XML 61 R19.htm IDEA: XBRL DOCUMENT v2.4.0.6
Equity Compensation Plans
 3 Months Ended
Mar. 31, 2013
Equity Compensation Plans  
Equity Compensation Plans

Note 10—Equity Compensation Plans

 

For additional discussion of our equity compensation awards, see Note 15 to our Consolidated Financial Statements included in Part IV of our 2012 Annual Report on Form 10-K.

 

Class B Units of Plains AAP, L.P. The following table contains a summary of Class B Units of Plains AAP, L.P.:

 

 

 

Reserved for Future
Grants

 

Outstanding

 

Outstanding Units
Earned

 

 

Grant Date Fair Value
of Outstanding Class B Units (1)
(in millions)

 

Balance at December 31, 2012

 

17,875

 

182,125

 

130,250

 

 

$

44

 

Granted

 

(3,500

)

3,500

 

—

 

 

6

 

Earned

 

N/A

 

N/A

 

26,000

 

 

N/A

 

Balance at March 31, 2013

 

14,375

 

185,625

 

156,250

 

 

$

50

 

 

 

(1)                       Of the grant date fair value, less than $1 million was recognized as expense during the three months ended March 31, 2013.

 

Class B Units of PNGS GP LLC. During July 2010, the Board of Directors of PNG’s general partner authorized the issuance of 165,000 Class B units of PNGS GP LLC (“PNGS GP LLC Class B Units”). At December 31, 2012, 74,250 PNGS GP LLC Class B Units were outstanding. In February 2013, PNG’s general partner determined that the PNGS GP LLC Class B Units were not serving their intended purpose due to the low likelihood of achieving the PNG distribution performance benchmarks required for vesting, which ranged from $2.00 to $2.70 per common unit. As a result, all 74,250 of the existing PNGS GP LLC Class B Unit awards were canceled. In order to encourage the retention of the holders of such canceled awards and provide them with long-term performance incentives, our general partner authorized the issuance of Special PAA Awards to such officers, as further discussed below.

 

Special PAA Awards. In February 2013, we granted 143,000 Special PAA Awards to certain members of PNG’s management.  These awards are denominated in PAA common units and will vest 50% on PAA’s August 2018 distribution date and 50% on PAA’s August 2019 distribution date provided that PNG’s annualized distribution averages at least $1.48 and $1.43 per unit, respectively, for the twelve months prior to each vesting date. DERs associated with these awards will vest on the date that we pay an annualized distribution of $2.40 per unit, provided that PNG’s quarterly distribution remains at least $1.43 (annualized) per unit. Any unvested Special PAA Awards that remain outstanding on December 31, 2020 will be forfeited.

 

PAA LTIP Awards. In addition to the Special PAA Awards described above, in February 2013, we also granted 2.7 million equity-classified phantom unit awards and 1.2 million liability-classified phantom unit awards under our LTIPs.  Substantially all of the equity-classified awards vest as follows: (i) one-third will vest upon the later of the August 2016 distribution date and the date we pay an annualized quarterly distribution of at least $2.35 per common unit, (ii) one-third will vest upon the later of the August 2017 distribution date and the date we pay an annualized quarterly distribution of at least $2.50 per common unit, and (iii) one-third will vest upon the later of the August 2018 distribution date and the date we pay an annualized quarterly distribution of at least $2.65 per unit.  Certain of these equity-classified awards include DERs that will vest in one-third increments upon achieving the referenced distribution performance thresholds, without regard to the minimum service period.  Any of these equity-classified awards and associated DERs that have not vested as of the August 2019 distribution date will be forfeited.  Substantially all of the liability-classified awards are expected to vest on dates ranging from the August 2015 distribution date to the August 2017 distribution date and vest dependent on PAA paying annualized quarterly distributions ranging from $2.30 per common unit to $2.50 per common unit. None of the liability-classified awards include DERs.

 

Other Equity Compensation Information.  Our equity compensation activity for LTIP awards denominated in PAA and PNG units is summarized in the following table (units in millions):

 

 

 

PAA Units (1)

 

PNG Units (2) (3)

 

 

 

Units

 

Weighted Average Grant
Date
Fair Value per Unit

 

Units

 

Weighted Average Grant
Date
Fair Value per Unit

 

Outstanding at December 31, 2012

 

6.0

 

$

25.55

 

0.9

 

$

17.49

 

Granted

 

4.1

 

$

47.04

 

0.4

 

$

17.42

 

Cancelled or forfeited

 

(0.1

)

$

31.47

 

—

 

$

—

 

Outstanding at March 31, 2013

 

10.0

 

$

34.24

 

1.3

 

$

17.47

 

 

 

(1)            Amounts do not include Class B Units of Plains AAP, L.P.

 

(2)            Amounts do not include PNGS GP LLC Class B Units.

 

(3)            Amounts include PNG Transaction Grants.

 

The table below summarizes the expense recognized and the value of vesting (settled both in units and cash) related to our equity compensation plans (in millions):

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

Equity compensation expense

 

$

51

 

$

39

 

LTIP unit-settled vestings

 

$

—

 

$

24

 

LTIP cash-settled vestings

 

$

—

 

$

36

 

DER cash payments

 

$

2

 

$

2