XML 80 R22.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Equity-Based Compensation Plans And Employee Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2012
Compensation and Retirement Disclosure [Abstract] |
Equity-Based Compensation Plans and Employee Benefit Plans | 15. Equity-Based Compensation Plans and Employee Benefit Plans 2010 Long Term Incentive Plan In 2010, we adopted the 2010 Long-Term Incentive Plan (the “2010 Plan”). The 2010 Plan provides for the awards of phantom units and distribution equivalent rights to members of our board of directors, and employees who provide services to us. Phantom units are notional units representing unfunded and unsecured promises to pay to the participant a specified amount of cash based on the market value of our common units should specified vesting requirements be met. Distribution equivalent rights (“DERs”) are tandem rights to receive on a quarterly basis a cash amount per phantom unit equal to the amount of cash distributions paid per common unit. The 2010 Plan is administered by the Governance, Compensation and Business Development Committee (the “G&C Committee”) of our board of directors. The G&C Committee (at its discretion) designates participants in the 2010 Plan, determines the types of awards to grant to participants, determines the number of units to be covered by any award, and determines the conditions and terms of any award including vesting, settlement and forfeiture conditions. The compensation cost associated with the phantom units is re-measured each reporting period based on the market value of our common units, and is recognized over the vesting period. The liability recorded for the estimated amount to be paid to the participants under the 2010 LTIP is adjusted to recognize changes in the estimated compensation cost and vesting. Management’s estimates of the fair value of these awards granted in 2012 are adjusted for assumptions about expected forfeitures of units prior to vesting. For our performance-based awards, our fair value estimates are weighted based on probabilities for each performance condition applicable to the award. During 2012, we granted 176,995 phantom units with tandem DERs at a weighted average grant fair value of $31.14 per unit. During 2011, we granted 151,916 phantom units with tandem DERs at a weighted average grant date fair value of $27.82 per unit. The phantom units granted during 2012 and 2011 were both service-based and performance-based awards. The service-based awards vest on the third anniversary of the date of grant. Between 50% and 150% of the number of performance-based phantom units awarded in 2011 and 2012 will vest on the third anniversary of the date of grant, if certain quarterly cash distribution per common unit targets are achieved in the fourth quarter of 2013 and 2014, respectively. If the quarterly cash distribution per common unit is below the threshold target, all of the performance-based phantom units granted will be forfeited. During 2010, we granted 62,927 phantom units that were service-based awards at a weighted average grant date fair value of $20.64 per unit. These phantom units will vest on the third anniversary of the date of grant. A summary of our phantom unit activity for our service-based and performance-based awards is set forth below:
| Service-Based Awards |  | Performance-Based Awards
| Number of Phantom Units |  | Average Grant Date Fair Value |  | Total Value |  | Number of Phantom Units |  | Average Grant Date Fair Value |  | Total Value
Unvested at December 31, 2011 | 109,762 |  |  | $ | 23.36 |  |  | $ | 2,564 |  |  | 102,970 |  |  | $ | 28.19 |  |  | $ | 2,902 |
Granted | 48,785 |  |  | $ | 30.52 |  |  | 1,489 |  |  | 128,210 |  |  | $ | 31.38 |  |  | 4,023 |
Forfeited | (1,787 | ) |  | $ | 29.04 |  |  | (52 | ) |  | (2,679 | ) |  | $ | 29.04 |  |  | (78 | )
Settled | (30,548 | ) |  | $ | 24.94 |  |  | (762 | ) |  | — |  |  | $ | — |  |  | — |
Unvested at December 31, 2012 | 126,212 |  |  | $ | 25.66 |  |  | $ | 3,239 |  |  | 228,501 |  |  | $ | 29.97 |  |  | $ | 6,847 |
At December 31, 2012, we estimated the unrecognized compensation cost of our phantom awards to be approximately $7.5 million to be recognized over a weighted average period of approximately two years. We recorded $6.7 million and $1.9 million of compensation expense for the years ended December 31, 2012 and 2011, respectively. Our liability for these awards totaled $7.2 million and $2 million at December 31, 2012 and 2011, respectively. 2007 Long Term Incentive Plan As a result of the sale of our general partner in February 2010, all outstanding phantom units issued pursuant to our 2007 Long Term Incentive Plan vested. As a result of this acceleration of the vesting period, we recorded non-cash compensation expense of $0.5 million in the first quarter of 2010. In total, 123,857 phantom units vested. This expense is primarily included in general and administrative expenses. At December 31, 2012 and 2011, there were no awards outstanding under this plan. Stock Appreciation Rights Plan Our Stock Appreciation Rights Plan is administered by the G&C Committee, who determines, in its full discretion, who shall receive awards under the Plan, the number of rights to award, the grant date of the units and the formula for allocating rights to the participants and the strike price of the rights awarded. Each right is equivalent to one common unit. The rights have a term of 10 years from the date of grant. If the right has not been exercised at the end of the ten year term and the participant has not terminated employment with us, the right will be deemed exercised as of the date of the right’s expiration and a cash payment will be made as described below. Upon vesting, the participant may exercise rights and receive a cash payment calculated as the difference between the average of the closing market price of our common units for the ten days preceding the date of exercise over the strike price of the right being exercised. If the G&C Committee determines, in its full discretion, that it would cause significant financial harm to the Partnership to make cash payments to participants who have exercised rights under the Stock Appreciation Rights Plan, then the G&C Committee may authorize deferral of the cash payments until a later date. Termination for any reason other than death, disability or normal retirement (as these terms are defined in the Stock Appreciation Rights Plan) will result in the forfeiture of any non-vested rights. Upon death, disability or normal retirement, all rights will become fully vested. If a participant is terminated for any reason within one year after the effective date of a change in control (as defined in the plan) all rights will become fully vested. The compensation cost associated with our Stock Appreciation Rights plan, which upon exercise will result in the payment of cash to the employee, is re-measured each reporting period based on the fair value of the rights. Under accounting guidance, the liability is calculated using a fair value method that takes into consideration the expected future value of the rights at their expected exercise dates. The liability amount accrued on the balance sheet is adjusted to the fair value of the outstanding awards at each balance sheet date with the adjustment reflected in the Consolidated Statement of Operations. The fair value is adjusted for expected forfeitures of rights (due to terminations before vesting, or expirations after vesting). The estimates that we make each period to determine the fair value of these rights include the following assumptions:
| Assumptions Used for Fair Value of Rights
| December 31, 2012 |  | December 31, 2011 |  | December 31, 2010
Expected life of rights (in years) | Less than 1 |  | 0.00 | - | 3.41 |  | 0.00 | - | 4.41
Risk-free interest rate | 0.00% | - | 0.07% |  | 0.00% | - | 0.58% |  | 0.12% | - | 1.73%
Expected unit price volatility | 39.3% |  | 40.6% |  | 41.9%
Expected future distribution yield | 5.00% |  | 6.00% |  | 6.00%
The following table reflects rights activity under our Stock Appreciation Rights Plan as of January 1, 2012, and changes during the year ended December 31, 2012:
| Stock Appreciation Rights |  | Weighted Average Strike Price |  | Weighted Average Contractual Remaining Term (Yrs) |  | Aggregate Intrinsic Value
Outstanding at December 31, 2011 | 662,484 |  |  | $ | 17.97 |  |  |  |  |
Exercised during 2012 | (264,060 | ) |  | $ | 18.85 |  |  |  |  |
Forfeited or expired during 2012 | (13,618 | ) |  | $ | 18.91 |  |  |  |  |
Outstanding at December 31, 2012 | 384,806 |  |  | $ | 17.25 |  |  | 4.83 |  | $ | 7,099 |
Exercisable at December 31, 2012 | 351,051 |  |  | $ | 17.66 |  |  | 4.71 |  | $ | 6,332 |
The total intrinsic value of rights exercised during 2012, 2011 and 2010 was $3.3 million, $2.4 million and $1.3 million, respectively, which was paid in cash to the participants. At December 31, 2012, there was less than $0.1 million of total unrecognized compensation cost related to rights that we expect will vest under the Stock Appreciation Rights Plan. This amount was calculated as the fair value at December 31, 2012 multiplied by those rights for which compensation cost has not been recognized, adjusted for estimated forfeitures. This unrecognized cost will be recalculated at each balance sheet date until the rights are exercised, forfeited or expire. For the awards outstanding at December 31, 2012, the remaining cost will be recognized in the first quarter of 2013. We recorded compensation expense related to our stock appreciation rights of $4.5 million, $0.6 million and $5.2 million in 2012, 2011 and 2010, respectively. Equity-Based Compensation Plan Expense Equity-based compensation expense during the three years ended December 31, 2012 was as follows:
| Expense Related to Equity-Based Compensation Plans
Consolidated Statement of Operations | 2012 |  | 2011 |  | 2010
Supply and logistics operating costs | $ | 3,038 |  |  | $ | 181 |  |  | $ | 2,611 |
Refinery services operating costs | 1,427 |  |  | 226 |  |  | 833 |
Pipeline operating costs | 247 |  |  | 135 |  |  | 575 |
General and administrative expenses | 6,467 |  |  | 2,013 |  |  | 2,098 |
Total | $ | 11,179 |  |  | $ | 2,555 |  |  | $ | 6,117 |
Series B Units Pursuant to restricted unit agreements entered into with Genesis Energy, LLC, our general partner, on February 5, 2010, certain members of our management team received an aggregate of 767 Series B units in our general partner. These awards provided for the conversion of the Series B units into Series A units in our general partner on the seventh anniversary of the issuance date of the awards or at the time of certain events including a change in control of our general partner. As a result of our IDR Restructuring on December 28, 2010, the Series B units converted into Series A units. The Series A units were then exchanged for a total of 2,364,279 Class A Units and 827,484 Waiver Units. See Note 11 for a discussion of our IDR Restructuring and our equity securities. Although the Series B Units represented an equity interest in our general partner and our general partner did not seek reimbursement under our partnership agreement for the value of these compensation arrangements, we recorded non-cash expense for the estimated fair value of the awards. For the year ended December 31, 2010, we recorded non-cash expense of $79.1 million related to these Series B awards with an offsetting entry to the capital account of our general partner. As the awards are fully-vested, no further compensation expense for these awards remains to be recorded. Class B Membership Interests As part of finalizing the compensation arrangements for our senior executives on December 31, 2008, our general partner awarded them an equity interest in our general partner as long-term incentive compensation. The Class B membership interests awarded to our senior executives were accounted for as liability awards under the guidance for equity-based compensation. All of the Class B membership interests in our general partner held by our management team at December 31, 2009 were either (i) converted into Series A units in our general partner or (ii) redeemed by our general partner on February 5, 2010. In total, the value of the Series A units issued and cash payments made by our general partner to settle its obligations under the Class B membership interests and related deferred compensation totaled $14.9 million. This value, when combined with amounts previously paid to our management team during 2009 related to the Class B membership interests, resulted in total compensation expense of $15.4 million. Upon settlement by our general partner of these arrangements with our management team, we recorded a reduction in expense of $2.1 million in the first quarter of 2010. Bonus Program Bonuses under our bonus plan are paid at the discretion of the G&C Committee to our employees and executive officers. In 2012, the G&C Committee based bonus amounts primarily on the amount of cash we generated for distributions to our unitholders, measured on a calendar-year basis. Two metrics were used to determine the general bonus pool – the level of Available Cash before Reserves (before subtracting bonus expense and related employer tax burdens) that we generated and our company-wide safety record improvement which included a targeted reduction in our company-wide incident injury rate. The level of Available Cash before Reserves generated for the year as a percentage of a target set by the G&C Committee is weighted 90% and the achieved level of the targeted improvement in our safety record is weighted 10%. The sum of the weighted percentage achievement of these targets is multiplied by the eligible compensation and the target percentages established by the G&C Committee for the various levels of our employees to determine the maximum general bonus pool. At December 31, 2012, we accrued $7.9 million for estimated bonuses to be paid in March 2013. For 2011 and 2010, we paid bonuses totaling $6.6 million and $5.2 million, respectively, to our executive officers and employees. Employee Benefit Plans In order to encourage long-term savings and to provide additional funds for retirement to its employees, we sponsor a tax qualified profit-sharing and retirement savings plan. Under this plan, our matching contribution is calculated as an equal match of the first 6% of each employee’s annual pretax contribution. Our profit-sharing plan targets a 3% contribution of each eligible employee’s total compensation (subject to IRS limitations). The expenses included in the Consolidated Statements of Operations for costs relating to this plan were $3.4 million, $2.6 million and $2.7 million for the years ended December 31, 2012, 2011 and 2010, respectively. We also provided certain health care and survivor benefits for our active employees. Our health care benefit programs are self-insured, with a catastrophic insurance policy to limit our costs. We plan to continue self-insuring these plans in the future. The expenses included in the Consolidated Statements of Operations for these benefits were $8.8 million, $8.1 million and $6.5 million in 2012, 2011 and 2010, respectively.

X
- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References No definition available. + Details
Name: | us-gaap_CompensationAndEmployeeBenefitPlansTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration