(3) Acquisitions

Chevron Acquisition

On November 1, 2014, the Partnership acquired, from affiliates of Chevron Corporation, Gulf Coast natural gas pipeline assets predominantly located in southern Louisiana, together with 100% of the voting interests in certain entities, for approximately $231.5 million in cash. 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 transaction was accounted for using the acquisition method, which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.

The following table presents the fair value of the identified assets received and liabilities assumed at the acquisition date (in millions):


Purchase Price Allocation:
Assets acquired:
Property, plant and equipment	$	225.3
Intangibles		13.0
Liabilities assumed:
Current liabilities		(6.8)
Total identifiable net assets	$	231.5

The Partnership recognized intangible assets related to customer relationships. The acquired intangible assets will be amortized on a straight-line basis over the estimated customer life of approximately 20 years.

The Partnership incurred $0.6 million of direct transaction costs for the year ended December 31, 2015. These costs are included in general and administrative costs in the accompanying Consolidated Statements of Operations.

LPC Acquisition

On January 31, 2015, the Partnership acquired 100% of the voting equity interests of LPC Crude Oil Marketing LLC (“LPC”), which has crude oil gathering, transportation and marketing operations in the Permian Basin, for approximately $108.1 million. The transaction was accounted for using the acquisition method.

The following table presents the fair value of the identified assets received and liabilities assumed at the acquisition date (in millions):


Purchase Price Allocation:
Assets acquired:
Current assets (including $21.1 million in cash)	$	107.4
Property, plant and equipment		29.8
Intangibles		43.2
Goodwill		29.6
Liabilities assumed:
Current liabilities		(97.9)
Deferred tax liability		(4.0)
Total identifiable net assets	$	108.1

The Partnership recognized intangible assets related to customer relationships and trade name. The acquired intangible assets related to customer relationships are amortized on a straight-line basis over the estimated customer life of approximately 10 years.

Goodwill recognized from the acquisition primarily relates to the value created from additional growth opportunities and greater operating leverage in the Permian Basin. All such goodwill is allocated to our Crude and Condensate segment.

The Partnership incurred $0.3 million of direct transaction costs for the year ended December 31, 2015. These costs are included in general and administrative costs in the accompanying consolidated statements of operations.

For the period from January 31, 2015 to December 31, 2015, the Partnership recognized $1.1 billion of revenues and $0.9 million of net income related to the assets acquired.

Coronado Acquisition

On March 16, 2015, the Partnership acquired 100% of the voting equity interests in Coronado Midstream Holdings LLC (“Coronado”), which owns natural gas gathering and processing facilities in the Permian Basin, for approximately $600.3 million. The purchase price consisted of $240.3 million in cash, 6,704,285 common units and 6,704,285 Class C Common Units, both in the Partnership.

The following table presents the fair value of the identified assets received and liabilities assumed at the acquisition date (in millions):


Purchase Price Allocation:
Assets acquired:
Current assets (including $1.4 million in cash)	$	20.8
Property, plant and equipment		302.1
Intangibles		281.0
Goodwill		18.7
Liabilities assumed:
Current liabilities		(22.3)
Total identifiable net assets	$	600.3

The Partnership recognized intangible assets related to customer relationships. The acquired intangible assets are amortized on a straight-line basis over the estimated customer life of approximately 10 years. Goodwill recognized from the acquisition primarily relates to the value created from additional growth opportunities and greater operating leverage in the Permian Basin. All such goodwill is allocated to the Partnership’s Texas segment.

The Partnership incurred $3.1 million of direct transaction costs for the year ended December 31, 2015. These costs are included in general and administrative costs in the accompanying consolidated statements of operations.

For the period from March 16, 2015 to December 31, 2015, the Partnership recognized $182.0 million of revenues and $14.2 million of net loss related to the assets acquired.

Matador Acquisition

On October 1, 2015, the Partnership acquired 100% of the voting equity interests in a subsidiary of Matador Resources Company (“Matador”), which has gathering and processing assets operations in the Delaware Basin, for approximately $141.3 million. The transaction was accounted for using the acquisition method.

The following table presents the fair value of the identified assets received and liabilities assumed at the acquisition date (in millions):


Purchase Price Allocation:
Assets acquired:
Current assets	$	1.1
Property, plant and equipment		35.5
Intangibles		98.8
Goodwill		10.7
Liabilities assumed:
Current liabilities		(4.8)
Total identifiable net assets	$	141.3

The Partnership recognized intangible assets related to customer relationships. The acquired intangible assets are amortized on a straight-line basis over the estimated customer life of approximately 15 years. Goodwill recognized from the acquisition primarily relates to the value created from additional growth opportunities and greater operating leverage in the Permian Basin. All such goodwill is allocated to the Partnership’s Texas segment.

The Partnership incurred $0.1 million of direct transaction costs for the year ended December 31, 2015. These costs are included in general and administrative costs in the accompanying consolidated statements of operations.

For the period from October 1, 2015 to December 31, 2015, the Partnership recognized $5.6 million of revenues and $0.7 million of net loss related to the assets acquired.

Deadwood Acquisition

Prior to November 2015, the Partnership co-owned the Deadwood natural gas processing plant with a subsidiary of Apache Corporation (“Apache”). On November 16, 2015, the Partnership acquired Apache’s 50% ownership interest in the Deadwood natural gas processing facility for approximately $40.1 million, all of which is considered property, plant and equipment. The transaction was accounted for using the acquisition method. Direct transaction costs attributable to this acquisition were less than $0.1 million.

For the period from November 16, 2015 to December 31, 2015, the Partnership recognized $3.5 million of revenues and $1.3 million of net income related to the assets acquired.

VEX Pipeline Drop Down

On April 1, 2015, the Partnership acquired the Victoria Express Pipeline and related truck terminal and storage assets located in the Eagle Ford Shale in south Texas, together with 100% of the voting equity interests (the “VEX Interests”) in certain entities, from Devon in a drop down transaction (the “VEX Drop Down”). The aggregate consideration paid by the Partnership consisted of $166.7 million in cash, 338,159 common units representing limited partner interests in the Partnership with an aggregate value of approximately $9.0 million and the Partnership’s assumption of up to $40.0 million in certain construction costs related to VEX. The VEX pipeline is a multi-grade crude oil pipeline located in the Eagle Ford Shale. Other VEX assets at the destination of the pipeline include a truck unloading terminal, above-ground storage and rights to barge loading docks. The acquisition has been accounted for as an acquisition under common control under ASC 805, resulting in the retrospective adjustment of our prior results. As such, the VEX Interests were recorded on the Partnership’s books at historical cost on the date of transfer of $131.0 million. The difference between the historical cost of the net assets and consideration given was $35.7 million and is recognized as a distribution to Devon. Construction costs paid by Devon during the first quarter of 2015 totaling $25.6 million are reflected as contributions from Devon to the Partnership in our consolidated statements of changes in partners’ equity and consolidated statements of cash flows for the year ended December 31, 2015. The period of common control for VEX began on February 28, 2014, the effective date of the acquisition of the VEX Interests by Devon.

Pro Forma of Acquisitions for the Years Ended 2015 and 2014

The following unaudited pro forma condensed financial information (in millions, except for per unit data) for the year ended December 31, 2015 and 2014 gives effect to the Business Combination, November 2014 Chevron acquisition, January 2015 LPC acquisition, March 2015 Coronado acquisition, October 2015 Matador acquisition, EMH Drop Downs, VEX Drop Down and E2 Drop Down as if they had occurred on January 1, 2014. The unaudited 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.


	Year Ended December 31,
	2015		2014
Pro forma total revenues (1)	$	4,585.5	$	5,679.3
Pro forma net income (loss)	$	(1,413.0)	$	220.2
Pro forma net income (loss) attributable to EnLink Midstream, LLC	$	(355.5)	$	64.8
Pro forma net income (loss) per common unit:
Basic	$	(2.18)	$	0.41
Diluted	$	(2.18)	$	0.41

(1)

“On January 1, 2014, Midstream Holdings entered into gathering and processing agreements with Devon, which are described in “Note 5—Related Party Transactions.”

EnLink Oklahoma T.O. Acquisition

On January 7, 2016, we and the Partnership acquired a 16% and 84% voting interest, respectively, in EnLink Oklahoma T.O. for approximately $1.4 billion. The first installment of $1.02 billion for the acquisition was paid at closing. The second installment of $250.0 million was paid on January 6, 2017, and the final installment of $250.0 million is due no later than January 7, 2018. The Partnership’s installment payables are valued net of discount within the total purchase price.

The first installment consisted of approximately $1.02 billion and was funded by (a) approximately $783.6 million in cash paid by the Partnership, the majority of which was derived from the proceeds from the issuance of Preferred Units, and (b) 15,564,009 common units representing limited liability company interests in ENLC issued directly by us and approximately $22.2 million in cash paid by us. The transaction was accounted for using the acquisition method.

The following table presents the considerations we and the Partnership paid and the fair value of the identified assets received and liabilities assumed at the acquisition date (in millions):


Consideration:
Cash	$	805.8
Issuance of common units		214.9
The Partnership's total installment payable, net of discount of $79.1 million assuming payments are made on January 7, 2017 and 2018		420.9
Total consideration	$	1,441.6

Purchase Price Allocation:
Assets acquired:
Current assets (including $12.8 million in cash)	$	23.0
Property, plant and equipment		406.1
Intangibles		1,051.3
Liabilities assumed:
Current liabilities		(38.8)
Total identifiable net assets	$	1,441.6

The fair value of assets acquired and liabilities assumed are based on inputs that are not observable in the market and thus represent Level 3 inputs. The Partnership recognized intangible assets related to customer relationships and determined their fair value using the income approach. The acquired intangible assets are amortized on a straight-line basis over the estimated customer life of approximately 15 years.

The Partnership incurred $4.4 million and $0.4 million of direct transaction costs for the year ended December 31, 2016 and December 31, 2015, respectively. These costs are incurred in general and administrative costs in the accompanying consolidated statements of operations.

For the period from January 7, 2016 to December 31, 2016, the Partnership recognized $246.1 million of revenues and $34.1 million of net loss related to the assets acquired.

Pro Forma of the EnLink Oklahoma T.O. Acquisition

The following unaudited pro forma condensed financial information (in millions, except for per unit data) for the year ended December 31, 2016 and 2015 gives effect to the January 2016 EnLink Oklahoma T.O. acquisition as if it had occurred on January 1, 2015. The unaudited 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 transaction taken place on the dates indicated and is not intended to be a projection of future results.


	Year Ended December 31,
	2016		2015
Pro forma total revenues	$	4,254.4	$	4,647.8
Pro forma net loss	$	(879.9)	$	(1,471.8)
Pro forma net loss attributable to EnLink Midstream, LLC	$	(451.3)	$	(368.4)
Pro forma net loss per common unit:
Basic	$	(2.51)	$	(2.05)
Diluted	$	(2.51)	$	(2.05)