(1) Organization and Summary of Significant Agreements

(a) Organization of Business and Nature of Business

EnLink Midstream, LLC (“ENLC”) is a publicly traded Delaware limited liability company formed in 2013. Effective as of March 7, 2014, EnLink Midstream, Inc. (“EMI”) merged with and into a wholly-owned subsidiary of the Company and Acacia Natural Gas Corp I, Inc. (“Acacia”), formerly a wholly-owned subsidiary of Devon Energy Corporation (“Devon”), merged with and into a wholly-owned subsidiary of the Company (collectively, the “Mergers”). Pursuant to the Mergers, each of EMI and New Acacia became wholly-owned subsidiaries of the Company and the Company became publicly held. EMI owns common units representing an approximate 5.0% limited partner interest in EnLink Midstream Partners, LP (the “Partnership” or “ENLK”) as of December 31, 2017 and also owns EnLink Midstream GP, LLC (the “General Partner”). Acacia directly owned a 50% limited partner interest in Midstream Holdings, which was formerly a wholly-owned subsidiary of Devon. Upon closing of the Business Combination (as defined below), ENLC issued 115,495,669 units to a wholly-owned subsidiary of Devon, represent approximately 64.0% of the outstanding limited liability company interests in ENLC as of December 31, 2017. Concurrently with the consummation of the Mergers, a wholly-owned subsidiary of ENLK acquired the remaining 50% of the outstanding 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”). The Company’s common units are traded on the New York Stock Exchange under the symbol “ENLC.”

In 2015, Acacia contributed the remaining 50% interest in Midstream Holdings to ENLK in exchange for 68.2 million ENLK common units in two separate drop down transactions, with 25% contributed in February 2015 and 25% contributed in May 2015 (the “EMH Drop Downs”). After giving effect to the EMH Drop Downs, ENLK owns 100% of Midstream Holdings. As a result of the EMH Drop Downs, Acacia owned approximately 16.7% of the limited partner interests in ENLK as of December 31, 2017, which brings ENLC’s total ownership, through its wholly-owned subsidiaries, of limited partner interests in ENLK to 21.7% as of December 31, 2017.

In addition, in April 2015, ENLK acquired the Victoria Express Pipeline and related truck terminal and storage assets located in the Eagle Ford Shale in South Texas (VEX”), 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”).

Effective as of January 7, 2016, ENLK acquired 83.9% of the outstanding equity interests in EnLink Oklahoma T.O., and ENLC acquired the remaining 16.1% equity interests in EnLink Oklahoma T.O. Since we control EnLink Oklahoma T.O., we reflect our ownership in EnLink Oklahoma T.O. on a consolidated basis in the consolidated financial statements and related disclosures. See “Note 3—Acquisitions” for further discussion.

Our assets consist of equity interests in ENLK and EnLink Oklahoma T.O. ENLK is a Delaware publicly traded limited partnership formed on July 12, 2002 and is engaged in the gathering, transmission, processing and marketing of natural gas and natural gas liquids, or natural gas liquids (“NGLs”), condensate and crude oil, as well as providing crude oil, condensate and brine services to producers. EnLink Oklahoma T.O. is a partnership held by us and ENLK, and is engaged in the gathering and processing of natural gas. As of December 31, 2017, our interests in ENLK consisted of the following:


•	88,528,451 common units representing an aggregate 21.7% limited partner interest in ENLK;


•	100.0% ownership interest in EnLink Midstream GP, LLC, the general partner of ENLK (the “General Partner”), which owns a 0.4% general partner interest and all of the incentive distribution rights in ENLK; and


•	16.1% limited partner interest in EnLink Oklahoma T.O.

(b) Nature of Business

We primarily focus on providing midstream energy services, including:


•	gathering, compressing, treating, processing, transporting, storing and selling natural gas;


•	fractionating, transporting, storing, exporting and selling NGLs; and


•	gathering, transporting, stabilizing, storing, trans-loading and selling crude oil and condensate.

Our midstream energy asset network includes approximately 11,000 miles of pipelines, 20 natural gas processing plants with approximately 4.8 Bcf/d of processing capacity, 7 fractionators with approximately 260,000 Bbls/d of fractionation capacity, barge and rail terminals, product storage facilities, purchasing and marketing capabilities, brine disposal wells, a crude oil trucking fleet, and equity investments in certain joint ventures. Our operations are based in the United States, and our sales are derived primarily from domestic customers.

We connect the wells of producers in our market areas to our gathering systems, which consist of networks of pipelines that collect natural gas from points near producing wells and transport it to our processing plants or to larger pipelines for further transmission. We operate processing plants that 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, other markets and pipelines. Our transmission pipelines receive natural gas from our gathering systems and from third-party gathering and transmission systems and deliver natural gas to industrial end-users, utilities and other pipelines.

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, and our fractionators also have the capability to receive NGLs by truck or rail terminals. We also have agreements pursuant to which third parties transport NGLs from our West Texas and Central Oklahoma operations to our NGL transmission lines that then transport the NGLs to our fractionators. In addition, we have NGL storage capacity to provide storage for customers.

Our crude oil and condensate business includes gathering and transmission via pipelines, barges, rail and trucks, condensate stabilization and brine disposal. We may purchase crude oil and condensate from producers and other supply sources and sell that crude oil and condensate through our terminal facilities that provide market access.

Across our businesses, we primarily earn our fees through various fee-based contractual arrangements, which include stated fee-only contract arrangements or arrangements with fee-based components where we purchase and resell commodities in connection with providing the related service and earn a net margin as our fee. We earn our net margin under our purchase and resell contract arrangements primarily as a result of stated service-related fees that are deducted from the price of the commodities purchased. While our transactions vary in form, the essential element of each transaction is the use of our assets to transport a product or provide a processed product to an end-user or other marketer or pipeline at the tailgate of the plant, barge terminal or pipeline.