Cheniere Energy, Inc. (“Cheniere”) (NYSE American: LNG) today
announced its financial results for the fourth quarter and full
year 2022.
YEAR END 2022 SUMMARY FINANCIAL RESULTS
(in billions)
Twelve Months Ended December
31, 2022
Revenues
$33.4
Net Income1
$1.4
Consolidated Adjusted EBITDA2
$11.6
Distributable Cash Flow2
$8.7
2023 FULL YEAR FINANCIAL GUIDANCE
(in billions)
2023
Consolidated Adjusted EBITDA2
$8.0
-
$8.5
Distributable Cash Flow2
$5.5
-
$6.0
RECENT HIGHLIGHTS
- During the three and twelve months ended December 31, 2022,
Cheniere generated revenues of approximately $9.1 billion and $33.4
billion, respectively, net income1 of approximately $3.9 billion
and $1.4 billion, respectively, Consolidated Adjusted EBITDA2 of
approximately $3.1 billion and $11.6 billion, respectively, and
Distributable Cash Flow2 of approximately $2.3 billion and $8.7
billion, respectively. Both Consolidated Adjusted EBITDA and
Distributable Cash Flow totals for the twelve months ended December
31, 2022 are above the most recent guidance ranges for those
metrics.
- Introducing full year 2023 Consolidated Adjusted EBITDA2
guidance of $8.0 - $8.5 billion and full year 2023 Distributable
Cash Flow2 guidance of $5.5 - $6.0 billion.
- Pursuant to Cheniere’s comprehensive capital allocation plan,
during the three months ended December 31, 2022, Cheniere prepaid
approximately $2.2 billion of consolidated long-term indebtedness,
repurchased an aggregate of approximately 4.4 million shares of
common stock for over $700 million, and paid a quarterly dividend
of $0.395 per share of common stock for the third quarter,
representing a 20% increase quarter over quarter. During the twelve
months ended December 31, 2022, Cheniere prepaid over $5.4 billion
of consolidated long-term indebtedness, repurchased an aggregate of
over 9.3 million shares of common stock for approximately $1.4
billion, and paid dividends in aggregate of $1.385 per share of
common stock.
- In November 2022, Cheniere achieved its first investment grade
issuer rating from S&P Global Ratings (“S&P”) as a result
of an upgrade from BB+ to BBB with a stable outlook, and Cheniere
Energy Partners, L.P. (“Cheniere Partners”) (NYSE American: CQP),
Cheniere’s consolidated subsidiary, achieved its second investment
grade issuer rating from S&P as a result of an upgrade from BB+
to BBB with a stable outlook. In January 2023, Cheniere achieved
its second investment grade issuer rating from Fitch Ratings of
BBB- with a stable outlook.
- In 2022, Cheniere’s subsidiaries signed new long-term contracts
representing an aggregate of over 180 million tonnes of liquefied
natural gas (“LNG”) through 2050 with creditworthy counterparties
in the form of free-on-board and delivered ex-ship LNG sale and
purchase agreements, as well as Integrated Production Marketing
(“IPM”) gas supply agreements.
- In February and October 2022, respectively, substantial
completion was achieved on Train 6 of the SPL Project, (defined
below) and the third marine berth at the Sabine Pass LNG
Terminal.
- In June 2022, Cheniere made a positive final investment
decision (“FID”) with respect to the CCL Stage 3 Project (defined
below) and issued full notice to proceed (“NTP”) to Bechtel Energy,
Inc. (“Bechtel”).
- In September 2022, certain subsidiaries of Cheniere entered the
pre-filing review process with the Federal Energy Regulatory
Commission (“FERC”) under the National Environmental Policy Act for
the CCL Midscale Trains 8 & 9 Project (defined below).
- In February 2023, certain subsidiaries of Cheniere Partners
initiated the pre-filing review process with the FERC under the
National Environmental Policy Act for the SPL Expansion Project
(defined below).
CEO COMMENT
“Reflecting on an incredible 2022, I am most proud of the
Cheniere team’s unwavering commitment to safety and operational
excellence, which enabled us to answer the call for reliable,
cleaner-burning energy supply during a critical time in energy
markets across the globe,” said Jack Fusco, Cheniere’s President
and Chief Executive Officer. “2022 brought the criticality of
natural gas and energy security into focus throughout the world,
and we are proud to have made FID on Corpus Christi Stage 3, which
will provide much-needed new LNG volumes to the market beginning in
late 2025.”
“Our stable operations continue to underpin our strong financial
results, which have enabled Cheniere to execute on our
comprehensive capital allocation plan, highlighted by the
achievement of investment grade ratings, returning meaningful
capital to our stakeholders via debt repayment, share repurchases
and dividends, and pursuing further accretive growth at Sabine Pass
and Corpus Christi - all of which serves to enhance the long-term
value of Cheniere. I look forward to maintaining this momentum
throughout 2023 in an environment of moderated global prices and a
more balanced market, which further supports our long-held
conviction in the structural shift to natural gas worldwide.”
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG data)
Three Months Ended December
31,
Twelve Months Ended December
31,
2022
2021
% Change
2022
2021
% Change
Revenues
$
9,085
$
6,557
39
%
$
33,428
$
15,864
111
%
Net income (loss)1
$
3,937
$
(1,323
)
nm
$
1,428
$
(2,343
)
nm
Consolidated Adjusted EBITDA2
$
3,100
$
1,339
132
%
$
11,564
$
4,867
138
%
LNG exported:
Number of cargoes
166
153
8
%
638
566
13
%
Volumes (TBtu)
601
542
11
%
2,306
2,018
14
%
LNG volumes loaded (TBtu)
600
540
11
%
2,308
2,015
15
%
Consolidated Adjusted EBITDA increased approximately $1.8
billion and $6.7 billion for the three and twelve months ended
December 31, 2022, respectively, as compared to the three and
twelve months ended December 31, 2021. The increase in both the
three and twelve months ended December 31, 2022 was due primarily
to increased total margins, driven by increased margins per MMBtu
of LNG, increased volumes of LNG delivered and, to a lesser extent,
a higher contribution from certain portfolio optimization
activities.
Net Income and Consolidated Adjusted EBITDA for the three and
twelve months ended December 31, 2022 was positively impacted by
the recognition of the $765 million lump-sum payment made by
Chevron U.S.A. Inc. (“Chevron”) throughout the six months ended
December 31, 2022 related to the previously announced early
termination of the Terminal Use Agreement (TUA) between Sabine Pass
LNG, L.P. and Chevron.
Net income (loss) was approximately $3.9 billion and $1.4
billion for the three and twelve months ended December 31, 2022,
respectively, as compared to approximately $(1.3) billion and
$(2.3) billion in the corresponding 2021 periods. The favorable
change for the three months ended December 31, 2022 was primarily
due to favorable changes in fair value of our derivative portfolio
of approximately $3.9 billion (before tax and non-controlling
interests) as compared to the $0.6 billion of unfavorable changes
in fair value in the prior period, as well as increased total
margins driven by increased volumes of LNG delivered and increased
margins per MMBtu of LNG. The favorable change for the twelve
months ended December 31, 2022 was primarily due to increased total
margins driven by increased margins per MMBtu of LNG and increased
volumes of LNG delivered, partially offset by an increase in
unfavorable changes in fair value of our derivative portfolio of
approximately $1.4 billion (before tax and non-controlling
interests), as well as the provision for income taxes as compared
to the tax benefit recognized in the prior period.
Substantially all derivative gains (losses) relate to the use of
commodity derivative instruments indexed to international gas and
LNG prices, primarily related to our long-term IPM agreements. Our
IPM agreements are designed to provide stable margins on purchases
of natural gas and sales of LNG over the life of the agreements and
have a fixed fee component, similar to that of LNG sold under our
long-term, fixed fee LNG SPAs. However, 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. In addition, accounting requirements prescribe
recognition of these long-term gas supply agreements at fair value,
but do not currently permit fair value recognition of the
associated sale of LNG, resulting in a mismatch of accounting
recognition for the purchase of natural gas and sale of LNG. As a
result of the significant volatility in forward international gas
and LNG price curves during the three and twelve months ended
December 31, 2022, we recognized $4.4 billion and $(4.7) billion,
respectively, of non-cash favorable (unfavorable) changes in fair
value attributable to such positions (before tax and
non-controlling interests).
Share-based compensation expenses included in net income (loss)
totaled $90 million and $205 million for the three and twelve
months ended December 31, 2022, respectively, compared to $48
million and $140 million for the three and twelve months ended
December 31, 2021, respectively. The increase in share-based
compensation expense for the three and twelve months ended December
31, 2022 compared to the corresponding 2021 periods is primarily
driven by higher expense recognized in 2022 on the modification of
certain equity awards to permit cash settlement upon vesting.
Our financial results are reported on a consolidated basis. Our
ownership interest in Cheniere Partners as of December 31, 2022
consisted of 100% ownership of the general partner and a 48.6%
limited partner interest.
BALANCE SHEET MANAGEMENT
Capital Resources
As of December 31, 2022, our total consolidated available
liquidity was approximately $9.9 billion. We had cash and cash
equivalents of $1.4 billion on a consolidated basis, of which $904
million was held by Cheniere Partners. In addition, we had
restricted cash and cash equivalents of $1.1 billion, $1.3 billion
of available commitments under the Cheniere Revolving Credit
Facility, $1.3 billion of available commitments under the Cheniere
Corpus Christi Holdings, LLC (“CCH”) Working Capital Facility, $3.3
billion of available commitments under CCH’s term loan credit
facility (the “CCH Credit Facility”), $750 million of available
commitments under Cheniere Partners’ credit facilities, and $872
million of available commitments under the Sabine Pass
Liquefaction, LLC (“SPL”) Working Capital Facility.
Recent Key Financial Transactions and Updates
In November and December 2022, SPL issued an aggregate principal
amount of $500 million of Senior Secured Amortizing Notes due 2037,
the proceeds of which, together with cash on hand, were used to
redeem the remaining outstanding amount of SPL’s 5.625% Senior
Secured Notes due 2023, subsequent to the $300 million redemption
in October 2022.
In December 2022, pursuant to a tender offer, $752 million in
aggregate principal amount outstanding of CCH’s 7.000% Senior
Secured Notes due 2024 (“2024 CCH Senior Notes”) was repurchased
with cash on hand. In January 2023, the remaining outstanding
principal amount of $498 million of the 2024 CCH Senior Notes was
redeemed with cash on hand.
During the three months ended December 31, 2022, Cheniere
repurchased over $434 million in principal of outstanding senior
notes at CCH in the open market, partially redeeming the 5.875%
Senior Secured Notes due 2025, the 5.125% Senior Secured Notes due
2027, the 3.700% Senior Secured Notes due 2029 and the Senior
Secured Notes due 2039.
LIQUEFACTION PROJECTS OVERVIEW
Construction Progress as of January 31, 2023:
CCL Stage 3 Project
Project Status
Under Construction
Project Completion Percentage
24.5%(1)
Expected Substantial Completion
2H 2025 - 1H 2027
(1) Engineering 41.3% complete,
procurement 36.9% complete, subcontract work 29.5% complete and
construction 2.2% complete.
SPL Project
Through Cheniere Partners, we operate six natural gas
liquefaction Trains for a total production capacity of
approximately 30 mtpa of LNG at the Sabine Pass LNG terminal in
Cameron Parish, Louisiana (the “SPL Project”).
SPL Expansion Project
Through Cheniere Partners, we are developing an expansion
adjacent to the SPL Project consisting of up to three natural gas
liquefaction Trains with an expected total production capacity of
approximately 20 mtpa of LNG (the “SPL Expansion Project”). In
February 2023, certain subsidiaries of Cheniere Partners initiated
the pre-filing review process with respect to the SPL Expansion
Project with the FERC.
CCL Project
We operate three natural gas liquefaction Trains for a total
production capacity of approximately 15 mtpa of LNG at the Corpus
Christi LNG terminal near Corpus Christi, Texas (the “CCL
Project”).
Corpus Christi Stage 3 Project
We are constructing an expansion adjacent to the CCL Project
consisting of seven midscale Trains with an expected total
production capacity of over 10 mtpa of LNG (the “CCL Stage 3
Project”). In June 2022, our Board of Directors made a positive FID
with respect to the CCL Stage 3 Project and issued full notice to
proceed with construction to Bechtel.
Corpus Christi Liquefaction Midscale
Trains 8 & 9 Project
We are developing an expansion adjacent to the CCL Stage 3
Project consisting of two midscale Trains with an expected total
production capacity of approximately 3 mtpa of LNG (the “CCL
Midscale Trains 8 & 9 Project”). In September 2022, certain of
our subsidiaries entered the pre-filing review process with the
FERC.
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 2022 on
Thursday, February 23, 2023, 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 (loss) as used herein refers
to Net income (loss) 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
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 total production capacity of approximately 45 mtpa of LNG in
operation and an additional 10+ mtpa of expected production
capacity 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, 2022, 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
regulatory authorization and approval expectations, (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, and (vii)
statements relating to Cheniere’s capital deployment, including
intent, ability, extent, and timing of capital expenditures, debt
repayment, dividends, share repurchases and execution on the
capital allocation plan. 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
As of February 17, 2023, approximately 2,650 cumulative LNG
cargoes totaling over 180 million tonnes of LNG have been produced,
loaded and exported from our liquefaction projects.
During the three and twelve months ended December 31, 2022, we
exported 601 and 2,306 TBtu of LNG, respectively, from our
liquefaction projects. 56 TBtu of LNG exported from our
liquefaction projects and sold on a delivered basis was in transit
as of December 31, 2022, none of which was related to commissioning
activities.
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 and twelve
months ended December 31, 2022:
Three Months Ended December
31, 2022
Twelve Months Ended December
31, 2022
(in TBtu)
Operational
Commissioning
Operational
Commissioning
Volumes loaded during the current
period
600
—
2,295
13
Volumes loaded during the prior period but
recognized during the current period
37
—
49
1
Less: volumes loaded during the current
period and in transit at the end of the period
(56
)
—
(56
)
—
Total volumes recognized in the current
period
581
—
2,288
14
In addition, during the three and twelve months ended December
31, 2022, we recognized 10 TBtu and 29 TBtu of LNG on our
Consolidated Financial Statements related to LNG cargoes sourced
from third-parties.
Cheniere Energy, Inc.
Consolidated Statements of
Operations
(in millions, except per share
data)(1)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
2021
2022
2021
Revenues
LNG revenues
$
8,355
$
6,405
$
31,804
$
15,395
Regasification revenues
477
67
1,068
269
Other revenues
253
85
556
200
Total revenues
9,085
6,557
33,428
15,864
Operating costs and expenses
Cost of sales (excluding items shown
separately below) (2)
1,471
5,365
25,632
13,773
Operating and maintenance expense
454
387
1,681
1,444
Selling, general and administrative
expense
151
101
416
325
Depreciation and amortization expense
292
258
1,119
1,011
Development expense
4
2
16
7
Other
2
5
5
5
Total operating costs and expenses
2,374
6,118
28,869
16,565
Income (loss) from operations
6,711
439
4,559
(701
)
Other income (expense)
Interest expense, net of capitalized
interest
(346
)
(350
)
(1,406
)
(1,438
)
Loss on modification or extinguishment of
debt
(23
)
(21
)
(66
)
(116
)
Interest rate derivative gain (loss),
net
—
2
2
(1
)
Other income (expense), net
26
(8
)
5
(22
)
Total other expense
(343
)
(377
)
(1,465
)
(1,577
)
Income (loss) before income taxes and
non-controlling interest
6,368
62
3,094
(2,278
)
Less: income tax provision (benefit)
1,221
1,151
459
(713
)
Net income (loss)
5,147
(1,089
)
2,635
(1,565
)
Less: net income attributable to
non-controlling interest
1,210
234
1,207
778
Net income (loss) attributable to common
stockholders
$
3,937
$
(1,323
)
$
1,428
$
(2,343
)
Net income (loss) per share attributable
to common stockholders—basic (3)
$
15.92
$
(5.22
)
$
5.69
$
(9.25
)
Net income (loss) per share attributable
to common stockholders—diluted (3)
$
15.78
$
(5.22
)
$
5.64
$
(9.25
)
Weighted average number of common shares
outstanding—basic
247.2
253.6
251.1
253.4
Weighted average number of common shares
outstanding—diluted
249.5
253.6
253.4
253.4
___________________________
(1)
Please refer to the Cheniere Energy, Inc.
Annual Report on Form 10-K for the year ended December 31, 2022,
filed with the Securities and Exchange Commission.
(2)
Cost of Sales includes approximately $3.8
billion and $(6.0) billion of gains (losses) from changes in the
fair value of commodity derivatives prior to contractual delivery
or termination during the three and twelve months ended December
31, 2022, respectively, as compared to $(1.5) billion and $(4.3)
billion of losses in the corresponding 2021 periods,
respectively.
(3)
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,
2022
2021
ASSETS
Current assets
Cash and cash equivalents
$
1,353
$
1,404
Restricted cash and cash equivalents
1,134
413
Trade and other receivables, net of
current expected credit losses
1,944
1,506
Inventory
826
706
Current derivative assets
120
55
Margin deposits
134
765
Other current assets
97
207
Total current assets
5,608
5,056
Property, plant and equipment, net of
accumulated depreciation
31,528
30,288
Operating lease assets
2,625
2,102
Derivative assets
35
69
Goodwill
77
77
Deferred tax assets
864
1,204
Other non-current assets, net
529
462
Total assets
$
41,266
$
39,258
LIABILITIES AND STOCKHOLDERS’
DEFICIT
Current liabilities
Accounts payable
$
124
$
155
Accrued liabilities
2,679
2,299
Current debt, net of discount and debt
issuance costs
813
366
Deferred revenue
234
155
Current operating lease liabilities
616
535
Current derivative liabilities
2,301
1,089
Other current liabilities
28
94
Total current liabilities
6,795
4,693
Long-term debt, net of premium, discount
and debt issuance costs
24,055
29,449
Operating lease liabilities
1,971
1,541
Finance lease liabilities
494
57
Derivative liabilities
7,947
3,501
Other non-current liabilities
175
50
Commitments and contingencies
Stockholders’ deficit
Preferred stock: $0.0001 par value, 5.0
million shares authorized, none issued
—
—
Common stock: $0.003 par value, 480.0
million shares authorized; 276.7 million shares and 275.2 million
shares issued at December 31, 2022 and 2021, respectively
1
1
Treasury stock: 31.2 million shares and
21.6 million shares at December 31, 2022 and 2021, respectively, at
cost
(2,342
)
(928
)
Additional paid-in-capital
4,314
4,377
Accumulated deficit
(4,942
)
(6,021
)
Total Cheniere stockholders’ deficit
(2,969
)
(2,571
)
Non-controlling interest
2,798
2,538
Total stockholders’ deficit
(171
)
(33
)
Total liabilities and stockholders’
deficit
$
41,266
$
39,258
___________________________
(1)
Please refer to the Cheniere
Energy, Inc. Annual Report on Form 10-K for the year ended December
31, 2022, 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, 2022, total assets and
liabilities of Cheniere Partners, which are included in our
Consolidated Balance Sheets, were $18.9 billion and $21.7 billion,
respectively, including $0.9 billion of cash and cash equivalents
and $0.1 billion of restricted cash and cash equivalents.
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 the three
and twelve months ended December 31, 2022 and 2021 (in
millions):
Three Months Ended December
31,
Twelve Months Ended December
31,
2022
2021
2022
2021
Net income (loss) attributable to common
stockholders
$
3,937
$
(1,323
)
$
1,428
$
(2,343
)
Net income attributable to non-controlling
interest
1,210
234
1,207
778
Income tax provision (benefit)
1,221
1,151
459
(713
)
Interest expense, net of capitalized
interest
346
350
1,406
1,438
Loss on modification or extinguishment of
debt
23
21
66
116
Interest rate derivative gain (loss),
net
—
(2
)
(2
)
1
Other income (expense), net
(26
)
8
(5
)
22
Income (loss) from operations
$
6,711
$
439
$
4,559
$
(701
)
Adjustments to reconcile loss from
operations to Consolidated Adjusted EBITDA:
Depreciation and amortization expense
292
258
1,119
1,011
Loss (gain) from changes in fair value of
commodity and FX derivatives, net (1)
(3,910
)
624
5,773
4,450
Total non-cash compensation expense
5
11
108
100
Other
2
7
5
7
Consolidated Adjusted EBITDA
$
3,100
$
1,339
$
11,564
$
4,867
___________________________
(1) Change in fair value of commodity and
FX derivatives prior to contractual delivery or termination
Consolidated 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. 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 financial and operating performance.
Consolidated Adjusted EBITDA is calculated by taking net income
(loss) attributable to common stockholders before net income (loss)
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 prior to contractual delivery or termination, and
non-cash compensation expense. The change in fair value of
commodity and FX derivatives is considered in determining
Consolidated 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.
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
twelve months ended December 31, 2022 and forecast amounts for full
year 2023 (in billions):
Three Months
Ended
December 31,
Twelve Months
Ended
December 31,
Full Year
2022
2022
2023
Net income attributable to common
stockholders
$
3.94
$
1.43
$
3.5
-
$
3.9
Net income attributable to non-controlling
interest
1.21
1.21
1.0
-
1.1
Income tax provision
1.22
0.46
1.1
-
1.2
Interest expense, net of capitalized
interest
0.35
1.41
1.2
-
1.2
Depreciation and amortization expense
0.29
1.12
1.2
-
1.2
Other expense (income), financing costs,
and certain non-cash operating expenses
(3.91
)
5.95
0.0
-
(0.1
)
Consolidated Adjusted EBITDA
$
3.10
$
11.56
$
8.0
-
$
8.5
Interest expense (net of capitalized
interest and amortization) and realized interest rate
derivatives
(0.32
)
(1.36
)
(1.2
)
-
(1.2
)
Maintenance capital expenditures, income
tax and other expense
(0.04
)
(0.15
)
(0.4
)
-
(0.3
)
Consolidated Distributable Cash
Flow
$
2.73
$
10.05
$
6.4
-
$
7.0
Cheniere Partners’ distributable cash flow
attributable to non-controlling interest
(0.41
)
(1.33
)
(0.9
)
-
(1.0
)
Cheniere Distributable Cash
Flow
$
2.32
$
8.72
$
5.5
-
$
6.0
Note: Totals may not sum due to
rounding.
Distributable Cash Flow is defined as cash generated from the
operations of Cheniere and its subsidiaries and adjusted for
non-controlling interest. The Distributable Cash Flow of Cheniere’s
subsidiaries is calculated by taking the subsidiaries’ EBITDA less
interest expense, net of capitalized interest, interest rate
derivatives, taxes, maintenance capital expenditures and other
non-operating income or expense items, and adjusting for the effect
of certain non-cash items and other items not otherwise predictive
or indicative of ongoing operating performance, including the
effects of modification or extinguishment of debt, amortization of
debt issue costs, premiums or discounts, changes in fair value of
interest rate derivatives, impairment of equity method investment
and deferred taxes. Cheniere’s Distributable Cash Flow includes
100% of the Distributable Cash Flow of Cheniere’s wholly-owned
subsidiaries. For subsidiaries with non-controlling investors, our
share of Distributable Cash Flow is calculated as the Distributable
Cash Flow of the subsidiary reduced by the economic interest of the
non-controlling investors as if 100% of the Distributable Cash Flow
were distributed in order to reflect our ownership interests and
our incentive distribution rights, if applicable. The Distributable
Cash Flow attributable to non-controlling interest is calculated in
the same method as Distributions to non-controlling interest as
presented on our Statements of Stockholders’ Equity in our Forms
10-Q and Forms 10-K filed with the Securities and Exchange
Commission. This amount may differ from the actual distributions
paid to non-controlling investors by the subsidiary for a
particular period.
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. 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/20230222005707/en/
Cheniere Energy, Inc.
Investors Randy Bhatia,
713-375-5479 Frances Smith, 713-375-5753 Media Relations Eben Burnham-Snyder,
713-375-5764
Cheniere Energy (AMEX:LNG)
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