Cheniere Energy Partners, L.P. (NYSE American: CQP):
Summary of First Quarter 2019 Results
(in millions, except LNG data)
Three Months Ended March 31, 2019
2018 Revenues $ 1,749 $ 1,593 Net income $ 385
$ 335 Adjusted EBITDA1 $ 607 $ 659 LNG exported: Number of cargoes
77 67 Volumes (TBtu) 275 244 LNG volumes loaded (TBtu) 273 241
2019 Full Year Distribution
Guidance
2019 Distribution per Unit $ 2.35
-
$
2.55
Recent Highlights
Operational
- As of April 30, 2019, over 630
cumulative LNG cargoes have been produced, loaded, and exported
from the SPL Project (defined below). LNG from the SPL Project has
been delivered to 31 countries and regions worldwide.
- Substantial completion of Train 5 of
the SPL Project was achieved in March 2019.
Financial
- 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 Project Update
SPL Project
Liquefaction Train
Train 6 Project Status LNTP(1) Issued
Note: Project update excludes Trains in
operation
(1) Limited Notice to Proceed
Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE
American: CQP) reported net income of $385 million for the three
months ended March 31, 2019, compared to net income of $335 million
for the comparable 2018 period. The increase in net income during
the three months ended March 31, 2019 was primarily due to
increased income from operations from additional natural gas
liquefaction train (“Trains”) in operation at the SPL Project and
increased net gain from changes in fair value of commodity
derivatives.
Adjusted EBITDA1 for the three months ended March 31, 2019 was
$607 million, compared to $659 million for the comparable 2018
period. The decrease in Adjusted EBITDA was primarily due to
decreased adjustments for non-cash operating expenses primarily due
to increased net gain from changes in fair value of commodity
derivatives, partially offset by increased income from
operations.
Income from operations increased $55 million during the three
months ended March 31, 2019 as compared to the three months ended
March 31, 2018. The increase in income from operations was
primarily due to increased net gain from changes in fair value of
commodity derivatives and an increase in LNG volumes recognized in
income due primarily to additional Trains in operation, partially
offset by increased volume and pricing of natural gas feedstock
related to our LNG sales and increased total operating costs and
expenses primarily due to additional Trains in operation and
increased service and maintenance costs from certain maintenance
and related activities at the SPL Project.
During the three months ended March 31, 2019, 77 LNG cargoes
were exported from the SPL Project, three of which were
commissioning cargoes. Five cargoes exported from the SPL Project
and sold on a delivered basis were in transit as of March 31,
2019, none of which were commissioning cargoes.
SPL Project
We are developing six Trains at the Sabine Pass LNG terminal
adjacent to the existing regasification facilities (the “SPL
Project”). Each Train is 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 and a run rate
adjusted nominal production capacity of approximately 4.5 to 4.9
mtpa of LNG. 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.
Distributions to
Unitholders
We will pay a cash distribution per common and subordinated unit
of $0.60 to unitholders of record as of May 7, 2019 and the
related general partner distribution on May 15, 2019.
Investor Conference Call and
Webcast
Cheniere Energy, Inc. will host a conference call to discuss its
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. The call and accompanying slide
presentation may include financial and operating results or other
information regarding Cheniere Partners.
About Cheniere Partners
Cheniere Partners, through its subsidiary, Sabine Pass
Liquefaction, LLC (“SPL”), is developing, constructing, and
operating natural gas liquefaction facilities at the Sabine Pass
LNG terminal located in Cameron Parish, Louisiana, on the
Sabine-Neches Waterway less than four miles from the Gulf Coast.
Cheniere Partners, through SPL, plans to construct six Trains,
which are in various stages of development, construction, and
operations. 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. Each Train is
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 and a run rate adjusted nominal
production capacity of approximately 4.5 to 4.9 mtpa of LNG.
Through its wholly owned subsidiary, Sabine Pass LNG, L.P.,
Cheniere Partners owns and operates regasification facilities at
the Sabine Pass LNG terminal, which includes pre-existing
infrastructure of five LNG storage tanks with aggregate capacity of
approximately 16.9 billion cubic feet equivalent, two marine berths
that can each accommodate vessels with nominal capacity of up to
266,000 cubic meters and vaporizers with regasification capacity of
approximately 4.0 Bcf/d. Cheniere Partners also owns a 94-mile
pipeline that interconnects the Sabine Pass LNG terminal with a
number of large interstate pipelines through its wholly owned
subsidiary, Cheniere Creole Trail Pipeline, L.P.
For additional information, please refer to the Cheniere
Partners 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.” 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 Partners’ 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 Partners’
LNG terminal and liquefaction business, (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 Partners 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 Partners’ 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 Partners’ 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 Partners
does not assume a duty to update these forward-looking
statements.
(Financial Tables Follow)
Cheniere Energy Partners, L.P.
Consolidated Statements of
Income
(in millions, except per unit
data)
(unaudited)
Three Months Ended March 31, (1)
2019 2018 Revenues LNG revenues $ 1,367 $ 1,015 LNG
revenues—affiliate 305 503 Regasification revenues 66 65 Other
revenues 11 10 Total revenues 1,749 1,593
Operating costs and expenses Cost of sales (excluding depreciation
and amortization expense shown separately below) 879 837 Operating
and maintenance expense 138 95 Operating and maintenance
expense—affiliate 29 26 General and administrative expense 3 4
General and administrative expense—affiliate 21 18 Depreciation and
amortization expense 114 105 Impairment expense and loss on
disposal of assets 2 — Total operating costs and
expenses 1,186 1,085 Income from operations
563 508 Other income (expense) Interest expense, net of
capitalized interest (187 ) (185 ) Derivative gain, net — 8 Other
income 9 4 Total other expense (178 ) (173 )
Net income $ 385 $ 335 Basic and diluted net
income per common unit $ 0.75 $ 0.67 Weighted
average number of common units outstanding used for basic and
diluted net income
per common unit calculation
348.6 348.6
______________________
(1) Please refer to the Cheniere Energy Partners, L.P.
Quarterly Report on Form 10-Q for the quarter ended March 31, 2019,
filed with the Securities and Exchange Commission.
Cheniere Energy Partners, L.P.
Consolidated Balance Sheets
(in millions, except unit data)
(1)
March 31, December 31, 2019 2018
ASSETS
(unaudited) Current assets Cash and cash equivalents
$ — $ — Restricted cash 1,297 1,541 Accounts and other receivables
208 348 Accounts receivable—affiliate 113 114 Advances to affiliate
316 228 Inventory 109 99 Other current assets 46 26 Other current
assets—affiliate 1 — Total current assets 2,090 2,356
Property, plant and equipment, net 15,615 15,390 Operating
lease assets, net 93 — Debt issuance costs, net 11 13 Non-current
derivative assets 36 31 Other non-current assets, net 160
184 Total assets $ 18,005 $ 17,974
LIABILITIES AND PARTNERS’ EQUITY Current liabilities Accounts
payable $ 31 $ 15 Accrued liabilities 725 821 Due to affiliates 51
49 Deferred revenue 106 116 Deferred revenue—affiliate — 1 Current
operating lease liabilities 5 — Derivative liabilities 10 66
Total current liabilities 928 1,068 Long-term debt,
net 16,073 16,066 Non-current operating lease liabilities 87 —
Non-current derivative liabilities 10 14 Other non-current
liabilities 4 4 Other non-current liabilities—affiliate 22 22
Partners’ equity Common unitholders’ interest (348.6 million
units issued and outstanding at March 31, 2019 and December 31,
2018) 1,872 1,806 Subordinated unitholders’ interest (135.4 million
units issued and outstanding at March 31, 2019 and December 31,
2018) (965 ) (990 ) General partner’s interest (2% interest with
9.9 million units issued and outstanding at March 31, 2019 and
December 31, 2018) (26 ) (16 ) Total partners’ equity 881
800 Total liabilities and partners’ equity $ 18,005 $
17,974
______________________
(1) Please refer to the Cheniere Energy Partners, L.P.
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 Reconciliation
In addition to disclosing financial results in accordance with
U.S. GAAP, the accompanying news release contains a non-GAAP
financial measure. Adjusted EBITDA is a non-GAAP financial measure
that is used to facilitate comparisons of operating performance
across periods. This non-GAAP measure 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 the reconciliation from these results should be
carefully evaluated.
Adjusted EBITDA is calculated by taking net income before
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 and changes in the fair value of our
commodity derivatives. 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 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. Management
believes 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 other items
not otherwise predictive or indicative of ongoing operating
performance enables comparability to prior period performance and
trend analysis.
Adjusted EBITDA
The following table reconciles our 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 $ 385 $ 335
Interest expense, net of capitalized interest 187 185 Derivative
gain, net — (8 ) Other income (9 ) (4 ) Income from operations $
563 $ 508 Adjustments to reconcile income from
operations to Adjusted EBITDA: Depreciation and amortization
expense 114 105 Loss (gain) from changes in fair value of commodity
derivatives, net (72 ) 46 Impairment expense and loss on disposal
of assets 2 — Adjusted EBITDA $ 607 $ 659
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version on businesswire.com: https://www.businesswire.com/news/home/20190509005200/en/
InvestorsRandy Bhatia, 713-375-5479Megan Light,
713-375-5492orMedia RelationsEben Burnham-Snyder, 713-375-5764
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