(8) Certain Provisions of the Partnership Agreement


(a)	Issuance of Common Units

In November 2014, ENLK 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 ENLK’s common units from time to time through an “at the market” equity offering program. ENLK 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. ENLK 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 three months ended March 31, 2017, ENLK sold an aggregate of approximately 3.0 million common units under the BMO EDA, generating proceeds of approximately $55.2 million (net of approximately $0.6 million of commissions). ENLK used the net proceeds for general partnership purposes. As of March 31, 2017, approximately $92.0 million of gross common unit issuances remain available under the BMO EDA.


(b)	Distributions

Unless restricted by the terms of the ENLK Credit Facility and/or the indentures governing ENLK’s unsecured senior notes, ENLK 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 ENLK 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 ENLK’s Preferred Units until such units are converted to common units.

The General Partner owns the general partner interest in ENLK and all of its incentive distribution rights. The General Partner is entitled to receive incentive distributions if the amount ENLK distributes with respect to any quarter exceeds levels specified in its partnership agreement. Under the quarterly incentive distribution provisions, generally the General Partner is entitled to 13.0% of amounts ENLK distributes in excess of $0.25 per unit, 23.0% of the amounts ENLK distributes in excess of $0.3125 per unit and 48.0% of amounts ENLK distributes in excess of $0.375 per unit.

Distributions on the Preferred Units for the three months ended December 31, 2016, were paid-in kind through the issuance of 1,130,131 additional Preferred Units on February 13, 2017. A distribution on the Preferred Units was declared for the three months ended March 31, 2017, which will result in the issuance of 1,154,147 additional Preferred Units on May 12, 2017.

A summary of ENLK’s distribution activity relating to the common units for the three months ended March 31, 2017 and 2016, respectively, is provided below:



Declaration period	Distribution/unit		Date paid/payable
2017
Fourth Quarter of 2016	$	0.39	February 13, 2017
First Quarter of 2017	$	0.39	May 12, 2017

2016
Fourth Quarter of 2015	$	0.39	February 11, 2016
First Quarter of 2016	$	0.39	May 12, 2016


(c)	Allocation of ENLK Income

Net income is allocated to the General Partner in an amount equal to its incentive distribution rights as described in (b) above. The General Partner’s share of 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 ENLK’s net income adjusted for ENLC’s unit-based compensation specifically allocated to our General Partner. The net income allocated to the General Partner is as follows (in millions):



	Three Months Ended March 31, 2017
	2017			2016
Income allocation for incentive distributions	$	14.7		$	13.8
Unit-based compensation attributable to ENLC’s restricted units	(8.8		)	(4.0		)
General Partner share of net income (loss)	—			(2.4		)
General Partner interest in net income	$	5.9		$	7.4