Cheniere Reports Third Quarter 2018 Results and Provides Business and Guidance Update
Raises 2018 Guidance and Provides 2019 Guidance
Raises Run Rate Production and Financial Guidance
Announces 24-Year LNG Sale and Purchase Agreement with PGNiG
Achieves First LNG Production From Train 5 of SPL Project
Signs EPC Contract with Bechtel for Train 6 of SPL Project and Issues
Limited Notice to Proceed
Cheniere Energy, Inc. (NYSE American: LNG):
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Summary of Third Quarter 2018 Results (in millions, except LNG
data)
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2018
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2017
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% Change
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2018
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2017
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% Change
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Revenues
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$
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1,819
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$
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1,403
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30
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%
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$
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5,604
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$
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3,855
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45
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%
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Net income (loss)1
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$
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65
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$
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(289
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)
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$
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404
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$
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(520
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)
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Consolidated Adjusted EBITDA2
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$
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569
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$
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442
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29
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%
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$
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2,007
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$
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1,297
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55
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%
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LNG exported:
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Number of cargoes
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65
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44
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48
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%
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193
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135
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43
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%
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Volumes (TBtu)
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228
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160
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43
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%
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691
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482
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43
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%
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LNG volumes loaded (TBtu)
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228
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162
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41
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%
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691
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483
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43
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%
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Summary Guidance (in billions, except LNG data)
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2018 Full Year Guidance
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2018
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Consolidated Adjusted EBITDA2
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$
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2.45
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-
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$
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2.55
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Distributable Cash Flow2
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$
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0.5
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-
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$
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0.6
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2019 Full Year Guidance
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2019
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Consolidated Adjusted EBITDA2
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$
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2.9
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-
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$
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3.2
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Distributable Cash Flow2
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$
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0.6
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-
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$
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0.8
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Run Rate Guidance
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Run Rate3
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Consolidated Adjusted EBITDA2
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$
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4.4
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-
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$
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4.9
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Distributable Cash Flow2
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$
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2.1
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-
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$
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2.6
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Adjusted Nominal Production Capacity per Train4 (mtpa)
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4.4
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-
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4.9
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____________________
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1
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Net income (loss) as used herein refers to Net income (loss)
attributable to common stockholders on our Consolidated Statements
of Operations.
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2
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Non-GAAP financial measure. See “Reconciliation of Non-GAAP
Measures” for further details.
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3
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Run rate start date assumed to be first full year of
operations for Trains 1-5 at the SPL Project and Trains 1-3 at the
CCL Project.
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4
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Includes expected impacts of planned maintenance, production
reliability, potential overdesign, and debottlenecking
opportunities.
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Recent Highlights
Strategic
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In November 2018, we entered into a 24-year LNG Sale and Purchase
Agreement (“SPA”) with Polish state-owned oil and gas company Polskie
Gornictwo Naftowe i Gazownictwo S.A. (“PGNiG”) for the sale of
approximately 1.45 million tonnes per annum (“mtpa”) of LNG on a
delivered ex-ship basis. Deliveries will commence in 2019, with the
full annual quantity commencing in 2023. The purchase price for LNG is
indexed to the monthly Henry Hub price, plus a fee.
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In November 2018, Sabine Pass Liquefaction, LLC (“SPL”) entered into
an Engineering, Procurement, and Construction (“EPC”) contract with
Bechtel Oil, Gas and Chemicals, Inc. (“Bechtel”) for Train 6 of the
SPL Project (defined below). SPL also issued limited notice to proceed
to Bechtel to commence early engineering, procurement, and site works.
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In September 2018, we entered into a 15-year LNG SPA with Vitol Inc.
(“Vitol”) for the sale of approximately 0.7 mtpa of LNG beginning in
2018.
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In August 2018, we entered into a 25-year LNG SPA with CPC
Corporation, Taiwan (“CPC”) for the sale of approximately 2 mtpa of
LNG beginning in 2021.
Operational
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As of October 31, 2018, more than 215 cargoes have been produced,
loaded, and exported from the SPL Project year to date. To date, more
than 475 cumulative LNG cargoes have been exported from the SPL
Project, with deliveries to 29 countries and regions worldwide.
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In August 2018, feed gas was introduced to Train 1 of the CCL Project
(defined below) as part of the commissioning process. In September
2018, feed gas was introduced to Train 5 of the SPL Project as part of
the commissioning process, and first LNG production from Train 5
occurred in October 2018.
Financial
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For the nine months ended September 30, 2018, we achieved Consolidated
Adjusted EBITDA of over $2.0 billion and Distributable Cash Flow of
approximately $470 million.
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In September 2018, we closed the previously announced merger of
Cheniere Energy Partners LP Holdings, LLC (“Cheniere Partners
Holdings”) with our wholly owned subsidiary. As a result of the
merger, all of the publicly-held shares of Cheniere Partners Holdings
not owned by us were canceled and shareholders received 0.4750 shares
of our common stock for each publicly-held share of Cheniere Partners
Holdings.
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In September 2018, Cheniere Energy Partners, L.P. (“Cheniere
Partners”) (NYSE American: CQP) issued an aggregate principal amount
of $1.1 billion of 5.625% Senior Notes due 2026 (the “2026 CQP Senior
Notes”). Net proceeds of the offering, after deducting commissions,
fees and expenses, were used to prepay all of the outstanding
indebtedness under Cheniere Partners’ credit facilities (the “CQP
Credit Facilities”). After applying the proceeds from this offering,
only a $115 million revolving credit facility remains as part of the
CQP Credit Facilities, and both the 2026 CQP Senior Notes and Cheniere
Partners’ outstanding $1.5 billion of 5.250% Senior Notes due 2025
became unsecured.
Liquefaction Projects Update
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SPL Project
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CCL Project
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Liquefaction Train
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Train 5
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Train 6
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Train 1
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Train 2
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Train 3
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Project Status
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Commissioning
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Permitted
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Commissioning
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Under Construction
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Under Construction
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Project Completion Percentage(1)
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98.5%
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—
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Stage 1 - 93.9%
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36.3%(2)
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Expected Substantial Completion
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1Q 2019
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—
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1Q 2019
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2H 2019
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2H 2021
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Note: Projects update excludes Trains in operation
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(1)
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Project completion percentages as of September 30, 2018
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(2)
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Engineering 79.2% complete, procurement 57.3% complete, and
construction 5.9% complete
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Cheniere Energy, Inc. (“Cheniere”) (NYSE American: LNG) reported a net
income1 of $65 million, or $0.26 per share (basic and
diluted), for the three months ended September 30, 2018, compared to a
net loss of $289 million, or $1.24 per share (basic and diluted), for
the comparable 2017 period. Cheniere reported net income1 of
$404 million, or $1.67 per share (basic) and $1.65 per share (diluted),
for the nine months ended September 30, 2018 compared to a net loss of
$520 million, or $2.24 per share (basic and diluted), for the comparable
2017 period. The increases in net income were primarily due to increased
income from operations as a result of additional Trains in operation at
the SPL Project, decreased net income attributable to non-controlling
interest, increased derivative gain, and decreased loss on modification
or extinguishment of debt, partially offset by increased interest
expense, net of amounts capitalized.
Consolidated Adjusted EBITDA2 for the three and nine months
ended September 30, 2018 was $569 million and $2.0 billion,
respectively, compared to $442 million and $1.3 billion for the
comparable 2017 periods. The increase in Consolidated Adjusted EBITDA
was primarily due to increased income from operations.
During the three and nine months ended September 30, 2018, 65 and 193
LNG cargoes, respectively, were exported from the SPL Project, none of
which were commissioning cargoes. One cargo exported from the SPL
Project and sold on a delivered basis was in transit as of September 30,
2018.
“Our focus on execution and operational excellence, coupled with
favorable LNG supply and demand fundamentals, drove solid financial
results again in the third quarter, and today we are raising our full
year 2018 Consolidated Adjusted EBITDA and Distributable Cash Flow
guidance,” said Jack Fusco, Cheniere’s President and Chief Executive
Officer. “Our commercial momentum continues, with SPAs recently
completed with CPC and Vitol, and today we’re pleased to announce a
long-term SPA with PGNiG. These SPAs support our growth plans and
solidify our position as the leader in U.S. LNG.
“As we look forward to 2019, we expect to build upon our reputation of
superior execution by placing Corpus Christi Trains 1 and 2 and Sabine
Pass Train 5 into service safely, ahead of schedule, and within budget,
and continue to leverage our world-scale infrastructure position to
commercialize and grow our LNG platform. To that end, we have finalized
the Sabine Pass Train 6 EPC contract with Bechtel, and we are releasing
Bechtel to commence early engineering, procurement, and construction
activities for Train 6 ahead of making a Final Investment Decision.
“Today we are also raising our run rate Consolidated Adjusted EBITDA and
Distributable Cash Flow guidance. The increase in these metrics is
driven by increased expected run-rate LNG production, as we have
identified significant incremental production potential from
debottlenecking opportunities, maintenance optimization, and plant
overdesign.”
LNG Volume Summary
The following table summarizes the volumes of operational and
commissioning LNG that were loaded from the SPL Project and for which
the financial impact was recognized on our Consolidated Financial
Statements during the three and nine months ended September 30, 2018:
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Three Months Ended September 30, 2018
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Nine Months Ended September 30, 2018
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(in TBtu)
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Operational
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Commissioning
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Operational
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Commissioning
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Volumes loaded during the current period
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228
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—
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691
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—
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Volumes loaded during the prior period but recognized during the
current period
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3
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—
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43
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—
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Less: volumes loaded during the current period and in transit at the
end of the period
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(3
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)
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—
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(3
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)
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—
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Total volumes recognized in the current period
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228
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—
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731
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—
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In addition, during the three and nine months ended September 30, 2018,
we recognized the financial impact of 23 TBtu of LNG and 44 TBtu of LNG,
respectively, on our Consolidated Financial Statements related to LNG
cargoes sourced from third parties.
Summary of Financial Performance
Third Quarter 2018 Results
Our financial results are reported on a consolidated basis. Our
ownership interest in Cheniere Partners as of September 30, 2018
consisted of 100% ownership of the general partner and a 48.6% limited
partner interest.
Total revenues increased $416 million and $1.7 billion during the three
and nine months ended September 30, 2018 as compared to the respective
2017 periods. Total operating costs and expenses increased $288 million
and $1.2 billion during the three and nine months ended September 30,
2018, compared to the respective 2017 periods. The increases in revenues
and total operating costs and expenses for the three and nine months
ended September 30, 2018, compared to the respective 2017 periods, were
primarily driven by the timing of completion of Trains at the SPL
Project and the length of each Train’s operations within the periods
being compared.
Selling, general and administrative expense included share-based
compensation expenses of $20 million and $58 million for the three and
nine months ended September 30, 2018, respectively, compared to $13
million and $38 million for the comparable 2017 periods.
Net income attributable to non-controlling interest decreased $217
million and $230 million during the three and nine months ended
September 30, 2018 as compared to the three and nine months ended
September 30, 2017, primarily due to the non-recurrence of non-cash
amortization of the beneficial conversion feature on Cheniere Partners’
Class B units that occurred during the comparable periods in 2017,
partially offset by increased consolidated net income recognized by
Cheniere Partners in which the non-controlling interests are held.
Capital Resources
As of September 30, 2018, we had cash and cash equivalents of $989
million available to us. In addition, we had current and non-current
restricted cash of $1.9 billion designated for the following purposes:
$649 million for the SPL Project, $220 million for the CCL Project, $808
million for restricted purposes under the terms of Cheniere Partners’
credit facilities and $266 million for other restricted purposes.
Liquefaction Projects
SPL Project and CCL Project
Through Cheniere Partners, we are developing up to six natural gas
liquefaction Trains at the Sabine Pass LNG terminal adjacent to the
existing regasification facilities (the “SPL Project”). Trains 1 through
4 are operational, Train 5 is undergoing commissioning, and Train 6 is
being commercialized and has all necessary regulatory approvals in place.
We are also developing three Trains near Corpus Christi, Texas (the “CCL
Project”). Train 1 is undergoing commissioning, and Trains 2 and 3 are
under construction.
Our Trains are expected to have a nominal production capacity, which is
prior to adjusting for planned maintenance, production reliability,
potential overdesign, and debottlenecking opportunities, of
approximately 4.5 mtpa of LNG per Train, and average run rate adjusted
nominal production capacity of approximately 4.4 to 4.9 mtpa of LNG per
Train.
Corpus Christi Stage 3
We are developing up to seven midscale liquefaction Trains adjacent to
the CCL Project (“Corpus Christi Stage 3”), each with an expected
nominal production capacity, which is prior to adjusting for planned
maintenance, production reliability, potential overdesign, and
debottlenecking opportunities, of approximately 1.4 mtpa of LNG. The
total expected nominal production capacity of the seven midscale Trains
is approximately 9.5 mtpa of LNG. In June 2018, we filed an application
with FERC to site, construct, and operate Corpus Christi Stage 3.
Investor Conference Call and Webcast
We will host a conference call to discuss our financial and operating
results for the third quarter of 2018 on Thursday, November 8, 2018, at
10 a.m. Eastern time / 9 a.m. Central time. A listen-only webcast of the
call and an accompanying slide presentation may be accessed through our
website at www.cheniere.com.
Following the call, an archived recording will be made available on our
website.
About Cheniere
Cheniere Energy, Inc. is the leading producer and exporter of liquefied
natural gas (LNG) in the United States, reliably providing a clean,
secure, and affordable solution to the growing global need for natural
gas. Cheniere is a full-service LNG provider, with capabilities that
include gas procurement and transportation, liquefaction, vessel
chartering, and LNG delivery. Cheniere has one of the largest
liquefaction platforms in the world, consisting of the Sabine Pass and
Corpus Christi liquefaction facilities on the U.S. Gulf Coast, with
expected aggregate nominal production capacity of 36 million tonnes per
annum of LNG operating or under construction. Cheniere is also pursuing
liquefaction expansion opportunities and other projects along the LNG
value chain. Cheniere is headquartered in Houston, Texas, and has
additional offices in London, Singapore, Beijing, Tokyo, and Washington,
D.C.
For additional information, please refer to the Cheniere website at www.cheniere.com
and Quarterly Report on Form 10-Q for the quarter ended September 30,
2018, filed with the Securities and Exchange Commission.
Forward-Looking Statements
This press release contains certain statements that may include
“forward-looking statements” within the meanings of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. All statements, other than statements of historical or present
facts or conditions, included herein are “forward-looking statements.”
Included among “forward-looking statements” are, among other things, (i)
statements regarding Cheniere’s financial and operational guidance,
business strategy, plans and objectives, including the development,
construction and operation of liquefaction facilities, (ii) statements
regarding expectations regarding regulatory authorizations and
approvals, (iii) statements expressing beliefs and expectations
regarding the development of Cheniere’s LNG terminal and pipeline
businesses, including liquefaction facilities, (iv) statements regarding
the business operations and prospects of third parties, (v) statements
regarding potential financing arrangements, and (vi) statements
regarding future discussions and entry into contracts. Although Cheniere
believes that the expectations reflected in these forward-looking
statements are reasonable, they do involve assumptions, risks and
uncertainties, and these expectations may prove to be incorrect.
Cheniere’s actual results could differ materially from those anticipated
in these forward-looking statements as a result of a variety of factors,
including those discussed in Cheniere’s periodic reports that are filed
with and available from the Securities and Exchange Commission. You
should not place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. Other than as
required under the securities laws, Cheniere does not assume a duty to
update these forward-looking statements.
(Financial Tables Follow)
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Cheniere Energy, Inc.
Consolidated Statements of Operations
(in millions, except per share data)(1)
(unaudited)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2018
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2017
|
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2018
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2017
|
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Revenues
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LNG revenues
|
|
|
|
$
|
1,719
|
|
|
|
|
$
|
1,332
|
|
|
|
|
$
|
5,327
|
|
|
|
|
$
|
3,646
|
|
|
Regasification revenues
|
|
|
|
66
|
|
|
|
|
65
|
|
|
|
|
196
|
|
|
|
|
195
|
|
|
Other revenues
|
|
|
|
30
|
|
|
|
|
5
|
|
|
|
|
73
|
|
|
|
|
12
|
|
|
Other—related party
|
|
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|
4
|
|
|
|
|
1
|
|
|
|
|
8
|
|
|
|
|
2
|
|
|
Total revenues
|
|
|
|
1,819
|
|
|
|
|
1,403
|
|
|
|
|
5,604
|
|
|
|
|
3,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (excluding depreciation and amortization expense shown
separately below)
|
|
|
|
1,027
|
|
|
|
|
824
|
|
|
|
|
3,078
|
|
|
|
|
2,140
|
|
|
Operating and maintenance expense
|
|
|
|
170
|
|
|
|
|
114
|
|
|
|
|
457
|
|
|
|
|
309
|
|
|
Development expense
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
|
6
|
|
|
|
|
7
|
|
|
Selling, general and administrative expense
|
|
|
|
74
|
|
|
|
|
64
|
|
|
|
|
214
|
|
|
|
|
179
|
|
|
Depreciation and amortization expense
|
|
|
|
113
|
|
|
|
|
92
|
|
|
|
|
333
|
|
|
|
|
252
|
|
|
Restructuring expense
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
6
|
|
|
Impairment expense and loss on disposal of assets
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
8
|
|
|
|
|
15
|
|
|
Total operating costs and expenses
|
|
|
|
1,394
|
|
|
|
|
1,106
|
|
|
|
|
4,096
|
|
|
|
|
2,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
425
|
|
|
|
|
297
|
|
|
|
|
1,508
|
|
|
|
|
947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net of capitalized interest
|
|
|
|
(221
|
)
|
|
|
|
(186
|
)
|
|
|
|
(653
|
)
|
|
|
|
(539
|
)
|
|
Loss on modification or extinguishment of debt
|
|
|
|
(12
|
)
|
|
|
|
(25
|
)
|
|
|
|
(27
|
)
|
|
|
|
(100
|
)
|
|
Derivative gain (loss), net
|
|
|
|
23
|
|
|
|
|
(2
|
)
|
|
|
|
132
|
|
|
|
|
(37
|
)
|
|
Other income
|
|
|
|
15
|
|
|
|
|
4
|
|
|
|
|
32
|
|
|
|
|
11
|
|
|
Total other expense
|
|
|
|
(195
|
)
|
|
|
|
(209
|
)
|
|
|
|
(516
|
)
|
|
|
|
(665
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes and non-controlling interest
|
|
|
|
230
|
|
|
|
|
88
|
|
|
|
|
992
|
|
|
|
|
282
|
|
|
Income tax benefit (provision)
|
|
|
|
(3
|
)
|
|
|
|
2
|
|
|
|
|
(15
|
)
|
|
|
|
1
|
|
|
Net income
|
|
|
|
227
|
|
|
|
|
90
|
|
|
|
|
977
|
|
|
|
|
283
|
|
|
Less: net income attributable to non-controlling interest
|
|
|
|
162
|
|
|
|
|
379
|
|
|
|
|
573
|
|
|
|
|
803
|
|
|
Net income (loss) attributable to common stockholders
|
|
|
|
$
|
65
|
|
|
|
|
$
|
(289
|
)
|
|
|
|
$
|
404
|
|
|
|
|
$
|
(520
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to common stockholders—basic
|
|
|
|
$
|
0.26
|
|
|
|
|
$
|
(1.24
|
)
|
|
|
|
$
|
1.67
|
|
|
|
|
$
|
(2.24
|
)
|
|
Net income (loss) per share attributable to common
stockholders—diluted
|
|
|
|
0.26
|
|
|
|
|
(1.24
|
)
|
|
|
|
$
|
1.65
|
|
|
|
|
$
|
(2.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding—basic
|
|
|
|
247.2
|
|
|
|
|
232.6
|
|
|
|
|
241.9
|
|
|
|
|
232.5
|
|
|
Weighted average number of common shares outstanding—diluted
|
|
|
|
250.2
|
|
|
|
|
232.6
|
|
|
|
|
244.6
|
|
|
|
|
232.5
|
|
|
____________________________
|
|
(1)
|
|
Please refer to the Cheniere Energy, Inc. Quarterly Report on
Form 10-Q for the quarter ended September 30, 2018, filed with the
Securities and Exchange Commission.
|
|
|
|
|
|
|
|
|
|
|
|
Cheniere Energy, Inc.
Consolidated Balance Sheets
(in millions, except share data)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
ASSETS
|
|
|
|
(unaudited)
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
989
|
|
|
|
|
$
|
722
|
|
|
Restricted cash
|
|
|
|
1,943
|
|
|
|
|
1,880
|
|
|
Accounts and other receivables
|
|
|
|
243
|
|
|
|
|
369
|
|
|
Accounts receivable—related party
|
|
|
|
3
|
|
|
|
|
2
|
|
|
Inventory
|
|
|
|
298
|
|
|
|
|
243
|
|
|
Derivative assets
|
|
|
|
63
|
|
|
|
|
57
|
|
|
Other current assets
|
|
|
|
131
|
|
|
|
|
96
|
|
|
Total current assets
|
|
|
|
3,670
|
|
|
|
|
3,369
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current restricted cash
|
|
|
|
—
|
|
|
|
|
11
|
|
|
Property, plant and equipment, net
|
|
|
|
26,499
|
|
|
|
|
23,978
|
|
|
Debt issuance costs, net
|
|
|
|
78
|
|
|
|
|
149
|
|
|
Non-current derivative assets
|
|
|
|
121
|
|
|
|
|
34
|
|
|
Goodwill
|
|
|
|
77
|
|
|
|
|
77
|
|
|
Other non-current assets, net
|
|
|
|
295
|
|
|
|
|
288
|
|
|
Total assets
|
|
|
|
$
|
30,740
|
|
|
|
|
$
|
27,906
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
80
|
|
|
|
|
$
|
25
|
|
|
Accrued liabilities
|
|
|
|
987
|
|
|
|
|
1,078
|
|
|
Current debt
|
|
|
|
66
|
|
|
|
|
—
|
|
|
Deferred revenue
|
|
|
|
120
|
|
|
|
|
111
|
|
|
Derivative liabilities
|
|
|
|
96
|
|
|
|
|
37
|
|
|
Other current liabilities
|
|
|
|
1
|
|
|
|
|
—
|
|
|
Total current liabilities
|
|
|
|
1,350
|
|
|
|
|
1,251
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net
|
|
|
|
27,438
|
|
|
|
|
25,336
|
|
|
Non-current capital lease obligations
|
|
|
|
29
|
|
|
|
|
—
|
|
|
Non-current derivative liabilities
|
|
|
|
16
|
|
|
|
|
19
|
|
|
Other non-current liabilities
|
|
|
|
76
|
|
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 5.0 million shares authorized,
none issued
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Common stock, $0.003 par value
|
|
|
|
|
|
|
|
|
|
Authorized: 480.0 million shares at September 30, 2018 and December
31, 2017
|
|
|
|
|
|
|
|
|
|
Issued: 269.7 million shares and 250.1 million shares at September
30, 2018 and December 31, 2017, respectively
|
|
|
|
|
|
|
|
|
|
Outstanding: 257.1 million shares and 237.6 million shares at
September 30, 2018 and December 31, 2017, respectively
|
|
|
|
1
|
|
|
|
|
1
|
|
|
Treasury stock: 12.6 million shares and 12.5 million shares at
September 30, 2018 and December 31, 2017, respectively, at cost
|
|
|
|
(396
|
)
|
|
|
|
(386
|
)
|
|
Additional paid-in-capital
|
|
|
|
4,009
|
|
|
|
|
3,248
|
|
|
Accumulated deficit
|
|
|
|
(4,223
|
)
|
|
|
|
(4,627
|
)
|
|
Total stockholders’ deficit
|
|
|
|
(609
|
)
|
|
|
|
(1,764
|
)
|
|
Non-controlling interest
|
|
|
|
2,440
|
|
|
|
|
3,004
|
|
|
Total equity
|
|
|
|
1,831
|
|
|
|
|
1,240
|
|
|
Total liabilities and equity
|
|
|
|
$
|
30,740
|
|
|
|
|
$
|
27,906
|
|
|
______________________
|
|
(1)
|
|
Please refer to the Cheniere Energy, Inc. Quarterly Report on Form
10-Q for the quarter ended September 30, 2018, filed with the
Securities and Exchange Commission.
|
|
|
|
|
Reconciliation of Non-GAAP Measures
Regulation G Reconciliations
In addition to disclosing financial results in accordance with U.S.
GAAP, the accompanying news release contains non-GAAP financial
measures. Consolidated Adjusted EBITDA and Distributable Cash Flow are
non-GAAP financial measures that we use to facilitate comparisons of
operating performance across periods. These non-GAAP measures should be
viewed as a supplement to and not a substitute for our U.S. GAAP
measures of performance and the financial results calculated in
accordance with U.S. GAAP and reconciliations from these results should
be carefully evaluated.
Consolidated Adjusted EBITDA represents net income (loss) attributable
to Cheniere before net income attributable to the non-controlling
interest, interest, taxes, depreciation and amortization, adjusted for
certain non-cash items, other non-operating income or expense items, and
other items not otherwise predictive or indicative of ongoing operating
performance, as detailed in the following reconciliation. Consolidated
Adjusted EBITDA is not intended to represent cash flows from operations
or net income (loss) as defined by U.S. GAAP and is not necessarily
comparable to similarly titled measures reported by other companies.
We believe Consolidated Adjusted EBITDA provides relevant and useful
information to management, investors and other users of our financial
information in evaluating the effectiveness of our operating performance
in a manner that is consistent with management’s evaluation of business
performance. We believe Consolidated Adjusted EBITDA is widely used by
investors to measure a company’s operating performance without regard to
items such as interest expense, taxes, depreciation and amortization
which vary substantially from company to company depending on capital
structure, the method by which assets were acquired and depreciation
policies. Further, the exclusion of certain non-cash items, other
non-operating income or expense items, and items not otherwise
predictive or indicative of ongoing operating performance enables
comparability to prior period performance and trend analysis.
Consolidated Adjusted EBITDA is calculated by taking net income (loss)
attributable to common stockholders before net income attributable to
non-controlling interest, interest expense, net of capitalized interest,
changes in the fair value and settlement of our interest rate
derivatives, taxes, depreciation and amortization, and adjusting for the
effects of certain non-cash items, other non-operating income or expense
items, and other items not otherwise predictive or indicative of ongoing
operating performance, including the effects of modification or
extinguishment of debt, impairment expense and loss on disposal of
assets, changes in the fair value of our commodity and foreign currency
exchange (“FX”) derivatives and non-cash compensation expense. We
believe the exclusion of these items enables investors and other users
of our financial information to assess our sequential and year-over-year
performance and operating trends on a more comparable basis and is
consistent with management’s own evaluation of performance.
Distributable Cash Flow is defined as cash received, or expected to be
received, from Cheniere’s ownership and interests in CQP and Cheniere
Corpus Christi Holdings, LLC, cash received (used) by Cheniere’s
integrated marketing function (other than cash for capital expenditures)
less interest, taxes and maintenance capital expenditures associated
with Cheniere and not the underlying entities. Management uses this
measure and believes it provides users of our financial statements a
useful measure reflective of our business’s ability to generate cash
earnings to supplement the comparable GAAP measure.
We believe Distributable Cash Flow is a useful performance measure for
management, investors and other users of our financial information to
evaluate our performance and to measure and estimate the ability of our
assets to generate cash earnings after servicing our debt, paying cash
taxes and expending sustaining capital, that could be used for
discretionary purposes such as common stock dividends, stock
repurchases, retirement of debt, or expansion capital expenditures.
Management uses this measure and believes it provides users of our
financial statements a useful measure reflective of our business’s
ability to generate cash earnings to supplement the comparable GAAP
measure. Distributable Cash Flow is not intended to represent cash flows
from operations or net income (loss) as defined by U.S. GAAP and is not
necessarily comparable to similarly titled measures reported by other
companies.
Non-GAAP measures have limitations as an analytical tool and should not
be considered in isolation or in lieu of an analysis of our results as
reported under GAAP, and should be evaluated only on a supplementary
basis.
Consolidated Adjusted EBITDA
The following table reconciles our Consolidated Adjusted EBITDA to U.S.
GAAP results for the three and nine months ended September 30, 2018 and
2017 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
|
September 30,
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
2017
|
|
Net income (loss) attributable to common stockholders
|
|
|
|
$
|
65
|
|
|
|
|
$
|
(289
|
)
|
|
|
|
$
|
404
|
|
|
|
|
$
|
(520
|
)
|
|
Net income attributable to non-controlling interest
|
|
|
|
162
|
|
|
|
|
379
|
|
|
|
|
573
|
|
|
|
|
803
|
|
|
Income tax provision (benefit)
|
|
|
|
3
|
|
|
|
|
(2
|
)
|
|
|
|
15
|
|
|
|
|
(1
|
)
|
|
Interest expense, net of capitalized interest
|
|
|
|
221
|
|
|
|
|
186
|
|
|
|
|
653
|
|
|
|
|
539
|
|
|
Loss on modification or extinguishment of debt
|
|
|
|
12
|
|
|
|
|
25
|
|
|
|
|
27
|
|
|
|
|
100
|
|
|
Derivative loss (gain), net
|
|
|
|
(23
|
)
|
|
|
|
2
|
|
|
|
|
(132
|
)
|
|
|
|
37
|
|
|
Other income
|
|
|
|
(15
|
)
|
|
|
|
(4
|
)
|
|
|
|
(32
|
)
|
|
|
|
(11
|
)
|
|
Income from operations
|
|
|
|
$
|
425
|
|
|
|
|
$
|
297
|
|
|
|
|
$
|
1,508
|
|
|
|
|
$
|
947
|
|
|
Adjustments to reconcile income from operations to Consolidated
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
113
|
|
|
|
|
92
|
|
|
|
|
333
|
|
|
|
|
252
|
|
|
Loss (gain) from changes in fair value of commodity and FX
derivatives, net
|
|
|
|
(6
|
)
|
|
|
|
35
|
|
|
|
|
96
|
|
|
|
|
63
|
|
|
Total non-cash compensation expense
|
|
|
|
22
|
|
|
|
|
9
|
|
|
|
|
55
|
|
|
|
|
20
|
|
|
Impairment expense and loss on disposal of assets
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
8
|
|
|
|
|
15
|
|
|
Legal settlement expense
|
|
|
|
7
|
|
|
|
|
—
|
|
|
|
|
7
|
|
|
|
|
—
|
|
|
Consolidated Adjusted EBITDA
|
|
|
|
$
|
569
|
|
|
|
|
$
|
442
|
|
|
|
|
$
|
2,007
|
|
|
|
|
$
|
1,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Adjusted EBITDA and Distributable Cash Flow
The following table reconciles our actual Consolidated Adjusted EBITDA
and Distributable Cash Flow to Net income (loss) attributable to common
stockholders for the three and nine months ended September 30, 2018 and
forecast amounts for full year 2018 and full year 2019 (in billions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
Nine Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2018
|
|
|
|
September 30,
2018
|
|
|
|
Full Year 2018
|
|
|
|
Full Year 2019
|
|
Net income attributable to common stockholders
|
|
|
|
$
|
0.07
|
|
|
|
|
$
|
0.40
|
|
|
|
|
$
|
0.4
|
|
|
-
|
|
$
|
0.5
|
|
|
|
|
$
|
0.0
|
|
|
-
|
|
$
|
0.2
|
|
|
Net income attributable to non-controlling interest
|
|
|
|
0.16
|
|
|
|
|
0.57
|
|
|
|
|
0.7
|
|
|
-
|
|
0.7
|
|
|
|
|
0.6
|
|
|
-
|
|
0.6
|
|
|
Income tax provision
|
|
|
|
0.00
|
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
0.0
|
|
|
|
|
|
|
|
|
0.0
|
|
|
Interest expense, net of capitalized interest
|
|
|
|
0.22
|
|
|
|
|
0.65
|
|
|
|
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
|
1.5
|
|
|
Depreciation and amortization expense
|
|
|
|
0.11
|
|
|
|
|
0.33
|
|
|
|
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
0.8
|
|
|
Other expense, financing costs, and certain non-cash operating
expenses
|
|
|
|
0.01
|
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
0.0
|
|
|
|
|
|
|
|
|
0.1
|
|
|
Consolidated Adjusted EBITDA
|
|
|
|
$
|
0.57
|
|
|
|
|
$
|
2.01
|
|
|
|
|
$
|
2.45
|
|
|
-
|
|
$
|
2.55
|
|
|
|
|
$
|
2.9
|
|
|
|
|
$
|
3.2
|
|
|
Distributions to CQP non-controlling interest
|
|
|
|
(0.14
|
)
|
|
|
|
(0.43
|
)
|
|
|
|
|
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
|
(0.6
|
)
|
|
SPL and CQP cash retained and interest expense
|
|
|
|
(0.31
|
)
|
|
|
|
(1.08
|
)
|
|
|
|
|
|
|
|
(1.3
|
)
|
|
|
|
|
|
|
|
(1.5
|
)
|
|
Cheniere interest expense, income tax and other
|
|
|
|
(0.01
|
)
|
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
(0.3
|
)
|
|
Cheniere Distributable Cash Flow
|
|
|
|
$
|
0.11
|
|
|
|
|
$
|
0.47
|
|
|
|
|
$
|
0.5
|
|
|
-
|
|
$
|
0.6
|
|
|
|
|
$
|
0.6
|
|
|
|
|
$
|
0.8
|
|
|
____________________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Totals may not sum due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We have not made any forecast of net income on a run rate basis, which
would be the most directly comparable financial measure under GAAP, and
we are unable to reconcile differences between run rate Consolidated
Adjusted EBITDA and Distributable Cash Flow and net income.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181108005382/en/
Copyright Business Wire 2018
