Acquisition

Chevron acquisition

Effective November 1, 2014, the Partnership acquired, through one of its wholly owned subsidiaries, Gulf Coast natural gas pipeline assets predominantly located in southern Louisiana for $234.0 million in cash, subject to certain adjustments. The natural gas assets include natural gas pipelines spanning from Beaumont, Texas to the Mississippi River corridor and working natural gas storage capacity in southern Louisiana. The Partnership paid cash of $231.5 million in November 2014 in cash.

The following table is a preliminary summary of the fair value of the assets acquired and liabilities assumed:



Purchase Price Allocation (in millions):
Assets acquired:
Property, plant and equipment	$	242.2
Liabilities assumed:
Current liabilities	(10.7		)
Total purchase price	$	231.5

The purchase price allocation has been prepared on a preliminary basis pending receipt of a final valuation report and is subject to change. For the period from November 1, 2014 to December 31, 2014, the Company recognized $5.3 million of revenues and $4.9 million of operating expenses related to the assets acquired.

E2 Investment and Drop Down to Partnership

On October 22, 2014, the Partnership acquired equity interests in E2 Appalachian Compression, LLC and E2 Energy Services, LLC (together “E2”) from EMI. The total consideration for the transaction is approximately $194.0 million, including a cash payment of $163.0 million and approximately 1.0 million Partnership units (valued at approximately $31.2 million based on the October 22, 2014 closing price of the Partnership's units). This acquisition has been accounted for as an acquisition under common control under ASC 805.

On October 10, 2014, the Company purchased 100% of Class A units and 50% of Class B Units owned by E2 management in E2 Appalachian Compression, LLC for $7.0 million and $5.5 million, respectively.

Devon Merger

On March 7, 2014, EMI merged with and into a wholly-owned subsidiary of the Company, and New Acacia, formerly a wholly-owned subsidiary of Devon, merged with and into another wholly-owned subsidiary of the Company (collectively, the “mergers”). Upon consummation of the mergers, EMI and New Acacia became wholly-owned subsidiaries of the Company and the Company became publicly held. As of December 31, 2014, the Company, through its ownership of EMI, owned approximately 7.1% of the outstanding limited partner interests in the Partnership and owned 100.0% of the General Partner. The Company, through its ownership of New Acacia, indirectly owns a 50% limited partner interest in Midstream Holdings. Midstream Holdings owns midstream assets previously held by Devon in the Barnett Shale in North Texas, the Cana-Woodford Shale and Arkoma-Woodford Shale in Oklahoma and a contractual right to the burdens and benefits associated with Devon’s 38.75% interest in Gulf Coast Fractionators (“GCF”) in Mt. Belvieu, Texas.

Also effective as of March 7, 2014, a wholly-owned subsidiary of the Partnership acquired the remaining 50% limited partner interest in Midstream Holdings and all of the outstanding equity interests in EnLink Midstream Holdings GP, LLC, the general partner of Midstream Holdings (together with the mergers, the “business combination”).

Under the acquisition method of accounting, Midstream Holdings is the acquirer in the business combination because its parent company, Devon, obtained control of ENLC. Consequently, Midstream Holdings’ assets and liabilities retained their carrying values. Additionally, EMI’s assets acquired and liabilities assumed by ENLC, as well as ENLC’s non-controlling interest in the Partnership, are recorded at their fair values measured as of the acquisition date. The excess of the purchase price over the estimated fair values of EMI’s net assets acquired is recorded as goodwill.

Since equity consideration was issued for this business combination, the purchase of these assets and liabilities has been excluded from our statement of cash flows, except for transaction related costs totaling $51.4 million assumed by ENLC at closing and subsequently paid by ENLC.

The following table summarizes the purchase price (in millions, except per unit price):



EMI outstanding common shares:
Held by public shareholders	48.0
Restricted shares	0.4
Total subject to exchange	48.4
Exchange ratio	1.0		x
Exchanged shares	48.4
EMI common share price(1)	$	37.6
EMI consideration	$	1,822.6
Fair value of non-controlling interests in E2	18.9
Total consideration and fair value of non-controlling interests	$	1,841.5
Partnership outstanding units:
Common units held by public unitholders	75.1
Preferred units held by third party (2)	17.1
Restricted units	0.4
Total	92.6
Partnership common unit price(3)	$	30.51
Partnership common units value	$	2,825.2
Partnership outstanding unit options value	$	3.9
Total fair value of non-controlling interests in the Partnership(3)	$	2,828.8
Total consideration and fair value of non-controlling interests	$	4,670.3

(1) The final purchase price is based on the fair value of the Company's common shares as of the closing date, March 7, 2014.

(2) The Partnership converted the preferred units to common units in February 2014.

(3) The final purchase price is based on the fair value of the Partnership's common units as of the closing date, March 7, 2014.

The following table is a summary of the fair value of the assets acquired and liabilities assumed from EMI in the business combination as of March 7, 2014:



Purchase Price Allocation (in millions):
Assets acquired:
Current assets	$	437.4
Property, plant and equipment	2,437.9
Intangibles assets	569.4
Equity investment	221.5
Goodwill	3,283.1
Other long term assets	1.3
Liabilities assumed:
Current liabilities	(515.0		)
Long-term debt	(1,453.7		)
Deferred taxes	(210.4		)
Other long term liabilities	(101.2		)
Total purchase price	$	4,670.3

Goodwill recognized from the business combination primarily relates to the value created from additional growth opportunities and greater operating leverage in the Company's core areas. The goodwill is allocated among our Texas, Louisiana, Oklahoma, and ORV segments. All of the goodwill is non-deductible for tax purposes.

For the period from March 7, 2014 to December 31, 2014, the Company recognized $2,504.4 million of revenues and $2,460.6 million of operating expenses related to the assets acquired in the business combination.

Unaudited Pro Forma Information

The following unaudited pro forma condensed financial data for the year ended December 31, 2014 and 2013 gives effect to the business combination, Chevron acquisition and E2 drop down as if they had occurred on January 1, 2013. The pro forma condensed financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the transactions taken place on the dates indicated and is not intended to be a projection of future results. As of March 7, 2014, Midstream Holdings entered into gathering and processing agreements with Devon, which are described in Note 4. Pro forma financial information associated with the business combination and with these agreements with Devon is reflected below.



	Year Ended December 31,
	2014		2013
	(in millions except for per unit data)
Pro forma total revenues	$	3,698.2	$	2,597.9
Pro forma net income	$	240.1	$	102.4
Pro forma net income attributable to Enlink Midstream, LLC	$	67.5	$	70.4
Pro forma net income per common unit:
Basic	$	0.41	$	0.43
Diluted	$	0.41	$	0.43