Cheniere Energy, Inc. (“Cheniere”) (NYSE American: LNG) today
announced its financial results for the second quarter 2023.
SECOND QUARTER 2023 SUMMARY FINANCIAL RESULTS
(in billions)
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
Revenues
$4.1
$11.4
Net Income1
$1.4
$6.8
Consolidated Adjusted EBITDA2
$1.9
$5.5
Distributable Cash Flow2
$1.4
$4.3
2023 FULL YEAR FINANCIAL GUIDANCE
(in billions)
2023 Previous
2023 Revised
Consolidated Adjusted EBITDA2
$8.2
-
$8.7
$8.3
-
$8.8
Distributable Cash Flow2
$5.7
-
$6.2
$5.8
-
$6.3
RECENT HIGHLIGHTS
- During the three and six months ended June 30, 2023, Cheniere
generated revenues of approximately $4.1 billion and $11.4 billion,
net income1 of approximately $1.4 billion and $6.8 billion,
Consolidated Adjusted EBITDA2 of approximately $1.9 billion and
$5.5 billion, and Distributable Cash Flow2 of approximately $1.4
billion and $4.3 billion, respectively.
- Raising full year 2023 Consolidated Adjusted EBITDA2 guidance
to $8.3 billion - $8.8 billion and full year 2023 Distributable
Cash Flow2 guidance to $5.8 billion - $6.3 billion.
- Pursuant to Cheniere’s comprehensive capital allocation plan,
during the three and six months ended June 30, 2023, Cheniere
prepaid approximately $201 million and $1.1 billion, respectively,
of consolidated long-term indebtedness, repurchased an aggregate of
approximately 2.3 million shares and 5.4 million shares of common
stock for approximately $337 million and $788 million,
respectively, and paid a quarterly dividend of $0.395 per share of
common stock attributable to the first quarter 2023 on May 17,
2023.
- During the three months ended June 30, 2023, Cheniere’s
subsidiaries signed new long-term contracts representing an
aggregate of up to approximately 76 million tonnes of liquefied
natural gas (“LNG”) with expected deliveries between 2026 and 2049:
- In June 2023, Cheniere Marketing, LLC (“Cheniere Marketing”)
entered into a long-term LNG sale and purchase agreement (“SPA”)
with ENN LNG (Singapore) Pte. Ltd. (“ENN”), under which ENN has
agreed to purchase approximately 1.8 million tonnes per annum
(“mtpa”) of LNG from Cheniere Marketing on a free-on-board (“FOB”)
basis, with early volumes beginning in 2026, ramping to 0.9 mtpa in
2027 and reaching the full 1.8 mtpa upon start of commercial
operations of the first train (“Train Seven”) of the SPL Expansion
Project (defined below), and extending for 20 years thereafter.
Delivery of 0.9 mtpa is subject to, among other things, a positive
Final Investment Decision (“FID”) with respect to Train Seven.
- In June 2023, Cheniere Marketing entered into a long-term LNG
SPA with Equinor ASA (“Equinor”), under which Equinor has agreed to
purchase approximately 1.75 mtpa of LNG from Cheniere Marketing on
a FOB basis, with delivery of half of the volumes commencing in
2027, and delivery of the remaining half commencing at the end of
this decade, with the total amount extending for 15 years
thereafter. Delivery of half of the volumes is subject to, among
other things, a positive FID with respect to Train Seven of the SPL
Expansion Project.
- In May 2023, Cheniere Marketing International LLP (“Cheniere
Marketing International”) entered into a long-term LNG SPA with
Korea Southern Power Co. Ltd (“KOSPO”), under which KOSPO has
agreed to purchase approximately 0.4 mtpa of LNG from Cheniere
Marketing International on a delivered ex-ship (“DES”) basis from
2027 through 2046, with a smaller annual quantity to be delivered
starting in 2024. Delivery of the volumes from 2028 through 2046 is
subject to, among other things, a positive FID with respect to
Train Seven of the SPL Expansion Project.
- In May 2023, certain subsidiaries of Cheniere Energy Partners,
L.P. (“Cheniere Partners”) (NYSE American: CQP) entered the
pre-filing review process with the FERC under the National
Environmental Policy Act (“NEPA”) for the SPL Expansion Project
(defined below), and in April 2023, executed a contract with
Bechtel Energy Inc. (“Bechtel”) to provide the Front End
Engineering and Design (“FEED”) for the SPL Expansion Project.
- In April 2023, certain subsidiaries of Cheniere filed an
application with the U.S. Department of Energy (“DOE”) with respect
to the CCL Midscale Trains 8 & 9 Project (defined below),
requesting authorization to export LNG to Free-Trade Agreement
(“FTA”) and non-FTA countries.
___________________________
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.
CEO COMMENT
“The outstanding financial, commercial and operational results
announced today are a product of our team’s commitment to safe,
efficient and strategic execution throughout the second quarter,”
said Jack Fusco, Cheniere’s President and Chief Executive Officer.
“In addition to the safe and successful completion of our planned
maintenance turnaround at Sabine Pass, our team achieved several
key milestones on construction and development across our growth
projects at both sites, as well as building significant commercial
momentum, all of which supports the continued growth of our
market-leading LNG platform and further evidences the long-term
role of our reliable, cleaner-burning LNG in the global energy
mix.”
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
% Change
2023
2022
% Change
Revenues
$
4,102
$
8,007
(49
)%
$
11,412
$
15,491
(26
)%
Net income (loss)1
$
1,369
$
741
85
%
$
6,803
$
(124
)
nm
Consolidated Adjusted EBITDA2
$
1,858
$
2,529
(27
)%
$
5,457
$
5,682
(4
)%
LNG exported:
Number of cargoes
149
156
(4
)%
316
316
—
%
Volumes (TBtu)
536
563
(5
)%
1,139
1,147
(1
)%
LNG volumes loaded (TBtu)
534
564
(5
)%
1,136
1,149
(1
)%
Net income (loss) was approximately $1.4 billion and $6.8
billion for the three and six months ended June 30, 2023,
respectively, as compared to approximately $741 million and $(124)
million in the corresponding 2022 periods. The favorable changes
were primarily due to changes in fair value of our derivative
portfolio (further described below) of approximately $782 million
and $5.5 billion for the three and six months ended June 30, 2023,
respectively, (before tax and non-controlling interests) as
compared to $(728) million and $(4.2) billion of changes in fair
value in the corresponding 2022 periods. The favorable changes were
partially offset by decreased total margins per MMBtu of LNG
delivered, higher provisions for income tax as well as higher net
income attributable to noncontrolling interests in both
periods.
Consolidated Adjusted EBITDA decreased approximately $671
million and $225 million for the three and six months ended June
30, 2023 as compared to the three and six months ended June 30,
2022, respectively. The decreases were due primarily to decreased
total margins per MMBtu of LNG delivered driven by a higher
proportion of volumes sold under long-term contracts, lower total
volumes sold into short-term markets, and lower international gas
prices in the current period. The decreases were partially offset
by an increased contribution from certain portfolio optimization
activities.
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 Integrated
Production Marketing (“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 continued
moderation of international gas price volatility and declines in
international forward commodity curves during the three and six
months ended June 30, 2023, we recognized $593 million and $4.6
billion, respectively, of non-cash favorable changes in fair value
attributable to such positions (before tax and non-controlling
interests).
Share-based compensation expenses included in net income (loss)
totaled $36 million and $86 million for the three and six months
ended June 30, 2023, respectively, compared to $36 million and $79
million for the three and six months ended June 30, 2022,
respectively.
Our financial results are reported on a consolidated basis. Our
ownership interest in Cheniere Partners as of June 30, 2023
consisted of 100% ownership of the general partner and a 48.6%
limited partner interest.
BALANCE SHEET MANAGEMENT
Capital Resources
As of June 30, 2023, our total consolidated available liquidity
was approximately $12.7 billion. We had cash and cash equivalents
of $4.5 billion, of which $1.8 billion was held by Cheniere
Partners. In addition, we had restricted cash and cash equivalents
of $640 million, $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”),
$1.0 billion of available commitments under the CQP Revolving
Credit Facility (defined below), and $671 million of available
commitments under the SPL Revolving Credit Facility (defined
below).
Recent Key Financial Transactions and Updates
In June 2023, Cheniere Partners issued $1.4 billion aggregate
principal amount of 5.95% Senior Notes due 2033 (the “2033 CQP
Senior Notes”), and used the proceeds, along with cash on hand, to
redeem a portion of SPL’s 5.75% Senior Secured Notes due 2024 (the
“2024 SPL Senior Notes”) in July 2023.
In June 2023, Cheniere Partners entered into a $1.0 billion
Senior Unsecured Revolving Credit and Guaranty Agreement (the “CQP
Revolving Credit Facility”), and Sabine Pass Liquefaction, LLC
(“SPL”) entered into a $1.0 billion Senior Secured Revolving Credit
and Guaranty Agreement (the “SPL Revolving Credit Facility”). The
CQP Revolving Credit Facility and SPL Revolving Credit Facility
each refinanced and replaced the respective existing credit
facilities to, among other things, extend the maturity date
thereunder, reduce the rate of interest and commitment fees
applicable thereunder and make certain other changes to the terms
and conditions.
During the three months ended June 30, 2023, Cheniere and its
subsidiaries repurchased approximately $201 million in aggregate
principal amount of the 2024 SPL Senior Notes and the CCH Senior
Secured Notes due 2039 in the open market with cash on hand.
LIQUEFACTION PROJECTS OVERVIEW
CCL Stage 3 Progress as of June 30, 2023:
CCL Stage 3 Project
Project Status
Under Construction
Project Completion Percentage
38.1%(1)
Expected Substantial Completion
2H 2025 - 1H 2027
(1) Engineering 63.5% complete,
procurement 56.3% complete, subcontract work 47.1% complete and
construction 4.9% complete.
SPL Project
Through Cheniere Partners, we operate 6 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 3 natural gas
liquefaction Trains with an expected total production capacity of
approximately 20 mtpa of LNG (the “SPL Expansion Project”). In May
2023, certain subsidiaries of Cheniere Partners entered the
pre-filing review process with respect to the SPL Expansion Project
with the FERC under the NEPA, and in April 2023, executed a
contract with Bechtel to provide the FEED for the SPL Expansion
Project.
CCL Project
We operate 3 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”).
CCL Stage 3 Project
We are constructing an expansion adjacent to the CCL Project
consisting of 7 midscale Trains with an expected total production
capacity of over 10 mtpa of LNG (the “CCL Stage 3 Project”).
CCL Midscale Trains 8 & 9
Project
We are developing 2 midscale Trains with an expected total
production capacity of approximately 3 mtpa of LNG (the “CCL
Midscale Trains 8 & 9 Project”) adjacent to the CCL Stage 3
Project. In March 2023, certain of our subsidiaries filed an
application with the FERC for authorization to site, construct and
operate the CCL Midscale Trains 8 & 9 Project under the Natural
Gas Act, and in April 2023, filed an application with the DOE
requesting authorization to export LNG to FTA and non-FTA
countries.
INVESTOR CONFERENCE CALL AND WEBCAST
We will host a conference call to discuss our financial and
operating results for the second quarter on Thursday, August 3,
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.
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 Quarterly Report on Form 10-Q for the
quarter ended June 30, 2023, 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 July 27, 2023, over 2,900 cumulative LNG cargoes totaling
approximately 200 million tonnes of LNG have been produced, loaded
and exported from our liquefaction projects.
During the three and six months ended June 30, 2023, we exported
536 TBtu and 1,139 TBtu, respectively, of LNG from our liquefaction
projects. 26 TBtu of LNG exported from our liquefaction projects
and sold on a delivered basis was in transit as of June 30, 2023,
none of which was related to commissioning activities.
The following table summarizes the volumes of operational 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 six months ended June 30, 2023:
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
(in TBtu)
Operational
Operational
Volumes loaded during the current
period
534
1,136
Volumes loaded during the prior period but
recognized during the current period
39
56
Less: volumes loaded during the current
period and in transit at the end of the period
(26
)
(26
)
Total volumes recognized in the current
period
547
1,166
In addition, during the three and six months ended June 30,
2023, we recognized 14 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)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Revenues
LNG revenues
$
3,919
$
7,873
$
11,010
$
15,213
Regasification revenues
33
68
67
136
Other revenues
150
66
335
142
Total revenues
4,102
8,007
11,412
15,491
Operating costs and expenses
(recoveries)
Cost (recovery) of sales (excluding items
shown separately below) (2)
912
5,752
(627
)
13,088
Operating and maintenance expense
487
419
931
808
Selling, general and administrative
expense
87
77
194
173
Depreciation and amortization expense
297
276
594
547
Other
11
6
21
11
Total operating costs and expenses
1,794
6,530
1,113
14,627
Income from operations
2,308
1,477
10,299
864
Other income (expense)
Interest expense, net of capitalized
interest
(291
)
(357
)
(588
)
(706
)
Gain (loss) on modification or
extinguishment of debt
(2
)
(28
)
18
(46
)
Interest rate derivative gain (loss),
net
—
(1
)
—
2
Interest income
55
7
89
8
Other income (expense), net
—
(4
)
3
—
Total other expense
(238
)
(383
)
(478
)
(742
)
Income before income taxes and
non-controlling interest
2,070
1,094
9,821
122
Less: income tax provision (benefit)
363
181
1,679
(10
)
Net income
1,707
913
8,142
132
Less: net income attributable to
non-controlling interest
338
172
1,339
256
Net income (loss) attributable to common
stockholders
$
1,369
$
741
$
6,803
$
(124
)
Net income (loss) per share attributable
to common stockholders—basic (3)
$
5.65
$
2.92
$
27.99
$
(0.49
)
Net income (loss) per share attributable
to common stockholders—diluted (3)
$
5.61
$
2.90
$
27.79
$
(0.49
)
Weighted average number of common shares
outstanding—basic
242.3
253.6
243.1
253.8
Weighted average number of common shares
outstanding—diluted
243.8
255.9
244.8
253.8
(1)
Please refer to the Cheniere Energy, Inc.
Quarterly Report on Form 10-Q for the quarter ended June 30, 2023,
filed with the Securities and Exchange Commission.
(2)
Cost of Sales includes approximately $0.8
billion and $5.5 billion of gains from changes in the fair value of
commodity derivatives prior to contractual delivery or termination
during the three and six months ended June 30, 2023, respectively,
as compared to $1.0 billion and $4.4 billion of losses in the
corresponding 2022 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)
June 30,
December 31,
2023
2022
ASSETS
(unaudited)
Current assets
Cash and cash equivalents
$
4,529
$
1,353
Restricted cash and cash equivalents
640
1,134
Trade and other receivables, net of
current expected credit losses
709
1,944
Inventory
404
826
Current derivative assets
93
120
Margin deposits
36
134
Other current assets
129
97
Total current assets
6,540
5,608
Property, plant and equipment, net of
accumulated depreciation
31,821
31,528
Operating lease assets
2,487
2,625
Derivative assets
282
35
Goodwill
77
77
Deferred tax assets
36
864
Other non-current assets, net
560
529
Total assets
$
41,803
$
41,266
LIABILITIES AND STOCKHOLDERS’
EQUITY (DEFICIT)
Current liabilities
Accounts payable
$
100
$
124
Accrued liabilities
1,037
2,679
Current debt, net of discount and debt
issuance costs
1,796
813
Deferred revenue
130
234
Current operating lease liabilities
598
616
Current derivative liabilities
1,215
2,301
Other current liabilities
37
28
Total current liabilities
4,913
6,795
Long-term debt, net of premium, discount
and debt issuance costs
23,380
24,055
Operating lease liabilities
1,863
1,971
Finance lease liabilities
483
494
Derivative liabilities
3,740
7,947
Deferred tax liabilities
731
—
Other non-current liabilities
201
175
Stockholders’ equity (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; 277.7 million shares and 276.7 million
shares issued at June 30, 2023 and December 31, 2022,
respectively
1
1
Treasury stock: 36.8 million shares and
31.2 million shares at June 30, 2023 and December 31, 2022,
respectively, at cost
(3,162
)
(2,342
)
Additional paid-in-capital
4,363
4,314
Accumulated income (deficit)
1,666
(4,942
)
Total Cheniere stockholders’ equity
(deficit)
2,868
(2,969
)
Non-controlling interest
3,624
2,798
Total stockholders’ equity (deficit)
6,492
(171
)
Total liabilities and stockholders’ equity
(deficit)
$
41,803
$
41,266
(1)
Please refer to the Cheniere Energy, Inc.
Quarterly Report on Form 10-Q for the quarter ended June 30, 2023,
filed with the Securities and Exchange Commission.
(2)
Amounts presented include balances held by
our consolidated variable interest entity, Cheniere Partners. As of
June 30, 2023, total assets and liabilities of Cheniere Partners,
which are included in our Consolidated Balance Sheets, were $19.3
billion and $20.5 billion, respectively, including $1.8 billion of
cash and cash equivalents and $0.2 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
six months ended June 30, 2023 and 2022 (in millions):
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net income (loss) attributable to common
stockholders
$
1,369
$
741
$
6,803
$
(124
)
Net income attributable to non-controlling
interest
338
172
1,339
256
Income tax provision (benefit)
363
181
1,679
(10
)
Interest expense, net of capitalized
interest
291
357
588
706
Loss (gain) on modification or
extinguishment of debt
2
28
(18
)
46
Interest rate derivative loss (gain),
net
—
1
—
(2
)
Interest income
(55
)
(7
)
(89
)
(8
)
Other expense (income), net
—
4
(3
)
—
Income from operations
$
2,308
$
1,477
$
10,299
$
864
Adjustments to reconcile loss from
operations to Consolidated Adjusted EBITDA:
Depreciation and amortization expense
297
276
594
547
Loss (gain) from changes in fair value of
commodity and FX derivatives, net (1)
(782
)
740
(5,513
)
4,198
Total non-cash compensation expense
33
33
75
70
Other
2
3
2
3
Consolidated Adjusted EBITDA
$
1,858
$
2,529
$
5,457
$
5,682
(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 six months
ended June 30, 2023 and forecast amounts for full year 2023 (in
billions):
Three Months Ended June
30,
Six Months Ended June
30,
Full Year
2023
2023
2023
Net income attributable to common
stockholders
$
1.37
$
6.80
$
7.7
-
$
8.1
Net income attributable to non-controlling
interest
$
0.34
$
1.34
1.8
-
1.9
Income tax provision
$
0.36
$
1.68
1.9
-
2.1
Interest expense, net of capitalized
interest
$
0.29
$
0.59
1.2
-
1.2
Depreciation and amortization expense
$
0.30
$
0.59
1.2
-
1.2
Other expense (income), financing costs,
and certain non-cash operating expenses
$
(0.80
)
$
(5.55
)
(5.5
)
-
(5.7
)
Consolidated Adjusted EBITDA
$
1.86
$
5.46
$
8.3
-
$
8.8
Interest expense (net of capitalized
interest and amortization) and realized interest rate
derivatives
$
(0.28
)
$
(0.56
)
(1.2
)
-
(1.2
)
Maintenance capital expenditures
$
(0.06
)
$
(0.10
)
(0.2
)
-
(0.2
)
Income tax
$
(0.01
)
$
(0.10
)
(0.1
)
-
(0.1
)
Other income (expense)
$
0.05
$
0.08
(0.1
)
-
0.0
Consolidated Distributable Cash
Flow
$
1.56
$
4.78
$
6.7
-
$
7.3
Cheniere Partners’ distributable cash flow
attributable to non-controlling interest
$
(0.21
)
$
(0.48
)
(0.9
)
-
(1.0
)
Cheniere Distributable Cash
Flow
$
1.35
$
4.29
$
5.8
-
$
6.3
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 Consolidated 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 considered for deployment by our Board of Directors
pursuant to our capital allocation plan, such as by way of common
stock dividends, stock repurchases, retirement of debt, or
expansion capital expenditures1. 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.
______________________________
1
Capital spending for our business consists
primarily of:
- Maintenance capital expenditures. These expenditures include
costs which qualify for capitalization that are required to sustain
property, plant and equipment reliability and safety and to address
environmental or other regulatory requirements rather than to
generate incremental distributable cash flow; and
- Expansion capital expenditures. These expenditures are
undertaken primarily to generate incremental distributable cash
flow and include investment in accretive organic growth,
acquisition or construction of additional complementary assets to
grow our business, along with expenditures to enhance the
productivity and efficiency of our existing facilities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802042354/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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