Cheniere Energy, Inc. (“Cheniere”) (NYSE American: LNG) today
announced its financial results for fourth quarter and full year
2020.
HIGHLIGHTS
- Consolidated Adjusted EBITDA1 of $1.05 billion for fourth
quarter 2020 and $3.96 billion for full year 2020, an increase of
35% compared to full year 2019 and within the full year 2020
guidance range. Distributable Cash Flow1 of approximately $330
million for fourth quarter 2020 and $1.35 billion for full year
2020, an increase of approximately 75% compared to full year 2019
and above the full year 2020 guidance range. Net loss2 of $194
million, or $0.77 per share, for fourth quarter 2020 and net loss
of $85 million, or $0.34 per share, for full year 2020. Fourth
quarter net loss was negatively impacted by non-cash changes in
fair value of commodity derivatives. Full year net loss was also
negatively impacted by non-cash changes in fair value of commodity
derivatives, as well as certain other non-operating losses.
- Increasing full year 2021 Consolidated Adjusted EBITDA guidance
to $4.1 - $4.4 billion and full year 2021 Distributable Cash Flow
guidance to $1.4 - $1.7 billion based on strong execution and
improved market conditions.
- Prepaid $100 million of outstanding borrowings under the
Cheniere Term Loan Facility with available cash in fourth quarter
2020, in line with previously announced capital allocation
priorities. During full year 2020, allocated over $650 million to
debt reduction and capital returns, including redemption of $300
million principal amount of the CCH Holdco convertible notes in
cash in March, prepayments totaling $200 million of borrowings
under the Cheniere Term Loan Facility, and repurchases of 2.9
million shares of common stock for $155 million.
- Entered into mid-term LNG sales agreements during fourth
quarter 2020 for portfolio volumes aggregating over four million
tonnes of LNG with multiple counterparties and with contract tenors
ranging from five to approximately 11 years, on both free on board
(“FOB”) and delivered ex-ship (“DES”) terms.
- Commenced shipment of LNG commissioning cargoes from Train 3 of
the CCL Project (defined below) in December as part of the
commissioning process. A total of 22 TBtu of commissioning LNG has
been exported from Train 3 as of February 19, 2021, and the project
remains on track to achieve substantial completion in first quarter
2021.
- Loaded and shipped the first two LNG cargoes under the 25-year
LNG Sale and Purchase Agreement (“SPA”) with CPC Corporation,
Taiwan in December. The cargoes were delivered in first quarter
2021.
CEO COMMENT
“After a year in which the unprecedented became ordinary course,
I am extremely proud to report fourth quarter and full year 2020
financial results that place us solidly within our original,
unchanged Consolidated Adjusted EBITDA guidance range and above our
Distributable Cash Flow guidance range for the year,” said Jack
Fusco, Cheniere’s President and Chief Executive Officer. “We
accomplished this while successfully managing a full spectrum of
challenges last year, from a global health crisis and its
wide-ranging effects, to record low LNG market pricing, and two
major hurricanes making landfall near our infrastructure. The
results we reported today once again prove the resilience,
stability, and reliability of our business through commodity
cycles.”
“I am pleased to report the recent winter storm and the
resulting effect on electricity and other utilities in the Gulf
Coast had no material impact on our assets or operations. We worked
closely with state and local officials, suppliers, customers, and
other stakeholders to mitigate the impact on our operations through
the event while providing critically needed natural gas back into
the system to help restore services for human needs.”
“I want to thank the entire Cheniere team for its tireless
efforts to adapt to new circumstances and to rise to new
challenges, excelling within them and helping us reinforce our
reputation within the LNG industry for operational excellence and
within the financial community for reliable execution and
delivering on our promises.”
“I am confident we can continue to execute in 2021, and many
tailwinds are present today. We are in the final stages of
commissioning Train 3 at Corpus Christi and look forward to placing
that project into service in the coming weeks. Additionally, the
global LNG market has strengthened significantly since our last
quarterly update, improving our outlook for the remainder of the
year. Today we are raising our 2021 financial guidance and are
confident in our ability to once again deliver reliable financial
results this year and to progress on commercializing additional
portfolio volumes as well as Corpus Christi Stage 3.”
2021 REVISED FULL YEAR FINANCIAL
GUIDANCE
Previous
Revised
Consolidated Adjusted EBITDA1
$
3.9
-
$
4.2
$
4.1
-
$
4.4
Distributable Cash Flow1
$
1.2
-
$
1.5
$
1.4
-
$
1.7
SUMMARY AND REVIEW OF FINANCIAL
RESULTS
(in millions, except LNG data)
Fourth Quarter
Full Year
2020
2019
% Change
2020
2019
% Change
Revenues
$
2,787
$
3,007
(7
)%
$
9,358
$
9,730
(4
)%
Net income (loss)2
$
(194
)
$
939
nm
$
(85
)
$
648
nm
Consolidated Adjusted EBITDA1
$
1,052
$
987
7
%
$
3,961
$
2,946
34
%
LNG exported:
Number of cargoes
130
130
—
%
391
429
(9
)%
Volumes (TBtu)
461
462
—
%
1,381
1,516
(9
)%
LNG volumes loaded (TBtu)
464
457
2
%
1,384
1,514
(9
)%
Net loss increased during fourth quarter 2020 as compared to
fourth quarter 2019 primarily due to decreased operating income and
decreased income tax benefit. Operating income decreased primarily
due to a decrease in total margins3, primarily attributable to
increased non-cash losses from changes in fair value of commodity
and foreign exchange (“FX”) derivatives, principally related to the
impact of commodity curve shifts on our long-term Integrated
Production Marketing (“IPM”) agreements for the purchase of natural
gas and on our forward sales of LNG. LNG volumes recognized in
income and margins per MMBtu of LNG delivered to customers were
comparable for fourth quarter 2020 and fourth quarter 2019. Tax
benefit decreased during fourth quarter 2020 due to a nonrecurrence
of the release of a significant portion of the valuation allowance
previously recorded against our deferred tax assets in 2019.
During fourth quarter 2020, net loss was negatively impacted by
approximately $515 million related to non-cash changes in fair
value of commodity and FX derivatives, primarily related to the
impact of commodity curve shifts on our IPM agreements for the
purchase of natural gas and on our forward sales of LNG.
Our IPM agreements and certain gas supply agreements qualify as
derivatives, requiring mark-to-market (“MTM”) accounting. From
period to period, we will experience non-cash gains and losses as
price movements occur in the underlying commodity curves related to
these forward purchases of natural gas. The long-term duration and
international price basis of our IPM agreements make them
particularly susceptible to fluctuations in fair market value from
period to period. While operationally we seek to eliminate
commodity risk by matching our natural gas purchases and LNG sales
on the same pricing index, our long-term LNG SPAs do not currently
qualify for MTM accounting, meaning that the fair market value
impact of only one side of the transaction is recognized on our
financial statements until the delivery of natural gas and sale of
LNG occurs. Our IPM agreements are designed to provide stable
margins on purchases of natural gas and sales of LNG over the life
of the agreement and have a fixed fee component, similar to that of
LNG sold under our long-term, fixed fee LNG SPAs.
Net loss increased during full year 2020 as compared to full
year 2019 primarily due to increased tax expense, increased
interest expense and interest rate derivative loss, increased loss
on modification or extinguishment of debt, and increased loss on
our equity method investments, partially offset by an increase in
operating income. Operating income increased due to an increase in
total margins, partially offset by increased operating costs and
expenses primarily due to additional Trains in operation and costs
incurred in response to the COVID-19 pandemic. Total margins
increased primarily due to increased LNG sold including both
physical and cancelled cargoes, primarily as a result of additional
Trains in operation, partially offset by increased non-cash losses
from changes in fair value of commodity and FX derivatives. Margins
per MMBtu of LNG delivered to customers increased slightly during
full year 2020 as compared to full year 2019, primarily due to an
increase in the proportion of volumes sold under higher-margin
long-term contracts, partially offset by a decrease in market
margins for short-term cargoes sold.
Consolidated Adjusted EBITDA increased $65 million, or 7%,
during fourth quarter 2020 as compared to fourth quarter 2019,
primarily due to accelerated recognition of revenues for cargoes
cancelled during fourth quarter 2020 that would have been delivered
during first quarter 2021 and a slight decrease in selling, general
and administrative expense.
Consolidated Adjusted EBITDA increased $1.02 billion, or 34%,
during full year 2020 as compared to full year 2019, primarily due
to increased LNG sold including both physical and cancelled
cargoes, primarily as a result of additional Trains in operation,
as well as slightly increased margins per MMBtu of LNG delivered to
customers as detailed above, partially offset by increased
operating costs and expenses primarily due to additional Trains in
operation.
During fourth quarter and full year 2020, we recognized $38 and
$969 million, respectively, in revenues associated with LNG cargoes
cancelled by customers, of which $38 million would have been
recognized subsequent to December 31, 2020, if the cargoes were
lifted pursuant to the customers’ delivery schedules. LNG revenues
during fourth quarter 2020 excluded $47 million that would have
been recognized during the quarter if the cargoes had been lifted,
as these revenues were recognized during third quarter 2020 when
cancellations were received. Excluding the impact of cargo
cancellations related to periods subsequent to December 31, 2020
and those received in prior periods for the current periods, our
total revenues would have been $2.80 and $9.32 billion for fourth
quarter and full year 2020, respectively.
Share-based compensation expenses included in income totaled $26
and $110 million for fourth quarter and full year 2020,
respectively, compared to $37 and $131 million for the comparable
2019 periods.
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 December 31, 2020 consisted
of 100% ownership of the general partner and a 48.6% limited
partner interest.
BALANCE SHEET MANAGEMENT
Capital Resources
As of December 31, 2020, we had cash and cash equivalents of
$1.6 billion on a consolidated basis, of which $1.2 billion was
held by Cheniere Partners. In addition, we had current restricted
cash of $449 million, $1.13 billion of available commitments under
our Revolving Credit Facility, $767 million of available
commitments under the Cheniere Corpus Christi Holdings, LLC Working
Capital Facility, $750 million of available commitments under
Cheniere Partners’ credit facilities, and $787 million of available
commitments under the Sabine Pass Liquefaction, LLC (“SPL”) Working
Capital Facility.
Key Financial Transactions and Updates
In February 2021, SPL entered into a note purchase agreement
with Allianz Global Investors GmbH 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.
LIQUEFACTION PROJECTS UPDATE
As of February 19, 2021, approximately 1,425 cumulative LNG
cargoes totaling over 95 million tonnes of LNG have been produced,
loaded and exported from our liquefaction projects.
Construction Progress as of December
31, 2020
CCL Project
SPL Project
Train 3
Train 6
Project Status
Commissioning
Under Construction
Project Completion Percentage
99.6% (1)
77.6% (2)
Expected Substantial Completion
1Q 2021
2H 2022
(1) Engineering 100.0% complete, procurement 100.0% complete,
and construction 99.0% complete (2) Engineering 99.0% complete,
procurement 99.9% complete, and construction 49.2% complete
Liquefaction Projects Overview
SPL Project
Through Cheniere Partners, we operate five natural gas
liquefaction Trains and are constructing one additional Train for a
total production capacity of approximately 30 million tonnes per
annum (“mtpa”) of LNG at the Sabine Pass LNG terminal (the “SPL
Project”).
CCL Project
We operate two Trains and are commissioning one additional Train
for a total production capacity of approximately 15 mtpa of LNG
near Corpus Christi, Texas (the “CCL Project”).
Corpus Christi Stage 3
We are developing an expansion adjacent to the CCL Project for
up to seven midscale Trains with an expected total production
capacity of approximately 10 mtpa of LNG (“Corpus Christi Stage
3”). We expect to commence construction of the Corpus Christi Stage
3 project upon, among other things, entering into an engineering,
procurement, and construction contract and additional commercial
agreements, and obtaining adequate financing.
INVESTOR CONFERENCE CALL AND WEBCAST
We will host a conference call to discuss our financial and
operating results for the fourth quarter and full year 2020 on
Wednesday, February 24, 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.
___________________________
1
Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details.
2
Net income (loss) as used herein refers to
Net income (loss) attributable to common stockholders on our
Consolidated Statements of Operations.
3
Total margins as used herein refers to
total revenues less cost of sales.
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 total
production capacity of approximately 45 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 Annual Report on Form 10-K for the year
ended December 31, 2020, 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 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.
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.
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, (vi) statements
regarding future discussions and entry into contracts, (vii)
statements relating to the amount and timing of share repurchases,
and (viii) statements regarding the COVID-19 pandemic and its
impact on our business and operating results. 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 and Supplementary
Information Follow)
LNG VOLUME SUMMARY
During fourth quarter and full year 2020, 130 and 391 LNG
cargoes, respectively, were exported from our liquefaction
projects, two of which were commissioning cargoes. Eight cargoes
exported from our liquefaction projects and sold on a delivered
basis were in transit as of December 31, 2020.
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 fourth quarter and full
year 2020:
Fourth Quarter 2020
Full Year 2020
(in TBtu)
Operational
Commissioning
Operational
Commissioning
Volumes loaded during the current
period
458
6
1,378
6
Volumes loaded during the prior period but
recognized during the current period
21
—
33
—
Less: volumes loaded during the current
period and in transit at the end of the period
(26
)
(3
)
(26
)
(3
)
Total volumes recognized in the current
period
453
3
1,385
3
In addition, during fourth quarter and full year 2020, we
recognized the financial impact of 24 TBtu and 103 TBtu of LNG,
respectively, on our Consolidated Financial Statements related to
LNG cargoes sourced from third parties.
CARGO CANCELLATION REVENUE
SUMMARY
The following table summarizes the timing impacts of revenue
recognition related to cancelled cargoes on our revenues for fourth
quarter and full year 2020 (in millions):
Fourth Quarter 2020
Full Year 2020
Total revenues
$
2,787
$
9,358
Impact of cargo cancellations recognized
in the prior period for deliveries scheduled in the current
period
47
—
Impact of cargo cancellations recognized
in the current period for deliveries scheduled in subsequent
periods
(38
)
(38
)
Total revenues excluding the timing impact
of cargo cancellations
$
2,796
$
9,320
Cheniere Energy, Inc.
Consolidated Statements of
Operations
(in millions, except per share
data)(1)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Revenues
LNG revenues
$
2,688
$
2,871
$
8,924
$
9,246
Regasification revenues
67
67
269
266
Other revenues
32
69
165
218
Total revenues
2,787
3,007
9,358
9,730
Operating costs and expenses
Cost of sales (excluding items shown
separately below)
1,866
1,321
4,161
5,079
Operating and maintenance expense
332
330
1,320
1,154
Development expense
1
3
6
9
Selling, general and administrative
expense
78
88
302
310
Depreciation and amortization expense
233
233
932
794
Impairment expense and loss on disposal of
assets
1
16
6
23
Total operating costs and expenses
2,511
1,991
6,727
7,369
Income from operations
276
1,016
2,631
2,361
Other income (expense)
Interest expense, net of capitalized
interest
(351
)
(418
)
(1,525
)
(1,432
)
Loss on modification or extinguishment of
debt
(2
)
(28
)
(217
)
(55
)
Interest rate derivative gain (loss),
net
—
53
(233
)
(134
)
Other income (expense), net
3
13
(112
)
(25
)
Total other expense
(350
)
(380
)
(2,087
)
(1,646
)
Income (loss) before income taxes and
non-controlling interest
(74
)
636
544
715
Income tax benefit (provision)
76
517
(43
)
517
Net income
2
1,153
501
1,232
Less: net income attributable to
non-controlling interest
196
214
586
584
Net income (loss) attributable to common
stockholders
$
(194
)
$
939
$
(85
)
$
648
Net income (loss) per share attributable
to common stockholders—basic(2)
$
(0.77
)
$
3.70
$
(0.34
)
$
2.53
Net income (loss) per share attributable
to common stockholders—diluted (2)
$
(0.77
)
$
3.34
$
(0.34
)
$
2.51
Weighted average number of common shares
outstanding—basic
252.2
254.4
252.4
256.2
Weighted average number of common shares
outstanding—diluted
252.2
299.8
252.4
258.1
___________________________
(1)
Please refer to the Cheniere Energy, Inc.
Annual Report on Form 10-K for the year ended December 31, 2020,
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)(2)
December 31,
2020
2019
ASSETS
Current assets
Cash and cash equivalents
$
1,628
$
2,474
Restricted cash
449
520
Accounts and other receivables, net
647
491
Inventory
292
312
Derivative assets
32
323
Other current assets
121
92
Total current assets
3,169
4,212
Property, plant and equipment, net
30,421
29,673
Operating lease assets, net
759
439
Non-current derivative assets
376
174
Goodwill
77
77
Deferred tax assets
489
529
Other non-current assets, net
406
388
Total assets
$
35,697
$
35,492
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
35
$
66
Accrued liabilities
1,175
1,281
Current debt
372
—
Deferred revenue
138
161
Current operating lease liabilities
161
236
Derivative liabilities
313
117
Other current liabilities
2
13
Total current liabilities
2,196
1,874
Long-term debt, net
30,471
30,774
Non-current operating lease
liabilities
597
189
Non-current finance lease liabilities
57
58
Non-current derivative liabilities
151
151
Other non-current liabilities
7
11
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.0001 par value, 5.0
million shares authorized, none issued
—
—
Common stock, $0.003 par value, 480.0
million shares authorized
Issued: 273.1 million shares and 270.7
million shares at December 31, 2020 and 2019, respectively
Outstanding: 252.3 million shares and
253.6 million shares at December 31, 2020 and 2019,
respectively
1
1
Treasury stock: 20.8 million shares and
17.1 million shares at December 31, 2020 and 2019, respectively, at
cost
(872
)
(674
)
Additional paid-in-capital
4,273
4,167
Accumulated deficit
(3,593
)
(3,508
)
Total stockholders' deficit
(191
)
(14
)
Non-controlling interest
2,409
2,449
Total equity
2,218
2,435
Total liabilities and stockholders’
equity
$
35,697
$
35,492
___________________________
(1)
Please refer to the Cheniere Energy, Inc.
Annual Report on Form 10-K for the year ended December 31, 2020,
filed with the Securities and Exchange Commission.
(2)
Amounts presented include balances held by
our consolidated variable interest entity, Cheniere Partners. As of
December 31, 2020, total assets and liabilities of Cheniere
Partners, which are included in our Consolidated Balance Sheets,
were $18.8 billion and $18.5 billion, respectively, including $1.2
billion of cash and cash equivalents and $0.1 billion of restricted
cash.
Reconciliation of Non-GAAP
Measures
Regulation G
Reconciliations
Consolidated Adjusted EBITDA
The following table reconciles our
Consolidated Adjusted EBITDA to U.S. GAAP results for fourth
quarter and full year 2020 and 2019 (in millions):
Fourth Quarter
Full Year
2020
2019
2020
2019
Net income (loss) attributable to common
stockholders
$
(194
)
$
939
$
(85
)
$
648
Net income attributable to non-controlling
interest
196
214
586
584
Income tax provision (benefit)
(76
)
(517
)
43
(517
)
Interest expense, net of capitalized
interest
351
418
1,525
1,432
Loss on modification or extinguishment of
debt
2
28
217
55
Interest rate derivative loss (gain),
net
—
(53
)
233
134
Other expense (income), net
(3
)
(13
)
112
25
Income from operations
$
276
$
1,016
$
2,631
$
2,361
Adjustments to reconcile income from
operations to Consolidated Adjusted EBITDA:
Depreciation and amortization expense
233
233
932
794
Loss (gain) from changes in fair value of
commodity and FX derivatives, net
515
(314
)
215
(355
)
Total non-cash compensation expense
26
36
108
123
Impairment expense and loss on disposal of
assets
1
16
6
23
Incremental costs associated with COVID-19
response
1
—
69
—
Consolidated Adjusted EBITDA
$
1,052
$
987
$
3,961
$
2,946
Consolidated Adjusted EBITDA represents net income (loss)
attributable to Cheniere before net income attributable to
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 FX
derivatives, non-cash compensation expense, and non-recurring costs
related to our response to the COVID-19 outbreak which are
incremental to and separable from normal operations. 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.
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 fourth quarter and full
year 2020 and forecast amounts for full year 2021 (in
billions):
Fourth Quarter
Full Year
Full Year
2020
2020
2021
Net income (loss) attributable to common
stockholders
$
(0.19
)
$
(0.09
)
$
0.8
-
$
1.2
Net income (loss) attributable to
non-controlling interest
0.20
0.59
0.6
-
0.7
Income tax provision (benefit)
(0.08
)
0.04
0.1
-
0.3
Interest expense, net of capitalized
interest
0.35
1.53
1.5
Depreciation and amortization expense
0.23
0.93
1.0
Other expense, financing costs, and
certain non-cash operating expenses
0.54
0.96
0.1
-
(0.3
)
Consolidated Adjusted EBITDA
$
1.05
$
3.96
$
4.1
-
$
4.4
Distributions to Cheniere Partners
non-controlling interest
(0.16
)
(0.63
)
(0.6
)
-
(0.7
)
SPL and Cheniere Partners cash retained
and interest expense
(0.41
)
(1.41
)
(1.4
)
-
(1.3
)
Cheniere interest expense, income tax and
other
(0.15
)
(0.58
)
(0.7
)
Cheniere Distributable Cash Flow
(1)
$
0.33
$
1.35
$
1.4
-
$
1.7
_____________________________
(1) Totals may not sum due to
rounding. For full year 2020, Distributable Cash Flow excludes cash
payments of $103 million related to the settlement of forward
starting interest rate derivatives.
Distributable Cash Flow is defined as cash received, or expected
to be received, from Cheniere’s ownership and interests in Cheniere
Partners, cash received (used) by Corpus Christi Holdings, LLC and
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210224005179/en/
Cheniere Contacts 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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