016 will vest at the 200% level and as a result 142,100 common units will be issued during the three months ended March 31, 2017, exclusive of units to be withheld to satisfy tax withholding requirements. •TUR-based phantom units with a performance period ending as of December 31, 2015 vested at the 200% level and as a result 74,050 common units (vested market value of $1.4 million) were issued during January 2016 with 24,683 units being withheld to satisfy tax withholding obligations. •TUR-based phantom units with a performance period ending as of December 31, 2014 vested at the 200% level and as a result 74,048 common units (vested market value of $1.8 million) were issued during January 2015 with 24,605 units being withheld to satisfy tax withholding obligations. OCF-based Phantom Units Phantom unit awards granted in 2016 include a performance criteria that considers operating cash flow, as defined therein ("OCF"), over a three year vesting period. The number of common units that may be received in settlement of each phantom unit award can range between 0 and 200% of the number of phantom units granted based on the level of OCF achieved during the vesting period. These awards are equity awards with performance and service conditions which result in compensation cost being recognized over the requisite service period once payment is determined to be probable. Compensation expense related to the OCF based awards is estimated each reporting period by multiplying the number of common units underlying such awards that, based on the Partnership's estimate of OCF, are probable to vest, by the grant-date fair value of the award and is recognized over the requisite service period using the straight-line method. The fair value of the OCF based phantom units was the grant date closing price listed on the New York Stock Exchange. The number of units that the Partnership estimates are probable to vest could change over the vesting period. Any such change in estimate is recognized as a cumulative adjustment calculated as if the new estimate had been in effect from the grant date. Equity Awards - Other 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 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 withheld from the recipients 6,768 units to satisfy tax withholding obligations. The remaining 23,685 awards (estimated grant date fair value of $0.5 million), consisted of phantom units issued to employees that vested as follows: 13,766 units on March 31, 2015 (with 4,851 units withheld to satisfy tax withholding requirements) and 9,919 on March 31, 2016 (with 3,705 units withheld to satisfy tax withholding requirements). Recipients had distribution equivalent rights on any phantom units that ultimately vested. On March 25, 2016, the board of directors of the General Partner granted 5,056 vested units (estimated grant date fair value of $0.1 million) to certain retiring employees of the Partnership. The Partnership withheld 1,384 units from the recipients to satisfy tax withholding obligations. 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 years ended December 31, 2016, 2015 and 2014 was $3.7 million, $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. Total unrecognized compensation cost related to the performance-based phantom units totaled $3.3 million as of December 31, 2016, which is expected to be recognized over a weighted average period of 19 months. Equity - Changes in Partnership's units The following table provides information with respect to changes in the Partnership’s units:
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