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.


	Year Ended December 31,
	2023		2022		2021
Cost of unit-based compensation charged to operating expense	$	3.7	$	5.7	$	6.6
Cost of unit-based compensation charged to general and administrative expense	15.5		24.7		18.7
Total unit-based compensation expense	$	19.2	$	30.4	$	25.3

Amount of related income tax benefit recognized in net income (1)	$	4.5	$	7.1	$	5.9

The 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, 2023 is provided below:


	Year Ended December 31, 2023
Restricted Incentive Units:	Number of Units		Weighted Average Grant-Date Fair Value
Unvested, beginning of period	6,775,186		$	5.89
Granted (1)	1,587,965		11.03
Vested (1)(2)	(2,489,603)		5.96
Forfeited	(427,568)		6.98
Unvested, end of period	5,445,980		$	7.27
Aggregate intrinsic value, end of period (in millions)	$	66.2

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, 2023, 2022, and 2021 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 applicable Covered Termination occurs after a change in control (if any). The Subject Grants will vest in full if death or a qualifying disability occurs prior to the Regular Vesting Date.

We grant 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, which in previous years has been based on distributable cash flow (“DCF”) or free cash flow after distributions (“FCFAD”) (as applicable “Cash Flow”). At the time of grant, 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 85% (1)

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 have a Cumulative Performance Period). The Board will establish the Cash Flow performance targets 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 2023, the Board adopted the DCF metric as the Cash Flow performance goal in the Performance-Based Award Agreement for all periods beginning after January 1, 2023, rather than the previously used FCFAD metric. The following table sets out the levels at which the Tranche CF Units were eligible to vest (using linear interpolation):

Performance Period Ended December 31,

2023

2022

2021

Performance Level

Vesting Percentage

of the Tranche CF Units

Achieved DCF

Achieved FCFAD

Below Threshold

Less than $801 million

Less than $154 million

Less than $205 million

Threshold

50%

Equal to $801 million

Equal to $154 million

Equal to $205 million

Target

100%

Equal to $932 million

Equal to $202 million

Equal to $256 million

Maximum

200%

Greater than or Equal to $1,123 million

Greater than or Equal to $241 million

Greater than or Equal to $300 million

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 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.


Performance Units:	March 2023			June 2022			March 2022 (1)			January 2021
Grant-date fair value	$	11.67		$	11.71		$	11.90		$	4.70
Beginning TSR price	$	10.40		$	8.54		$	8.83		$	3.71
Risk-free interest rate	3.76		%	3.35		%	2.15		%	0.17		%
Volatility factor	64.00		%	76.00		%	75.00		%	71.00		%

(1)Excludes certain performance units awarded March 1, 2022 with vesting conditions based on performance metrics. The 88,863 performance units have a grant-date fair value of $8.90 and were scheduled to vest in February 2023. However, this award partially vested in October 2022 and is reflected in the “Vested” row of the summary of the performance units table below.


	Year Ended December 31, 2023
Performance Units:	Number of Units		Weighted Average Grant-Date Fair Value
Unvested, beginning of period	2,979,154		$	6.44
Granted	420,128		11.67
Vested (1)	(1,091,523)		8.30
Forfeited	(71,015)		10.97
Unvested, end of period	2,236,744		$	6.37
Aggregate intrinsic value, end of period (in millions)	$	27.2

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, 2023, 2022, and 2021 is provided below (in millions).