Unit Based Compensation
 12 Months Ended
Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Unit Based Compensation
UNIT BASED COMPENSATION
Class A units
In connection with our IPO and as provided for in our partnership agreement, we granted 250,000 non-voting Class A units to certain executive officers and other key employees of our general partner who provide services to us, of which 185,000 and 220,000 were outstanding as of December 31, 2015 and 2014, respectively. None of the Class A units were vested as of December 31, 2015. We had forfeitures of 35,000 for the year ended December 31, 2015 and 30,000 for the year ended December 31, 2014.

The Class A units vest over a four year period depending upon the attainment of established distribution target thresholds for each year in the four year vesting period. If distributions exceed the threshold by more than the target amount, the Class A units in that tranche vest and become convertible into more than one common unit (each Class A unit is convertible into a maximum number of common units of 1.25 to 2.0 times, depending on the tranche). The maximum number of common units available for issuance under the plan was 300,625 at December 31, 2015. Each of the Class A units have distribution equivalent rights, or DERs, until they are forfeited, expire, or are terminated. However, distributions over the vesting period are not paid in arrearage if the Class A units become convertible into more than one common unit.

We measure the compensation cost associated with the Class A units based on the fair value at the effective date of the grant, representing the October 8, 2014 date our common units began trading on the NYSE. We determined the fair value of our Class A units at the grant date to be $25.71 per Class A unit based on the market price of the underlying common units on the date of our IPO, adjusted for vesting probabilities associated with the performance-based vesting requirements and the present value of the expected distributions. We assumed distribution rates ranging from $0.24375 per quarter to $0.4905 per quarter during the vesting period which we discounted assuming a 13% annual cost of equity. For the year ended December 31, 2015, we revised our assumptions regarding the expected distribution rates to quarterly amounts ranging from $0.2875 per unit to $0.3565 per unit, based upon revised vesting probabilities associated with performance-based vesting requirements.

The ultimate percentage of units vesting in each tranche depends on a performance condition: specifically, the total distributions paid in the four quarters of the vesting period for each tranche. If distributions meet or fall below a threshold, the Class A units in that tranche are forfeited. If distributions exceed a threshold by less than a target amount, the Class A units in that tranche vest and become convertible into one common unit. If distributions exceed the threshold by the target amount or more, the Class A units in that tranche vest and become convertible into more than one common unit (1.25 to 2.0 times common units per Class A unit, depending on the tranche). We did not assume any forfeitures in our initial determination of fair value, although we have reflected actual forfeitures in our determination of compensation expense with respect to the Class A units.

We estimated the expense for each tranche as the number of unit equity awards, multiplied by the per unit grant date fair value of those awards less actual forfeitures in the probable vesting scenario for each tranche (equaling the applicable conversion multiple times the value of the unit excluding the expected distributions paid over the vesting period (the common unit price at IPO less the present value of the expected distributions) plus the present value of the expected distributions for any tranches that vest). The estimated fair value of our Class A units is amortized over the four-year vesting period using the straight-line method. The Class A unit awards will convert into our common units upon the vesting. We recognized approximately $1.3 million and $0.6 million, respectively, as compensation expense for the years ended December 31, 2015 and 2014, related to the Class A units granted, which costs are included in “Selling, general and administrative” in our consolidated statements of operations.

Each recipient of a Class A unit is entitled to nonforfeitable cash distributions equal to the product of the number of Class A units outstanding for the participant and the cash distribution per unit paid to our common unitholders. These distributions are included in “Distributions” as presented in our consolidated statements of cash flows and our consolidated statement of partners’ capital. However, distributions paid on Class A units that have been forfeited are reclassified to unit based compensation expense when it is determined that the Class A units are not expected to vest. For the year ended December 31, 2015 we recognized compensation expense in the amount of $19 thousand for distributions paid on Class A units that are not expected to vest.

Long-term Incentive Plan
In 2015, the board of directors of our general partner, acting in its capacity as the general partner of USDP approved the grant of phantom unit awards, or Phantom Units, to directors and employees of our general partner and its affiliates under the USD Partners LP 2014 Long-Term Incentive Plan, which we refer to as the LTIP. The total number of our common units initially authorized for issuance under the LTIP was 1,654,167, of which 1,280,146 remain available at December 31, 2015. The Phantom Units are subject to all of the terms and conditions of the LTIP and the Phantom Unit award agreements, which are referred to as the Award Agreements. Phantom Unit awards generally represent rights to receive our common units, or with respect to the awards granted to our directors and employees domiciled in Canada, each Phantom Unit that vests is redeemed in cash for an amount equivalent to the closing market price of one of our common units on the vesting date.

The following table presents our Equity-classified phantom unit award activity:
 
Number of Director and Independent Consultant Units (1)
 
Number of Employee Units
 
Weighted-Average Grant Date Fair Value Per Unit
Phantom Unit awards at December 31, 2014
—

 
—

 
$
—

Granted
24,045

 
367,548

 
$
12.76

Vested
—

 
—

 
$
—

Forfeited
—

 
(17,572
)
 
$
12.90

Phantom Unit awards at December 31, 2015
24,045

 
349,976

 
$
12.75

 
(1) 
Phantom Unit grants to consultants and independent directors vest over a one-year period and are valued at the price of a common unit as quoted on the New York Stock Exchange at the end of each reporting period. These Phantom Units were valued at $169 thousand at December 31, 2015.

The following table presents our Liability-classified phantom unit award activity:
 
Number of Director and Independent Consultant Units (1)
 
Number of Employee Units (2)
 
Weighted-Average Grant Date Fair Value Per Unit
Phantom Unit awards at December 31, 2014
—

 
—

 
$
—

Granted
10,256

 
17,702

 
$
12.76

Vested
—

 
(4,426
)
 
$
12.76

Forfeited
—

 
—

 
$
—

Phantom Unit awards at December 31, 2015
10,256

 
13,276

 
$
12.76

 
(1) 
Phantom Unit grants to directors and independent consultants vest over a one year period following the grant date, and are valued at the price as of a common unit quoted on the New York Stock Exchange at the end of each reporting period. These Phantom Units were valued at $72 thousand at December 31, 2015.
(2) 
Phantom Unit grants to employees will vest in four equal annual installments following the grant date, and are valued at the price of a common unit as quoted on the New York Stock Exchange at the end of each reporting period. These units were valued at $93 thousand at December 31, 2015.

The Award Agreements set forth the terms of grants of Phantom Units to participants under the LTIP. Each Phantom Unit granted under the Award Agreement includes an accompanying DER, which entitles the grantee to receive payments at a per unit rate equal in amount to the per unit rate for any distributions we make with respect to our common units underlying the Phantom Units. The Award Agreements granted to employees of our general partner generally contemplate that the individual grants of Phantom Units will vest in four equal annual installments based on the grantee’s continued employment through the vesting dates specified in the Award Agreements, subject to acceleration upon the grantee’s death or disability, or involuntary termination in connection with a change in control of the Partnership or our general partner. Awards to independent directors of the board of our general partner typically vest over a one year period following the grant date. Award amounts for a significant majority of the grants were generally determined by reference to a specified dollar amount determined based on an allocation formula which included a percentage multiplier of the grantee's base salary, among other factors, converted to a number of units based on the initial public offering price of $17.00 per common unit.

The fair value of each Phantom Unit on the grant date is equal to the market price of our common units on the grant date. We account for the Phantom Unit grants to independent directors and employees of our general partner domiciled in Canada that are paid out in cash upon vesting, throughout the requisite vesting period, by revaluing the unvested Phantom Units outstanding at the end of each reporting period and recording a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of operations and recognizing a liability in "Accounts payable and accrued expenses" in our consolidated balance sheets. With respect to the Phantom Units granted to employees of our general partner domiciled in the United States, we amortize the initial grant date fair value over the requisite service period using the straight-line method with a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of operations, with an offset to common units within the Partners' Capital section of our consolidated balance sheet. With respect to the Phantom Units granted to consultants and independent directors of our general partner domiciled in the United States, throughout the requisite service period we revalue the unvested Phantom Units outstanding at the end of each reporting period and record a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of operations, with an offset to common units within the Partners' Capital section of our consolidated balance sheet.

For the year ended December 31, 2015, we recognized approximately $1.2 million in compensation expense associated with outstanding Phantom Units. As of December 31, 2015, the unrecognized compensation expense related to Phantom Units was $3.6 million, which we expect to recognize over a weighted average period of 3.1 years.

We made payments to holders of the Phantom Units pursuant to the DERs we granted to them under the Award Agreements as follows:
 
Year Ended
 
December 31, 2015
 
(in thousands)
Equity-classified Phantom Units (1)
$
327

Liability-classified Phantom Units
24

Total
$
351

    
(1) 
For the year ended December 31, 2015, we reclassified $5 thousand to unit based compensation expense for DERs paid in respect of Phantom Units that have been forfeited.