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Equity-Based Compensation | 12 Months Ended
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Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity-Based Compensation | Equity-Based Compensation Description of the Plan Effective March 15, 2018, the MPLX LP 2012 Incentive Compensation Plan (“MPLX 2012 Plan”) was replaced by the MPLX LP 2018 Incentive Compensation Plan (“MPLX 2018 Plan”). The MPLX 2018 Plan will continue in effect until February 28, 2028, unless terminated earlier. Subject to customary anti-dilution adjustments, the MPLX 2018 Plan allows for no more than 16 million common units representing limited partnership interests in MPLX to be delivered under the plan. The MPLX LP 2012 Plan allowed for no more than 2.75 million MPLX LP common limited partner units to be delivered. Consistent with the MPLX 2012 Plan, the MPLX 2018 Plan authorizes the MPLX GP board of directors (the “Board”) to grant unit options, unit appreciation rights, restricted units and phantom units, distribution equivalent rights, unit awards, profits interest units, performance units and other unit-based awards to the employees, officers and directors of the General Partner, MPLX, or any of their affiliates, including MPC. Common units delivered pursuant to an award granted under the MPLX 2018 Plan may be newly issued common units or acquired in the open market or from any other person, including an affiliate of MPLX, as determined by the Board. Unit-based Awards under the Plan MPLX expenses all unit-based payments to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures. Phantom Units – MPLX has granted phantom units under the MPLX 2018 Plan and the MPLX 2012 Plan to non-employee directors of MPLX LP’s general partner and of MPC. Awards to non-employee directors are accounted for as non-employee awards. Phantom units granted to non-employee directors vest immediately at the time of the grant, as they are non-forfeitable, but are not issued until the director’s departure from the board of directors. Prior to issuance, non-employee directors do not have the right to vote such units and cash distribution equivalents accrue in the form of additional phantom units and will be issued when the director departs from the board of directors. MPLX has granted phantom units under the MPLX 2018 Plan and the MPLX 2012 Plan to certain officers and non-officers of MPLX LP, MPLX LP’s general partner and MPC who make significant contributions to our business. These grants are accounted for as employee awards. In general, these phantom units will vest over a requisite service period of up to three years. Prior to vesting, these phantom unit recipients will not have the right to vote such units and cash distributions declared will be accrued and paid upon vesting. The accrued distributions at December 31, 2018 and 2017 were $4 million and $4 million, respectively. The fair values of phantom units are based on the fair value of MPLX LP common units on the grant date. Performance Units – MPLX has granted performance units under the MPLX 2018 Plan and the MPLX 2012 Plan to certain officers of the general partner and certain eligible MPC officers who make significant contributions to our business. Performance units are designed to pay out 75 percent in cash and 25 percent in MPLX LP common units. The performance units paying out in cash are accounted for as liability awards and recorded at fair value with a mark-to-market adjustment made each quarter. The performance units paying out in units are accounted for as equity awards. The performance units granted in 2016 have a three-year performance period of January 1, 2016 through December 31, 2018. The payout of the award is dependent on the total unitholder return of MPLX LP common units as compared to the total unitholder return of a selected group of peer partnerships. The final per unit payout will be based on the average of the results of four measurement periods during the period. The performance units granted in 2017 are hybrid awards having a three-year performance period of January 1, 2017 through December 31, 2019. The payout of the award is dependent on two independent conditions, each constituting 50 percent of the overall target units granted. The awards have a performance condition based on MPLX LP’s DCF during the last twelve months of the performance period, and a market condition based on MPLX LP’s total unitholder return over the entire three-year performance period. During the first quarter of 2018, a performance award was granted; however, a grant date could not be established based on the nature of the award terms. Given that a grant date cannot be established, no expense or units have been recorded. When a grant date is established, the fair value of the award will be recognized over the remaining service period. Outstanding Phantom Unit Awards The following is a summary of phantom unit award activity of MPLX LP common units in 2018:
|  | Phantom Units
|  | Number of Units |  | Weighted Average Fair Value |  | Aggregate Intrinsic Value (In millions)
Outstanding at December 31, 2017 |  | 1,351,523 |  |  | $ | 34.53 |  |  |
Granted |  | 437,092 |  |  | 33.84 |  |  |
Settled |  | (509,570 | ) |  | 34.38 |  |  |
Forfeited |  | (124,710 | ) |  | 34.50 |  |  |
Outstanding at December 31, 2018 |  | 1,154,335 |  |  | 34.34 |  |  |
Vested and expected to vest at December 31, 2018 |  | 1,139,877 |  |  | 34.34 |  |  | $ | 35 |
Non-forfeitable at December 31, 2018(1) |  | 321,638 |  |  | $ | 34.59 |  |  | $ | 10 |
(1) | Represents a subset of phantom units held by our non-employee directors and certain of our officers and non-officer employees that are generally non-forfeitable and that would be paid out as common units upon the holder’s separation from service.
The following is a summary of the values related to phantom units:
|  | Phantom Units
|  | Intrinsic Value of Units Issued During the Period (in millions) |  | Weighted Average Grant Date Fair Value of Units Granted During the Period
2018 |  | $ | 18 |  |  | $ | 33.84 |
2017 |  | 15 |  |  | 36.26 |
2016 |  | $ | 5 |  |  | $ | 29.42 |
As of December 31, 2018, unrecognized compensation cost related to phantom unit awards was $17 million, which is expected to be recognized over a weighted average period of 1.8 years. Outstanding Performance Unit Awards The following table presents a summary of the 2018 activity for performance unit awards to be settled in MPLX LP common units:
|  | Performance Units
|  | Number of Units |  | Weighted Average Fair Value
Outstanding at December 31, 2017 |  | 2,536,594 |  |  | $ | 0.85 |
Granted |  | — |  |  | — |
Settled |  | (538,594 | ) |  | 1.04 |
Forfeited |  | (56,250 | ) |  | 0.90 |
Outstanding at December 31, 2018 |  | 1,941,750 |  |  | 0.80 |
The number of common units that would be issued upon target vesting, using the closing price of our common units on December 31, 2018 would be 64,084 common units. As of December 31, 2018, unrecognized compensation cost related to equity-classified performance unit awards was $1 million, which is expected to be recognized over a weighted average period of 1.0 year. Performance units paying out in MPLX LP common units have a grant date fair value calculated using a Monte Carlo valuation model, which requires the input of subjective assumptions. The following table provides a summary of the weighted average inputs used for these assumptions:
|  | 2018 |  | 2017 |  | 2016
Risk-free interest rate |  | N/A |  | 1.52% |  | 0.96%
Look-back period |  | N/A |  | 2.83 years |  | 2.83 years
Expected volatility |  | N/A |  | 49.34% |  | 47.59%
Grant date fair value of performance units granted |  | N/A |  | $0.90 |  | $0.63
The assumption for expected volatility of our unit price reflects the historical volatility of MPLX LP common units. The look-back period reflects the remaining performance period at the grant date. The risk-free interest rate for the remaining performance period as of the grant date is based on the U.S. Treasury yield curve in effect at the time of the grant. No grant date fair value has been calculated for performance units granted in 2018, since due to the award terms, a grant date has not yet been established. Total Unit-Based Compensation Expense Total unit-based compensation expense for awards settling in MPLX LP common units was $22 million in 2018, $18 million in 2017 and $10 million in 2016. MPC’s Stock-based Compensation Stock-based compensation expenses charged to MPLX LP under our employee services agreement with MPC were $6 million, $2 million and $5 million for 2018, 2017 and 2016, respectively.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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