Cheniere Energy, Inc. (“Cheniere”) (NYSE American: LNG) today
announced its financial results for the third quarter of 2021.
RECENT HIGHLIGHTS
- Consolidated Adjusted EBITDA1 of approximately $1.1 billion and
$3.5 billion for the three and nine months ended September 30,
2021, respectively. Distributable Cash Flow1 of approximately $390
million and $1.48 billion for the three and nine months ended
September 30, 2021, respectively, an increase of approximately 45%
over the nine months ended September 30, 2020. Net loss2 of
approximately $1.1 billion and $1.0 billion for the three and nine
months ended September 30, 2021, respectively.
- Raising full year 2021 Consolidated Adjusted EBITDA1 guidance
to $4.6 - $5.0 billion and reconfirming full year 2021
Distributable Cash Flow1 guidance of $1.8 - $2.1 billion.
- Introducing full year 2022 Consolidated Adjusted EBITDA1
guidance of $5.8 - $6.3 billion and full year 2022 Distributable
Cash Flow1 guidance of $3.1 - $3.6 billion.
- In September 2021, our Board of Directors approved a
comprehensive long-term capital allocation plan designed to achieve
an investment grade balance sheet, return significant capital to
shareholders over time, and enable investment in accretive growth.
The plan includes (i) debt repayment of approximately $1.0 billion
annually through 2024 until consolidated investment grade credit
metrics are met, (ii) the initiation of a quarterly dividend, with
an initial dividend of $0.33 per share for the third quarter of
2021, payable November 17, 2021, and (iii) a new three-year, $1.0
billion share repurchase program, inclusive of any amounts
remaining under the previous authorization as of September 30,
2021, effective October 1, 2021.
- During the nine months ended September 30, 2021, in line with
our capital allocation plan, we repaid $750 million of consolidated
indebtedness and repurchased an aggregate of 77,100 shares of our
common stock for approximately $6 million.
- In October 2021, Cheniere Marketing LLC, (“Cheniere Marketing”)
entered into a new long-term LNG sale and purchase agreement
(“SPA”) with ENN LNG (Singapore) Pte Ltd (“ENN LNG”), under which
ENN LNG has agreed to purchase approximately 0.9 million tonnes per
annum of LNG from Cheniere Marketing on a free-on-board basis for a
term of approximately 13 years beginning in July 2022.
- In October 2021, Cheniere Marketing entered into a new
long-term LNG SPA with a subsidiary of Glencore plc (“Glencore”),
under which Glencore has agreed to purchase approximately 0.8
million tonnes per annum of LNG from Cheniere Marketing on a
free-on-board basis for a term of approximately 13 years beginning
in April 2023.
- In September 2021, feed gas was introduced to Train 6 of the
SPL Project (defined below) as part of the commissioning process.
Train 6 is expected to reach substantial completion in the first
quarter of 2022.
- In August 2021, we announced the publication of our
peer-reviewed, LNG life cycle assessment (“LCA”) study, which is
the first of its kind and allows for the improved assessment of
greenhouse gas (“GHG”) emissions throughout the LNG value chain.
The study is published in the American Chemical Society Sustainable
Chemistry & Engineering Journal.
CEO COMMENT
“Our strong third quarter results are the product of our
operational excellence as well as the continued strength in the
global LNG market,” said Jack Fusco, Cheniere’s President and Chief
Executive Officer. “As we look ahead to 2022, we look forward to
substantial completion on Train 6 at Sabine Pass in the first
quarter, approximately a year ahead of the guaranteed completion
schedule, fully realizing our original 9-train vision, and
expanding on that platform with a positive FID on Corpus Christi
Stage 3.”
“Our 2022 guidance ranges are driven by Train 6 commencing in
the first quarter and sustained higher margins available in the
market. We look forward to reinforcing our reputation for
operational excellence and delivering results within the guidance
ranges next year.”
“We have recently executed two new long-term SPAs with ENN and
Glencore. These transactions showcase the global demand for
securing flexible, reliable LNG supply for the long term as well as
Cheniere’s role as a leading global LNG supplier. Strength in the
LNG market, coupled with Cheniere’s commercial momentum, supports
our confidence in a Stage 3 FID in 2022.”
2021 REVISED FULL YEAR FINANCIAL GUIDANCE
(in billions)
2021 Previous
2021 Revised
Consolidated Adjusted EBITDA1
$
4.6
-
$
4.9
$
4.6
-
$
5.0
Distributable Cash Flow1
$
1.8
-
$
2.1
$
1.8
-
$
2.1
2022 FULL YEAR FINANCIAL GUIDANCE
(in billions)
2022
Consolidated Adjusted EBITDA1
$
5.8
-
$
6.3
Distributable Cash Flow1
$
3.1
-
$
3.6
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
% Change
2021
2020
% Change
Revenues
$
3,200
$
1,460
119
%
$
9,307
$
6,571
42
%
Net income (loss)2
$
(1,084
)
$
(463
)
(134
)%
$
(1,020
)
$
109
nm
Consolidated Adjusted EBITDA1
$
1,053
$
477
121
%
$
3,528
$
2,909
21
%
LNG exported:
Number of cargoes
141
55
156
%
413
261
58
%
Volumes (TBtu)
500
193
159
%
1,476
920
60
%
LNG volumes loaded (TBtu)
500
187
167
%
1,475
920
60
%
Net income decreased $621 million and $1.1 billion for the three
and nine months ended September 30, 2021, respectively, as compared
to the corresponding 2020 periods, primarily due to an increase in
derivative losses from changes in fair value and settlements of
$3.4 billion and $4.5 billion (pre-tax and excluding the impact of
non-controlling interests). This impact was partially offset by
increased volume and revenue per MMBtu of LNG as well as an income
tax benefit generated by the pre-tax derivative losses in our
earnings, and the proportion of such earnings attributable to
non-controlling interests, during the three and nine months ended
September 30, 2021, respectively.
Substantially all after-tax derivative losses relate to the use
of commodity derivative instruments, principally those indexed to
international LNG prices. While operationally we seek to eliminate
commodity risk by utilizing derivatives to mitigate price
volatility for commodities procured or sold over a period of time,
as a result of the significant appreciation in forward
international LNG commodity curves during the three and nine months
ended September 30, 2021, we incurred $3.2 billion and $4.0
billion, respectively, of non-cash changes in fair value attributed
to positions indexed to such prices (pre-tax and excluding the
impact of non-controlling interest), primarily related to our
Integrated Production Marketing (“IPM”) agreements, as well as
certain physical and financial derivatives to hedge exposure to
commodity markets in which we have contractual agreements to
purchase or sell physical LNG. Our IPM agreements are structured to
provide stable margins on purchases of natural gas and sales of LNG
over the life of the agreement 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.
Consolidated Adjusted EBITDA increased $576 million, or 121%,
and $619 million, or 21%, during the three and nine months ended
September 30, 2021, respectively, as compared to the comparable
2020 periods, due primarily to increased volume and margin per
MMBtu of LNG delivered.
During the three and nine months ended September 30, 2020, we
recognized $171 million and $932 million, respectively, in LNG
revenues associated with cancelled LNG cargoes, of which $47
million would have been recognized subsequent to September 30, 2020
had the cargoes been lifted pursuant to the delivery schedules with
the customers. LNG revenues during the three months ended September
30, 2020 excluded $458 million that would have otherwise been
recognized during the quarter if the cargoes were lifted pursuant
to the delivery schedules with the customers. We did not have any
such revenue timing impacts during the three months ended September
30, 2021. LNG revenues during the nine months ended September 30,
2021 exclude $38 million that would have been recognized during the
period if the cargoes were lifted pursuant to the delivery
schedules with the customers.
Share-based compensation expenses included in income totaled $28
million and $91 million for the three and nine months ended
September 30, 2021, respectively, compared to $27 million and $84
million for the three and nine months ended September 30, 2020,
respectively.
Our financial results are reported on a consolidated basis. Our
ownership interest in Cheniere Partners (NYSE American: CQP) as of
September 30, 2021 consisted of 100% ownership of the general
partner and a 48.6% limited partner interest.
BALANCE SHEET MANAGEMENT
Capital Resources
As of September 30, 2021, our total consolidated liquidity
position was over $6 billion. We had cash and cash equivalents of
$2.2 billion on a consolidated basis, of which $1.7 billion was
held by Cheniere Partners. In addition, we had current restricted
cash of $419 million, $1.25 billion of available commitments under
our Revolving Credit Facility, $840 million of available
commitments under the Cheniere Corpus Christi Holdings, LLC (“CCH”)
Working Capital Facility, $750 million of available commitments
under Cheniere Partners’ credit facilities, and $804 million of
available commitments under the SPL Working Capital Facility.
Key Financial Transactions and Updates
In October 2021, we amended and restated our $1.25 billion
Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
with 23 financial institutions. The amendment extended the maturity
through October 2026, reduced the interest rate and commitment
fees, which can be further reduced based on our credit ratings and
may be positively or negatively adjusted up to 5 basis points on
the interest rate and up to one basis point on the commitment fees
based on the achievement of defined ESG milestones, and makes
certain other changes to the terms and conditions of the existing
revolving credit facility. Borrowings under the Cheniere Revolving
Credit Facility will initially bear interest at a rate of London
Interbank Offered Rate (LIBOR) plus 162.5 basis points per
annum.
In September 2021, Cheniere Partners issued $1.2 billion of
3.25% Senior Notes due 2032 (the “2032 CQP Senior Notes”). Net
proceeds from the 2032 CQP Senior Notes were used to redeem a
portion of the outstanding $1.1 billion aggregate principal amount
of the 5.625% Senior Notes due 2026 (the “2026 CQP Senior Notes”)
in September 2021 pursuant to a tender offer and consent
solicitation. In October 2021, the remaining net proceeds from the
2032 CQP Senior Notes were used to redeem the remaining outstanding
aggregate principal amount of the 2026 CQP Senior Notes and,
together with cash on hand, redeem $318 million of the 6.25% Senior
Secured Notes due 2022 (the “2022 SPL Senior Notes”).
In August 2021, CCH issued $750 million of fully amortizing
2.742% Senior Secured Notes due 2039 (the “2.742% CCH Senior
Secured Notes”). Net proceeds from the 2.742% CCH Senior Secured
Notes were used to prepay a portion of the principal amount
outstanding under CCH’s amended and restated credit facility due
2024.
During 2021, SPL entered into a series of note purchase
agreements for the sale of approximately $482 million aggregate
principal amount of Senior Secured Notes due 2037, on a private
placement basis (the “2037 SPL Private Placement Senior Secured
Notes”). The 2037 SPL Private Placement Senior Secured Notes are
expected to be issued in the fourth quarter of 2021, subject to
customary closing conditions, and the net proceeds will be used to
redeem a portion of the 2022 SPL Senior Notes. The 2037 SPL Private
Placement Senior Secured Notes will be fully amortizing, with a
weighted average life of over 10 years and a weighted average
interest rate of 3.07%.
LIQUEFACTION PROJECTS UPDATE
As of October 31, 2021, over 1,800 cumulative LNG cargoes
totaling over 135 million tonnes of LNG have been produced, loaded
and exported from our liquefaction projects.
Construction Progress as of September 30, 2021
SPL Project
Train 6
Project Status
Commissioning
Project Completion Percentage
97.1% (1)
Expected Substantial Completion
1Q 2022
(1) Engineering 100.0% complete,
procurement 100.0% complete, and construction 92.9% complete
Liquefaction Projects Overview
SPL Project
Through Cheniere Partners, we operate five natural gas
liquefaction Trains and are commissioning one additional Train for
a total production capacity of approximately 30 million tonnes per
annum (“mtpa”) of LNG at the Sabine Pass LNG terminal (the “SPL
Project”). Train 6 is expected to reach substantial completion in
the first quarter of 2022.
CCL Project
We operate three Trains for a total production capacity of
approximately 15 mtpa of LNG near Corpus Christi, Texas (the “CCL
Project”).
Corpus Christi Stage 3
We are developing an expansion adjacent to the CCL Project for
up to seven midscale Trains with an expected total production
capacity of over 10 mtpa of LNG (“Corpus Christi Stage 3”). We
expect to commence construction of the Corpus Christi Stage 3
project upon, among other things, entering into an engineering,
procurement, and construction contract and additional commercial
agreements, and obtaining adequate financing. We expect Corpus
Christi Stage 3 to reach Final Investment Decision in 2022.
INVESTOR CONFERENCE CALL AND WEBCAST
We will host a conference call to discuss our financial and
operating results for the third quarter 2021 on Thursday, November
4, 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.
___________________________
1
Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details.
2
Net income (loss) as used herein refers to
Net income (loss) attributable to common stockholders on our
Consolidated Statements of Operations.
About Cheniere
Cheniere Energy, Inc. is the leading producer and exporter of
liquefied natural gas (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 expected total
production capacity of approximately 45 million tonnes per annum of
LNG operating or commissioning. 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 September 30, 2021, 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
expectations regarding regulatory authorizations and approvals,
(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, (vii)
statements relating to Cheniere’s capital deployment, including
intent, ability, extent, and timing of capital expenditures, debt
repayment, dividends, and share repurchases, and (viii) statements
regarding the COVID-19 pandemic and its impact on our business and
operating results. 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
During the three and nine months ended September 30, 2021, we
exported 500 TBtu and 1,476 TBtu of LNG, respectively, from our
liquefaction projects. 34 TBtu of LNG exported from our
liquefaction projects and sold on a delivered basis was in transit
as of September 30, 2021, none of which 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 nine months
ended September 30, 2021:
Three Months Ended September
30, 2021
Nine Months Ended September
30, 2021
(in TBtu)
Operational
Commissioning
Operational
Commissioning
Volumes loaded during the current
period
500
—
1,447
28
Volumes loaded during the prior period but
recognized during the current period
23
—
26
3
Less: volumes loaded during the current
period and in transit at the end of the period
(34
)
—
(34
)
—
Total volumes recognized in the current
period
489
—
1,439
31
In addition, during the three and nine months ended September
30, 2021, we recognized the financial impact of 10 TBtu and 38 TBtu
of LNG on our Consolidated Financial Statements related to LNG
cargoes sourced from third parties.
CARGO CANCELLATION REVENUE
SUMMARY
The following table summarizes the timing impacts of revenue
recognition related to cancelled cargoes on our revenues for the
three and nine months ended September 30, 2021 (in millions):
Three Months Ended
September 30, 2021
Nine Months Ended
September 30, 2021
Total revenues
$
3,200
$
9,307
Impact of cargo cancellations recognized
in the prior period for deliveries scheduled in the current
period
—
38
Impact of cargo cancellations recognized
in the current period for deliveries scheduled in subsequent
periods
—
—
Total revenues excluding the timing impact
of cargo cancellations
$
3,200
$
9,345
Cheniere Energy, Inc.
Consolidated Statements of
Operations
(in millions, except per share
data)(1)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Revenues
LNG revenues
$
3,078
$
1,373
$
8,990
$
6,236
Regasification revenues
68
67
202
202
Other revenues
54
20
115
133
Total revenues
3,200
1,460
9,307
6,571
Operating costs and expenses
Cost of sales (excluding items shown
separately below) (2)
4,868
768
8,408
2,295
Operating and maintenance expense
350
317
1,057
988
Development expense
2
—
5
5
Selling, general and administrative
expense
70
70
224
224
Depreciation and amortization expense
259
233
753
699
Impairment expense and loss on disposal of
assets
1
—
—
5
Total operating costs and expenses
5,550
1,388
10,447
4,216
Income (loss) from operations
(2,350
)
72
(1,140
)
2,355
Other expense
Interest expense, net of capitalized
interest
(364
)
(355
)
(1,088
)
(1,174
)
Loss on modification or extinguishment of
debt
(36
)
(171
)
(95
)
(215
)
Interest rate derivative loss, net
(2
)
—
(3
)
(233
)
Other expense, net
(24
)
(129
)
(14
)
(115
)
Total other expense
(426
)
(655
)
(1,200
)
(1,737
)
Income (loss) before income taxes and
non-controlling interest
(2,776
)
(583
)
(2,340
)
618
Less: income tax provision (benefit)
(1,860
)
(75
)
(1,864
)
119
Net income (loss)
(916
)
(508
)
(476
)
499
Less: net income (loss) attributable to
non-controlling interest
168
(45
)
544
390
Net income (loss) attributable to common
stockholders
$
(1,084
)
$
(463
)
$
(1,020
)
$
109
Net income (loss) per share attributable
to common stockholders—basic and diluted
$
(4.27
)
$
(1.84
)
$
(4.03
)
$
0.43
Weighted average number of common shares
outstanding—basic
253.6
252.2
253.3
252.5
Weighted average number of common shares
outstanding—diluted
253.6
252.2
253.3
253.2
___________________________
(1)
Please refer to the Cheniere Energy, Inc.
Quarterly Report on Form 10-Q for the quarter ended September 30,
2021, filed with the Securities and Exchange Commission.
(2)
Cost of Sales includes approximately $2.4
and $2.8 billion of losses from changes in the fair value of
commodity derivatives prior to contractual delivery or termination
during the three and nine months ended September 30, 2021,
respectively, as compared to $0.1 billion and ($0.4) billion in the
corresponding 2020 periods.
Cheniere Energy, Inc.
Consolidated Balance
Sheets
(in millions, except share
data)(1)(2)
September 30,
December 31,
2021
2020
ASSETS
(unaudited)
Current assets
Cash and cash equivalents
$
2,203
$
1,628
Restricted cash
419
449
Accounts and other receivables, net of
current expected credit losses
983
647
Inventory
471
292
Current derivative assets
266
32
Margin deposits
336
25
Other current assets
185
96
Total current assets
4,863
3,169
Property, plant and equipment, net of
accumulated depreciation
30,318
30,421
Operating lease assets
2,064
759
Derivative assets
71
376
Goodwill
77
77
Deferred tax assets
2,361
489
Other non-current assets, net
425
406
Total assets
$
40,179
$
35,697
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
73
$
35
Accrued liabilities
1,787
1,175
Current debt, net of discount and debt
issuance costs
1,047
372
Deferred revenue
187
138
Current operating lease liabilities
458
161
Current derivative liabilities
1,979
313
Other current liabilities
129
2
Total current liabilities
5,660
2,196
Long-term debt, net of premium, discount
and debt issuance costs
29,481
30,471
Operating lease liabilities
1,590
597
Finance lease liabilities
57
57
Derivative liabilities
2,158
151
Other non-current liabilities
20
7
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.0001 par value, 5.0
million shares authorized, none issued
—
—
Common stock, $0.003 par value, 480.0
million shares authorized; 275.1 million shares and
273.1 million shares issued at September
30, 2021 and December 31, 2020, respectively
1
1
Treasury stock: 21.6 million shares and
20.8 million shares at September 30, 2021 and
December 31, 2020, respectively, at
cost
(924
)
(872
)
Additional paid-in-capital
4,364
4,273
Accumulated deficit
(4,698
)
(3,593
)
Total stockholders' deficit
(1,257
)
(191
)
Non-controlling interest
2,470
2,409
Total equity
1,213
2,218
Total liabilities and stockholders’
equity
$
40,179
$
35,697
___________________________
(1)
Please refer to the Cheniere Energy, Inc.
Quarterly Report on Form 10-Q for the quarter ended September 30,
2021, filed with the Securities and Exchange Commission.
(2)
Amounts presented include balances held by
our consolidated variable interest entity, Cheniere Partners. As of
September 30, 2021, total assets and liabilities of Cheniere
Partners, which are included in our Consolidated Balance Sheets,
were $19.6 billion and $19.3 billion, respectively, including $1.7
billion of cash and cash equivalents and $0.1 billion of restricted
cash.
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 nine months ended September
30, 2021 and 2020 (in millions):
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net income (loss) attributable to common
stockholders
$
(1,084
)
$
(463
)
$
(1,020
)
$
109
Net income (loss) attributable to
non-controlling interest
168
(45
)
544
390
Income tax provision (benefit)
(1,860
)
(75
)
(1,864
)
119
Interest expense, net of capitalized
interest
364
355
1,088
1,174
Loss on modification or extinguishment of
debt
36
171
95
215
Interest rate derivative loss, net
2
—
3
233
Other expense, net
24
129
14
115
Income (loss) from operations
$
(2,350
)
$
72
$
(1,140
)
$
2,355
Adjustments to reconcile income from
operations to Consolidated Adjusted EBITDA:
Depreciation and amortization expense
259
233
753
699
Loss (gain) from changes in fair value of
commodity and FX derivatives, net (1)
3,115
140
3,826
(300
)
Total non-cash compensation expense
28
26
89
82
Impairment expense and loss on disposal of
assets
1
—
—
5
Incremental costs associated with COVID-19
response
—
6
—
68
Consolidated Adjusted EBITDA
$
1,053
$
477
$
3,528
$
2,909
(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, non-cash
compensation expense, and non-recurring costs related to our
response to the COVID-19 outbreak which are incremental to and
separable from normal operations. 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 nine months
ended September 30, 2021 and forecast amounts for full year 2021
(in billions):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Full Year
2021
2021
2021
Net income (loss) attributable to common
stockholders
$
(1.08
)
$
(1.02
)
$
(1.5
)
-
$
(1.1
)
Net income attributable to non-controlling
interest
0.17
0.54
0.7
-
0.8
Income tax benefit
(1.86
)
(1.86
)
(0.4
)
-
(0.3
)
Interest expense, net of capitalized
interest
0.36
1.09
1.5
-
1.5
Depreciation and amortization expense
0.26
0.75
1.0
-
1.0
Other expense, financing costs, and
certain non-cash operating expenses
3.21
4.03
3.3
-
3.1
Consolidated Adjusted EBITDA
$
1.05
$
3.53
$
4.6
-
$
5.0
Distributions to Cheniere Partners
non-controlling interest
(0.17
)
(0.49
)
(0.6
)
-
(0.8
)
SPL and Cheniere Partners cash retained
and interest expense
(0.32
)
(1.10
)
(1.5
)
-
(1.4
)
Cheniere interest expense, income tax and
other
(0.18
)
(0.46
)
(0.7
)
-
(0.7
)
Cheniere Distributable Cash
Flow
$
0.39
$
1.48
$
1.8
-
$
2.1
Note: Totals may not sum due to
rounding.
Distributable Cash Flow, in 2021 and all prior periods, is
defined as cash received, or expected to be received, from
Cheniere’s ownership and interests in Cheniere Partners, cash
received (used) by CCH and Cheniere’s integrated marketing function
(other than cash for capital expenditures) less interest, taxes and
maintenance capital expenditures associated with Cheniere and not
the underlying entities. Management uses this measure and believes
it provides users of our financial statements a useful measure
reflective of our business’s ability to generate cash earnings to
supplement the comparable GAAP measure.
The following table reconciles our Consolidated Adjusted EBITDA
and Distributable Cash Flow to Net income attributable to common
stockholders for the forecast amounts for full year 2022 (in
billions):
Full Year
2022
Net income attributable to common
stockholders
$
1.4
-
$
1.8
Net income attributable to non-controlling
interest
1.0
-
1.2
Income tax provision
0.7
-
0.8
Interest expense, net of capitalized
interest
1.5
-
1.5
Depreciation and amortization expense
1.1
-
1.1
Other expense (income), financing costs,
and certain non-cash operating expenses
0.1
-
(0.1)
Consolidated Adjusted EBITDA
$
5.8
-
$
6.3
Interest expense (net of capitalized
interest and amortization) and realized interest rate
derivatives
(1.4)
-
(1.4)
Maintenance capital expenditures, income
tax and other
(0.4)
-
(0.2)
Consolidated Distributable Cash
Flow
$
4.0
-
$
4.7
CQP distributable cash flow attributable
to noncontrolling interests
(0.9)
-
(1.1)
Cheniere Distributable Cash
Flow
$
3.1
-
$
3.6
Note: Totals may not sum due to
rounding.
Beginning with our 2022 financial guidance, we have adopted a
revised definition for Distributable Cash Flow, which aims to more
accurately reflect the consolidated distributable cash flow of each
of our subsidiaries, including Cheniere Partners. The revised
definition reflects the distributable cash flow of Cheniere
Partners before the impacts from capital allocation, less amounts
attributable to minority interests. There is no change to our
run-rate distributable cash flow guidance as a result of this
definition change.
Distributable Cash Flow for 2022 and going forward 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 Statements of Stockholders’ Equity. 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/20211104005131/en/
Cheniere Energy, Inc.
Investors Randy Bhatia.
713-375-5479
Media Relations Eben
Burnham-Snyder, 713-375-5764
Cheniere Energy (NYSE:LNG)
Historical Stock Chart
From Sep 2024 to Oct 2024
Cheniere Energy (NYSE:LNG)
Historical Stock Chart
From Oct 2023 to Oct 2024