Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE
American: CQP) today announced its financial results for first
quarter 2021.
HIGHLIGHTS
- Net income of $347 million for first quarter 2021.
- Adjusted EBITDA1 of $779 million for first quarter 2021.
- Declared a distribution of $0.660 per common unit that will be
paid on May 14, 2021 to unitholders of record as of May 6,
2021.
- Reconfirmed full year 2021 distribution guidance.
- Accelerated the estimated timeline for substantial completion
of Train 6 of the SPL Project (defined below) to the first half of
2022 from the second half of 2022. This follows a previous
acceleration of the estimated Train 6 completion timeline in July
2020 from the first half of 2023 to the second half of 2022.
- Supplied a carbon neutral LNG cargo to Shell. Together with
Shell, the complete lifecycle greenhouse gas emissions associated
with the LNG cargo were offset using nature-based credits by
accounting for all estimated CO2 equivalent emissions produced
through the entire value chain, from production through use by the
final customer.
2021 FULL YEAR DISTRIBUTION GUIDANCE
2021
Distribution per Unit
$
2.60
-
$
2.70
SUMMARY AND REVIEW OF FINANCIAL
RESULTS
(in millions, except LNG data)
First Quarter
2021
2020
% Change
Revenues
$
1,963
$
1,718
14
%
Net income
$
347
$
435
(20
)
%
Adjusted EBITDA1
$
779
$
792
(2
)
%
LNG exported:
Number of cargoes
89
92
(3
)
%
Volumes (TBtu)
321
325
(1
)
%
LNG volumes loaded (TBtu)
317
327
(3
)
%
Net income decreased $88 million during first quarter 2021 as
compared to first quarter 2020, primarily due to increased loss on
modification or extinguishment of debt and decreased total
margins2, partially offset by decreased interest expense. Total
margins decreased primarily due to increased losses from changes in
fair value of commodity derivatives. LNG volumes recognized in
income and margins per MMBtu of LNG delivered to customers were
comparable for first quarter 2021 and first quarter 2020.
During first quarter 2021, we recognized in income 317 TBtu of
LNG loaded from the SPL Project. Additionally, we recognized in
income 8 TBtu of LNG which was procured by Sabine Pass
Liquefaction, LLC (“SPL”) from Cheniere Energy, Inc.’s Corpus
Christi liquefaction facility.
LNG revenues during first quarter 2020 included $16 million in
LNG revenues associated with LNG cargoes for which customers
notified us that they would not take delivery, which would have
been recognized subsequent to March 31, 2020 had the cargoes been
lifted pursuant to the delivery schedules with the customers. We
did not have such revenues during first quarter 2021.
KEY FINANCIAL TRANSACTIONS AND UPDATES
SPL entered into a note purchase agreement with Allianz Global
Investors GmbH in February to issue an aggregate principal amount
of $147 million of 2.95% Senior Secured Notes due 2037. The notes
are expected to be issued in December 2021, and net proceeds are
expected to be used to refinance a portion of SPL’s outstanding
Senior Secured Notes due 2022. The Senior Secured Notes due 2037
will be fully amortizing, with a weighted average life of over 10
years.
Cheniere Partners issued an aggregate principal amount of $1.5
billion of 4.00% Senior Notes due 2031 in March. The proceeds of
these notes, together with cash on hand, were used to refinance all
of Cheniere Partners’ 5.25% Senior Notes due 2025 and to pay fees
and expenses in connection with the refinancing.
In February, Fitch Ratings changed the outlook of SPL’s senior
secured notes rating to positive from stable and the outlook of
Cheniere Partners’ long-term issuer default rating and senior
unsecured rating to positive from stable. S&P Global Ratings
changed the outlook of Cheniere Partners’ ratings to positive from
negative in April.
SABINE PASS LIQUEFACTION PROJECT UPDATE
As of April 30, 2021, more than 1,250 cumulative LNG cargoes
totaling over 85 million tonnes of LNG have been produced, loaded,
and exported from the SPL Project.
Construction Progress as of March 31, 2021
SPL Project
Train 6
Project Status
Under Construction
Project Completion Percentage (1)
83.0% (1)
Expected Substantial Completion
1H 2022
(1)
Engineering 99.6% complete,
procurement 99.9% complete, and construction 61.7% complete
SPL Project Overview
We own natural gas liquefaction facilities consisting of five
operational liquefaction Trains and one additional Train under
construction, with a total production capacity of approximately 30
million tonnes per annum (“mtpa”) of LNG at the Sabine Pass LNG
terminal (the “SPL Project”).
DISTRIBUTIONS TO UNITHOLDERS
We declared a cash distribution of $0.660 per common unit to
unitholders of record as of May 6, 2021 and the related general
partner distribution to be paid on May 14, 2021.
INVESTOR CONFERENCE CALL AND WEBCAST
Cheniere Energy, Inc. will host a conference call to discuss its
financial and operating results for the first quarter 2021 on
Tuesday, May 4, 2021, 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.
1
Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details.
2
Total margins as used herein
refers to total revenues less cost of sales.
About Cheniere Partners
Cheniere Partners owns the Sabine Pass LNG terminal located in
Cameron Parish, Louisiana, which has natural gas liquefaction
facilities consisting of five operational liquefaction Trains and
one additional Train under construction, with a total production
capacity of approximately 30 mtpa of LNG. The Sabine Pass LNG
terminal also has operational regasification facilities that
include five LNG storage tanks, vaporizers, and two marine berths
with a third marine berth under construction. Cheniere Partners
also owns the Creole Trail Pipeline, which interconnects the Sabine
Pass LNG terminal with a number of large interstate pipelines.
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, 2021, filed with the
Securities and Exchange Commission.
Use of Non-GAAP Financial Measures
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.
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, (vi)
statements regarding future discussions and entry into contracts,
and (vii) statements regarding the COVID-19 pandemic and its impact
on our business and operating results. 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)(1)
(unaudited)
Three Months Ended
March 31,
2021
2020
Revenues
LNG revenues
$
1,669
$
1,449
LNG revenues—affiliate
214
188
Regasification revenues
67
67
Other revenues
13
14
Total revenues
1,963
1,718
Operating costs and expenses
Cost of sales (excluding items shown
separately below)
948
699
Cost of sales—affiliate
42
—
Operating and maintenance expense
149
152
Operating and maintenance
expense—affiliate
34
33
Operating and maintenance expense—related
party
10
—
General and administrative expense
2
2
General and administrative
expense—affiliate
21
25
Depreciation and amortization expense
139
138
Impairment expense and loss on disposal of
assets
—
5
Total operating costs and expenses
1,345
1,054
Income from operations
618
664
Other income (expense)
Interest expense, net of capitalized
interest
(217
)
(234
)
Loss on modification or extinguishment of
debt
(54
)
(1
)
Other income, net
—
6
Total other expense
(271
)
(229
)
Net income
$
347
$
435
Basic and diluted net income per common
unit
$
0.64
$
0.84
Weighted average number of common units
outstanding used for basic and diluted net income per common unit
calculation
484.0
348.6
(1)
Please refer to the Cheniere
Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter
ended March 31, 2021, 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,
2021
2020
ASSETS
(unaudited)
Current assets
Cash and cash equivalents
$
1,219
$
1,210
Restricted cash
123
97
Accounts and other receivables, net
373
318
Accounts receivable—affiliate
98
184
Advances to affiliate
127
144
Inventory
103
107
Derivative assets
16
14
Other current assets
59
61
Other current assets—affiliate
2
—
Total current assets
2,120
2,135
Property, plant and equipment, net
16,734
16,723
Operating lease assets, net
97
99
Debt issuance costs, net
16
17
Non-current derivative assets
9
11
Other non-current assets, net
177
160
Total assets
$
19,153
$
19,145
LIABILITIES AND PARTNERS’
EQUITY
Current liabilities
Accounts payable
$
11
$
12
Accrued liabilities
704
658
Accrued liabilities—related party
3
4
Current debt
850
—
Due to affiliates
31
53
Deferred revenue
101
137
Deferred revenue—affiliate
5
1
Current operating lease liabilities
8
7
Derivative liabilities
26
11
Total current liabilities
1,739
883
Long-term debt, net
16,732
17,580
Non-current operating lease
liabilities
89
90
Non-current derivative liabilities
42
35
Other non-current liabilities
—
1
Other non-current
liabilities—affiliate
16
17
Partners’ equity
Common unitholders’ interest (484.0
million units issued and outstanding at both March 31, 2021 and
December 31, 2020)
738
714
General partner’s interest (2% interest
with 9.9 million units issued and outstanding at March 31, 2021 and
December 31, 2020)
(203
)
(175
)
Total partners’ equity
535
539
Total liabilities and partners’ equity
$
19,153
$
19,145
(1)
Please refer to the Cheniere
Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter
ended March 31, 2021, filed with the Securities and Exchange
Commission.
Reconciliation of Non-GAAP Measures
Regulation G Reconciliations
Adjusted EBITDA
The following table reconciles our Adjusted EBITDA to U.S. GAAP
results for first quarter 2021 and 2020 (in millions):
First Quarter
2021
2020
Net income
$
347
$
435
Interest expense, net of capitalized
interest
217
234
Loss on modification or extinguishment of
debt
54
1
Other income, net
—
(6
)
Income from operations
$
618
$
664
Adjustments to reconcile income from
operations to Adjusted EBITDA:
Depreciation and amortization expense
139
138
Loss (gain) from changes in fair value of
commodity derivatives, net (1)
22
(17
)
Impairment expense and loss on disposal of
assets
—
5
Incremental costs associated with COVID-19
response
—
2
Adjusted EBITDA
$
779
$
792
(1)
Change in fair value of commodity
derivatives prior to contractual delivery or termination
Adjusted EBITDA is commonly used as a supplemental financial
measure by our management and external users of our consolidated
financial statements to assess the financial performance of our
assets without regard to financing methods, capital structures, or
historical cost basis. 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 financial and operating performance.
Adjusted EBITDA is calculated by taking net income before
interest expense, net of capitalized interest, 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 derivatives
prior to contractual delivery or termination, and non-recurring
costs related to our response to the COVID-19 outbreak which are
incremental to and separable from normal operations. The change in
fair value of commodity derivatives is considered in determining
Adjusted EBITDA given that the timing of recognizing gains and
losses on these derivative contracts differs from the recognition
of the related item economically hedged. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20210504005287/en/
Cheniere Partners Investors Randy
Bhatia 713-375-5479 Megan Light 713-375-5492 Media Relations Eben Burnham-Snyder 713-375-5764
Jenna Palfrey 713-375-5491
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