Equity-Based Awards (Tables)

6 Months Ended

Jun. 30, 2018

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 Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Equity-classified awards:
Phantom unit awards	$	25.9	$	23.5	$	50.5	$	46.3
Restricted common unit awards		--		--		--		0.5
Profits interest awards		1.0		1.6		2.6		3.1
Liability-classified awards		0.1		--		0.2		0.2
Total	$	27.0	$	25.1	$	53.3	$	50.1

Other Share-based Compensation Plans

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 January 1, 2018		9,289,501		$	27.65
Granted (2)		4,967,681		$	26.81
Vested		(3,285,976	)	$	28.58
Forfeited		(216,897	)	$	26.92
Phantom unit awards at June 30, 2018		10,754,309		$	26.99

(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 2018 was $133.2 million based on a grant date market price of our common units ranging from $25.40 to $28.18 per unit. An estimated annual forfeiture rate of 3.2% was applied to these awards.

The following table summarizes key elements of each Employee Partnership as of June 30, 2018:

Employee

Partnership

Enterprise

Common Units

contributed to

Employee Partnership

by EPCO Holdings

Class A

Capital

Base (1)

Class A

Preference Return (2)

Expected

Vesting/

Liquidation

Date

Estimated

Grant Date

Fair Value of

Profits Interest

Awards (3)

Unrecognized

Compensation

Cost (4)

PubCo I

2,723,052

$63.7 million

0.39

Feb. 2020

$13.0 million

$5.9 million

PubCo II

2,834,198

$66.3 million

0.39

Feb. 2021

$14.7 million

$8.3 million

PubCo III

105,000

$2.5 million

0.39

Apr. 2020

$0.5 million

$0.3 million

PrivCo I

1,111,438

$26.0 million

0.39

Feb. 2021

$5.8 million

$0.7 million

(1) Represents fair market value of the Enterprise common units contributed to each Employee Partnership at the applicable contribution date.

(2) Each quarter, the Class A limited partner in each Employee Partnership is paid a cash distribution equal to the product of (i) the number of common units owned by the Employee Partnership and (ii) the Class A Preference Return of $0.39 per unit (subject to equitable adjustment in order to reflect any equity split, equity distribution or dividend, reverse split, combination, reclassification, recapitalization or other similar event affecting such common units). To the extent that the Employee Partnership has cash remaining after making this quarterly payment to the Class A limited partner, the residual cash is distributed to the Class B limited partners on a quarterly basis.

(3) Represents the total grant date fair value of the profits interest awards irrespective of how such costs will be allocated between us and EPCO and its privately held affiliates.

(4) Represents our expected share of the unrecognized compensation cost at June 30, 2018. We expect to recognize our share of the unrecognized compensation cost for PubCo I, PubCo II, PubCo III and PrivCo I over a weighted-average period of 1.6 years, 2.6 years, 1.8 years and 2.6 years, respectively.

The following table summarizes the assumptions we used in applying a Black-Scholes option pricing model to derive that portion of the estimated grant date fair value of the profits interest awards for each Employee Partnership:

	Expected	Risk-Free	Expected	Expected Unit
Employee	Life	Interest	Distribution	Price
Partnership	of Award	Rate	Yield	Volatility
PubCo I	4.0 years	0.9% to 2.5%	6.2% to 7.0%	20% to 40%
PubCo II	5.0 years	1.1% to 2.7%	6.1% to 7.0%	27% to 40%
PubCo III	4.0 years	1.0% to 2.2%	6.1% to 6.8%	27% to 40%
PrivCo I	5.0 years	1.2% to 1.6%	6.1% to 6.7%	28% to 40%

Cash Distributions and Total Intrinsic Value of Phantom Unit Awards

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

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Cash payments made in connection with DERs	$	4.7	$	4.0	$	8.6	$	7.2
Total intrinsic value of phantom unit awards that vested during period		3.1		3.1		85.1		66.3