Cheniere Energy Partners, L.P. (NYSE American:
CQP):
Summary of Fourth Quarter and Full Year
2018 Results (in millions, except LNG data)
Three Months Ended Year Ended December
31, December 31, 2018 2017 2018
2017 Revenues $ 1,897 $ 1,518 $ 6,426 $ 4,304 Net income $
351 $ 374 $ 1,274 $ 490 Adjusted EBITDA1 $ 692 $ 612 $ 2,517 $
1,512 LNG exported: Number of cargoes 78 70 271 205 Volumes (TBtu)
278 252 969 734 LNG volumes loaded (TBtu) 277 252 968 735
Summary Full Year 2019 Distribution
Guidance
2019 Distribution per Unit $ 2.35 - $
2.55
Recent Highlights
Strategic
- In December 2018, Sabine Pass
Liquefaction, LLC (“SPL”) entered into a 20-year LNG Sale and
Purchase Agreement with PETRONAS LNG Ltd. for the sale of
approximately 1.1 million tonnes per annum (“mtpa”) of LNG,
commencing on the date of first commercial delivery for Train 6 of
the SPL Project (defined below).
- In November 2018, SPL entered into an
Engineering, Procurement, and Construction contract with Bechtel
Oil, Gas and Chemicals, Inc. (“Bechtel”) for Train 6 of the SPL
Project. SPL has also issued limited notices to proceed (“LNTP”) to
Bechtel to commence early engineering, procurement, and site
works.
Operational
- As of February 20, 2019, over 570
cumulative LNG cargoes have been produced, loaded, and exported
from the SPL Project, including more than 270 cargoes in 2018. LNG
from the SPL Project has been delivered to 31 countries and regions
worldwide.
- In November 2018, the first LNG
commissioning cargo was exported from Train 5 of the SPL
Project.
Financial
- We declared and paid distributions of
$2.28 per unit to common unitholders for full year 2018, within the
guidance range for the period.
Liquefaction Project Update
SPL Project Liquefaction Train Train
5 Train 6 Project Status Commissioning
LNTP Issued Project Completion Percentage(1) 99.7% — Expected
Substantial Completion 1Q 2019 — Note: Project update
excludes Trains in operation (1) Project completion percentage as
of December 31, 2018
Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE
American: CQP) reported net income of $351 million and $1.3 billion
for the three and twelve months ended December 31, 2018,
respectively, compared to net income of $374 million and $490
million for the comparable 2017 periods. The increase in net income
during the twelve months ended December 31, 2018 was primarily due
to increased income from operations as a result of additional
natural gas liquefaction trains (“Trains”) in operation at the SPL
Project and decreased loss on modification or extinguishment of
debt, partially offset by increased interest expense, net of
amounts capitalized.
Adjusted EBITDA1 for the three and twelve months ended December
31, 2018 was $692 million and $2.5 billion, respectively, compared
to $612 million and $1.5 billion for the comparable 2017 periods.
The increase in Adjusted EBITDA was primarily due to increased
income from operations.
Total revenues increased $379 million during the three months
ended December 31, 2018 as compared to the three months ended
December 31, 2017, due to an increase in the sales price of LNG as
well as increased LNG volumes recognized due to increased
production at the SPL Project. Total operating costs and expenses
increased $395 million during the three months ended December 31,
2018, as compared to the three months ended December 31, 2017, due
to increases in the cost of LNG sold and volumes recognized, and an
increase in unrealized derivative losses related to liquefaction
supply.
Total revenues increased $2.1 billion, and total operating costs
and expenses increased $1.3 billion during the twelve months ended
December 31, 2018 as compared to the comparable 2017 period. The
increases in revenues and total operating costs and expenses for
the twelve months ended December 31, 2018 were primarily driven by
the timing of completion of Trains at the SPL Project and the
length of each Train’s operations within the periods being
compared.
During the three and twelve months ended December 31, 2018, 78
and 271 LNG cargoes, respectively, were exported from the SPL
Project, four of which were commissioning cargoes.
SPL Project
We are developing six Trains at the Sabine Pass LNG terminal
adjacent to the existing regasification facilities (the “SPL
Project”). Each Train is expected to have a nominal production
capacity, which is prior to adjusting for planned maintenance,
production reliability, potential overdesign, and debottlenecking
opportunities, of approximately 4.5 mtpa of LNG and a run rate
adjusted nominal production capacity of approximately 4.5 to 4.9
mtpa of LNG. Trains 1 through 4 are operational, Train 5 is
undergoing commissioning, and Train 6 is being commercialized and
has all necessary regulatory approvals in place.
Distributions to
Unitholders
We paid a cash distribution per common and subordinated unit of
$0.59 to unitholders of record as of February 6, 2019 and the
related general partner distribution on February 14, 2019.
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 2018 on Tuesday, February 26, 2019, at 10 a.m. Eastern
time / 9 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.
About Cheniere Partners
Cheniere Partners, through its subsidiary, Sabine Pass
Liquefaction, LLC (“SPL”), is developing, constructing, and
operating natural gas liquefaction facilities at the Sabine Pass
LNG terminal located in Cameron Parish, Louisiana, on the
Sabine-Neches Waterway less than four miles from the Gulf Coast.
Cheniere Partners, through SPL, plans to construct six Trains,
which are in various stages of development, construction, and
operations. Trains 1 through 4 are operational, Train 5 is
undergoing commissioning, and Train 6 is being commercialized and
has all necessary regulatory approvals in place. Each Train is
expected to have a nominal production capacity, which is prior to
adjusting for planned maintenance, production reliability,
potential overdesign, and debottlenecking opportunities, of
approximately 4.5 mtpa of LNG and a run rate adjusted nominal
production capacity of approximately 4.5 to 4.9 mtpa of LNG.
Through its wholly owned subsidiary, Sabine Pass LNG, L.P.,
Cheniere Partners owns and operates regasification facilities at
the Sabine Pass LNG terminal, which includes pre-existing
infrastructure of five LNG storage tanks with aggregate capacity of
approximately 16.9 billion cubic feet equivalent, two marine berths
that can each accommodate vessels with nominal capacity of up to
266,000 cubic meters and vaporizers with regasification capacity of
approximately 4.0 Bcf/d. Cheniere Partners also owns a 94-mile
pipeline that interconnects the Sabine Pass LNG terminal with a
number of large interstate pipelines through its wholly owned
subsidiary, Cheniere Creole Trail Pipeline, L.P.
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, 2018, 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 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, 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.
Cheniere Energy Partners, L.P.
Consolidated Statements of Operations (in millions,
except per unit data) (Unaudited) Three Months
Ended Year Ended December 31, December
31, (1) 2018 2017 2018
2017 Revenues LNG revenues $ 1,408 $ 917 $ 4,827 $ 2,635 LNG
revenues—affiliate 413 525 1,299 1,389 Regasification revenues 65
65 261 260 Other revenues 11 13 39 20 Other revenues—affiliate —
(2 ) — — Total revenues 1,897 1,518 6,426
4,304 Operating costs and expenses Cost of sales (excluding
depreciation and amortization expense shown separately below) 1,112
740 3,403 2,320 Operating and maintenance expense 103 87 409 292
Operating and maintenance expense—affiliate 30 30 117 100
Development expense — 1 2 3 General and administrative expense 2 2
11 12 General and administrative expense—affiliate 20 17 73 80
Depreciation and amortization expense 106 100 424 339 Impairment
expense and loss on disposal of assets — — 8 — Other — 1
— 2 Total operating costs and expenses 1,373
978 4,447 3,148 Income from
operations 524 540 1,979 1,156 Other income (expense)
Interest expense, net of capitalized interest (181 ) (177 ) (733 )
(614 ) Loss on modification or extinguishment of debt — — (12 ) (67
) Derivative gain, net 1 6 14 4 Other income 7 5 26
11 Total other expense (173 ) (166 ) (705 ) (666 )
Net income $ 351 $ 374 $ 1,274 $ 490
Basic and diluted net income (loss) per common unit $
0.69 $ 0.76 $ 2.51 $ (1.32 ) Weighted
average number of common units outstanding used for basic and
diluted net income (loss) per common unit calculation 348.6 348.6
348.6 178.5 (1) Please refer to the Cheniere Energy Partners, L.P.
Annual Report on Form 10-K for the fiscal year ended December 31,
2018, filed with the Securities and Exchange Commission.
Cheniere Energy Partners, L.P. Consolidated
Balance Sheets
(in millions, except unit data)
(1)
December 31, 2018 2017 ASSETS
Current assets Cash and cash equivalents $ — $ — Restricted cash
1,541 1,589 Accounts and other receivables 348 191 Accounts
receivable—affiliate 114 163 Advances to affiliate 228 36 Inventory
99 95 Other current assets 26 65 Total current assets
2,356 2,139 Property, plant and equipment, net 15,390 15,139
Debt issuance costs, net 13 38 Non-current derivative assets 31 31
Other non-current assets, net 184 206 Total assets $
17,974 $ 17,553 LIABILITIES AND PARTNERS’
EQUITY Current liabilities Accounts payable $ 15 $ 12 Accrued
liabilities 821 637 Due to affiliates 49 68 Deferred revenue 116
111 Deferred revenue—affiliate 1 1 Derivative liabilities 66
— Total current liabilities 1,068 829 Long-term debt,
net 16,066 16,046 Non-current derivative liabilities 14 3 Other
non-current liabilities 4 11 Other non-current
liabilities—affiliate 22 25 Commitments and contingencies
Partners’ equity Common unitholders’ interest (348.6 million
units issued and outstanding at December 31, 2018 and 2017) 1,806
1,670 Subordinated unitholders’ interest (135.4 million units
issued and outstanding at December 31, 2018 and 2017) (990 ) (1,043
) General partner’s interest (2% interest with 9.9 million units
issued and outstanding at December 31, 2018 and 2017) (16 ) 12
Total partners’ equity 800 639 Total
liabilities and partners’ equity $ 17,974 $ 17,553
(1) Please refer to the Cheniere Energy Partners, L.P. Annual
Report on Form 10-K for the fiscal year ended December 31, 2018,
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 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 and changes in the fair value of our
commodity derivatives. 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.
Adjusted EBITDA
The following table reconciles our Adjusted EBITDA to U.S. GAAP
results for the three and twelve months ended December 31, 2018 and
2017 (in millions):
Three Months Ended Year Ended
December 31, December 31, 2018
2017 2018 2017 Net income $ 351 $ 374 $
1,274 $ 490 Interest expense, net of capitalized interest 181 177
733 614 Loss on modification or extinguishment of debt — — 12 67
Derivative gain, net (1 ) (6 ) (14 ) (4 ) Other income (7 ) (5 )
(26 ) (11 ) Income from operations $ 524 $ 540 $
1,979 $ 1,156 Adjustments to reconcile income from
operations to Adjusted EBITDA: Depreciation and amortization
expense 106 100 424 339 Loss (gain) from changes in fair value of
commodity derivatives, net 62 (28 ) 99 17 Impairment expense and
loss on disposal of assets — — 8 — Legal settlement expense —
— 7 — Adjusted EBITDA $ 692 $
612 $ 2,517 $ 1,512
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version on businesswire.com: https://www.businesswire.com/news/home/20190226005183/en/
Cheniere Energy Partners, L.P.InvestorsRandy Bhatia,
713-375-5479Megan Light, 713-375-5492orMedia RelationsEben
Burnham-Snyder, 713-375-5764
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