HOUSTON, Feb. 28, 2017
/PRNewswire/ -- Cheniere Energy Partners, L.P. ("Cheniere
Partners") (NYSE MKT: CQP) reported net income of $85.3 million and a net loss of $171.2 million for the three and twelve months
ended December 31, 2016,
respectively, compared to a net loss of $56.0 million and $318.9
million for the same periods in 2015, respectively.
Adjusted EBITDA1 for the three and twelve months ended
December 31, 2016 was $202.0 million and $365.5
million, respectively, compared to $(0.1) million and $37.8
million for the comparable 2015 periods, respectively.
During the three months ended December
31, 2016, a total of 24 LNG cargoes were loaded from the
Sabine Pass Liquefaction Project (defined below), none of which
were commissioning cargoes.
Total operating costs and expenses increased $265.2 million and $582.8
million during the three and twelve months ended
December 31, 2016 compared to the
three and twelve months ended December 31,
2015, respectively, generally as a result of the
commencement of operations of Train 1 and Train 2 of the Sabine
Pass Liquefaction Project in May and September 2016, respectively. Depreciation and
amortization expense increased during the three and twelve months
ended December 31, 2016 as we began
depreciation of our assets related to Train 1 and Train 2 of the
Sabine Pass Liquefaction Project upon reaching substantial
completion. General and administrative expense-affiliate decreased
during the three and twelve months ended December 31, 2016 compared to the comparable 2015
periods, partially due to a decrease in the amount payable under
our service agreements with affiliates and partially due to a
reallocation of resources from general and administrative
activities to operating and maintenance activities following
commencement of operations at the Sabine Pass Liquefaction
Project.
For the three and twelve months ended December 31, 2016, Adjusted EBITDA excludes the
impact of loss on early extinguishment of debt associated with the
write-off of debt issuance costs by Sabine Pass Liquefaction, LLC
("SPL") in connection with the refinancing of a portion of its
credit facilities, by Sabine Pass LNG, L.P. ("SPLNG") as a result
of the redemption of its senior notes, and by Cheniere Creole Trail
Pipeline, L.P. as a result of the prepayment of its outstanding
term loan, derivative loss (gain) primarily as a result of changes
in the forward LIBOR curve over the period as well as an increase
in the notional amount of interest rate swaps related to our new
credit facilities entered into in February
2016, and changes in the fair value of commodity
derivatives. For the three and twelve months ended December 31, 2015, Adjusted EBITDA excludes the
impact of losses on early extinguishment of debt related primarily
to the write-off of debt issuance costs by SPL in connection with
the refinancing of a portion of its credit facilities, derivative
loss due primarily to the termination of certain interest rate
derivatives, and changes in the fair value of commodity
derivatives.
Fourth Quarter 2016 Highlights
- In November 2016, the date of
first commercial delivery was reached under the fixed price,
20-year LNG Sale and Purchase Agreement with BG Gulf Coast LNG, LLC
relating to the first train of the Sabine Pass Liquefaction
Project.
- In November 2016, SPLNG redeemed
all of its outstanding $420 million
in aggregate principal amount of 6.50% Senior Secured Notes due
2020 (the "2020 Notes") and repaid all of its outstanding
$1,665.5 million in aggregate
principal amount of 7.50% Senior Secured Notes due 2016 (the "2016
Notes"). Subsequent to the redemption of the 2020 Notes and the
repayment of the 2016 Notes, the Cheniere Partners complex has no
long-term debt maturity until 2020.
- In December 2016, Moody's
Investors Service upgraded SPL's senior secured rating to Ba1 from
Ba2. Subsequent to the end of the quarter, in January 2017 Fitch Ratings assigned a BBB-
(Investment Grade) rating to senior secured debt issued by
SPL.
Sabine Pass Liquefaction Project Update
Through
Cheniere Partners, we are developing up to six Trains at the Sabine
Pass LNG terminal adjacent to the existing regasification
facilities (the "Sabine Pass Liquefaction Project"). Each train is
expected to have a nominal production capacity, which is prior to
adjusting for planned maintenance, production reliability, and
potential overdesign, of approximately 4.5 million tonnes per annum
("mtpa") of LNG.
The Trains are in various stages of operation, construction, and
development.
- Construction on Trains 1 and 2 began in August 2012 and substantial completion was
achieved in May 2016 and September 2016, respectively. Substantial
completion is achieved upon the completion of construction,
commissioning and the satisfaction of certain performance
tests.
- Construction on Trains 3 and 4 began in May 2013, and as of December 31, 2016, the
overall project completion percentage for Trains 3 and 4 was
approximately 95.5%, which is ahead of the contractual schedule. In
September 2016, commissioning
activities commenced on Train 3. Based on the current
construction schedule, we expect to reach substantial completion
for Train 3 in the first quarter of 2017 and Train 4 in the second
half of 2017.
- Construction on Train 5 began in June
2015, and as of December 31, 2016, the overall project
completion percentage for Train 5 was approximately 52.4%, which is
ahead of the contractual schedule. Engineering, procurement,
subcontract work and construction were approximately 96.6%, 76.6%,
43.7% and 11.3% complete, respectively. Based on the current
construction schedule, we expect Train 5 to reach substantial
completion in the second half of 2019.
- Train 6 is currently under development, with all necessary
regulatory approvals in place. We expect to make a final investment
decision and commence construction on Train 6 upon, among other
things, entering into an engineering, procurement, and construction
contract, entering into acceptable commercial arrangements, and
obtaining adequate financing.
|
Sabine Pass
Liquefaction Project
|
Liquefaction
Train
|
Train
1
|
Train
2
|
Trains
3-4
|
Train
5
|
Project
Status
|
Operational
|
Operational
|
96% Overall
Completion
|
52% Overall
Completion
|
Expected Substantial
Completion
|
-
|
-
|
T3 - 1Q
2017 T4 - 2H 2017
|
2019
|
|
|
|
|
|
Distributions to Unitholders
We paid a cash
distribution per common unit of $0.425 to unitholders of record as of
February 2, 2017, and the related general partner distribution
on February 13, 2017.
We estimate that the annualized distribution to common
unitholders for fiscal year 2016 will be $1.70 per unit.
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 on Tuesday,
February 28, 2017, 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.
About Cheniere Partners
Through its wholly owned
subsidiary, Sabine Pass LNG, L.P., Cheniere Partners owns 100% of
the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, on the
Sabine-Neches Waterway less than four miles from the Gulf Coast.
The Sabine Pass LNG terminal includes existing infrastructure of
five LNG storage tanks with capacity of approximately 16.9 billion
cubic feet equivalent (Bcfe), two marine berths that can
accommodate vessels with nominal capacity of up to 266,000 cubic
meters and vaporizers with regasification capacity of approximately
4.0 Bcf/d. Through its wholly owned subsidiary, Cheniere
Creole Trail Pipeline, L.P., Cheniere Partners also owns a 94-mile
pipeline that interconnects the Sabine Pass LNG terminal with a
number of large interstate pipelines.
Cheniere Partners, through its subsidiary, SPL, is developing
and constructing natural gas liquefaction facilities at the Sabine
Pass LNG terminal adjacent to the existing regasification
facilities. Cheniere Partners, through SPL, plans to construct over
time up to six liquefaction trains, which are in various stages of
development and construction. Trains 1 and 2 have commenced
commercial operations, Train 3 is undergoing commissioning, Trains
4 and 5 are under construction and Train 6 is fully
permitted. Each liquefaction train is expected to have a
nominal production capacity, which is prior to adjusting for
planned maintenance, production reliability, and potential
overdesign, of approximately 4.5 mtpa of LNG. SPL has entered into
six third-party LNG sale and purchase agreements ("SPAs") that in
the aggregate equate to approximately 19.75 mtpa of LNG and
commence with the date of first commercial delivery of Trains 1
through 5 as specified in the respective SPAs.
For additional information, please refer to the Cheniere
Partners website at www.cheniere.com and Annual Report on Form 10-K
for the fiscal year ended December 31, 2016, filed with the
Securities and Exchange Commission.
Forward-Looking Statements
This press release contains
certain statements that may include "forward-looking statements."
All statements, other than statements of historical fact, included
herein are "forward-looking statements." Included among
"forward-looking statements" are, among other things, (i)
statements regarding Cheniere Partners' 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, and (vi) statements regarding future
discussions and entry into contracts. 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 Table Follows)
Cheniere Energy
Partners, L.P.
|
Consolidated
Statements of Operations
|
(in thousands,
except per unit data)
|
|
|
(Unaudited)
|
|
|
|
Three Months
Ended December
31,
|
|
Year
Ended December 31,
(1)
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
LNG
revenues
|
$
|
205,913
|
|
|
$
|
—
|
|
|
$
|
539,468
|
|
|
$
|
—
|
|
LNG
revenues—affiliate
|
277,721
|
|
|
—
|
|
|
293,957
|
|
|
—
|
|
Regasification
revenues
|
66,262
|
|
|
65,833
|
|
|
263,030
|
|
|
265,637
|
|
Regasification
revenues—affiliate
|
717
|
|
|
1,439
|
|
|
3,785
|
|
|
4,391
|
|
Total
revenues
|
550,613
|
|
|
67,272
|
|
|
1,100,240
|
|
|
270,028
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Cost (cost recovery)
of sales (excluding depreciation and amortization expense shown
separately below)
|
198,572
|
|
|
(476)
|
|
|
410,433
|
|
|
(31,466)
|
|
Cost of
sales—affiliate
|
60
|
|
|
—
|
|
|
1,490
|
|
|
—
|
|
Operating and
maintenance expense
|
47,322
|
|
|
13,576
|
|
|
126,878
|
|
|
62,406
|
|
Operating and
maintenance expense—affiliate
|
16,236
|
|
|
9,024
|
|
|
52,137
|
|
|
29,379
|
|
Development expense
(recovery)
|
(11)
|
|
|
219
|
|
|
126
|
|
|
2,850
|
|
Development
expense—affiliate
|
27
|
|
|
160
|
|
|
396
|
|
|
722
|
|
General and
administrative expense
|
3,822
|
|
|
3,810
|
|
|
13,200
|
|
|
15,079
|
|
General and
administrative expense—affiliate
|
21,658
|
|
|
41,551
|
|
|
89,523
|
|
|
122,312
|
|
Depreciation and
amortization expense
|
63,520
|
|
|
18,147
|
|
|
155,621
|
|
|
65,704
|
|
Total operating costs
and expenses
|
351,206
|
|
|
86,011
|
|
|
849,804
|
|
|
266,986
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
199,407
|
|
|
(18,739)
|
|
|
250,436
|
|
|
3,042
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized interest
|
(128,222)
|
|
|
(42,247)
|
|
|
(356,900)
|
|
|
(184,600)
|
|
Loss on early
extinguishment of debt
|
(18,298)
|
|
|
—
|
|
|
(71,824)
|
|
|
(96,273)
|
|
Derivative gain
(loss), net
|
31,961
|
|
|
4,819
|
|
|
5,544
|
|
|
(41,722)
|
|
Other
income
|
497
|
|
|
127
|
|
|
1,549
|
|
|
662
|
|
Total other
expense
|
(114,062)
|
|
|
(37,301)
|
|
|
(421,631)
|
|
|
(321,933)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
85,345
|
|
|
$
|
(56,040)
|
|
|
$
|
(171,195)
|
|
|
$
|
(318,891)
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per common unit
|
$
|
0.07
|
|
|
$
|
0.01
|
|
|
$
|
(0.20)
|
|
|
$
|
(0.43)
|
|
Diluted net income
(loss) per common unit
|
$
|
0.07
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.20)
|
|
|
$
|
(0.43)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common units outstanding used for basic and diluted net
income (loss) per common unit calculation
|
57,089
|
|
|
57,083
|
|
|
57,086
|
|
|
57,081
|
|
|
|
|
|
|
|
|
(1)
|
Please refer to the
Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the
fiscal year ended December 31, 2016, filed with the Securities
and Exchange Commission.
|
Cheniere Energy
Partners, L.P.
|
Consolidated
Balance Sheets
|
(in thousands,
except per unit data) (1)
|
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
—
|
|
|
$
|
146,221
|
|
Restricted
cash
|
604,944
|
|
|
274,557
|
|
Accounts and other
receivables
|
90,196
|
|
|
741
|
|
Accounts
receivable—affiliate
|
99,336
|
|
|
1,271
|
|
Advances to
affiliate
|
37,697
|
|
|
39,836
|
|
Inventory
|
97,431
|
|
|
16,667
|
|
Other current
assets
|
28,656
|
|
|
14,182
|
|
Total current
assets
|
958,260
|
|
|
493,475
|
|
|
|
|
|
Non-current
restricted cash
|
—
|
|
|
13,650
|
|
Property, plant and
equipment, net
|
14,158,187
|
|
|
11,931,602
|
|
Debt issuance costs,
net
|
120,704
|
|
|
132,091
|
|
Non-current
derivative assets
|
82,861
|
|
|
30,304
|
|
Other non-current
assets, net
|
222,328
|
|
|
232,031
|
|
Total
assets
|
$
|
15,542,340
|
|
|
$
|
12,833,153
|
|
|
|
|
|
LIABILITIES AND
PARTNERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
27,162
|
|
|
$
|
16,407
|
|
Accrued
liabilities
|
417,502
|
|
|
224,292
|
|
Current debt,
net
|
223,500
|
|
|
1,673,379
|
|
Due to
affiliates
|
99,529
|
|
|
115,123
|
|
Deferred
revenue
|
72,631
|
|
|
26,669
|
|
Deferred
revenue—affiliate
|
717
|
|
|
717
|
|
Derivative
liabilities
|
14,446
|
|
|
6,430
|
|
Other current
liabilities
|
224
|
|
|
—
|
|
Total current
liabilities
|
855,711
|
|
|
2,063,017
|
|
|
|
|
|
Long-term debt,
net
|
14,209,229
|
|
|
10,018,325
|
|
Non-current deferred
revenue
|
5,500
|
|
|
9,500
|
|
Non-current
derivative liabilities
|
2,001
|
|
|
2,884
|
|
Other non-current
liabilities
|
165
|
|
|
175
|
|
Other non-current
liabilities—affiliate
|
26,680
|
|
|
26,321
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Partners'
equity
|
|
|
|
Common unitholders'
interest (57.1 million units issued and outstanding at December 31,
2016 and 2015)
|
129,712
|
|
|
305,747
|
|
Class B unitholders'
interest (145.3 million units issued and outstanding at December
31, 2016 and 2015)
|
62,256
|
|
|
(37,429)
|
|
Subordinated
unitholders' interest (135.4 million units issued and outstanding
at December 31, 2016 and 2015)
|
239,909
|
|
|
428,035
|
|
General partner's
interest (2% interest with 6.9 million units issued and outstanding
at December 31, 2016 and 2015)
|
11,177
|
|
|
16,578
|
|
Total partners'
equity
|
443,054
|
|
|
712,931
|
|
Total liabilities and
partners' equity
|
$
|
15,542,340
|
|
|
$
|
12,833,153
|
|
|
|
|
|
|
|
(1)
|
Please refer to the
Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the
fiscal year ended December 31, 2016, filed with the Securities
and Exchange Commission.
|
Reconciliation of Non-GAAP Measures
Regulation G Reconciliation
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.
Adjusted EBITDA is calculated by taking net income (loss) 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 and other income. Adjusted EBITDA is not intended to
represent cash flows from operations or net loss 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.
Adjusted EBITDA
The following table reconciles our Adjusted EBITDA to U.S. GAAP
results for the three and twelve months ended December 31, 2016 and 2015 (in thousands):
|
Three Months
Ended December
31,
|
|
Year
Ended December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income
(loss)
|
$ 85,345
|
|
|
$ (56,040)
|
|
|
$
(171,195)
|
|
|
$
(318,891)
|
|
Interest expense, net
of capitalized interest
|
128,222
|
|
|
42,247
|
|
|
356,900
|
|
|
184,600
|
|
Loss on early
extinguishment of debt
|
18,298
|
|
|
—
|
|
|
71,824
|
|
|
96,273
|
|
Derivative loss
(gain), net
|
(31,961)
|
|
|
(4,819)
|
|
|
(5,544)
|
|
|
41,722
|
|
Other
income
|
(497)
|
|
|
(127)
|
|
|
(1,549)
|
|
|
(662)
|
|
Income (loss) from
operations
|
199,407
|
|
|
(18,739)
|
|
|
250,436
|
|
|
3,042
|
|
Adjustments to
reconcile income (loss) from operations to Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
63,520
|
|
|
18,147
|
|
|
155,621
|
|
|
65,704
|
|
Loss (gain) from
changes in fair value of commodity derivatives, net
|
(60,965)
|
|
|
510
|
|
|
(40,559)
|
|
|
(30,948)
|
|
Adjusted
EBITDA
|
$ 201,962
|
|
|
$ (82)
|
|
|
$ 365,498
|
|
|
$ 37,798
|
|
|
|
|
|
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1 Non-GAAP financial measure. See
"Reconciliation of Non-GAAP Measures" for further details.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cheniere-energy-partners-lp-reports-fourth-quarter-and-full-year-2016-results-300414262.html
SOURCE Cheniere Energy Partners, L.P.