EnLink Midstream LLC : ENLK Quarterly Report Q1 2024

Table of Contents

QUARTERLY REPORT

CONSOLIDATED FINANCIAL STATEMENTS OF

ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

For the fiscal year ended March 31, 2024

TABLE OF CONTENTS

	Item	Description		Page
				PART I-FINANCIAL INFORMATION
1.			Financial Statements	4
			Consolidated Balance Sheets	4
			Consolidated Statements of Operations	5
			Consolidated Statements of Comprehensive Income	6
			Consolidated Statements of Changes in Partners' Equity	7
			Consolidated Statements of Cash Flows	9
			Notes to Consolidated Financial Statements	10
	(1)	General	10
	(2)	Significant Accounting Policies	11
	(3)	Intangible Assets	12
	(4)	Related Party Transactions	13
	(5)	Long-Term Debt	14
	(6)	Partners' Capital	15
	(7)	Investment in Unconsolidated Affiliates	16
	(8)	Employee Incentive Plans	17
	(9)	Derivatives	19
			(10) Fair Value Measurements	21
			(11) Segment Information	23
			(12) Other Information	27
			(13) Commitments and Contingencies	28
2.			Management's Discussion and Analysis of Financial Condition and Results of Operations	29
			Overview	29
			Recent Developments Affecting Industry Conditions and Our Business	31
			Other Recent Developments	33
			Non-GAAP Financial Measures	33
			Results of Operations	34
			Critical Accounting Policies	39
			Liquidity and Capital Resources	39
			Indebtedness	41
			Inflation	42
			Recent Accounting Pronouncements	42
			Disclosure Regarding Forward-Looking Statements	42

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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.
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.
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 transmission pipeline that
		connects ENLK's Riverside fractionator to Marathon Petroleum Corporation's Garyville refinery.
Bbl		Barrel.
Bbtu		Billion British thermal units.
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.
CCS		Carbon capture, transportation, and sequestration.
Cedar Cove JV		Cedar Cove Midstream LLC, a joint venture in which we own a 30% 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.
Central Oklahoma		On December 19, 2022, we acquired gathering and processing assets located in Central Oklahoma, including
Acquisition		approximately 900 miles of lean and rich natural gas gathering pipeline and two processing plants with 280
		MMcf/d of total processing capacity.
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 plants located in the Delaware Basin in
		Texas.
ENLC		EnLink Midstream, LLC together with its consolidated subsidiaries.
ENLK		EnLink Midstream Partners, LP or, when applicable, EnLink Midstream Partners, LP together with its
		consolidated subsidiaries.
FCDTCs		Futures and Cleared Derivatives Transactions Customer Agreements.
Federal Reserve		The Board of Governors of the Federal Reserve System of the United States.
GAAP		Generally accepted accounting principles in the United States of America.
Gal		Gallon.
GCF		Gulf Coast Fractionators, a joint venture in which we own a 38.75% interest. GCF owns an NGL fractionator in
		Mont Belvieu, Texas. The GCF assets were idled to reduce operating expenses in 2021 but are expected to
		resume operations in the third quarter of 2024.
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.
LNG		Liquified natural gas.

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Matterhorn JV	Matterhorn JV, a joint venture in which we own a 15% interest. The Matterhorn JV is constructing a pipeline
	designed to transport up to 2.5 Bcf/d of natural gas through approximately 490 miles of 42-inch pipeline from
	the Waha Hub in West Texas to Katy, Texas.
Midland Basin	A large sedimentary basin in West Texas.
MMbbls	Million barrels.
MMbtu	Million British thermal units.
MMcf	Million cubic feet.
MMgals	Million gallons.
MVC	Minimum volume commitment.
NGL	Natural gas liquid.
NGP	NGP Natural Resources XI, LP.
NYMEX	New York Mercantile Exchange.
Operating Partnership	EnLink Midstream Operating, LP, a Delaware limited partnership and wholly owned subsidiary of ENLK.
OPIS	Oil Price Information Service.
ORV	ENLK's Ohio River Valley crude oil, condensate stabilization, natural gas compression, and brine disposal
	assets in the Utica and Marcellus shales, which were divested in November 2023.
Permian Basin	A large sedimentary basin that includes the Midland and Delaware Basins primarily in West Texas and New
	Mexico.
PIK Distribution	A quarterly distribution in-kind of Series B Preferred Units. We agreed with the holders of the Series B
	Preferred Units to make a PIK Distribution until the quarterly distribution in respect of the earlier of (x) any
	quarter in which the holders of the Series B Preferred Units give notice to our general partner of their election to
	terminate such PIK Distribution right and (y) the quarter ending June 30, 2024.
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, which includes a $500.0 million letter
Facility	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.
SPV	EnLink Midstream Funding, LLC, a bankruptcy-remote special purpose entity that is an indirect subsidiary of
	ENLC.
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)

		March 31, 2024			December 31, 2023
ASSETS		(Unaudited)
Current assets:
Cash and cash equivalents	$	16.8	$	28.7
Accounts receivable:
Trade receivables (1)		57.5			85.9
Accrued revenue and other		483.5			581.4
Related party		588.8			506.8
Fair value of derivative assets		90.6			76.9
Other current assets		63.8			65.5
Total current assets		1,301.0			1,345.2
Property and equipment, net of accumulated depreciation of $5,261.6 and $5,137.2,		6,360.4			6,407.0
respectively
Intangible assets, net of accumulated amortization of $1,083.0 and $1,051.2,		761.8			793.6
respectively
Investment in unconsolidated affiliates		159.8			150.5
Fair value of derivative assets		21.5			27.0
Other assets, net		112.4			112.2
Total assets	$	8,716.9		$	8,835.5
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Accounts payable and drafts payable	$	113.0	$	126.5
Accrued natural gas, NGLs, condensate, and crude oil purchases		356.2			428.0
Fair value of derivative liabilities		98.0			62.7
Current maturities of long-term debt		97.9			97.9
Other current liabilities		224.6			239.2
Total current liabilities		889.7			954.3
Long-term debt, net of unamortized issuance cost		4,469.5			4,471.0
Other long-term liabilities		83.5			98.0
Deferred tax liability		3.9			3.9
Fair value of derivative liabilities		21.8			26.7
Partners' equity:
Common unitholder (144,358,720 units issued and outstanding)		1,377.2			1,423.4
Series B Preferred Unitholders (54,712,077 and 54,575,638 units issued and		805.5			803.5
outstanding, respectively)
Series C Preferred Unitholders (366,500 units issued and outstanding)		367.3			367.3
General partner interest (1,594,974 equivalent units outstanding)		223.6			223.4
Accumulated other comprehensive income		4.8			0.9
Non-controlling interest		470.1			463.1
Total partners' equity		3,248.5			3,281.6
Commitments and contingencies (Note 13)
Total liabilities and partners' equity	$	8,716.9		$	8,835.5

____________________________

(1) There was no allowance for bad debt at March 31, 2024 and December 31, 2023.

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

March 31,

		2024			2023
		(Unaudited)
Revenues:
Product sales	$	1,405.0	$	1,476.3
Midstream services		271.9			279.3
Gain (loss) on derivative activity		(29.0)			11.9
Total revenues		1,647.9			1,767.5
Operating costs and expenses:
Cost of sales, exclusive of operating expenses and depreciation and amortization		1,150.4			1,271.9
Operating expenses		152.6			132.4
Depreciation and amortization		165.3			160.4
Impairments		14.2			-
Gain on disposition of assets		(1.7)			(0.4)
General and administrative		55.0			29.3
Total operating costs and expenses		1,535.8			1,593.6
Operating income		112.1			173.9
Other income (expense):
Interest expense, net of interest income		(65.4)			(68.5)
Loss from unconsolidated affiliate investments		(0.8)			(0.1)
Other income (expense)		0.5			(0.1)
Total other expense		(65.7)			(68.7)
Income before non-controlling interest and income taxes		46.4			105.2
Income tax expense		(0.1)			(0.1)
Net income		46.3			105.1
Net income attributable to non-controlling interest		9.2			10.9
Net income attributable to ENLK	$	37.1	$	94.2

See accompanying notes to consolidated financial statements.

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ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(In millions)

Three Months Ended

March 31,

		2024			2023
		(Unaudited)
Net income	$	46.3	$	105.1
Unrealized gain (loss) on designated cash flow hedge		3.9			(1.6)
Comprehensive income		50.2			103.5
Comprehensive income attributable to non-controlling interest		9.2			10.9
Comprehensive income attributable to ENLK	$	41.0	$	92.6

See accompanying notes to consolidated financial statements.

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ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

Consolidated Statements of Changes in Partners' Equity

(In millions)

																		Accumulated			Non-
					Series B		Series C		General			Other
	Common Units					Comprehensive		Controlling		Total
		Preferred Units		Preferred Units		Partner Interest		Income (Loss)			Interest
	$		Units		$		Units		$		Units		$		Units			$			$		$
											(Unaudited)
Balance, December 31, 2023	$1,423.4	144.4	$803.5	54.6	$367.3	0.4	$223.4	1.6	$	0.9	$	463.1	$ 3,281.6
Unit-based compensation	-		-		-		-		-		-	5.6		-			-			-	5.6
Distributions	(62.4)		-	(15.3)	0.1	(9.0)		-		-		-			-			(15.2)	(101.9)
Contributions from non-controlling interests	-		-		-		-		-		-		-		-			-			13.0	13.0
Unrealized gain on designated cash flow hedge	-		-		-		-		-		-		-		-			3.9			-	3.9
Net income (loss)	16.2		-		17.3		-		9.0		-		(5.4)		-			-			9.2		46.3
Balance, March 31, 2024	$1,377.2	144.4	$805.5	54.7	$367.3	0.4	$223.6	1.6	$	4.8	$	470.1	$ 3,248.5

See accompanying notes to consolidated financial statements.

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ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES Consolidated Statements of Changes in Partners' Equity (Continued) (In millions)

																		Accumulated			Non-
					Series B		Series C		General			Other
	Common Units					Comprehensive		Controlling		Total
		Preferred Units		Preferred Units		Partner Interest		Income (Loss)			Interest
	$		Units		$		Units		$		Units		$		Units			$			$		$
											(Unaudited)
Balance, December 31, 2022	$1,373.5	144.4	$799.2	54.2	$380.4	0.4	$220.2	1.6	$	-	$	426.7	$ 3,200.0
Unit-based compensation	-		-		-		-		-		-	4.0		-			-			-	4.0
Distributions	(61.7)		-	(17.3)		-	(8.4)		-		-		-			-			(16.7)	(104.1)
Contributions from non-controlling interests	-		-		-		-		-		-		-		-			-			8.4	8.4
Unrealized loss on designated cash flow hedge	-		-		-		-		-		-		-		-			(1.6)			-	(1.6)
Repurchase of Series C Preferred Units	-		-		-		-	(3.9)		-		-		-			-			-	(3.9)
Net income (loss)	72.3		-		16.7		-		8.4		-		(3.2)		-			-			10.9		105.1
Balance, March 31, 2023	$1,384.1	144.4	$798.6	54.2	$376.5	0.4	$221.0	1.6	$	(1.6)	$	429.3	$ 3,207.9

See accompanying notes to consolidated financial statements.

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ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In millions)

Three Months Ended

March 31,

		2024			2023
		(Unaudited)
Cash flows from operating activities:
Net income	$	46.3	$	105.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		165.3			160.4
Gain on disposition of assets		(1.7)			(0.4)
Non-cashunit-based compensation		5.6			4.0
Non-cash loss on derivatives recognized in net income		26.1			1.4
Amortization of debt issuance costs and net discount of senior unsecured notes		1.5			1.5
Loss from unconsolidated affiliate investments		0.8			0.1
Impairments		14.2			-
Other operating activities		(1.9)			1.7
Changes in assets and liabilities, net of the effects of acquisitions:
Accounts receivable, accrued revenue, and other		44.7			24.5
Product inventory, prepaid expenses, and other		11.3			68.5
Accounts payable, accrued product purchases, and other accrued liabilities		(103.0)			(162.9)
Net cash provided by operating activities		209.2			203.9
Cash flows from investing activities:
Additions to property and equipment		(110.4)			(100.7)
Contributions to unconsolidated affiliate investments		(9.4)			(49.7)
Other investing activities		(5.7)			0.4
Net cash used in investing activities		(125.5)			(150.0)
Cash flows from financing activities:
Proceeds from borrowings		629.4			1,173.0
Repayments on borrowings		(632.4)			(1,067.4)
Distributions to common unitholders		(62.4)			(61.7)
Distributions to non-controlling interests		(15.2)			(16.7)
Distributions to Series B Preferred Units		(15.3)			(17.3)
Distributions to Series C Preferred Units		(9.0)			(8.4)
Earnout payments		(2.5)			-
Payment to redeem mandatorily redeemable non-controlling interest		-			(10.5)
Repurchase of Series C Preferred Units		-			(3.9)
Contributions from non-controlling interests		13.0			8.4
Other financing activities		(1.2)			0.8
Net cash used in financing activities		(95.6)			(3.7)
Net increase (decrease) in cash and cash equivalents		(11.9)			50.2
Cash and cash equivalents, beginning of period		28.7			22.6
Cash and cash equivalents, end of period	$	16.8		$	72.8
Supplemental disclosures of cash flow information:
Cash paid for interest	$	65.8	$	62.2
Non-cash investing activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	11.2	$	10.4
Non-cash accrual of property and equipment	$	(7.0)	$	13.4

See accompanying notes to consolidated financial statements.

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ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2024

(Unaudited)

(1) General

In this report, the term "Partnership," as well as the terms "ENLK," "our," "we," "us," and "its" are sometimes used as abbreviated references to EnLink Midstream Partners, LP itself or EnLink Midstream Partners, LP together with its consolidated subsidiaries, including the Operating Partnership.

Please read the notes to the consolidated financial statements in conjunction with the Definitions page set forth in this report prior to Part I-Financial Information.

1. Organization of Business

ENLK is a Delaware limited partnership formed in 2002. Our business activities are conducted through the Operating Partnership and the subsidiaries of the Operating Partnership.

EnLink Midstream GP, LLC, a Delaware limited liability company, is our general partner. Our general partner manages our operations and activities. Our general partner is a direct, wholly-owned subsidiary of ENLC. ENLC's units are traded on the New York Stock Exchange under the symbol "ENLC." ENLC's managing member is a wholly-owned subsidiary of GIP. As of March 31, 2024, GIP, through GIP III Stetson I, L.P. and GIP III Stetson II, L.P, owns 45.8% of the outstanding limited liability company interests in ENLC. In addition to their equity interests in ENLC, GIP maintains control over the managing member of ENLC.

1. Nature of Business

We primarily focus on owning, operating, investing in, and developing midstream energy infrastructure assets to provide midstream energy services, including:

• gathering, compressing, treating, processing, transporting, storing, and selling natural gas;
• fractionating, transporting, storing, and selling NGLs; and
• gathering, transporting, storing, trans-loading, and selling crude oil and condensate.

As of March 31, 2024, our midstream infrastructure network includes approximately 13,600 miles of pipelines, 25 natural gas processing plants with approximately 5.8 Bcf/d of processing capacity, seven fractionators with approximately 316,300 Bbls/d of fractionation capacity, barge and rail terminals, product storage facilities, purchasing and marketing capabilities, and equity investments in certain joint ventures. Our operations are based in the United States, and our sales are derived primarily from domestic customers.

Our natural gas gathering business includes connecting the wells of producers in our market areas to our gathering systems. Our gathering systems consist of networks of pipelines that collect natural gas from points at or near producing wells and transport it to our processing plants or to larger diameter pipelines for further transmission. Our processing plants remove NGLs from the natural gas stream that is transported to the processing plants by our own gathering systems or by third-party pipelines. In conjunction with our gathering and processing business, we may purchase natural gas and NGLs from producers and other supply sources and sell that natural gas or NGLs to utilities, industrial consumers, marketers, and pipelines. We also store natural gas and NGLs on behalf of third parties for a fee or to balance our own purchases and sales in marketing natural gas and NGLs for our customers.

Our large diameter natural gas transmission pipelines provide access to multiple domestic production basins to a variety of customers, such as industrial end-users, LNG facilities, and utilities. Our large diameter natural gas transmission pipelines are connected to our gathering systems or third party gathering systems, natural gas transmission pipeline systems, and natural gas storage caverns.

Our fractionators separate NGLs into separate purity products, including ethane, propane, iso-butane, normal butane, and natural gasoline. Our fractionators receive NGLs primarily through our transmission lines that transport NGLs from East Texas and from our South Louisiana processing plants. Our fractionators also have the capability to receive NGLs by truck or rail

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