EnLink Midstream LLC : 2Q22 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	28

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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. 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.
Agua Blanca Pipeline		The Agua Blanca Pipeline is a Delaware Basin intrastate natural gas pipeline servicing portions of Culberson,
		Loving, Pecos, Reeves, Ward, and Winkler counties and is owned by a joint venture between WhiteWater
		Midstream, LLC and MPLX LP.
Amarillo Rattler		On April 30, 2021, we completed the acquisition of Amarillo Rattler, LLC, the owner of a gathering and
Acquisition		processing system located in the Midland Basin.
AR Facility		An accounts receivable securitization facility of up to $500 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 and
		sustainability agent. The AR Facility is scheduled to terminate on August 1, 2025, unless extended or earlier
		terminated in accordance with its terms.
ASC		The Financial Accounting Standards Board Accounting Standards Codification.
ASC 718		ASC 718, Compensation-Stock Compensation.
ASC 820		ASC 820, Fair Value Measurements.
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.
Bbl		Barrel.
Bcf		Billion cubic feet.
Beginning TSR Price		The beginning total shareholder return ("TSR") price, which is the closing unit price of ENLC on the grant date
		of the performance award agreement or the previous trading day if the grant date was not a trading day, is one of
		the assumptions used to calculate the grant-date fair value of performance award agreements.
BKV		BKV Corporation.
CCS		Carbon capture, transportation, and sequestration.
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.
CO2		Carbon dioxide.
Commission		U.S. Securities and Exchange Commission.
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.
ENLC		EnLink Midstream, LLC.
ENLC Class C Common		A class of non-economic ENLC common units issued immediately prior to the Merger equal to the number of
Units		Series B Preferred Units held immediately prior to the effective time of the Merger, in order to provide certain
		voting rights to holders of the Series B Preferred Units with respect to ENLC.
ENLK		EnLink Midstream Partners, LP or, when applicable, EnLink Midstream Partners, LP together with its
		consolidated subsidiaries. Also referred to as the "Partnership."
GAAP		Generally accepted accounting principles in the United States of America.
Gal		Gallon.
GCF		Gulf Coast Fractionators, which owns an NGL fractionator in Mont Belvieu, Texas. ENLK owns 38.75% of
		GCF. The GCF assets have been temporarily idled to reduce operating expenses. We expect these assets to
		resume operations when there is a sustained need for additional fractionation capacity in Mont Belvieu.
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.
LIBOR		U.S. Dollar London Interbank Offered Rate.

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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.
Operating Partnership	EnLink Midstream Operating, LP, a Delaware limited partnership and wholly owned subsidiary of ENLK.
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 primarily in West Texas and New
	Mexico.
POL contracts	Percentage-of-liquids contracts.
POP contracts	Percentage-of-proceeds contracts.
Revolving Credit	A $1.40 billion unsecured revolving credit facility entered into by ENLC that matures on June 3, 2027, which
Facility	includes a $500.0 million letter of credit subfacility. The Revolving Credit Facility is guaranteed by ENLK.
Series B Preferred Unit	ENLK's Series B Cumulative Convertible Preferred Unit.
Series C Preferred Unit	ENLK's Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Unit.
SOFR	Secured overnight financing rate.
STACK	Sooner Trend Anadarko Basin Canadian and Kingfisher Counties in Oklahoma.

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PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

Consolidated Balance Sheets (In millions, except unit data)

		June 30, 2022			December 31, 2021
ASSETS		(Unaudited)
Current assets:
Cash and cash equivalents	$	18.1	$	26.2
Accounts receivable:
Trade, net of allowance for bad debt of $0.3 and $0.3, respectively		101.1			94.9
Accrued revenue and other		913.7			693.3
Related party		97.3			42.2
Fair value of derivative assets		95.6			22.4
Other current assets		159.9			83.6
Total current assets		1,385.7			962.6
Property and equipment, net of accumulated depreciation of $4,570.4 and $4,332.0,		6,259.0			6,388.3
respectively
Intangible assets, net of accumulated amortization of $859.8 and $795.1,		985.0			1,049.7
respectively
Investment in unconsolidated affiliates		53.0			28.0
Fair value of derivative assets		-			0.2
Other assets, net		92.8			95.6
Total assets	$	8,775.5		$	8,524.4
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Accounts payable and drafts payable	$	177.9	$	139.6
Accrued gas, NGLs, condensate, and crude oil purchases (1)		768.9			521.5
Fair value of derivative liabilities		88.7			34.9
Other current liabilities		168.8			187.5
Total current liabilities		1,204.3			883.5
Long-term debt, net of unamortized issuance cost (2)		4,320.0			4,363.7
Other long-term liabilities		93.3			93.9
Deferred tax liability		4.7			5.4
Fair value of derivative liabilities		1.2			2.2
Partners' equity:
Common unitholders (144,358,720 units issued and outstanding)		1,321.6			1,298.1
Series B Preferred Unitholders (54,168,359 and 57,501,693 units issued and		799.3			850.8
outstanding, respectively)
Series C Preferred Unitholders (400,000 units outstanding)		395.1			395.1
General partner interest (1,594,974 equivalent units outstanding)		218.2			216.9
Accumulated other comprehensive loss		(1.8)			(1.9)
Non-controlling interest		419.6			416.7
Total partners' equity		3,152.0			3,175.7
Commitments and contingencies (Note 13)
Total liabilities and partners' equity	$	8,775.5		$	8,524.4

____________________________

1. Includes related party accounts payable balances of $5.7 million and $1.6 million at June 30, 2022 and December 31, 2021, respectively.
2. Includes related party debt, net of unamortized issuance cost, of $984.6 million and $1,002.6 million at June 30, 2022 and December 31, 2021, respectively.

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,
		2022			2021			2022			2021
					(Unaudited)
Revenues:
Product sales	$	2,370.5	$	1,235.6	$	4,414.4	$	2,358.5
Midstream services		225.6			209.3			440.6			418.2
Gain (loss) on derivative activity		4.5			(38.2)			(26.7)			(121.6)
Total revenues		2,600.6			1,406.7			4,828.3			2,655.1
Operating costs and expenses:
Cost of sales, exclusive of operating expenses and depreciation and		2,105.1			1,055.1			3,899.6			1,989.8
amortization (1)
Operating expenses		128.9			96.8			249.8			153.1
Depreciation and amortization		159.0			151.9			311.9			302.9
(Gain) loss on disposition of assets		(0.4)			(0.3)			4.7			(0.3)
General and administrative		28.3			25.9			57.3			51.8
Total operating costs and expenses		2,420.9			1,329.4			4,523.3			2,497.3
Operating income		179.7			77.3			305.0			157.8
Other income (expense):
Interest expense, net of interest income (2)		(55.5)			(56.8)			(110.6)			(113.5)
Loss on extinguishment of debt		(0.5)			-			(0.5)			-
Loss from unconsolidated affiliate investments		(1.2)			(1.3)			(2.3)			(7.6)
Other income		0.2			0.2			0.3			-
Total other expense		(57.0)			(57.9)			(113.1)			(121.1)
Income before non-controlling interest and income taxes		122.7			19.4			191.9			36.7
Income tax benefit		0.4			0.2			0.2			0.1
Net income		123.1			19.6			192.1			36.8
Net income attributable to non-controlling interest		15.3			11.3			22.6			17.2
Net income attributable to ENLK	$	107.8	$	8.3	$	169.5	$	19.6

____________________________

1. Includes related party cost of sales of $9.1 million and $3.6 million for the three months ended June 30, 2022 and 2021, respectively, and $19.7 million and $6.8 million for the six months ended June 30, 2022 and 2021, respectively.
2. Includes related party interest expense, net of related party interest income, of $15.9 million and $20.2 million for the three months ended June 30, 2022 and 2021, respectively, and $31.9 million and $26.3 million for the six months ended June 30, 2022 and 2021, respectively.

See accompanying notes to consolidated financial statements.

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