Note 3. Equity-based Awards

An allocated portion of the fair value of EPCO's equity-based awards is charged to us under the ASA. The following table summarizes the expense we recognized in connection with equity-based awards for the periods presented:

	For the Three Months Ended March 31,
	2012		2011
Restricted common unit awards	$	14.8	$	11.4
Unit option awards		0.7		0.9
Other (1)		0.9		(0.5	)
Total compensation expense	$	16.4	$	11.8

(1) Primarily consists of unit appreciation rights ("UARs"), phantom units and similar awards.

The fair value of equity-classified awards (e.g., restricted common unit and unit option awards) is amortized to earnings over the requisite service or vesting period. Compensation expense for liability-classified awards (e.g., UARs and phantom units) is recognized over the requisite service or vesting period based on the fair value of the award remeasured at each reporting period. Liability-classified awards are settled in cash upon vesting.

At March 31, 2012, EPCO's significant long-term incentive plans applicable to us were the Enterprise Products 1998 Long-Term Incentive Plan ("1998 Plan") and the Amended and Restated 2008 Enterprise Products Long-Term Incentive Plan ("2008 Plan"). In addition, there were unvested awards outstanding under an inactive plan, the Enterprise Products 2006 TPP Long-Term Incentive Plan ("2006 Plan"). After giving effect to awards granted under the 1998 Plan and 2008 Plan through March 31, 2012, a total of 531,669 and 4,885,394 additional common units could be issued under these plans, respectively.

Restricted Common Unit Awards

Restricted common unit awards allow recipients to acquire our common units (at no cost to the recipient apart from service or other conditions) once a defined vesting period expires, subject to customary forfeiture provisions. Restricted common unit awards issued in 2012 generally vest at a rate of 25% per year beginning one year after the grant date. As used in the context of EPCO's long-term incentive plans, the term "restricted common unit" represents a time-vested unit. Such awards are non-vested until the required service period expires. Restricted common units are included in the number of common units presented on our Unaudited Condensed Consolidated Balance Sheets.

The fair value of a restricted common unit award is based on the market price per unit of the underlying security on the date of grant. Compensation expense is recognized based on the grant date fair value, net of an allowance for estimated forfeitures, over the requisite service or vesting period.

The following table presents information regarding restricted common unit awards for the period presented:

	Number of Units			Weighted- Average Grant Date Fair Value per Unit (1)
Restricted common units at December 31, 2011		3,868,216		$	34.22
Granted (2)		1,529,438		$	51.92
Vested (3)		(632,298	)	$	38.31
Forfeited		(24,800	)	$	36.33
Restricted common units at March 31, 2012		4,740,556		$	39.37

(1) Determined by dividing the aggregate grant date fair value of awards (before an allowance for forfeitures) by the number of awards issued. (2) The aggregate grant date fair value of restricted common unit awards issued in 2012 was $79.4 million based on a grant date market price of $51.92 per unit. An estimated annual forfeiture rate of 3.25% was applied to these awards. (3) Includes awards granted to the independent directors of the board of directors of Enterprise GP as part of their annual compensation for 2012. A total of 10,038 restricted common units were issued in February 2012 to the independent directors of Enterprise GP that immediately vested upon issuance.

Typically, each recipient is also entitled to nonforfeitable cash distributions equal to the product of the number of restricted common units outstanding for the participant and the cash distribution per unit paid to limited partners. Since these restricted common units are participating securities, such distributions are included in "Cash distributions paid to limited partners" as presented on our Unaudited Condensed Statements of Consolidated Cash Flows.

The following table presents supplemental information regarding our restricted common unit awards for the periods presented:

	For the Three Months
	Ended March 31,
	2012		2011
Cash distributions paid to restricted common unit holders	$	2.4	$	2.1
Total intrinsic value of our restricted common unit awards vesting during period		32.6		14.7

For the EPCO group of companies, the unrecognized compensation cost associated with restricted common unit awards was an aggregate $107.5 million at March 31, 2012, of which our allocated share of the cost is currently estimated to be $102.2 million. We expect to recognize our share of the unrecognized compensation cost for these awards over a weighted-average period of 2.2 years.

Unit Option Awards

EPCO's long-term incentive plans provide for the issuance of non-qualified incentive options. These unit option awards are denominated in our common units. When issued, the exercise price of each unit option grant may be no less than the market price of our common units on the date of grant. In general, option grants have a vesting period of four years from the date of grant and expire at the end of the calendar year following the year of vesting (e.g., an option vesting on May 29, 2011 will expire on December 31, 2012). However, unit options only become exercisable at certain times during the calendar year following the year in which they vest (typically the months of February, May, August and November).

The fair value of each unit option is estimated on the date of grant using a Black-Scholes option pricing model. Compensation expense recorded in connection with unit options is based on the grant date fair value of such awards, net of an allowance for estimated forfeitures, over the requisite service or vesting period. The following table presents unit option activity for the period presented:

	Number of Units			Weighted- Average Strike Price (dollars/unit)		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (1)
Unit options at December 31, 2011		3,753,420		$	28.08		2.6	$	11.1
Exercised		(712,280	)	$	30.76
Unit options at March 31, 2012		3,041,140		$	27.45		2.8	$	--
Options exercisable at March 31, 2012		--					--		--

(1) Aggregate intrinsic value reflects fully vested unit options at the date indicated.

In order to fund its unit option-related obligations, EPCO may purchase common units at fair value either in the open market or directly from us. When employees exercise unit options, we reimburse EPCO for the cash difference between the strike price paid by the employee and the actual purchase price paid by EPCO for the units issued to the employee.

The following table presents supplemental information regarding our unit options during the periods presented:

	For the Three Months Ended March 31,
	2012		2011
Total intrinsic value of unit option awards exercised during period	$	14.0	$	--
Cash received from EPCO in connection with the exercise of unit option awards		10.2		--
Unit option-related reimbursements to EPCO		14.0		--

For the EPCO group of companies, the unrecognized compensation cost associated with unit option awards was an aggregate $3.0 million at March 31, 2012, of which our allocated share of the cost is currently estimated to be $2.7 million. We expect to recognize our share of the unrecognized compensation cost for these awards over a weighted-average period of 1.3 years.

Unit Appreciation Rights

UARs entitle the recipient to receive a cash payment on the vesting date of the award equal to the excess, if any, of the then current fair market value of our common units over the grant date fair value of the award. UARs are accounted for as liability awards.

At March 31, 2012 and December 31, 2011, there were 107,328 UARs outstanding that had been granted under the 2006 Plan. The accrued liability for UARs at March 31, 2012 and December 31, 2011 was $1.1 million and $0.5 million, respectively.