Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE
American: CQP) today announced its financial results for fourth
quarter and full year 2020.
HIGHLIGHTS
- Net income of $409 million for fourth quarter 2020 and $1.18
billion for full year 2020.
- Adjusted EBITDA1 of $772 million for fourth quarter 2020 and
$2.76 billion for full year 2020.
- Paid a distribution of $0.655 per common unit on February 12,
2021 to unitholders of record as of February 8, 2021.
- Paid total distributions of $2.59 per common unit for full year
2020, within the full year guidance range.
- Reconfirmed full year 2021 distribution guidance.
2021 FULL YEAR DISTRIBUTION
GUIDANCE
2021
Distribution per Unit
$
2.60
-
$
2.70
SUMMARY AND REVIEW OF FINANCIAL
RESULTS
(in millions, except LNG data)
Fourth Quarter
Full Year
2020
2019
% Change
2020
2019
% Change
Revenues
$
1,997
$
1,908
5 %
$
6,167
$
6,838
(10)%
Net income
$
409
$
448
(9)%
$
1,183
$
1,175
1 %
Adjusted EBITDA1
$
772
$
766
1 %
$
2,762
$
2,507
10 %
LNG exported:
Number of cargoes
89
95
(6)%
275
336
(18)%
Volumes (TBtu)
315
336
(6)%
971
1,192
(19)%
LNG volumes loaded (TBtu)
318
335
(5)%
974
1,190
(18)%
Net income decreased $39 million, or 9%, during fourth quarter
2020 as compared to fourth quarter 2019, primarily due to decreased
total margins2 which were driven primarily by increased non-cash
losses from changes in fair value of commodity derivatives,
partially offset by slightly increased LNG sold including both
physical and cancelled cargoes. LNG volumes recognized in income
and margins per MMBtu of LNG delivered to customers were comparable
for fourth quarter 2020 and fourth quarter 2019.
Net income during full year 2020 was flat as compared to full
year 2019 as a result of increased operating income offset by
increased loss on modification or extinguishment of debt, increased
interest expense, and decreased interest income earned on cash and
cash equivalents. Operating income increased primarily due to an
increase in total margins, partially offset by 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, and higher margins per MMBtu of LNG delivered to
customers, partially offset by increased non-cash losses from
changes in fair value of commodity derivatives. Margins per MMBtu
of LNG delivered to customers increased during full year 2020 as
compared to full year 2019, due to both a higher proportion of
volumes sold under higher-margin long-term contracts and an
increase in margins on excess production volumes sold to our
marketing affiliate.
Adjusted EBITDA2 during fourth quarter 2020 increased 1% as
compared to fourth quarter 2019, primarily due to the slight
increase in LNG revenues as described above.
Adjusted EBITDA increased $255 million, or 10%, 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, and higher margins per
MMBtu of LNG delivered to customers as described above.
During fourth quarter and full year 2020, we recognized $40 and
$553 million, respectively, in revenues associated with LNG cargoes
cancelled by customers. LNG revenues during fourth quarter 2020
excluded $21 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 received in
prior periods for the current periods, our total revenues would
have been $2.02 and $6.17 billion for fourth quarter and full year
2020, respectively.
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
$
1,997
$
6,167
Impact of cargo cancellations recognized
in the prior period for deliveries scheduled in the current
period
21
—
Total revenues excluding the timing impact
of cargo cancellations
$
2,018
$
6,167
During fourth quarter and full year 2020, 89 and 275 LNG
cargoes, respectively, were exported from the SPL Project and
recognized in income. Additionally, during fourth quarter 2020, we
recognized in income two cargoes totaling approximately 6 TBtu of
LNG which were procured by Sabine Pass Liquefaction, LLC (“SPL”)
from Cheniere Energy, Inc.’s Corpus Christi liquefaction facility
(the “CCL Project”). During full year 2020, we recognized in income
five cargoes totaling approximately 17 TBtu of LNG which were
procured by SPL from the CCL Project.
KEY FINANCIAL TRANSACTIONS
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.
SABINE PASS LIQUEFACTION PROJECT UPDATE
As of February 19, 2021, more than 1,175 cumulative LNG cargoes
totaling over 80 million tonnes of LNG have been produced, loaded,
and exported from the SPL Project.
Construction Progress as of December 31, 2020
SPL Project
Train 6
Project Status
Under Construction
Project Completion Percentage (1)
77.6% (1)
Expected Substantial Completion
2H 2022
(1) Engineering 99.0% complete, procurement 99.9% complete, and
construction 49.2% complete
SPL Project Overview
We own natural gas liquefaction facilities consisting of five
operational liquefaction Trains and one additional Train under
construction, with a total production capacity of approximately 30
million tonnes per annum (“mtpa”) of LNG at the Sabine Pass LNG
terminal (the “SPL Project”).
DISTRIBUTIONS TO UNITHOLDERS
We paid a cash distribution of $0.655 per common unit to
unitholders of record as of February 8, 2021 and the related
general partner distribution on February 12, 2021.
INVESTOR CONFERENCE CALL AND WEBCAST
Cheniere Energy, Inc. will host a conference call to discuss its
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. The call and accompanying slide
presentation may include financial and operating results or other
information regarding Cheniere Partners.
___________________________ 1 Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details. 2 Total
margins as used herein refers to total revenues less cost of
sales.
About Cheniere Partners
Cheniere Partners owns the Sabine Pass LNG terminal located in
Cameron Parish, Louisiana, which has natural gas liquefaction
facilities consisting of five operational liquefaction Trains and
one additional Train under construction, with a total production
capacity of approximately 30 mtpa of LNG. The Sabine Pass LNG
terminal also has operational regasification facilities that
include five LNG storage tanks, vaporizers, and two marine berths
with a third marine berth under construction. Cheniere Partners
also owns the Creole Trail Pipeline, which interconnects the Sabine
Pass LNG terminal with a number of large interstate pipelines.
For additional information, please refer to the Cheniere
Partners website at www.cheniere.com and 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 a non-GAAP
financial measure. Adjusted EBITDA is a non-GAAP financial measure
that is used to facilitate comparisons of operating performance
across periods. This non-GAAP measure should be viewed as a
supplement to and not a substitute for our U.S. GAAP measures of
performance and the financial results calculated in accordance with
U.S. GAAP, and the reconciliation from these results should be
carefully evaluated.
Forward-Looking Statements
This press release contains certain statements that may include
“forward-looking statements.” All statements, other than statements
of historical or present facts or conditions, included herein are
“forward-looking statements.” Included among “forward-looking
statements” are, among other things, (i) statements regarding
Cheniere Partners’ financial and operational guidance, business
strategy, plans and objectives, including the development,
construction and operation of liquefaction facilities, (ii)
statements regarding expectations regarding regulatory
authorizations and approvals, (iii) statements expressing beliefs
and expectations regarding the development of Cheniere Partners’
LNG terminal and liquefaction business, (iv) statements regarding
the business operations and prospects of third parties, (v)
statements regarding potential financing arrangements, (vi)
statements regarding future discussions and entry into contracts,
and (vii) statements regarding the COVID-19 pandemic and its impact
on our business and operating results. Although Cheniere Partners
believes that the expectations reflected in these forward-looking
statements are reasonable, they do involve assumptions, risks and
uncertainties, and these expectations may prove to be incorrect.
Cheniere Partners’ actual results could differ materially from
those anticipated in these forward-looking statements as a result
of a variety of factors, including those discussed in Cheniere
Partners’ periodic reports that are filed with and available from
the Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Other than as required under the
securities laws, Cheniere Partners does not assume a duty to update
these forward-looking statements.
(Financial Tables Follow)
Cheniere Energy Partners,
L.P.
Consolidated Statements of
Income
(in millions, except per unit
data)(1)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Revenues
LNG revenues
$
1,607
$
1,533
$
5,195
$
5,211
LNG revenues—affiliate
310
295
662
1,312
Regasification revenues
67
67
269
266
Other revenues
13
13
41
49
Total revenues
1,997
1,908
6,167
6,838
Operating costs and expenses
Cost of sales (excluding items shown
separately below)
954
873
2,505
3,374
Cost of sales—affiliate
39
1
77
7
Operating and maintenance expense
166
160
629
632
Operating and maintenance
expense—affiliate
37
38
152
138
Operating and maintenance expense—related
party
13
—
13
—
General and administrative expense
2
2
14
11
General and administrative
expense—affiliate
23
20
96
102
Depreciation and amortization expense
138
137
551
527
Impairment expense and loss on disposal of
assets
—
1
5
7
Total operating costs and expenses
1,372
1,232
4,042
4,798
Income from operations
625
676
2,125
2,040
Other income (expense)
Interest expense, net of capitalized
interest
(218
)
(237
)
(909
)
(885
)
Loss on modification or extinguishment of
debt
—
—
(43
)
(13
)
Other income, net
—
7
8
31
Other income—affiliate
2
2
2
2
Total other expense
(216
)
(228
)
(942
)
(865
)
Net income
$
409
$
448
$
1,183
$
1,175
Basic and diluted net income per common
unit
$
0.77
$
0.87
$
2.32
$
2.25
Weighted average number of common units
outstanding used for basic and diluted net income per common unit
calculation
484.0
348.6
399.3
348.6
______________________
(1)
Please refer to the Cheniere Energy
Partners, L.P. Annual Report on Form 10-K for the year ended
December 31, 2020, filed with the Securities and Exchange
Commission.
Cheniere Energy Partners,
L.P.
Consolidated Balance
Sheets
(in millions, except unit
data) (1)
December 31,
2020
2019
ASSETS
Current assets
Cash and cash equivalents
$
1,210
$
1,781
Restricted cash
97
181
Accounts and other receivables, net
318
297
Accounts receivable—affiliate
184
105
Advances to affiliate
144
158
Inventory
107
116
Derivative assets
14
17
Other current assets
61
51
Other current assets—affiliate
—
1
Total current assets
2,135
2,707
Property, plant and equipment, net
16,723
16,368
Operating lease assets, net
99
94
Debt issuance costs, net
17
15
Non-current derivative assets
11
32
Other non-current assets, net
160
168
Total assets
$
19,145
$
19,384
LIABILITIES AND PARTNERS’
EQUITY
Current liabilities
Accounts payable
$
12
$
40
Accrued liabilities
658
709
Accrued liabilities—related party
4
—
Due to affiliates
53
46
Deferred revenue
137
155
Deferred revenue—affiliate
1
1
Current operating lease liabilities
7
6
Derivative liabilities
11
9
Total current liabilities
883
966
Long-term debt, net
17,580
17,579
Non-current operating lease
liabilities
90
87
Non-current derivative liabilities
35
16
Other non-current liabilities
1
1
Other non-current
liabilities—affiliate
17
20
Partners’ equity
Common unitholders’ interest (484.0
million and 348.6 million units issued and outstanding at December
31, 2020 and 2019, respectively)
714
1,792
Subordinated unitholders’ interest (zero
and 135.4 million units issued and outstanding at December 31, 2020
and 2019, respectively)
—
(996
)
General partner’s interest (2% interest
with 9.9 million units issued and outstanding at December 31, 2020
and 2019)
(175
)
(81
)
Total partners’ equity
539
715
Total liabilities and partners’ equity
$
19,145
$
19,384
______________________
(1)
Please refer to the Cheniere Energy
Partners, L.P. Annual Report on Form 10-K for the year ended
December 31, 2020, filed with the Securities and Exchange
Commission.
Reconciliation of Non-GAAP Measures
Regulation G Reconciliations
Adjusted EBITDA
The following table reconciles our Adjusted EBITDA to U.S. GAAP
results for fourth quarter and full year 2020 and 2019 (in
millions):
Fourth Quarter
Full Year
2020
2019
2020
2019
Net income
$
409
$
448
$
1,183
$
1,175
Interest expense, net of capitalized
interest
218
237
909
885
Loss on modification or extinguishment of
debt
—
—
43
13
Other income, net
—
(7
)
(8
)
(31
)
Other income—affiliate
(2
)
(2
)
(2
)
(2
)
Income from operations
$
625
$
676
$
2,125
$
2,040
Adjustments to reconcile income from
operations to Adjusted EBITDA:
Depreciation and amortization expense
138
137
551
527
Loss (gain) from changes in fair value of
commodity derivatives, net
9
(48
)
45
(67
)
Impairment expense and loss on disposal of
assets
—
1
5
7
Incremental costs associated with COVID-19
response
—
—
36
—
Adjusted EBITDA
$
772
$
766
$
2,762
$
2,507
Adjusted EBITDA is calculated by taking net income before
interest expense, net of capitalized interest, changes in the fair
value and settlement of our interest rate derivatives, taxes,
depreciation and amortization, and adjusting for the effects of
certain non-cash items, other non-operating income or expense items
and other items not otherwise predictive or indicative of ongoing
operating performance, including the effects of modification or
extinguishment of debt, changes in the fair value of our commodity
derivatives, impairment expense and loss on disposal of assets, and
non-recurring costs related to our response to the COVID-19
outbreak which are incremental to and separable from normal
operations. Adjusted EBITDA is not intended to represent cash flows
from operations or net income as defined by U.S. GAAP and is not
necessarily comparable to similarly titled measures reported by
other companies.
We believe Adjusted EBITDA provides relevant and useful
information to management, investors and other users of our
financial information in evaluating the effectiveness of our
operating performance in a manner that is consistent with
management’s evaluation of business performance. Management
believes Adjusted EBITDA is widely used by investors to measure a
company’s operating performance without regard to items such as
interest expense, taxes, depreciation and amortization which vary
substantially from company to company depending on capital
structure, the method by which assets were acquired and
depreciation policies. Further, the exclusion of certain non-cash
items, other non-operating income or expense items and other items
not otherwise predictive or indicative of ongoing operating
performance enables comparability to prior period performance and
trend analysis.
We have not made any forecast of net income on a run rate basis,
which would be the most directly comparable financial measure under
GAAP, in part because net income includes the impact of derivative
transactions, which cannot be determined at this time, and we are
unable to reconcile differences between run rate Distributable Cash
Flow and income.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210224005130/en/
Cheniere Partners 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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