EQUITY-BASED COMPENSATION

3 Months Ended

Mar. 31, 2013

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EQUITY-BASED COMPENSATION

NOTE 2. EQUITY–BASED COMPENSATION

We grant various forms of equity–based awards to employees, consultants and directors of EV Management and its affiliates who perform services for us.  These equity–based awards consist primarily of phantom units and performance units.   

We accounted for the phantom units issued prior to 2009 as liability awards, and the fair value of these phantom units was remeasured at the end of each reporting period based on the current market price of our common units until settlement.  Prior to settlement, compensation cost was recognized for these phantom units based on the proportionate amount of the requisite service period that has been rendered to date.  The last of these phantom units vested in January 2013.

We account for the phantom units issued beginning in 2009 as equity awards, and we estimated the fair value of these phantom units using the Black–Scholes option pricing model.  We account for the performance units as equity awards, and we estimated the fair value of these market condition performance units using the Monte Carlo simulation model.   

The following table presents the compensation costs recognized in our unaudited condensed consolidated statements of operations: 

	Three Months Ended
	March 31,
	2013	2012
Liability awards	$ 182	$ 822
Equity awards	4,303	3,458
Total	$ 4,485	$ 4,280

These costs are included in “General and administrative expenses” in our unaudited condensed consolidated statements of operations.   

As of March 31, 2013, there was $39.6million of unrecognized compensation costs related to our unvested phantom units and performance units which is expected to be recognized over a weighted average period of 2.70 years.