Equity-Based Compensation

6 Months Ended

Jun. 30, 2018

Equity Based Compensation [Abstract]

Equity-Based Compensation

Note 10. EQUITY-BASED COMPENSATION

Overview

We record equity-based compensation as a component of general and administrative expenses in the statements of operations. Equity-based compensation expense was $0.1 million and $0.8 million for the three months ended June 30, 2018 and 2017, and $0.2 million and $1.7 million for the six months ended June 30, 2018 and 2017, respectively.

Partnership Equity-Based Awards

Since we grant awards to employees of Circle K who provide services to us under the Amended Omnibus Agreement, and since the grants may be settled in cash, unvested phantom units and vested and unvested profits interests receive fair value variable accounting treatment. As such, they are measured at fair value at each balance sheet reporting date and the cumulative compensation cost recognized is classified as a liability, which is included in accrued expenses and other current liabilities on the consolidated balance sheet. The balance of the accrual is not significant at June 30, 2018 and $0.7 million at December 31, 2017.  

CST Equity-Based Awards

In February 2017, CST granted approximately 47,000 equity-based awards in the form of time vested restricted stock units of CST to certain employees for services rendered on our behalf. Upon completion of the Merger, these awards converted to cash awards and remained subject to the same vesting terms and payment schedule of three annual tranches as those set forth in the original award agreement; provided that, upon completion of the Merger, such awards will vest in full upon an involuntary termination of employment without cause, or termination for “Good Reason”, or termination due to death, “Disability” or Retirement. The expense associated with these awards that was charged to us under the Amended Omnibus Agreement was $0.1 million and $0.2 million for the three and six months ended June 30, 2018, respectively. Unrecognized compensation expense associated with these awards amounted to $0.5 million and $0.7 million as of June 30, 2018 and December 31, 2017, respectively, which will be recognized over the vesting term through January 2020.

For the three and six months ended June 30, 2017, the expense associated with CST equity-based awards in the form of time vested restricted stock units of CST, stock options of CST and market share units of CST, which was charged to us under the Amended Omnibus Agreement, was $0.8 million and $1.5 million, respectively.