(8) Certain Provisions of the Partnership Agreement

(a) Issuance of Common Units

In November 2014, the Partnership issued 12,075,000 common units representing limited partner interests in the Partnership at an offering price of $28.37 per unit for net proceeds of $332.3 million. The net proceeds from the common units offering were used for capital expenditures and general partnership purposes.

In October 2014, the Partnership issued 1,016,322 common units to ENLC representing limited partner interests in the Partnership as partial consideration for the E2 acquisition.

In May 2014, the Partnership entered into an Equity Distribution Agreement (the “EDA”) with BMO Capital Markets Corp. (“BMOCM”). Pursuant to the terms of the EDA, the Partnership may from time to time through BMOCM, as its sales agent, sell common units representing limited partner interests having an aggregate offering price of up to $75.0 million. Through December 31, 2014, the Partnership sold an aggregate of 2.4 million common units under the EDA, generating proceeds of approximately $71.9 million (net of approximately $0.7 million of commissions to BMOCM). The Partnership used the net proceeds for general partnership purposes.

In November 2014, the Partnership entered into an Equity Distribution Agreement (the “BMO EDA”) with BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Jefferies LLC, Raymond James & Associates, Inc. and RBC Capital Markets, LLC (collectively, the “Sales Agents”) to sell up to $350.0 million in aggregate gross sales of the Partnership’s common units representing limited partner interests from time to time through an “at the market” equity offering program. The Partnership may also sell common units to any Sales Agent as principal for the Sales Agent’s own account at a price agreed upon at the time of sale. The Partnership has no obligation to sell any of the common units under the BMO EDA and may at any time suspend solicitation and offers under the BMO EDA. For the year ended December 31, 2014, the Partnership sold an aggregate of 0.3 million common units under the BMO EDA, generating proceeds of approximately $7.9 million (net of approximately $0.1 million of commissions). For the year ended December 31, 2015, the Partnership sold an aggregate of 1.3 million common units under the BMO EDA, generating proceeds of approximately $24.7 million (net of approximately $0.3 million of commissions). For the year ended December 31, 2016, the Partnership sold an aggregate of 10.0 million common units under the BMO EDA, generating proceeds of approximately $167.5 million (net of approximately $1.7 million of commissions). The Partnership used the net proceeds for general partnership purposes. As of December 31, 2016, approximately $147.8 million of gross common unit issuances remain available to be issued under the BMO EDA.

On October 29, 2015, the Partnership issued 2,849,100 common units at an offering price of $17.55 per unit to a subsidiary of ENLC for aggregate consideration of approximately $50.0 million in a private placement transaction.

(b) Class C Common Units

In March 2015, the Partnership issued 6,704,285 Class C Common Units representing a new class of limited partner interests as partial consideration for the acquisition of Coronado. The Class C Common Units were substantially similar in all respects to the Partnership’s common units, except that distributions paid on the Class C Common Units could be paid in cash or in additional Class C Common Units issued in kind, as determined by the general partner in its sole discretion. Distributions on the Class C Common Units for the three months ended March 31, 2015, June 30, 2015, and September 30, 2015 were paid-in-kind through the issuance of 99,794, 120,622, and 150,732 Class C Common Units on May 14, 2015, August 13, 2015, and November 12, 2015, respectively. Distributions on the Class C Common Units for the three months ended December 31, 2015 and March 31, 2016 were paid-in-kind through the issuance of 209,044 and 233,107 Class C Common Units on February 11, 2016 and May 12, 2016, respectively. All of the outstanding Class C Common Units were converted into common units on a one-for-one basis on May 13, 2016.

In February 2015, the Partnership issued 31,618,311 Class D Common Units to Acacia as consideration for a 25% interest in Midstream Holdings. For further discussion see “Note 3—Acquisitions.” Our Class D Common Units were substantially similar in all respects to our common units, except that they only received a pro rata distribution from the date of issuance for the fiscal quarter ended March 31, 2015. Our Class D Common Units automatically converted into our common units on a one-for-one basis on May 4, 2015.

(d) Class E Common Units

In May 2015, the Partnership issued 36,629,888 Class E Common Units to Acacia as consideration for the remaining 25% interest in Midstream Holdings. For further discussion, see “Note 3—Acquisitions.” The Partnership’s Class E Common Units were substantially similar in all respects to the Partnership’s common units, except that they only received a pro rata distribution from the date of issuance for the fiscal quarter ended June 30, 2015. The Partnership’s Class E Common Units automatically converted into the Partnership’s common units on a one-for-one basis on August 3, 2015.

(e) Preferred Units

In January 2016, the Partnership issued an aggregate of 50,000,000 Series B Cumulative Convertible Preferred Units (the “Preferred Units”) representing the Partnership’s limited partner interests to Enfield Holdings, L.P. (“Enfield”) in a private placement for a cash purchase price of $15.00 per Preferred Unit (the “Issue Price”), resulting in net proceeds of approximately $724.1 million after fees and deductions. Proceeds from the private placement were used to partially fund the Partnership’s portion of the purchase price payable in connection with the EnLink Oklahoma T.O. acquisition. Affiliates of the Goldman Sachs Group, Inc. and affiliates of TPG Global, LLC own interests in the general partner of Enfield. The Preferred Units are convertible into the Partnership’s common units on a one-for-one basis, subject to certain adjustments, at any time after the record date for the quarter ending June 30, 2017 (a) in full, at the Partnership’s option, if the volume weighted average price of a common unit over the 30-trading day period ending two trading days prior to the conversion date (the “Conversion VWAP”) is greater than 150% of the Issue Price or (b) in full or in part, at Enfield’s option. In addition, upon certain events involving a change of control of the general partner or the managing member of ENLC, all of the Preferred Units will automatically convert into a number of common units equal to the greater of (i) the number of common units into which the Preferred Units would then convert and (ii) the number of Preferred Units to be converted multiplied by an amount equal to (x) 140% of the Issue Price divided by (y) the Conversion VWAP.

As a holder of Preferred Units, Enfield is entitled to receive a quarterly distribution, subject to certain adjustments, equal to (x) during the quarter ending March 31, 2016 through the quarter ending June 30, 2017, an annual rate of 8.5% on the Issue Price payable in-kind in the form of additional Preferred Units and (y) thereafter, an annual rate of 7.5% on the Issue Price payable in cash (the “Cash Distribution Component”) plus an in-kind distribution equal to the greater of (A) an annual rate of 1.0% of the Issue Price and (B) an amount equal to (i) the excess, if any, of the distribution that would have been payable had the Preferred Units converted into common units over the Cash Distribution Component, divided by (ii) the Issue Price. Distributions on the Preferred Units for the three months ended March 31, 2016, June 30, 2016 and September 30,2016, were paid-in kind through the issuance of 992,445, 1,083,589, and 1,106,616 Preferred Units on May 12, 2016, August 11, 2016, and November 10, 2016 respectively. A distribution on the Preferred Units was declared for the three months ended December 31, 2016, which will result in the issuance of 1,130,131 additional Preferred Units on February 13, 2016. Income was allocated to the Preferred Units in an amount equal to the quarterly distribution with respect to the period earned. For the year ended December 31, 2016, $69.9 million of income at the Partnership was allocated to the Preferred Units.

(f) Distributions

Unless restricted by the terms of the Partnership’s credit facility and/or the indentures governing the Partnership’s unsecured senior notes, the Partnership must make distributions of 100% of available cash, as defined in the partnership agreement, within 45 days following the end of each quarter. Distributions are made to the general partner in accordance with its current percentage interest with the remainder to the common unitholders, subject to the payment of incentive distributions as described below to the extent that certain target levels of cash distributions are achieved. The general partner was not entitled to its general partner or incentive distributions with respect to the Class C Common Units issued in kind. In addition, the General Partner is not entitled to its general partner or incentive distributions with respect to the Preferred Units until conversion to common units.

The Company owns the general partner interest in the Partnership and all of its incentive distribution rights. The Company is entitled to receive incentive distributions if the amount the Partnership distributes with respect to any quarter exceeds levels specified in our partnership agreement. Under the quarterly incentive distribution provisions, the Company is entitled to 13.0% of amounts the Partnership distributes in excess of $0.25 per unit, 23% of the amounts the Partnership distributes in excess of $0.3125 per unit and 48.0% of amounts the Partnership distributes in excess of $0.375 per unit.

A summary of the Partnership’s distribution activity relating to the common units for the years ended December 31, 2016, 2015 and 2014 is provided below:


Declaration period	Distribution/unit		Date paid/payable
2016
First Quarter of 2016	$	0.390	May 12, 2016
Second Quarter of 2016	$	0.390	August 11, 2016
Third Quarter of 2016	$	0.390	November 11, 2016
Fourth Quarter of 2016	$	0.390	February 13, 2017

2015
First Quarter of 2015 (1)	$	0.380	May 14, 2015
Second Quarter of 2015 (2)	$	0.385	August 13, 2015
Third Quarter of 2015	$	0.390	November 12, 2015
Fourth Quarter of 2015	$	0.390	February 11, 2016

2014
First Quarter of 2014 (3)	$	0.360	May 14, 2014
Second Quarter of 2014	$	0.365	August 13, 2014
Third Quarter of 2014	$	0.370	November 13, 2014
Fourth Quarter of 2014	$	0.375	February 12, 2015

(1)

The Partnership’s partial first quarter 2015 distributions on its Class D Common Units of $0.18 per unit were paid on May 14, 2015. Distributions paid for the Class D Common Units represent a pro rata distribution for the number of days the Class D Common Units were issued and outstanding during the quarter. The Class D Common Units automatically converted into common units on a one-for-one basis on May 4, 2015.

(2)

The Partnership’s partial second quarter 2015 distributions on its Class E Common Units of $0.15 per unit were paid on August 13, 2015. Distributions paid for the Class E Common Units represent a pro rata distribution for the number of days the Class E Common Units were issued and outstanding during the quarter. The Class E Common Units automatically converted into common units on a one-for-one basis on August 3, 2015.

(3)

The Partnership’s first quarter 2014 distributions on its Class B Common Units of $0.10 per unit were paid on May 14, 2014. Distributions declared for the Class B Common Units represent a pro rata distribution for the number of days the Class B Common Units were issued and outstanding during the quarter. The Class B Common Units automatically converted into common units on a one-for-one basis on May 6, 2014.

(g) Allocation of Partnership Income

The General Partner’s share of the Partnership’s net income consists of incentive distribution rights to the extent earned, a deduction for unit-based compensation attributable to ENLC’s restricted units, the percentage interest of the Partnership’s net income adjusted for ENLC’s unit-based compensation specifically allocated to the General Partner and net income attributable to the drop down transactions described in “Note 3—Acquisitions.” The net income allocated to the General Partner is as follows (in millions):


	Year Ended December 31,
	2016		2015		2014 (1)
Income allocation for incentive distributions	$	56.8	$	47.5	$	20.6
Unit-based compensation attributable to ENLC’s restricted units		(14.7)		(18.3)		(10.4)
General Partner share of net income (loss)		(2.6)		(6.7)		1.1
General Partner interest in drop down transactions		—		35.5		127.0
General Partner interest in net income	$	39.5	$	58.0	$	138.3

(1) The year ended December 31, 2014 amounts consist only of the period from March 7, 2014 through December 31, 2014.