EnLink Midstream LLC : 2Q21 EnLink Midstream Partners, LP Quarterly Report

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS OF

ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

TABLE OF CONTENTS

Item		Description		Page
		PART I-FINANCIAL INFORMATION
1.		Financial Statements	4
2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	29

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Table of Contents

		DEFINITIONS
The following terms as defined are used in this document:
Defined Term		Definition
/d		Per day.
2014 Plan		ENLC's 2014 Long-Term Incentive Plan.
Adjusted gross margin		Revenue less cost of sales, exclusive of operating expenses and depreciation and amortization related to our
		operating segments. Adjusted gross margin is a non-GAAP financial measure. See "Item 2. Management's
		Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures"
		for additional information.
AR Facility		A three-year committed accounts receivable securitization facility of up to $300 million entered into by EnLink
		Midstream Funding, LLC, a bankruptcy-remote special purpose entity and our indirect subsidiary, with PNC
		Bank, National Association, as administrative agent and lender, and PNC Capital Markets, LLC, as structuring
		agent.
ASC		The FASB Accounting Standards Codification.
Ascension JV		Ascension Pipeline Company, LLC, a joint venture between a subsidiary of ENLK and a subsidiary of Marathon
		Petroleum Corporation in which ENLK owns a 50% interest and Marathon Petroleum Corporation owns a 50%
		interest. The Ascension JV, which began operations in April 2017, owns an NGL pipeline that connects ENLK's
		Riverside fractionator to Marathon Petroleum Corporation's Garyville refinery.
Bbls		Barrels.
Bcf		Billion cubic feet.
Cedar Cove JV		Cedar Cove Midstream LLC, a joint venture between a subsidiary of ENLK and a subsidiary of Kinder Morgan,
		Inc. in which ENLK owns a 30% interest and Kinder Morgan, Inc. owns a 70% interest. The Cedar Cove JV,
		which was formed in November 2016, owns gathering and compression assets in Blaine County, Oklahoma,
		located in the STACK play.
CNOW		Central Northern Oklahoma Woodford Shale.
Commission		U.S. Securities and Exchange Commission.
Consolidated Credit		A $1.75 billion unsecured revolving credit facility entered into by ENLC that matures on January 25, 2024,
Facility		which includes a $500.0 million letter of credit subfacility.
Delaware Basin		A large sedimentary basin in West Texas and New Mexico.
Delaware Basin JV		Delaware G&P LLC, a joint venture between a subsidiary of ENLK and an affiliate of NGP in which ENLK
		owns a 50.1% interest and NGP owns a 49.9% interest. The Delaware Basin JV, which was formed in August
		2016, owns the Lobo processing facilities and the Tiger processing plant located in the Delaware Basin in Texas.
Devon		Devon Energy Corporation.
ENLC		EnLink Midstream, LLC.
ENLK		EnLink Midstream Partners, LP or, when applicable, EnLink Midstream Partners, LP together with its
		consolidated subsidiaries. Also referred to as the "Partnership."
FASB		Financial Accounting Standards Board.
GAAP		Generally accepted accounting principles in the United States of America.
Gal		Gallons.
GCF		Gulf Coast Fractionators, which owns an NGL fractionator in Mont Belvieu, Texas. ENLK owns 38.75% of
		GCF.
GIP		Global Infrastructure Management, LLC, an independent infrastructure fund manager, itself, its affiliates, or
		managed fund vehicles, including GIP III Stetson I, L.P., GIP III Stetson II, L.P., and their affiliates.
ISDAs		International Swaps and Derivatives Association Agreements.
Merger		On January 25, 2019, NOLA Merger Sub, LLC (previously a wholly-owned subsidiary of ENLC) merged with
		and into ENLK with ENLK continuing as the surviving entity and a subsidiary of ENLC.
Midland Basin		A large sedimentary basin in West Texas.
MMbbls		Million barrels.
MMbtu		Million British thermal units.
MMcf		Million cubic feet.
MVC		Minimum volume commitment.
NGL		Natural gas liquid.
NGP		NGP Natural Resources XI, LP.
OPEC+		Organization of the Petroleum Exporting Countries and its broader partners.
Operating Partnership		EnLink Midstream Operating, LP, a Delaware limited partnership and wholly owned subsidiary of ENLK.

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ORV	ENLK's Ohio River Valley crude oil, condensate stabilization, natural gas compression, and brine disposal
	assets in the Utica and Marcellus shales.
Permian Basin	A large sedimentary basin that includes the Midland and Delaware Basins.
POL contracts	Percentage-of-liquids contracts.
POP contracts	Percentage-of-proceeds contracts.
Series B Preferred Units	ENLK's Series B Cumulative Convertible Preferred Units.
Series C Preferred Units	ENLK's Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units.
STACK	Sooner Trend Anadarko Basin Canadian and Kingfisher Counties in Oklahoma.
Term Loan	A term loan originally in the amount of $850.0 million entered into by ENLK on December 11, 2018 with Bank
	of America, N.A., as Administrative Agent, Bank of Montreal and Royal Bank of Canada, as Co-Syndication
	Agents, Citibank, N.A. and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the
	lenders party thereto, which ENLC assumed in connection with the Merger and the obligations of which ENLK
	guarantees.

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Table of Contents

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

Consolidated Balance Sheets (In millions, except unit data)

		June 30, 2021			December 31, 2020
ASSETS		(Unaudited)
Current assets:
Cash and cash equivalents	$	32.8	$	39.6
Accounts receivable:
Trade, net of allowance for bad debt of $0.3 and $0.5, respectively		55.3			80.6
Accrued revenue and other		534.3			447.5
Related party		31.0			43.2
Fair value of derivative assets		69.1			25.0
Other current assets		116.6			58.7
Total current assets		839.1			694.6
Property and equipment, net of accumulated depreciation of $4,096.8 and $3,863.0,		6,493.6			6,652.1
respectively
Intangible assets, net of accumulated amortization of $731.3 and $668.8,		1,120.2			1,125.4
respectively
Investment in unconsolidated affiliates		30.7			41.6
Fair value of derivative assets		2.0			4.9
Note receivable from related party		170.0			170.0
Other assets, net		110.7			74.1
Total assets	$	8,766.3		$	8,762.7
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Accounts payable and drafts payable	$	95.5	$	60.5
Accounts payable to related party		1.4			1.0
Accrued gas, NGLs, condensate, and crude oil purchases		415.0			290.5
Fair value of derivative liabilities		107.6			37.1
Current maturities of long-term debt, from related parties		249.9			349.8
Other current liabilities		152.4			144.9
Total current liabilities		1,021.8			883.8
Long-term debt, including $998.8 and $998.9 from related parties, respectively		4,206.4			4,244.0
Asset retirement obligations		14.6			14.2
Other long-term liabilities		89.3			80.6
Deferred tax liability		5.8			6.0
Fair value of derivative liabilities		-			2.5
Partners' equity:
Common unitholders (144,358,720 units issued and outstanding)		1,309.1			1,418.1
Series B preferred unitholders (60,499,149 and 60,197,784 units issued and		898.4			896.7
outstanding, respectively)
Series C preferred unitholders (400,000 units outstanding)		395.1			395.1
General partner interest (1,594,974 equivalent units outstanding)		215.9			216.0
Accumulated other comprehensive loss		(10.6)			(20.1)
Non-controlling interest		620.5			625.8
Total partners' equity		3,428.4			3,531.6
Commitments and contingencies (Note 13)
Total liabilities and partners' equity	$	8,766.3		$	8,762.7

See accompanying notes to consolidated financial statements.

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ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

Consolidated Statements of Operations

(In millions)

		Three Months Ended			Six Months Ended
		June 30,				June 30,
		2021			2020			2021			2020
					(Unaudited)
Revenues:
Product sales	$	1,235.6	$	532.6	$	2,358.5	$	1,425.5
Midstream services		209.3			234.7			418.2			478.7
Loss on derivative activity		(38.2)			(22.4)			(121.6)			(3.2)
Total revenues		1,406.7			744.9			2,655.1			1,901.0
Operating costs and expenses:
Cost of sales, exclusive of operating expenses and depreciation and		1,055.1			397.7			1,989.8			1,153.0
amortization (1)(2)
Operating expenses		96.8			88.1			153.1			188.8
Depreciation and amortization		151.9			158.2			302.9			321.0
Impairments		-			1.5			-			169.9
(Gain) loss on disposition of assets		(0.3)			5.2			(0.3)			4.6
General and administrative		25.9			23.4			51.8			54.3
Total operating costs and expenses		1,329.4			674.1			2,497.3			1,891.6
Operating income		77.3			70.8			157.8			9.4
Other income (expense):
Interest expense, net of interest income (3)		(56.8)			(55.2)			(113.5)			(110.8)
Gain on extinguishment of debt		-			26.7			-			32.0
Income (loss) from unconsolidated affiliates		(1.3)			(0.7)			(7.6)			1.0
Other income		0.2			-			-			-
Total other expense		(57.9)			(29.2)			(121.1)			(77.8)
Income (loss) before non-controlling interest and income taxes		19.4			41.6			36.7			(68.4)
Income tax benefit (expense)		0.2			(1.0)			0.1			(1.5)
Net income (loss)		19.6			40.6			36.8			(69.9)
Net income attributable to non-controlling interest		11.3			2.5			17.2			5.9
Net income (loss) attributable to ENLK	$	8.3	$	38.1	$	19.6	$	(75.8)
____________________________

1. Includes related party cost of sales of $3.6 million and $1.3 million for the three months ended June 30, 2021 and 2020, respectively, and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $150.1 million and $156.1 million for the three months ended June 30, 2021 and 2020, respectively.
2. Includes related party cost of sales of $6.8 million and $4.2 million for the six months ended June 30, 2021 and 2020, respectively, and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $299.1 million and $316.9 million for the six months ended June 30, 2021 and 2020, respectively.
3. Includes related party interest expense, net of related party interest income, of $20.2 million and $15.1 million for the three months ended June 30, 2021 and 2020, respectively, and $26.3 million and $32.2 million for the six months ended June 30, 2021 and 2020, respectively.

See accompanying notes to consolidated financial statements.

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