We have audited the accompanying combined balance sheets of Devon Midstream Holdings, L.P. Predecessor (Predecessor) as of December 31, 2012 and 2011, and the related combined statements of operations, equity, and cash flows for each of the years in the three-year period ended December 31, 2012. These combined financial statements are the responsibility of the Predecessor's management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the Predecessor as of December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.

	Year Ended December 31,

	2012			2011			2010
	(in millions)
Operating revenues:
Operating revenues—affiliates	$	1,816.5		$	2,325.0		$	1,778.1
Operating revenues		184.3			298.4			237.9

Total operating revenues		2,000.8			2,623.4			2,016.0

Operating expenses:
Product purchases—affiliates		1,324.2			1,774.2			1,288.4
Product purchases		140.3			239.9			180.5
Operations and maintenance		127.2			109.6			81.4
Operations and maintenance—affiliates		43.8			45.9			38.1
Depreciation and amortization		159.8			144.8			124.9
General and administrative—affiliates		43.6			40.1			39.4
Non-income taxes		13.2			15.3			13.8
Asset impairments		50.1			—			—
Other, net		(3.0	)		(58.0	)		0.4

Total operating expenses		1,899.2			2,311.8			1,766.9

Operating income		101.6			311.6			249.1
Income from equity investment		2.0			9.3			5.1

Income from continuing operations before income taxes		103.6			320.9			254.2
Income tax expense		37.3			115.5			91.5

Net income from continuing operations		66.3			205.4			162.7

Discontinued operations:
Net income from discontinued operations		10.6			12.8			20.5
Net income from discontinued operations attributable to non-controlling interests		(1.1	)		(2.1	)		(4.5	)

Net income from discontinued operations attributable to Devon		9.5			10.7			16.0

Net income attributable to Devon	$	75.8		$	216.1		$	178.7

	December 31,

	2012			2011
	(in millions)
Assets
Current assets:
Inventories	$	5.5		$	6.0
Prepaid expenses		4.2			4.3
Assets held for sale		21.4			16.7
Other		0.3			0.3

Total current assets		31.4			27.3

Property, plant and equipment, at cost		2,985.8			2,619.3
Less accumulated depreciation and amortization		(1,142.6	)		(932.3	)

Net property, plant and equipment		1,843.2			1,687.0
Equity investment		57.7			41.8
Goodwill		401.7			401.7
Assets held for sale		201.2			288.5

Total assets	$	2,535.2		$	2,446.3

Liabilities and Equity
Current liabilities:
Accrued expenses and other	$	80.1		$	80.0
Current liabilities associated with assets held for sale		3.3			4.0

Total current liabilities		83.4			84.0
Asset retirement obligations		13.2			11.8
Deferred income taxes		431.8			443.8
Other		4.8			5.4

Total liabilities		533.2			545.0

Equity:
Devon equity		1,953.3			1,856.0
Non-controlling interests		48.7			45.3

Total equity		2,002.0			1,901.3
Commitments and contingencies (Note 9)

Total liabilities and equity	$	2,535.2		$	2,446.3

	Year Ended December 31,

	2012			2011			2010
	(in millions)
Devon equity
Balance as of beginning of year	$	1,856.0		$	1,800.4		$	1,820.9
Net income		75.8			216.1			178.7
Net distributions from (to) Devon—continuing operations		115.7			(131.1	)		(171.8	)
Net distributions to Devon—discontinued operations		(94.2	)		(29.4	)		(27.4	)

Balance as of end of year	$	1,953.3		$	1,856.0		$	1,800.4

Non-controlling interests
Balance as of beginning of year	$	45.3		$	48.6		$	48.8
Net income		1.1			2.1			4.5
Net distributions from (to) non-controlling interests—discontinued operations		2.3			(5.4	)		(4.7	)

Balance as of end of year	$	48.7		$	45.3		$	48.6

Total equity
Balance as of beginning of year	$	1,901.3		$	1,849.0		$	1,869.7
Net income		76.9			218.2			183.2
Net distributions from (to) Devon—continuing operations		115.7			(131.1	)		(171.8	)
Net distributions to Devon and non-controlling interests—discontinued operations		(91.9	)		(34.8	)		(32.1	)

Balance as of end of year	$	2,002.0		$	1,901.3		$	1,849.0

	Year Ended December 31,

	2012			2011			2010
	(in millions)
Cash flows from operating activities:
Net income from continuing operations	$	66.3		$	205.4		$	162.7
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:
Depreciation and amortization		159.8			144.8			124.9
Asset impairments		50.1			—			—
Deferred income tax (benefit) expense		(10.5	)		42.0			91.1
(Income) loss from equity investment, net of distributions		0.3			(0.9	)		—
Other noncash items, net		(1.0	)		1.9			10.7
Changes in assets and liabilities:
Inventories		0.5			3.7			1.7
Prepaid expenses		0.1			(1.0	)		(1.0	)
Other assets		0.5			0.7			(1.1	)
Accrued expenses and other liabilities		(11.7	)		4.6			2.5

Net cash provided by operating activities		254.4			401.2			391.5

Cash used in investing activities:
Capital expenditures		(351.7	)		(247.6	)		(224.0	)
Contribution to equity investment		(16.8	)		(21.1	)		—
Distribution from equity investment in excess of cumulative income		—			—			3.6
Other		—			0.1			—

Net cash used in investing activities		(368.5	)		(268.6	)		(220.4	)

Cash flows from financing activities:
Net distributions from (to) Devon		115.7			(131.1	)		(171.8	)
Other		(1.6	)		(1.5	)		0.7

Net cash provided by (used in) financing activities		114.1			(132.6	)		(171.1	)

Cash flows from discontinued operations:
Net cash provided by operating activities		25.3			33.4			49.1
Net cash provided by (used in) investing activities		74.1			(22.5	)		(5.9	)
Net cash used in financing activities—net distributions to Devon and non-controlling interests		(91.9	)		(34.8	)		(32.1	)

Net cash provided by (used in) discontinued operations		7.5			(23.9	)		11.1

Net change in cash and cash equivalents		7.5			(23.9	)		11.1
Beginning cash and cash equivalents—related to assets held for sale		8.1			32.0			20.9

Ending cash and cash equivalents—related to assets held for sale	$	15.6		$	8.1		$	32.0

The accompanying financial statements of Devon Midstream Holdings, L.P. Predecessor (the "Predecessor") have been prepared in connection with the proposed agreement and plan of merger between Crosstex Energy, Inc. ("Crosstex") and Devon Energy Corporation ("Devon") and certain of its wholly owned subsidiaries (the "merger agreement"). The Predecessor is comprised of Devon's U.S. midstream assets and operations, including its 38.75% economic interest in Gulf Coast Fractionators.

As part of the merger agreement, Crosstex and Acacia Natural Gas Corp I, Inc., a wholly owned subsidiary of Devon ("New Acacia"), will merge with subsidiaries of a new holding company named New Public Rangers, L.L.C. ("New Public Rangers") and will survive as wholly owned subsidiaries of New Public Rangers. Pursuant to these mergers, the business of New Public Rangers will be the combined business of Crosstex and a 50% limited partner interest in Devon Midstream Holdings, L.P. ("Midstream Holdings"), which, together with its subsidiaries, will own Devon's midstream assets in the Barnett Shale in North Texas, the Cana-Woodford and Arkoma-Woodford Shales in Oklahoma and Devon's economic interest in Gulf Coast Fractionators in Mont Belvieu, Texas. Pursuant to a separate contribution agreement among Devon, Crosstex Energy, L.P. (the "Partnership") and certain of their respective wholly owned subsidiaries, Devon will contribute the remaining 50% limited partner interest in Midstream Holdings to the Partnership in exchange for limited partner interests in the Partnership. New Public Rangers and its directly and indirectly wholly owned subsidiaries have all adopted December 31 fiscal year ends.

The Predecessor is engaged in the business of purchasing natural gas from Devon and third parties at or near the wellhead and then gathering, compressing, treating and processing the purchased natural gas and fractionating the natural gas liquids, or NGLs, that result from the natural gas processing. After performing these activities, the Predecessor sells its natural gas and NGLs to Devon. The Predecessor primarily performs these activities to support Devon's operations. However, to the extent system capacity is available, the Predecessor also provides these services to other companies engaged in the production, distribution and marketing of natural gas and NGLs.

The Predecessor's assets consist of Devon's U.S. natural gas gathering and processing systems, as well as a 38.75% economic interest in Gulf Coast Fractionators. These systems are located primarily in Texas and Oklahoma. The most significant system is the Bridgeport system, which serves the Barnett Shale in North Texas. This system includes integrated gathering pipelines, one gas processing plant and an NGL fractionator. The Cana system serves the Cana-Woodford Shale in West Central Oklahoma. This system consists of integrated gathering pipelines and a gas processing plant. The Northridge system serves the Arkoma-Woodford Shale in Southeastern Oklahoma. This system consists of integrated gathering pipelines and a gas processing plant. Gulf Coast Fractionators is a full-service NGL fractionator located on the Gulf Coast at the Mont Belvieu hub. The Predecessor's other assets include systems that serve the Powder River Basin in Wyoming and other areas where Devon operates.

The Predecessor's accompanying combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on the basis of Devon's historical ownership of the Predecessor's assets and its operations. These financial statements include the Predecessor's accounts and those of its majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.

The accompanying financial statements have been prepared from records maintained by Devon and may not be indicative of the actual results of operations that might have occurred if the Predecessor had been operated separately during the periods reported. Because a direct ownership relationship did not exist among the businesses comprising the Predecessor, the net investment in the Predecessor is shown as equity, in lieu of owner's equity, in the combined financial statements.

During the reporting periods for the accompanying financial statements, Devon provided cash management services to the Predecessor through a centralized treasury system. As a result, all revenues covered by the centralized treasury system were deemed to have been received in cash by the Predecessor from Devon during the period in which the revenue was recorded in the financial statements. All charges and cost allocations covered by the centralized treasury system were deemed to have been paid in cash to Devon during the period in which the cost was recorded in the financial statements. The net effects of these amounts are reflected as net distributions to or contributions from Devon and non-controlling interests in the accompanying statements of equity. As a result of this accounting treatment, the Predecessor's working capital does not reflect any affiliate accounts receivables or payables, except for amounts that pertain to planned cash transfers between the Predecessor and Devon affiliates.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the following:

The Predecessor's operations are managed through distinct operating segments, which are defined primarily as each natural gas gathering and processing system serving separate geographic regions. For financial reporting purposes, the operating segments are aggregated into one reporting segment due to the similar nature of the businesses.

The Predecessor's operating revenues consist of revenues from gathering, compressing, treating and processing natural gas and from fractionating NGLs. Generally, the Predecessor receives fees for the services it provides. For natural gas processing services, the Predecessor receives a percent-of-proceeds fee based on the sales value of extracted NGLs and residue natural gas. For gathering, compression and treating services, the Predecessor receives a fixed fee based on the volume and thermal content of the associated natural gas.

Operating revenues are recorded at the time products are sold or services are provided to Devon or other customers at a fixed or determinable price, delivery or performance has occurred, title has transferred and collectability of the revenue is probable.

Operating revenues and expenses attributable to the Predecessor's natural gas and NGL purchase and processing contracts are reported on a gross basis when the Predecessor takes title to the products and has risks and rewards of ownership. The natural gas purchased under these contracts is processed in the Predecessor's processing facilities.

Certain of Devon's centralized overhead and operating costs represent shared services that benefit its subsidiaries and affiliates, including the Predecessor. The shared services consist primarily of accounting, treasury, information technology, human resources, legal and facilities management. The accompanying financial statements include costs allocated by Devon for these shared services in the form of a management services fee. The costs are allocated to the Predecessor based on its proportionate share of Devon's revenues, employee compensation and gross property, plant and equipment. Management believes these allocation methodologies are reasonable. All allocated costs are included in general and administrative expenses in the accompanying combined statements of operations.

Devon grants certain share-based awards to members of its Board of Directors and selected employees. The Predecessor does not grant share-based awards but does participate in Devon's share-based award plans. The awards granted under Devon's plans are measured at fair value on the date of grant and are recognized as expense over the applicable requisite service periods.

The Predecessor does not sponsor any pension, postretirement or employee savings plans. However, the Predecessor participates in certain plans sponsored by Devon. The Predecessor participates in Devon's non-contributory defined benefit pension plans, including both qualified and nonqualified plans. Devon also has defined benefit postretirement plans that provide medical and, in some cases, life insurance benefits, in which the Predecessor participates. Devon also sponsors, and the Predecessor participates in, 401(k) and enhanced contribution plans to which Devon makes contributions to participant accounts.

Certain of the Predecessor's operations are subject to income taxes assessed by the federal and various state jurisdictions in the U.S. Additionally, certain of the Predecessor's operations are subject to tax assessed by the State of Texas that is computed based on modified gross margin as defined by the

State of Texas. The Texas margin tax is presented as income tax expense in the accompanying combined statements of operations.

In addition, the Predecessor accounts for deferred income taxes related to the federal and state jurisdictions using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for the future tax benefits attributable to the expected utilization of existing tax net operating loss carryforwards and other types of carryforwards. If the future utilization of some portion of carryforwards is determined to be unlikely, a valuation allowance is provided to reduce the recorded tax benefits from such assets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Predecessor recognizes the financial statement effects of tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not of being realized upon ultimate settlement with a taxing authority. Liabilities for unrecognized tax benefits are presented as other current or long-term liabilities in the accompanying balance sheet based on timing of the expected settlement. Interest and penalties related to unrecognized tax benefits are included in current income tax expense.

In connection with the mergers, the Predecessor's operations will be structured so that none of its operations will be subject to income tax, except for the operations subject to the Texas gross margin tax. Accordingly, Midstream Holdings, including its subsidiaries, will no longer be subject to corporate federal income taxes.

The Predecessor classifies as discontinued operations its assets or asset groups that have clearly distinguishable cash flows and are in the process of being sold or have been sold.

The Predecessor considers all highly liquid investments with original contractual maturities of three months or less to be cash equivalents. Under the Predecessor's cash management arrangement with Devon, the Predecessor remits all excess cash to Devon who then funds the Predecessor's controlled disbursement accounts as amounts are presented for payment. There were no outstanding checks in excess of cash balances as of December 31, 2012.

Inventories consist of materials and supplies used in the Predecessor's operations. All inventories are recorded at the lower of the weighted average cost or market value.

Costs directly and indirectly related to the acquisition or construction of the Predecessor's processing facilities, pipelines and equipment are capitalized and recorded as property, plant and equipment. Direct costs include labor and material costs. Indirect costs include taxes, fees, the cost of funds used during construction and other various costs. Improvement costs which extend the useful lives or increase the capacity of these assets are also capitalized. Repair and maintenance costs which do not increase the useful lives or capacity of these assets are recognized as operations and maintenance expense in the accompanying statements of operations.

Costs for property, plant and equipment that are in use are depreciated over the assets' estimated useful lives, using either the unit-of-production or straight-line method.

Upon the disposition or retirement of property, plant and equipment related to continuing operations, any gain or loss is recognized as other income or expense in the statement of operations. When a disposition or retirement occurs which qualifies as discontinued operations, any gain or loss is recognized as income or loss from discontinued operations in the statement of operations.

The Predecessor evaluates its property, plant and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The carrying amount of a long-lived asset is not recoverable when it exceeds the undiscounted sum of the cash flows expected to result from the use and eventual disposition of the asset. Estimates of expected future cash flows represent management's best estimate based on reasonable and supportable assumptions. When the carrying amount of a long-lived asset is not recoverable, an impairment loss is recognized equal to the excess of the asset's carrying value over its fair value. The fair values of long-lived assets are generally determined from estimated discounted future net cash flows. The fair value of the predecessor's long-lived assets is considered a level 3 fair value measurement. Estimated future net cash flows are highly dependent on the duration of expected cash flows and estimated future natural gas and NGL pricing, operating costs, capital expenditures and throughput volumes.

The Predecessor accounts for investments it does not control but has the ability to exercise significant influence using the equity method of accounting. Under this method, equity investments are carried originally at the acquisition cost, increased by the Predecessor's proportionate share of the investee's net income and by contributions made, and decreased by the Predecessor's proportionate share of the investee's net losses and by distributions received.

The Predecessor evaluates its equity investments for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable.

Goodwill represents the excess of the purchase price of business combinations over the fair value of the net assets acquired. Goodwill is tested at least annually for impairment. The impairment test requires allocating goodwill and all other assets and liabilities to assigned reporting units. The fair value of each reporting unit is estimated and compared to the net book value of the reporting unit. If the estimated fair value of the reporting unit is less than the net book value, including goodwill, then the

goodwill is written down to the implied fair value of the goodwill through a charge to expense. Because quoted market prices are not available for the Predecessor's reporting unit, the fair value of the reporting unit is estimated using valuation analyses based on values of comparable companies and comparable transactions. The Predecessor performed annual impairment tests of goodwill as of the fourth quarters of 2012, 2011 and 2010. Based on these assessments, no impairment of goodwill was required.

The Predecessor recognizes liabilities for retirement obligations associated with its pipelines and processing and fractionation facilities. Such liabilities are recognized when there is a legal obligation associated with the retirement of the assets and the amount can be reasonably estimated. The initial measurement of an asset retirement obligation is recorded as a liability at its fair value, with an offsetting asset retirement cost recorded as an increase to the associated property, plant and equipment. If the fair value of a recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the asset retirement cost. The Predecessor's asset retirement obligations include estimated environmental remediation costs which arise from normal operations and are associated with the retirement of the long-lived assets. The asset retirement cost is depreciated using a systematic and rational method similar to that used for the associated property, plant and equipment.

Liabilities for loss contingencies arising from claims, assessments, litigation or other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Liabilities for environmental remediation or restoration claims resulting from improper operation of assets are recorded when it is probable that an obligation has been incurred and the amount can be reasonably estimated. Expenditures related to such environmental matters are expensed or capitalized in accordance with the Predecessor's accounting policy for property, plant and equipment.

The Predecessor engages in various transactions with Devon and other affiliated entities. These transactions relate to sales to and from affiliates, services provided by affiliates, cost allocations from affiliates and centralized cash management activities performed by affiliates. Management believes these transactions are executed on terms that are fair and reasonable and are consistent with terms for transactions with nonaffiliated third parties. The amounts related to affiliate transactions are specified in the accompanying combined financial statements.

The following schedule presents the affiliate transactions and other transactions made to or received from Devon, all of which are settled through an adjustment to equity:

	Year Ended December 31,

	2012			2011			2010
	(in millions)
Continuing operations:
Operating revenues—affiliates	$	(1,816.5	)	$	(2,325.0	)	$	(1,778.1	)
Operating expenses—affiliates		1,411.6			1,860.2			1,365.9

Net affiliate transactions		(404.9	)		(464.8	)		(412.2	)

Capital expenditures		351.7			247.6			224.0
Other third-party transactions, net		168.9			86.1			16.4

Total third-party transactions		520.6			333.7			240.4

Net distributions from (to) Devon—continuing operations	$	115.7		$	(131.1	)	$	(171.8	)

Discontinued operations:
Operating revenues—affiliates	$	(89.5	)	$	(152.3	)	$	(173.2	)
Operating expenses—affiliates		60.3			107.6			111.8
Cash used in financing activities—affiliates		(1.1	)		(24.7	)		(22.3	)

Net affiliate transactions		(30.3	)		(69.4	)		(83.7	)

Capital expenditures		13.5			22.5			7.0
Other third-party transactions, net		(75.1	)		12.1			44.6

Net third-party transactions		(61.6	)		34.6			51.6

Net distributions to Devon and non-controlling interests—discontinued operations	$	(91.9	)	$	(34.8	)	$	(32.1	)

During 2012, 2011 and 2010, Devon was the Predecessor's only significant customer. Devon accounted for 91%, 89% and 88% of the Predecessor's operating revenues during 2012, 2011 and 2010, respectively.

Share-based compensation costs included in the management services fee charged to the Predecessor by Devon were approximately $12.8 million, $12.6 million, and $12.7 million for 2012, 2011 and 2010, respectively. Pension, postretirement and employee savings plan costs included in the management services fee charged to the Predecessor by Devon were approximately $9.1 million, $8.3 million, and $6.9 million for 2012, 2011 and 2010, respectively. These amounts are included in general and administrative expenses in the accompanying combined statements of operations.

During 2012 and 2011, the Predecessor recognized $3.0 million and $58.0 million of net other income, respectively. In 2012, the Predecessor received insurance proceeds of $5.6 million related to business interruption that occurred at Gulf Coast Fractionators. In 2011, the Predecessor received $57.8 million of excess insurance recoveries related to business interruption and equipment damage at its Cana system that resulted from tornadoes.

The Predecessor is a member of an affiliated group that files consolidated income tax returns. Income taxes are calculated based on each entity's separate taxable income or loss. The components of income tax expense related to the Predecessor's income from continuing operations are as follows:

	Year Ended December 31,

	2012			2011		2010
	(in millions)
Current income tax expense:
U.S. federal	$	46.2		$	71.4	$	0.4
Various states		1.6			2.1		—

Total current tax expense		47.8			73.5		0.4

Deferred income tax expense (benefit):
U.S. federal		(10.2	)		40.8		88.3
Various states		(0.3	)		1.2		2.8

Total deferred tax expense (benefit)		(10.5	)		42.0		91.1

Total income tax expense	$	37.3		$	115.5	$	91.5

The following schedule reconciles the Predecessor's total income tax expense and the amount computed by applying the statutory U.S. federal tax rate to income from continuing operations before income taxes:

The tax effects of temporary differences that gave rise to significant portions of the Predecessor's deferred tax assets and liabilities are presented below:

	December 31,

	2012			2011
	(in millions)
Deferred tax assets:
Asset retirement obligations	$	4.2		$	3.9
Other		0.1			1.8

Total deferred tax assets		4.3			5.7

Deferred tax liabilities:
Property, plant and equipment		(435.4	)		(449.5	)
Other		(0.7	)		—

Total deferred tax liabilities		(436.1	)		(449.5	)

Deferred tax liability, net	$	(431.8	)	$	(443.8	)

For the years ended December 31, 2012, 2011 and 2010, the Predecessor had not recorded any amounts related to unrecognized tax benefits. Included below is a summary of the tax years that remain subject to examination by taxing authorities:

The Predecessor is in the process of selling or has sold certain non-core assets that are presented as discontinued operations in the accompanying financial statements. The following schedule summarizes net income for the Predecessor's discontinued operations:

	Year Ended December 31,

	2012			2011			2010
	(in millions)
Operating revenues:
Operating revenues	$	22.6		$	20.4		$	25.5
Operating revenues—affiliates		89.5			152.3			173.2

Total operating revenues		112.1			172.7			198.7

Operating expenses:
Operating expenses		40.9			38.3			51.9
Operating expenses—affiliates		60.3			107.6			111.8
Asset impairments		3.0			6.8			1.2
(Gain) loss on sale of assets, net		(8.7	)		—			1.7

Total operating expenses		95.5			152.7			166.6

Income before income taxes		16.6			20.0			32.1
Income tax expense		6.0			7.2			11.6

Net income		10.6			12.8			20.5
Net income attributable to non-controlling interests		(1.1	)		(2.1	)		(4.5	)

Net income attributable to Devon	$	9.5		$	10.7		$	16.0

The following schedule presents the main classes of assets and liabilities associated with the Predecessor's discontinued operations:

	December 31,

	2012		2011
	(in millions)
Cash and cash equivalents	$	15.6	$	8.1
Accounts receivable		3.7		4.3
Inventories		2.0		2.2
Other current assets		0.1		2.1

Total current assets		21.4		16.7
Property, plant and equipment		184.7		262.5
Goodwill		16.5		26.0

Total assets	$	222.6	$	305.2

Accounts payable	$	2.8	$	3.6
Other current liabilities		0.5		0.4

Total current liabilities		3.3		4.0
Asset retirement obligations		4.2		4.8
Other long-term liabilities		0.3		0.2

Total liabilities	$	7.8	$	9.0

Non-controlling interests in equity	$	48.7	$	45.3

In May 2013, the Predecessor entered into an agreement to sell its controlling interest in its assets and operations located in Montana for approximately $10 million. This sales price is subject to customary adjustments for financial activity between the effective and closing date of the transaction.

In August 2013, the Predecessor sold its controlling interest in its assets and operations located in Wyoming for approximately $148 million.

During 2012, the Predecessor recognized $50.1 million of asset impairments related to its continuing operations. The impairments resulted from the impact of lower natural gas and NGL prices on the Predecessor's Northridge system and other less significant systems.

The schedule below summarizes the changes in the Predecessor's asset retirement obligations:

	Year Ended December 31,

	2012		2011
	(in millions)
Beginning asset retirement obligations	$	11.8	$	10.0
Revisions to existing liabilities		0.2		1.0
Liabilities incurred		0.5		0.4
Liabilities settled		—		(0.1	)
Liabilities assumed by others		—		(0.2	)
Accretion		0.7		0.7

Ending asset retirement obligations	$	13.2	$	11.8

The Predecessor leases certain equipment and office space under operating lease arrangements. Total rental expense recognized under these operating leases was $27.8 million, $25.9 million and $27.8 million in 2012, 2011 and 2010, respectively.

In addition to its operating leases, the Predecessor has rights-of-way commitments that have remaining non-cancelable terms in excess of one year. The following schedule includes these long-term

commitments and short-term commitments to purchase materials in connection with the Predecessor's growth projects as of December 31, 2012:

The Predecessor is involved in various routine legal actions and proceedings arising in the normal course of its business. However, to the Predecessor's knowledge, there were no material pending legal proceedings to which the Predecessor is a party or to which any of its property is subject.

The operation of pipelines, plants and other facilities for gathering, processing or transmitting natural gas, NGLs and other products is subject to stringent and complex laws and regulations pertaining to health, safety and the environment. As an owner or operator of these facilities, the Predecessor must comply with United States laws and regulations at the federal, state and local levels that relate to air and water quality, hazardous and solid waste management and disposal, and other environmental matters. The cost of planning, designing, constructing and operating pipelines, plants, and other facilities must incorporate compliance with environmental laws and regulations and safety standards. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and potentially criminal enforcement measures, including citizen suits, which can include the assessment of monetary penalties, the imposition of remedial requirements, and the issuance of injunctions or restrictions on operation. Management believes that, based on currently known information, compliance with these laws and regulations will not have a material adverse effect on the Predecessor's results of operations, financial condition or cash flows. At December 31, 2012, the Predecessor had $0.4 million of liabilities recorded for environmental matters which are included in other long-term liabilities in the accompanying combined balance sheet.

Jurisdiction		Tax Years Open

U.S. federal			2008 - 2012
Various U.S. states			2008 - 2012

Year Ending December 31,	Operating Leases		Rights-of-Way		Purchase Commitments

	(in millions)
2013	$	21.6	$	0.2	$	21.4
2014		5.2		0.1		—
2015		—		0.1		—
2016		—		0.1		—
2017		—		0.1		—
Thereafter		—		0.5		—

Total	$	26.8	$	1.1	$	21.4


		/s/ KPMG LLP