Cheniere Energy, Inc. (NYSE American: LNG):
Summary of First Quarter 2019 Results
(in millions, except LNG data)
Three Months Ended March 31,
2019 2018 %
Change Revenues $ 2,261 $ 2,242 1 % Net
income1 $ 141 $ 357 (61 )% Consolidated Adjusted EBITDA2 $ 650 $
907 (28 )% LNG exported: Number of cargoes 87 67 30 % Volumes
(TBtu) 310 244 27 % LNG volumes loaded (TBtu) 309 241 28 %
Summary 2019 Full Year Guidance (in
billions)
2019 Consolidated Adjusted EBITDA2 $ 2.9 - $
3.2 Distributable Cash Flow2 $ 0.6 - $ 0.8
Recent Highlights
Strategic
- In March 2019, we received a positive
Environmental Assessment from the Federal Energy Regulatory
Commission relating to our Corpus Christi Stage 3 project (defined
below).
- In February 2019, Midship Pipeline
Company, LLC (“Midship Pipeline”), in which we hold an indirect
equity interest, issued notice to proceed to construct the Midship
natural gas pipeline and related compression and interconnect
facilities (the “Midship Project”). To complete financing of the
Midship Project, Midship Pipeline entered into senior secured
credit facilities with total commitments of up to approximately
$680 million.
Operational
- As of April 30, 2019, over 650
cumulative LNG cargoes have been produced, loaded and exported from
our liquefaction projects. LNG from our liquefaction projects has
been delivered to 32 countries and regions worldwide.
- Substantial completion of Train 5 of
the SPL Project (defined below) was achieved in March 2019.
- Substantial completion of Train 1 of
the CCL Project (defined below) was achieved in February 2019.
Financial
- For the three months ended March 31,
2019, we achieved net income1 of $141 million, Consolidated
Adjusted EBITDA2 of $650 million, and Distributable Cash Flow2 of
over $200 million.
- In March 2019, the date of first
commercial delivery was reached under the 20-year LNG Sale and
Purchase Agreement with BG Gulf Coast LNG, LLC relating to Train 4
of the SPL Project.
Liquefaction Projects Update
SPL Project
CCL Project Liquefaction Train
Train 6 Train 2
Train 3 Project Status LNTP(1) Issued Commissioning
Under Construction Project Completion Percentage(2) —
98.4%(3) 51.6% Expected Substantial Completion — 2H 2019 2H
2021 Note: Projects update excludes Trains in operation (1)
Limited Notice to Proceed (2) Project completion percentages as of
March 31, 2019 (3) Completion percentage for Stage 1, includes
Trains 1 and 2
Cheniere Energy, Inc. (“Cheniere”) (NYSE American: LNG) reported
net income1 of $141 million, or $0.55 per share—basic and $0.54 per
share—diluted, for the three months ended March 31, 2019, compared
to net income of $357 million, or $1.52 per share—basic and $1.50
per share—diluted, for the comparable 2018 period. The decrease in
net income was primarily due to increased operating costs and
expenses from additional natural gas liquefaction trains (“Trains”)
operating between each of the periods and increased service and
maintenance costs at the SPL Project, and from increased derivative
loss related to interest rate swaps and increased interest expense,
net of amounts capitalized, partially offset by decreased income
attributable to non-controlling interest.
Consolidated Adjusted EBITDA2 for the three months ended March
31, 2019 was $650 million, compared to $907 million for the
comparable 2018 period. The decrease in Consolidated Adjusted
EBITDA was primarily due to decreased income from operations and
decreased adjustments for non-cash operating expenses primarily due
to increased net gain from changes in fair value of commodity and
foreign currency exchange (“FX”) derivatives.
During the three months ended March 31, 2019, 87 LNG cargoes
were exported from our liquefaction projects, seven of which were
commissioning cargoes. Seven cargoes exported from our liquefaction
projects and sold on a delivered basis were in transit as of March
31, 2019, none of which were commissioning cargoes.
“Our strong financial results for the first quarter 2019 are in
line with our forecasts, and we are reconfirming our full year 2019
financial guidance. During the quarter, we placed both Sabine Pass
Train 5 and Corpus Christi Train 1 into service only days apart,
with both projects ahead of schedule and within budget - a
significant achievement, and a product of our relentless focus on
excellence in execution,” said Jack Fusco, Cheniere’s President and
Chief Executive Officer. “We remain on track to place Corpus
Christi Train 2 into service in the second half of 2019, and we
expect to progress Sabine Pass Train 6 to a positive Final
Investment Decision in the coming months.”
LNG Volume Summary
The following table summarizes the volumes of operational and
commissioning LNG that were loaded from our liquefaction projects
and for which the financial impact was recognized on our
Consolidated Financial Statements during the three months ended
March 31, 2019:
Three Months Ended March 31, 2019 (in TBtu)
Operational Commissioning
Volumes loaded during the current period 284 25
Volumes loaded during the prior period but recognized during the
current period 25 3 Less: volumes loaded during the current period
and in transit at the end of the period (27 ) — Total volumes
recognized in the current period 282 28
In addition, during the three months ended March 31, 2019, we
recognized the financial impact of 18 TBtu of LNG on our
Consolidated Financial Statements related to LNG cargoes sourced
from third parties.
Summary of Financial
Performance
First Quarter and Full Year 2019 Results
Our financial results are reported on a consolidated basis. Our
ownership interest in Cheniere Energy Partners, L.P. (“Cheniere
Partners”) (NYSE American: CQP) as of March 31, 2019 consisted
of 100% ownership of the general partner and a 48.6% limited
partner interest.
Income from operations decreased $141 million during the three
months ended March 31, 2019 as compared to the comparable 2018
period. The decrease in income from operations was primarily driven
by increased total operating costs and expenses primarily as a
result of additional Trains in operation and increased service and
maintenance costs from certain maintenance and related activities
at the SPL Project, increased volume and pricing of natural gas
feedstock related to our LNG sales, and decreased pricing of LNG
sales recognized in income, partially offset by an increase in LNG
volumes recognized in income due primarily to additional Trains in
operation and increased net gain from changes in fair value of
commodity and FX derivatives.
Selling, general and administrative expense included share-based
compensation expenses of $20 million for the three months ended
March 31, 2019, compared to $18 million for the comparable 2018
period.
Net income attributable to non-controlling interest decreased
$47 million during the three months ended March 31, 2019 as
compared to the three months ended March 31, 2018, primarily due to
the decrease of non-controlling interest as a result of our merger
with Cheniere Energy Partners LP Holdings, LLC in September 2018.
This decrease was partially offset by an increase in consolidated
net income recognized by Cheniere Partners in which the
non-controlling interests are held.
Capital Resources
As of March 31, 2019, we had cash and cash equivalents of
$1.1 billion available to us. In addition, we had current
restricted cash of $1.9 billion designated for the following
purposes: $621 million for the SPL Project, $218 million for the
CCL Project, $676 million for restricted purposes under the terms
of Cheniere Partners’ credit facilities and $403 million for other
restricted purposes.
Liquefaction Projects
SPL Project and CCL Project
Through Cheniere Partners, we are developing six natural gas
liquefaction Trains at the Sabine Pass LNG terminal adjacent to the
existing regasification facilities (the “SPL Project”). Trains 1
through 5 are operational and early works have begun for Train 6
under limited notices to proceed ahead of an anticipated positive
Final Investment Decision.
We are also developing three Trains near Corpus Christi, Texas
(the “CCL Project”). Train 1 is operational, Train 2 is undergoing
commissioning, and Train 3 is 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, and we are in
the process of obtaining all necessary regulatory approvals for
Corpus Christi Stage 3.
Investor Conference Call and
Webcast
We will host a conference call to discuss our financial and
operating results for the first quarter on Thursday, May 9,
2019, at 11 a.m. Eastern time / 10 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.
___________________________
1
Net income as used herein refers to Net
income attributable to common stockholders on our Consolidated
Statements of Operations.
2 Non-GAAP financial measure. See “Reconciliation of Non-GAAP
Measures” for further details.
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 March 31, 2019, 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)
Cheniere Energy, Inc.
Consolidated Statements of
Operations
(in millions, except per share
data)
(unaudited)
Three Months Ended March 31, (1)
2019 2018 Revenues LNG revenues $ 2,143 $ 2,166
Regasification revenues 66 65 Other revenues 48 10 Other—related
party 4 1 Total revenues 2,261 2,242 Operating
costs and expenses Cost of sales (excluding depreciation and
amortization expense shown separately below) 1,204 1,178 Cost of
sales—related party 10 — Operating and maintenance expense 221 140
Development expense 1 1 Selling, general and administrative expense
73 67 Depreciation and amortization expense 144 109 Impairment
expense and loss on disposal of assets 2 — Total
operating costs and expenses 1,655 1,495
Income from operations 606 747 Other income (expense)
Interest expense, net of capitalized interest (247 ) (216 )
Derivative gain (loss), net (35 ) 77 Other income 16 7
Total other expense (266 ) (132 ) Income before
income taxes and non-controlling interest 340 615 Income tax
provision (3 ) (15 ) Net income 337 600 Less: net income
attributable to non-controlling interest 196 243 Net
income attributable to common stockholders $ 141 $ 357
Net income per share attributable to common
stockholders—basic $ 0.55 $ 1.52 Net income per share
attributable to common stockholders—diluted (2) $ 0.54 $
1.50 Weighted average number of common shares
outstanding—basic 257.1 235.5 Weighted average number of common
shares outstanding—diluted 258.5 238.0
________________________________
(1)
Please refer to the Cheniere Energy, Inc.
Quarterly Report on Form 10-Q for the quarter ended March 31, 2019,
filed with the Securities and Exchange Commission.
(2)
Earnings per share in the table may not
recalculate exactly due to rounding because it is calculated based
on whole numbers, not the rounded numbers presented.
Cheniere Energy, Inc.
Consolidated Balance Sheets
(in millions, except share
data)(1)
March 31, December 31,
2019 2018 ASSETS
(unaudited) Current assets
Cash and cash equivalents $ 1,093 $ 981 Restricted cash 1,918 2,175
Accounts and other receivables 390 581 Accounts receivable—related
party 3 4 Inventory 279 316 Derivative assets 107 63 Other current
assets 106 114 Total current assets 3,896 4,234
Property, plant and equipment, net 27,953 27,245 Operating
lease assets, net 542 — Debt issuance costs, net 58 72 Non-current
derivative assets 42 54 Goodwill 77 77 Other non-current assets,
net 317 305 Total assets $ 32,885 $ 31,987
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities Accounts payable $ 66 $ 58 Accrued liabilities 1,101
1,169 Accrued liabilities—related party 5 — Current debt — 239
Deferred revenue 108 139 Current operating lease liabilities 325 —
Derivative liabilities 37 128 Other current liabilities 17 9
Total current liabilities 1,659 1,742 Long-term debt,
net 28,726 28,179 Non-current operating lease liabilities 207 —
Non-current finance lease liabilities 58 57 Non-current derivative
liabilities 39 22 Other non-current liabilities 58 58
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 March 31, 2019 and December 31, 2018 Issued: 270.4
million shares at March 31, 2019 and 269.8 million shares at
December 31, 2018 Outstanding: 257.4 million shares at March 31,
2019 and 257.0 million shares at December 31, 2018 1 1 Treasury
stock: 13.0 million shares and 12.8 million shares at March 31,
2019 and December 31, 2018, respectively, at cost (418 ) (406 )
Additional paid-in-capital 4,063 4,035 Accumulated deficit (4,015 )
(4,156 ) Total stockholders’ deficit (369 ) (526 ) Non-controlling
interest 2,507 2,455 Total equity 2,138 1,929
Total liabilities and equity $ 32,885 $ 31,987
______________________________
(1) Please refer to the Cheniere Energy, Inc. Quarterly
Report on Form 10-Q for the quarter ended March 31, 2019, 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 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 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
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 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,
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
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 months ended March 31, 2019 and
2018 (in millions):
Three Months Ended March 31,
2019 2018 Net income
attributable to common stockholders $ 141 $ 357 Net income
attributable to non-controlling interest 196 243 Income tax
provision 3 15 Interest expense, net of capitalized interest 247
216 Derivative loss (gain), net 35 (77 ) Other income (16 ) (7 )
Income from operations $ 606 $ 747 Adjustments to
reconcile income from operations to Consolidated Adjusted EBITDA:
Depreciation and amortization expense 144 109 Loss (gain) from
changes in fair value of commodity and FX derivatives, net (127 )
37 Total non-cash compensation expense 25 14 Impairment expense and
loss on disposal of assets 2 — Consolidated Adjusted
EBITDA $ 650 $ 907
Consolidated Adjusted EBITDA and Distributable Cash
Flow
The following table reconciles our actual Consolidated Adjusted
EBITDA and Distributable Cash Flow to Net income attributable to
common stockholders for the three months ended March 31, 2019 and
forecast amounts for full year 2019 (in billions):
Three Months
Ended Full Year March 31, 2019 2019 Net
income attributable to common stockholders $ 0.14 $ 0.0 - $ 0.2 Net
income attributable to non-controlling interest 0.20 0.6 - 0.6
Income tax provision 0.00 0.0 Interest expense, net of capitalized
interest 0.25 1.5 Depreciation and amortization expense 0.14 0.8
Other expense, financing costs, and certain non-cash operating
expenses (0.08 ) 0.1
Consolidated Adjusted
EBITDA $ 0.65 $ 2.9
- $ 3.2 Distributions to CQP
non-controlling interest (0.15 ) (0.6 ) SPL and CQP cash retained
and interest expense (0.31 ) (1.5 ) Cheniere interest expense,
income tax and other 0.01 (0.3 )
Cheniere
Distributable Cash Flow $ 0.20 $
0.6 - $ 0.8
______________________________
Note: Totals may not sum due to
rounding.
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version on businesswire.com: https://www.businesswire.com/news/home/20190509005193/en/
Cheniere Energy, Inc.InvestorsRandy Bhatia, 713-375-5479Megan
Light, 713-375-5492orMedia RelationsEben Burnham-Snyder,
713-375-5764
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