Unit-Based Compensation

6 Months Ended

Jun. 30, 2013

Unit-Based Compensation [Abstract]

Unit-Based Compensation

NOTE 12 – UNIT-BASED COMPENSATION

The QRE GP, LLC Long-Term Incentive Plan (the “Plan”) was established for employees, officers, consultants and directors of QRE GP and its affiliates, including QRM, who perform services for us. The Plan consists of unit options, restricted units, phantom units, unit appreciation rights, distribution equivalent rights, other unit-based awards and unit awards. The purpose of awards under the Plan is to provide additional incentive compensation to such individuals providing services to us and to align the economic interests of such individuals with the interests of our unitholders. The Plan limits the number of common units that may be delivered pursuant to awards under the Plan to 1.8 million units.

Restricted Units

Periodically we issue restricted units with a service condition (“Restricted Units”) and restricted units with a market condition (“Performance Units”). The fair value of the Restricted Units, based on the closing price of our common units at the grant date, is amortized to compensation expense on a straight-line basis over the vesting period of the award. The fair value of the Performance Units, based on a Monte Carlo model with assumptions based on market conditions, is amortized to compensation expense on a straight-line basis over the vesting period of the award.

On April 22, 2013, we granted approximately 455,000 Restricted Unit awards and approximately 149,000 Performance Unit awards to employees of QRM and 20,000 unit awards to independent directors of the Partnership.

Service Restricted Units

For the three months endedJune 30, 2013 and 2012, we recognized compensation expense related to the outstanding Restricted Units of $2.0 million and $0.4 million. For the six months endedJune 30, 2013 and 2012, we recognized compensation expense related to the outstanding Restricted Units of $2.9 million and $0.8 million. 

Performance Restricted Units.

The Performance Units will be earned over a three year period based on the Partnership’s performance relative to its peers in accordance with the Plan. The final units to be issued will range from 0 – 225% of the initial units granted. For the three and six months endedJune 30, 2013, we recognized $0.2 million and $0.3 million of compensation expense related to the Performance Units. There were no Performance Units outstanding for the three and six months ended June 30, 2012. 

The following table summarizes the activity of our Restricted Units and Performance Units forJune 30, 2013:

		Weighted			Weighted
		Average			Average
	Number of	Grant-Date		Number of	Grant-Date
	Service Restricted units	Fair Value		Performance units	Fair Value
Unvested units, December 31, 2012	550	$	18.80	118	$	10.34
Granted	479		17.99	149		10.03
Forfeited	(50)		18.49	-		-
Vested	(26)		19.01	-		-
Unvested units, June 30, 2013	953	$	18.39	267	$	10.17