Equity-Indexed Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of estimated vesting dates for PAA long-term incentive plan awards outstanding

At December 31, 2015, the following LTIP awards, denominated in PAA units, were outstanding (units in millions):

PAA	PAA	Probable Awards						Not Yet
LTIP Units	Distribution	Estimated Unit Vesting Date						Probable
Outstanding (1) (2)	Required (3)	2016	2017	2018	2019	Thereafter	Total	Awards (4)
6.9	$2.075-$3.300	1.9	1.5	1.0	0.8	0.5	5.7	1.2

(1)

Approximately 2.7 million of the 6.9 million outstanding PAA LTIP awards also include DERs, of which 2.4 million had vested as of December 31, 2015.

(2)

LTIP units outstanding do not include AAP Management Units.

(3)

These LTIP awards have performance conditions requiring the attainment of an annualized PAA distribution of between $2.075 and $3.30 and vest upon the later of a certain date or the attainment of such levels. If the performance conditions are not attained while the grantee remains employed by us, or the grantee does not meet employment requirements, these awards will be forfeited. For purposes of this disclosure, vesting dates are based on an estimate of future distribution levels and assume that all grantees remain employed by us through the vesting date. As of December 31, 2015, a distribution of $2.90 per unit was deemed probable of occurring in the reasonably foreseeable future (and was initially determined to be probable in the fourth quarter of 2014).

(4)

The achievement of the applicable performance conditions (distributions greater than $2.90 per unit) was not deemed to be probable as of December 31, 2015 and, therefore, no expense has been recognized related to these awards.

Summary of expense recognized and the value of vested LTIP awards under equity-indexed compensation plans

The table below summarizes the expense recognized and the value of vested LTIP awards (settled both in common units and cash) under our equity-indexed compensation plans and includes both liability-classified and equity-classified awards for the periods indicated (in millions):

	Year Ended December 31,
	2015		2014		2013
Equity-indexed compensation expense	$	27	$	98	$	116
LTIP unit-settled vestings	$	37	$	53	$	48
LTIP cash-settled vestings	$	66	$	53	$	61
DER cash payments	$	8	$	8	$	8

Estimated equity-indexed compensation plan fair value amortization

We estimate that the remaining fair value will be recognized in expense as shown below (in millions):

Year	Equity-Indexed Compensation Plan Fair Value Amortization (1) (2)
2016	$	37
2017	21
2018	11
2019	3
2020	1

Total	$	73

(1)

Amounts do not include fair value associated with awards containing performance conditions that are not considered to be probable of occurring at December 31, 2015.

(2)

Includes unamortized fair value associated with AAP Management Units.

Long-Term Incentive Plan Awards

Equity-Indexed Compensation Plans

Summary of activity for equity-indexed compensation plans

Activity for LTIP awards under our equity-indexed compensation plans denominated in PAA and PNG units is summarized in the following table for the periods indicated (units in millions):

	PAA Units (1) (2)				PNG Units
			Weighted Average				Weighted Average
			Grant Date				Grant Date
	Units		Fair Value per Unit		Units		Fair Value per Unit
Outstanding at December 31, 2012	6.0		$	25.55	0.9		$	17.49

Granted	4.1		$	47.60	0.4		$	17.51
Vested (3)	(1.8	)	$	24.79	—		$	18.88
Cancelled or forfeited (4)	(0.3	)	$	36.70	(0.3	)	$	21.62
Conversion of PNG unit-denominated awards into PAA unit-denominated awards (5)	0.4		$	40.54	(1.0	)	$	16.41

Outstanding at December 31, 2013	8.4		$	36.97	—		$	—

Granted	1.2		$	47.68
Vested	(1.9	)	$	25.49
Cancelled or forfeited	(0.4	)	$	40.14

Outstanding at December 31, 2014	7.3		$	41.45

Granted	2.1		$	28.76
Vested	(2.1	)	$	28.91
Cancelled or forfeited	(0.4	)	$	44.56

Outstanding at December 31, 2015	6.9		$	41.23

(1)

Amounts do not include AAP Management Units.

(2)

Approximately 0.5 million, 0.6 million and 0.5 million PAA common units were issued, net of tax withholding of approximately 0.3 million, 0.3 million and 0.3 million units during 2015, 2014 and 2013, respectively, in connection with the settlement of vested awards. The remaining PAA awards (approximately 1.3 million, 1.0 million and 1.0 million units) that vested during 2015, 2014 and 2013, respectively, were settled in cash.

(3)

Less than 0.1 million PNG units vested during the year ended December 31, 2013.

(4)

The unvested portion of grants of PNG phantom unit awards other than those granted under the PNG 2010 LTIP was surrendered on December 31, 2013 in connection with the closing of the PNG Merger.

(5)

As a result of the PNG Merger on December 31, 2013, outstanding awards of PNG phantom units issued under the PNG 2010 LTIP were converted into comparable awards of PAA phantom units representing the right to receive PAA common units by applying the Merger Exchange Ratio to each outstanding PNG phantom unit and rounding down to the nearest PAA phantom unit for any fractions.

AAP Management Units

Equity-Indexed Compensation Plans

Summary of activity for equity-indexed compensation plans

The following is a summary of activity of AAP Management Units for the periods indicated (in millions):

	Reserved for Future Grants		Outstanding	Outstanding Units Earned	Grant Date Fair Value of Outstanding AAP Management Units (1)
Balance at December 31, 2013	3.5		48.6	47.0	$	51

Granted	(0.5	)	0.5	—	13
Earned	N/A		N/A	0.8	N/A

Balance at December 31, 2014	3.0		49.1	47.8	$	64

Granted	(1.6	)	1.6	—	24
Earned	N/A		N/A	0.7	N/A

Balance at December 31, 2015	1.4		50.7	48.5	$	88

(1)

Of the $88 million grant date fair value, $56 million had been recognized through December 31, 2015 on a cumulative basis. Of this amount, $1 million, $7 million and $5 million was recognized as expense during the years ended December 31, 2015, 2014 and 2013, respectively.