Equity-Based Compensation

6 Months Ended

Jun. 30, 2013

Equity-Based Compensation [Abstract]

Equity-Based Compensation

Equity-Based Compensation

The Partnership’s LTIP for its employees, directors and consultants authorizes grants up to 5,865,584 common units. LTIP compensation expense of $1 million and $1 million was recorded in general and administrative expense for the three months ended June 30, 2013 and 2012, respectively, and $3 million and $2 million for the six months ended June 30, 2013 and 2012, respectively.

Phantom Units. All phantom units granted prior to November 2010 were in substance two grants composed of (1) service condition grants with graded vesting over three years or (2) market condition grants with cliff vesting based upon the Partnership’s relative ranking in total unitholder return among 20 peer companies. Distributions related to these unvested phantom units will be accrued and paid upon vesting. During 2013, all remaining market condition grants were forfeited due to the completion of the three year vesting period without attaining the market based incentive requirements.

All phantom units granted from November 2010 to November 2012 were service condition grants with graded vesting over five years. Phantom units granted after November 2012 were service condition grants that (1) have graded vesting over five years or (2) vest over the next five years on a cliff basis; by vesting 60% at the end of the third year of service and vesting the remaining 40% at the end of the fifth year of service. Distributions related to these unvested phantom units will be paid concurrent with the Partnership’s distribution for common units.

The following table presents phantom units activity for the six months endedJune 30, 2013:

Phantom Units	Units		Weighted Average Grant Date Fair Value
Outstanding at beginning of period	1,231,342		$	23.22
Service condition grants	52,360		25.30
Vested service condition	(26,158	)	23.98
Forfeited service condition	(23,900	)	23.45
Forfeited market condition	(44,397	)	19.52
Outstanding at end of period	1,189,247		24.43

The Partnership expects to recognize $22 million of compensation expense related to non-vested phantom units over a period of 5 years.