Note 5. 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 compensation expense we recognized in connection with equity-based awards for the periods indicated:

	For the Year Ended December 31,
	2014		2013		2012
Equity-classified awards:
Restricted common unit awards	$	42.1	$	71.5	$	57.0
Unit option awards		--		0.8		1.3
Phantom unit awards		45.1		--		--
Liability-classified awards		0.3		0.5		1.7
Total	$	87.5	$	72.8	$	60.0

The fair value of equity-classified awards is amortized into earnings over the requisite service or vesting period. Equity-classified awards are expected to result in the issuance of common units upon vesting. Compensation expense for liability-classified awards is recognized over the requisite service or vesting period based on the fair value of the award remeasured at each reporting date. Liability-classified awards are settled in cash upon vesting.

At December 31, 2014, EPCO's significant long-term incentive plans applicable to us were the Enterprise Products 1998 Long-Term Incentive Plan ("1998 Plan") and the 2008 Enterprise Products Long-Term Incentive Plan (Third Amendment and Restatement) ("2008 Plan").

The 1998 Plan provides for awards of our common units and other rights to our non-employee directors and to employees of EPCO and its affiliates providing services to us. Awards under the 1998 Plan may be granted in the form of unit options, restricted common units, phantom units and distribution equivalent rights ("DERs"). Up to 14,000,000 of our common units may be issued as awards under the 1998 Plan. After giving effect to awards granted under the 1998 Plan through December 31, 2014, a total of 2,748,017 additional common units could be issued.

The 2008 Plan (as amended and restated) is a long-term incentive plan under which any employee or consultant of EPCO, us or our affiliates that provides services to us, directly or indirectly, may receive incentive compensation awards in the form of options, restricted common units, phantom units, DERs, unit appreciation rights ("UARs"), unit awards, other unit-based awards or substitute awards. Non-employee directors of our general partner may also participate in the 2008 Plan.

The maximum number of common units available for issuance under the 2008 Plan was 25,000,000 at December 31, 2014. This amount automatically increased under the terms of the 2008 Plan by 5,000,000 common units on January 1, 2015 and will continue to automatically increase annually on January 1 thereafter during the term of the 2008 Plan; provided, however, that in no event shall the maximum aggregate number exceed 70,000,000 common units. The 2008 Plan is effective until September 30, 2023 or, if earlier, until the time that all available common units under the 2008 Plan have been delivered to participants or the time of termination of the 2008 Plan by the Board of Directors of EPCO or by the Audit and Conflicts Committee. After giving effect to awards granted under the 2008 Plan through December 31, 2014, a total of 12,895,605 additional common units could be issued.

Restricted Common Unit Awards

Restricted common unit awards allow recipients to acquire our common units (at no cost to the recipient apart from fulfilling service and other conditions) once a defined vesting period expires, subject to customary forfeiture provisions. Restricted common unit awards generally vest at a rate of 25% per year beginning one year after the grant date and are non-vested until the required service periods expire. Restricted common units are included in the number of common units outstanding as presented on our Consolidated Balance Sheets.

The fair value of a restricted common unit award is based on the market price per unit of our common units 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 periods indicated:

	Number of Units			Weighted- Average Grant Date Fair Value per Unit (1)
Restricted common units at December 31, 2011		7,736,432		$	17.11
Granted (2)		3,177,476		$	25.98
Vested		(2,633,206	)	$	17.40
Forfeited		(493,730	)	$	20.21
Restricted common units at December 31, 2012		7,786,972		$	20.43
Granted (3)		3,549,052		$	28.61
Vested		(3,770,696	)	$	17.48
Forfeited		(344,114	)	$	23.82
Restricted common units at December 31, 2013		7,221,214		$	25.83
Vested		(2,634,074	)	$	23.94
Forfeited		(357,350	)	$	26.38
Restricted common units at December 31, 2014		4,229,790		$	26.96

(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 during 2012 was $82.5 million based on a grant date market price of our common units ranging from $25.96 to $26.77 per unit. An estimated annual forfeiture rate of 3.25% was applied to these awards. (3) The aggregate grant date fair value of restricted common unit awards issued during 2013 was $101.5 million based on a grant date market price of our common units ranging from $28.56 to $31.74 per unit. An estimated annual forfeiture rate of 3.9% was applied to these awards.

Each recipient of a restricted common unit award is 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 our common unitholders. These distributions are included in "Cash distributions paid to limited partners" as presented on our Statements of Consolidated Cash Flows.

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

	For the Year Ended December 31,
	2014		2013		2012
Cash distributions paid to restricted common unitholders	$	7.3	$	10.6	$	10.5
Total intrinsic value of restricted common unit awards that vested during period	$	87.1	$	109.9	$	67.0

For the EPCO group of companies, the unrecognized compensation cost associated with restricted common unit awards was an aggregate $28.3 million at December 31, 2014, of which our allocated share of the cost is currently estimated to be $24.9 million. Due to the graded vesting provisions of these awards, we expect to recognize our share of the unrecognized compensation cost for these awards over a weighted-average period of 1.5 years.

Unit Option Awards

EPCO's long-term incentive plans provide for the issuance of non-qualified incentive options denominated in our common units. When issued, the exercise price of each unit option award may be no less than the market price of our common units on the date of grant (except as otherwise provided with respect to substitute awards). In general, unit option awards 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, 2014 will expire on December 31, 2015). However, unit option awards 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 award is estimated on the date of grant using a Black-Scholes option pricing model, which incorporates various assumptions including expected life of the option, risk-free interest rates, expected distribution yield of our common units, and expected price volatility of our common units. In general, our assumption of expected life of the options represents the period of time that the options are expected to be outstanding based on an analysis of our historical option activity. Our selection of risk-free interest rates is based on published yields for U.S. government securities with terms comparable to the expected life of the option. The expected distribution yield and unit price volatility assumptions are estimated based on several factors, which include an analysis of historical price volatility and distribution yield over a period of time equal to the expected life of the option. Compensation expense recorded in connection with unit option awards is 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 unit option award activity for the periods indicated:

	Number of Units			Weighted- Average Strike Price (dollars/unit)		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (1)
Unit option awards at December 31, 2011		7,506,840		$	14.04
Exercised		(1,484,560	)	$	15.39
Forfeited		(500,000	)	$	13.73
Unit option awards at December 31, 2012		5,522,280		$	13.71
Exercised		(1,472,280	)	$	14.98
Unit option awards at December 31, 2013 (2,3)		4,050,000		$	13.24
Exercised		(2,720,000	)	$	11.83
Forfeited		(60,000	)	$	16.14
Unit option awards at December 31, 2014 (2,3)		1,270,000		$	16.14		1.0	$	25.4

(1) Aggregate intrinsic value reflects fully vested unit option awards at the date indicated. (2) At December 31, 2014 and 2013, we were committed to issue 1,270,000 and 4,050,000, respectively, of our common units if all outstanding unit option awards were exercised. All of the unit option awards outstanding at December 31, 2014 vested during 2014 and became exercisable beginning in February 2015. (3) None of the unit option awards outstanding at December 31, 2014, 2013 and 2012 were exercisable as of such dates, respectively.

In order to fund its unit option award-related obligations, EPCO may purchase common units at fair value either in the open market or directly from us. When employees exercise unit option awards, 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 unit option awards during the periods indicated:

	For the Year Ended December 31,
	2014		2013		2012
Total intrinsic value of unit option awards exercised during period	$	57.5	$	19.8	$	14.6
Cash received from EPCO in connection with the exercise of unit option awards	$	33.4	$	11.5	$	10.2
Unit option award-related cash reimbursements to EPCO	$	57.5	$	19.8	$	14.0

As of December 31, 2014, all compensation expense related to unit option awards had been recognized.

Phantom Unit Awards

Phantom unit awards allow recipients to acquire our common units (at no cost to the recipient apart from fulfilling service and other conditions) once a defined vesting period expires, subject to customary forfeiture provisions. Phantom unit awards generally vest at a rate of 25% per year beginning one year after the grant date and are non-vested until the required service periods expire.

At December 31, 2014, substantially all of our phantom unit awards are expected to result in the issuance of common units upon vesting; therefore, the applicable awards are accounted for as equity-classified awards. The fair value of a phantom unit award is based on the market price per unit of our common units 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. These awards were first issued in February 2014.

The following table presents phantom unit award activity for the period indicated:

	Number of Units			Weighted- Average Grant Date Fair Value per Unit (1)
Phantom unit awards at December 31, 2013		--		$	--
Granted (2)		3,530,710		$	33.12
Vested		(38,200	)	$	33.04
Forfeited		(150,120	)	$	33.12
Phantom unit awards at December 31, 2014		3,342,390		$	33.13

(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 phantom unit awards issued during 2014 was $117.0 million based on a grant date market price of our common units ranging from $33.04 to $37.59 per unit. An estimated annual forfeiture rate of 3.4% was applied to these awards.

Our long-term incentive plans provide for the issuance of DERs in connection with phantom unit awards. A DER entitles the participant to nonforfeitable cash payments equal to the product of the number of phantom unit awards outstanding for the participant and the cash distribution per common unit paid to our common unitholders. Cash payments made in connection with DERs are charged to partners' equity when the phantom unit award is expected to result in the issuance of common units; otherwise, such amounts are expensed.

The following table presents supplemental information regarding our phantom unit awards for the periods indicated:

	For the Year Ended December 31,
	2014		2013		2012
Cash payments made in connection with DERs	$	3.7	$	--	$	--
Total intrinsic value of phantom unit awards that vested during period	$	1.4	$	--	$	--

For the EPCO group of companies, the unrecognized compensation cost associated with phantom unit awards was $58.2 million at December 31, 2014, of which our allocated share of the cost is currently estimated to be $53.1 million. Due to the graded vesting provisions of these awards, we expect to recognize our share of the unrecognized compensation cost for these awards over a weighted-average period of 2.2 years.