Unit-Based Compensation

3 Months Ended

Mar. 31, 2014

Equity-Based Compensation [Abstract]

Unit-Based Compensation

NOTE 16 – UNIT-BASED COMPENSATION

The QRE GP, LLC Long-Term Incentive Plan (the “Plan”) was established for employees, officers, consultants and directors of the Partnership 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.

On March 10, 2014, we held a special meeting our common unitholders. At the meeting our common unitholders approved the First Amendment to the QRE GP, LLC Long-Term Incentive Plan (the “Amended LTIP”). The Amended LTIP increases the number of common units available for delivery with respect to awards under the Plan so that, an additional 3 million common units are available for delivery with respect to awards under the Amended LTIP.

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 endedMarch 31, 2014 and 2013, we recognized compensation expense related to the outstanding Restricted Units of $1.5 million and $0.9 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 months endedMarch 31, 2014 and 2013, we recognized $0.2 million and $0.1 million of compensation expense related to the Performance Units.

The following table summarizes the activity of our Restricted Units and Performance Units forMarch 31, 2014:

		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, 2013	754,822	$	18.22	267,489	$	10.17
Granted	-		-	-		-
Forfeited	(15,922)		18.19	-		-
Vested	(7,272)		21.58	-		-
Unvested units, March 31, 2014	731,628	$	18.18	267,489	$	10.17