We account for unit-based compensation in accordance with ASC 718, which requires that compensation related to all unit-based awards be recognized in the consolidated financial statements. Unit-based compensation cost is valued at fair value at the date of grant, and that grant date fair value is recognized as expense over each award’s requisite service period with a corresponding increase to equity or liability based on the terms of each award and the appropriate accounting treatment under ASC 718. Unit-based compensation associated with ENLC’s unit-based compensation plan awarded to directors, officers, and employees of the General Partner is recorded by ENLK since ENLC has no substantial or managed operating activities other than its interests in ENLK.


	Year Ended December 31,
	2021		2020		2019
Cost of unit-based compensation charged to general and administrative expense	$	18.7	$	21.3	$	32.7
Cost of unit-based compensation charged to operating expense	6.6		7.1		6.7
Total unit-based compensation expense	$	25.3	$	28.4	$	39.4
Non-controlling interest in unit-based compensation	$	—	$	—	$	0.5
Amount of related income tax benefit recognized in net income (loss) (1)	$	5.9	$	6.7	$	9.1

(1)For the years ended December 31, 2021, 2020, and 2019 the amount of related income tax benefit recognized in net income (loss) excluded $3.1 million, $6.0 million, and $2.2 million of income tax expense, respectively, related to book-to-tax differences recorded upon vesting of restricted units.

ENLC restricted incentive units were valued at their fair value at the date of grant, which is equal to the market value of ENLC common units on such date. A summary of the restricted incentive unit activity for the year ended December 31, 2021 is provided below:


	Year Ended December 31, 2021
ENLC Restricted Incentive Units:	Number of Units		Weighted Average Grant-Date Fair Value
Non-vested, beginning of period	5,350,086		$	8.45
Granted (1)	3,937,301		3.86
Vested (1)(2)	(1,268,801)		12.85
Forfeited	(511,115)		6.10
Non-vested, end of period	7,507,471		$	5.46
Aggregate intrinsic value, end of period (in millions)	$	51.7

A summary of the restricted incentive units’ aggregate intrinsic value (market value at vesting date) and fair value of units vested (market value at date of grant) for the years ended December 31, 2021, 2020, and 2019 is provided below (in millions):

For restricted incentive unit awards granted to certain officers and employees (the “grantee”), such awards (the “Subject Grants”) generally provide that, subject to the satisfaction of the conditions set forth in the agreement, the Subject Grants will vest on the third anniversary of the vesting commencement date (the “Regular Vesting Date”). The Subject Grants will be forfeited if the grantee’s employment or service with ENLC and its affiliates terminates prior to the Regular Vesting Date except that the Subject Grants will vest in full or on a pro-rated basis for certain terminations of employment or service prior to the Regular Vesting Date. For instance, the Subject Grants will vest on a pro-rated basis for any terminations of the grantee’s employment: (i) due to retirement, (ii) by ENLC or its affiliates without cause, or (iii) by the grantee for good reason (each, a “Covered Termination” and more particularly defined in the Subject Grants agreement) except that the Subject Grants will vest in full if the applicable Covered Termination is a “normal retirement” (as defined in the Subject Grants agreement) or the

ENLC grants performance awards under the 2014 Plan. The performance award agreements provide that the vesting of performance units (i.e., performance-based restricted incentive units) granted thereunder is dependent on the achievement of certain performance goals over the applicable performance period. At the end of the vesting period, recipients receive distribution equivalents, if any, with respect to the number of performance units vested. The vesting of such units ranges from zero to 200% of the units granted depending on the extent to which the related performance goals are achieved over the relevant performance period.

The vesting of performance units is dependent on (a) the grantee’s continued employment or service with ENLC or its affiliates for all relevant periods and (b) the TSR performance of ENLC (the “ENLC TSR”) and a performance goal based on cash flow (“Cash Flow”). At the time of grant, the Board of Directors of the Managing Member (the “Board”) will determine the relative weighting of the two performance goals by including in the award agreement the number of units that will be eligible for vesting depending on the achievement of the TSR performance goals (the “Total TSR Units”) versus the achievement of the Cash Flow performance goals (the “Total CF Units”). These performance awards have four separate performance periods: (i) three performance periods are each of the first, second, and third calendar years that occur following the vesting commencement date of the performance awards and (ii) the fourth performance period is the cumulative three-year period from the vesting commencement date through the third anniversary thereof (the “Cumulative Performance Period”).

One-fourth of the Total TSR Units (the “Tranche TSR Units”) relates to each of the four performance periods described above. Following the end date of a given performance period, the Governance and Compensation Committee (the “Committee”) of the Board will measure and determine the ENLC TSR relative to the TSR performance of a designated group of peer companies (the “Designated Peer Companies”) to determine the Tranche TSR Units that are eligible to vest, subject to the grantee’s continued employment or service with ENLC or its affiliates through the end date of the Cumulative Performance Period. In short, the TSR for a given performance period is defined as (i)(A) the average closing price of a common equity security at the end of the relevant performance period minus (B) the average closing price of a common equity security at the beginning of the relevant performance period plus (C) reinvested dividends divided by (ii) the average closing price of a common equity security at the beginning of the relevant performance period.

The following table sets out the levels at which the Tranche TSR Units may vest (using linear interpolation) based on the ENLC TSR percentile ranking for the applicable performance period relative to the TSR achievement of the Designated Peer Companies:

Performance Level

Achieved ENLC TSR
Position Relative to Designated Peer Companies

Vesting percentage
of the Tranche TSR Units

Below Threshold

Less than 25%

Threshold

Equal to 25%

50%

Target

Equal to 50%

100%

Maximum

Greater than or Equal to 75%

200%

Approximately one-third of the Total CF Units (the “Tranche CF Units”) relates to each of the first three performance periods described above (i.e., the Cash Flow performance goal does not relate to the Cumulative Performance Period). The Board will establish the Cash Flow performance targets for purposes of the column in the table below titled “ENLC’s Achieved Cash Flow” for each performance period no later than March 31 of the year in which the relevant performance period begins. Following the end date of a given performance period, the Committee will measure and determine the Cash Flow performance of ENLC to determine the Tranche CF Units that are eligible to vest, subject to the grantee’s continued employment or service with ENLC or its affiliates through the end of the Cumulative Performance Period. In short, the Performance-Based Award Agreement defines Cash Flow for a given performance period as (A)(i) ENLC’s adjusted EBITDA minus (ii) interest expense, current taxes and other, maintenance capital expenditures, and preferred unit accrued distributions divided by (B) the time-weighted average number of ENLC’s common units outstanding during the relevant performance period.

In 2021, the Board adopted the metric free cash flow after distributions (“FCFAD”) as the cash flow performance goal in the Performance-Based Award Agreement rather than the previously used distributable cash flow per unit. The following table sets out the levels at which the Tranche CF Units were eligible to vest (using linear interpolation) based on the FCFAD performance of ENLC for the performance period ending December 31, 2021:

Performance Level

ENLC’s Achieved FCFAD

Vesting percentage
of the Tranche CF Units

Below Threshold

Less than $205 million

Threshold

Equal to $205 million

50%

Target

Equal to $256 million

100%

Maximum

Greater than or Equal to $300 million

200%

Performance Level

ENLC’s Achieved
Distributable Cash Flow per Unit

Vesting percentage
of the Tranche CF Units

Below Threshold

Less than $1.345

Threshold

Equal to $1.345

50%

Target

Equal to $1.494

100%

Maximum

Greater than or Equal to $1.643

200%

Performance Level

ENLC’s Achieved
Distributable Cash Flow per Unit

Vesting percentage
of the Tranche CF Units

Below Threshold

Less than $1.43

Threshold

Equal to $1.43

50%

Target

Equal to $1.55

100%

Maximum

Greater than or Equal to $1.72

200%

The fair value of each performance unit is estimated as of the date of grant using a Monte Carlo simulation with the following assumptions used for all performance unit grants made under the plan: (i) a risk-free interest rate based on United States Treasury rates as of the grant date; (ii) a volatility assumption based on the historical realized price volatility of ENLC’s common units and the Designated Peer Companies’ or Peer Companies’ securities as applicable; (iii) an estimated ranking of ENLC (or for outstanding performance units granted prior to the Merger, ENLC and ENLK) among the Designated Peer Companies or Peer Companies, and (iv) the distribution yield. The fair value of the performance unit on the date of grant is expensed over a vesting period of approximately three years.


ENLC Performance Units:	January 2021			July 2020			March 2020			January 2020			October 2019			June 2019			March 2019
Grant-date fair value	$	4.70		$	2.33		$	1.13		$	7.69		$	7.29		$	9.92		$	13.10
Beginning TSR price	$	3.71		$	2.52		$	1.25		$	6.13		$	7.42		$	9.84		$	10.92
Risk-free interest rate	0.17		%	0.17		%	0.42		%	1.62		%	1.44		%	1.72		%	2.42		%
Volatility factor	71.00		%	67.00		%	51.00		%	37.00		%	35.00		%	33.50		%	33.86		%


	Year Ended December 31, 2021
ENLC Performance Units:	Number of Units		Weighted Average Grant-Date Fair Value
Non-vested, beginning of period	2,351,241		$	8.82
Granted	1,388,139		4.70
Vested (1)	(164,553)		26.73

Non-vested, end of period	3,574,827		$	6.40
Aggregate intrinsic value, end of period (in millions)	$	24.6

A summary of the performance units’ aggregate intrinsic value (market value at vesting date) and fair value of units vested (market value at date of grant) for the years ended December 31, 2021, 2020, and 2019 is provided below (in millions).