Cheniere Energy, Inc. (“Cheniere”) (NYSE American: LNG) today
announced its financial results for the fourth quarter and full
year 2021.
RECENT HIGHLIGHTS
- Consolidated Adjusted EBITDA1 of approximately $1.3 billion and
$4.9 billion for the fourth quarter and full year 2021,
respectively. Distributable Cash Flow1 of approximately $540
million and $2.0 billion for the fourth quarter and full year 2021,
respectively. Full year 2021 Consolidated Adjusted EBITDA1 and
Distributable Cash Flow1 are within guidance ranges. Net loss2 of
approximately $1.3 billion and $2.3 billion for the fourth quarter
and full year 2021, respectively.
- Raising full year 2022 Consolidated Adjusted EBITDA1 guidance
to $7.0 - $7.5 billion and full year 2022 Distributable Cash Flow1
guidance to $4.3 - $4.8 billion due primarily to the accelerated
substantial completion of Train 6 at the SPL Project (defined
below), further improvement in LNG market margins across 2022, and
the timing of delivery of certain LNG cargoes around year end
2021.
- Cheniere Energy Partners, L.P. (“Cheniere Partners”) is
increasing full year 2022 distribution guidance to $4.00 - $4.25
per common unit and announcing the initiation of quarterly
distributions to be comprised of a base amount plus a variable
amount, which are expected to begin with the distribution related
to the first quarter of 2022. It is anticipated that the quarterly
distribution with respect to the first quarter of 2022 will be
comprised of a base amount equal to $0.775 ($3.10 annualized), and
a variable amount equal to the remaining available cash per unit,
which will take into consideration, among other things, amounts
reserved for annual debt repayment and capital allocation goals,
anticipated capex to be funded with cash, and cash reserves to
provide for the proper conduct of the business.
- In line with our comprehensive capital allocation plan, during
the year ended December 31, 2021, we repaid approximately $1.2
billion of consolidated indebtedness, repurchased an aggregate of
101,944 shares of our common stock for approximately $9 million,
and paid an inaugural quarterly dividend of $0.33 per common share
on November 17, 2021.
- In November 2021, Cheniere Marketing LLC (“Cheniere Marketing”)
entered into a long-term LNG sale and purchase agreement (“SPA”)
with Sinochem Group Co., Ltd (“Sinochem Group”), under which
Sinochem Group has agreed to purchase an initial volume of
approximately 0.9 million tonnes per annum (“mtpa”) of LNG, which
increases to 1.8 mtpa, from Cheniere Marketing on a free-on-board
basis for a term of approximately 17.5 years beginning in July
2022.
- In November 2021, Cheniere Marketing International LLP
(“Cheniere Marketing International”) entered into a long-term LNG
SPA with Foran Energy Group Co., Ltd. (“Foran”), under which Foran
has agreed to purchase approximately 0.3 mtpa of LNG from Cheniere
Marketing International on a delivered ex-ship basis for a term of
20 years beginning in January 2023.
- On February 4, 2022, substantial completion was achieved on
Train 6 of the SPL Project (defined below), upon which Bechtel Oil,
Gas and Chemicals, Inc. (“Bechtel”) turned over care, custody, and
control of Train 6 to Cheniere Partners. Cheniere Partners began
producing and exporting commissioning LNG from Train 6 in December
with a total of 12 TBtu exported in the fourth quarter.
______________________________
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.
CEO COMMENT
“2021 proved to be a defining year for Cheniere, marked by
significant milestones across our business, including the
realization of our initial 9-train platform across Sabine Pass and
Corpus Christi, and the implementation of our comprehensive capital
allocation plan. Our 2021 financial results are the product of a
relentless focus on execution throughout the Cheniere organization
and a fundamentally strong global LNG market,” said Jack Fusco,
Cheniere’s President and Chief Executive Officer.
“Today we are raising our 2022 financial guidance due to the
early completion of Sabine Pass Train 6, the sustained strength in
the global LNG market as demand for reliable LNG supply continues
to grow, and the timing of delivery of certain cargoes around year
end 2021. LNG market strength provides significant long-term growth
tailwinds for our business, reinforcing our confidence in a
positive FID on Corpus Christi Stage 3 this year, and our
excitement about our opportunities to leverage the platform for
growth beyond Stage 3 in the future.”
2022 REVISED FULL YEAR FINANCIAL GUIDANCE
(in billions)
2022 Previous
2022 Revised
Consolidated Adjusted EBITDA1
$ 5.8
-
$ 6.3
$ 7.0
-
$ 7.5
Distributable Cash Flow1
$ 3.1
-
$ 3.6
$ 4.3
-
$ 4.8
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG data)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
% Change
2021
2020
% Change
Revenues
$
6,557
$
2,787
135
%
$
15,864
$
9,358
70
%
Net loss2
$
(1,323
)
$
(194
)
(582
)%
$
(2,343
)
$
(85
)
nm
Consolidated Adjusted EBITDA1
$
1,339
$
1,052
27
%
$
4,867
$
3,961
23
%
LNG exported:
Number of cargoes
153
130
18
%
566
391
45
%
Volumes (TBtu)
542
461
18
%
2,018
1,381
46
%
LNG volumes loaded (TBtu)
540
464
16
%
2,015
1,384
46
%
Net loss increased $2.3 billion for the full year 2021 as
compared to full year 2020, primarily due to an increase in
derivative losses from changes in fair value and settlements of
$5.8 billion (pre-tax and excluding the impact of non-controlling
interests), as well as $969 million related to the non-recurrence
of revenues recognized from cancelled LNG cargoes during the full
year 2020. These impacts were partially offset by increased margins
and volumes of LNG delivered during the full year 2021, the income
tax benefit generated by the pre-tax derivative losses, as well as
lower interest costs as a result of refinancing activities and
repayment of debt in accordance with our capital allocation
plan.
Net loss increased $1.1 billion for the fourth quarter 2021 as
compared to the fourth quarter 2020, primarily due to an increase
in derivative losses from changes in fair value and settlements of
$1.3 billion (pre-tax and excluding the impact of non-controlling
interests), as well as an increase in income tax provision due to
the variability of our forecast earnings for the full year 2021
driven by the pre-tax derivative losses, and the proportion of such
earnings attributable to non-controlling interests. These impacts
were partially offset by increased margins and volumes of LNG
delivered during the fourth quarter 2021.
Substantially all derivative losses relate to the use of
commodity derivative instruments indexed to international LNG
prices, primarily related to our long-term Integrated Production
Marketing (“IPM”) agreements. 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 fourth quarter and
full year 2021, we incurred $0.6 billion and $4.5 billion,
respectively, of non-cash unfavorable changes in fair value
attributed to positions indexed to such prices (pre-tax and
excluding the impact of non-controlling interest). 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 $287 million and $906
million during the fourth quarter and full year 2021, respectively,
as compared to the comparable 2020 periods, due primarily to
increased margin per MMBtu of LNG and volume delivered as described
above. This impact was partially offset by an increase in realized
losses from financial derivative instruments used to hedge our
exposure to the commodity markets in which we have contractual
arrangements to purchase or sell physical LNG during the fourth
quarter and full year 2021, as well as the non-recurrence of
revenues recognized from cancelled LNG cargoes during the fourth
quarter and full year 2020.
During the fourth quarter and full year 2020, we recognized $38
million and $969 million, respectively, in LNG revenues associated
with cancelled LNG cargoes, of which $38 million would have been
recognized during the full year 2021 had the cargoes been lifted
pursuant to the delivery schedules with the customers. LNG revenues
during fourth quarter 2020 excluded $47 million that would have
otherwise been recognized during the quarter if the cargoes were
lifted pursuant to the delivery schedules with the customers, as
these revenues were recognized during third quarter 2020 when
cancellation notices were received. We did not have any such
revenue timing impacts during the fourth quarter 2021.
Share-based compensation expenses included in net loss totaled
$48 million and $140 million for the fourth quarter and full year
2021, respectively, compared to $26 million and $110 million for
the comparable 2020 periods.
Our financial results are reported on a consolidated basis. Our
ownership interest in Cheniere Partners (NYSE American: CQP) as of
December 31, 2021 consisted of 100% ownership of the general
partner and a 48.6% limited partner interest.
BALANCE SHEET MANAGEMENT
Capital Resources
As of December 31, 2021, our total consolidated liquidity
position was over $5 billion. We had cash and cash equivalents of
$1.4 billion on a consolidated basis, of which $0.9 billion was
held by Cheniere Partners. In addition, we had restricted cash and
cash equivalents of $413 million, $1.25 billion of available
commitments under the Cheniere Revolving Credit Facility, $589
million of available commitments under the Cheniere Corpus Christi
Holdings, LLC Working Capital Facility, $750 million of available
commitments under Cheniere Partners’ credit facilities, and $805
million of available commitments under the Sabine Pass
Liquefaction, LLC (“SPL”) Working Capital Facility.
Key Financial Transactions and Updates
In December 2021, we issued a notice of redemption for all $625
million aggregate principal amount outstanding of our 4.25%
Convertible Senior Notes due 2045, which were redeemed on January
5, 2022.
In December 2021, SPL issued Senior Secured Notes due 2037 on a
private placement basis for an aggregate principal amount of
approximately $482 million (the “2037 SPL Private Placement Senior
Secured Notes”). The proceeds of the 2037 SPL Private Placement
Senior Secured Notes, net of related fees, costs and expenses, were
used to redeem a portion of the 2022 SPL Senior Notes. The
remaining balance of the 2022 SPL Senior Notes was redeemed with
cash on hand, including proceeds from the CQP 2032 Notes issued in
September 2021. The 2037 SPL Private Placement Senior Secured Notes
are fully amortizing, with a weighted average life of over 10 years
and a weighted average interest rate of 3.07%.
Liquefaction Projects Overview
SPL Project
Through Cheniere Partners, we operate six natural gas
liquefaction Trains for a total production capacity of
approximately 30 mtpa of LNG at the Sabine Pass LNG terminal (the
“SPL Project”). On February 4, 2022, substantial completion was
achieved on Train 6 of the SPL Project.
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 obtaining adequate
financing.
INVESTOR CONFERENCE CALL AND WEBCAST
We will host a conference call to discuss our financial and
operating results for the fourth quarter 2021 on Thursday, February
24, 2022, 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
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 total
production capacity of approximately 45 million tonnes per annum of
LNG in operation. 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 Annual Report on Form 10-K for the year
ended December 31, 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
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, (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
As of February 18, 2022, over 2,000 cumulative LNG cargoes
totaling approximately 140 million tonnes of LNG have been
produced, loaded and exported from our liquefaction projects.
During the fourth quarter and full year 2021, we exported 542
TBtu and 2,018 TBtu of LNG, respectively, from our liquefaction
projects. 51 TBtu of LNG exported from our liquefaction projects
and sold on a delivered basis was in transit as of December 31,
2021, of which 1 TBtu was 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 fourth quarter and
full year 2021:
Three Months Ended December
31, 2021
Year Ended December 31,
2021
(in TBtu)
Operational
Commissioning
Operational
Commissioning
Volumes loaded during the current
period
528
12
1,975
40
Volumes loaded during the prior period but
recognized during the current period
34
—
26
3
Less: volumes loaded during the current
period and in transit at the end of the period
(49
)
(1
)
(49
)
(1
)
Total volumes recognized in the current
period
513
11
1,952
42
In addition, during the fourth quarter and full year 2021, we
recognized the financial impact of 7 TBtu and 45 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
fourth quarter and full year 2021 (in millions):
Three Months Ended December
31, 2021
Year Ended December 31,
2021
Total revenues
$
6,557
$
15,864
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
$
6,557
$
15,902
Cheniere Energy, Inc.
Consolidated Statements of
Operations
(in millions, except per share
data)(1)
Three Months Ended
Year Ended
December 31,
December 31,
2021
2020
2021
2020
Revenues
LNG revenues
$
6,405
$
2,688
$
15,395
$
8,924
Regasification revenues
67
67
269
269
Other revenues
85
32
200
165
Total revenues
6,557
2,787
15,864
9,358
Operating costs and expenses
Cost of sales (excluding items shown
separately below) (2)
5,365
1,866
13,773
4,161
Operating and maintenance expense
387
332
1,444
1,320
Development expense
2
1
7
6
Selling, general and administrative
expense
101
78
325
302
Depreciation and amortization expense
258
233
1,011
932
Impairment expense and loss on disposal of
assets
5
1
5
6
Total operating costs and expenses
6,118
2,511
16,565
6,727
Income (loss) from operations
439
276
(701
)
2,631
Other expense (income)
Interest expense, net of capitalized
interest
(350
)
(351
)
(1,438
)
(1,525
)
Loss on modification or extinguishment of
debt
(21
)
(2
)
(116
)
(217
)
Interest rate gain (loss), net
2
—
(1
)
(233
)
Other expense (income), net
(8
)
3
(22
)
(112
)
Total other expense
(377
)
(350
)
(1,577
)
(2,087
)
Income (loss) before income taxes and
non-controlling interest
62
(74
)
(2,278
)
544
Less: income tax provision (benefit)
1,151
(76
)
(713
)
43
Net income (loss)
(1,089
)
2
(1,565
)
501
Less: net income attributable to
non-controlling interest
234
196
778
586
Net loss attributable to common
stockholders
$
(1,323
)
$
(194
)
$
(2,343
)
$
(85
)
Net loss per share attributable to common
stockholders—basic and diluted
$
(5.22
)
$
(0.77
)
$
(9.25
)
$
(0.34
)
Weighted average number of common shares
outstanding—basic and diluted
253.6
252.2
253.4
252.4
______________________________
(1)
Please refer to the Cheniere Energy, Inc.
Annual Report on Form 10-K for the year ended December 31, 2021,
filed with the Securities and Exchange Commission.
(2)
Cost of Sales includes approximately $4.3
billion of losses from changes in the fair value of commodity
derivatives prior to contractual delivery or termination during the
year ended December 31, 2021, as compared to $0.1 billion of gains
in the corresponding 2020 period.
Cheniere Energy, Inc.
Consolidated Balance
Sheets
(in millions, except share
data)(1)(2)
December 31,
2021
2020
ASSETS
Current assets
Cash and cash equivalents
$
1,404
$
1,628
Restricted cash and cash equivalents
413
449
Accounts and other receivables, net of
current expected credit losses
1,506
647
Inventory
706
292
Current derivative assets
55
32
Margin deposits
765
25
Other current assets
207
96
Total current assets
5,056
3,169
Property, plant and equipment, net of
accumulated depreciation
30,288
30,421
Operating lease assets
2,102
759
Derivative assets
69
376
Goodwill
77
77
Deferred tax assets
1,204
489
Other non-current assets, net
462
406
Total assets
$
39,258
$
35,697
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
155
$
35
Accrued liabilities
2,299
1,175
Current debt, net of discount and debt
issuance costs
366
372
Deferred revenue
155
138
Current operating lease liabilities
535
161
Current derivative liabilities
1,089
313
Other current liabilities
94
2
Total current liabilities
4,693
2,196
Long-term debt, net of premium, discount
and debt issuance costs
29,449
30,471
Operating lease liabilities
1,541
597
Finance lease liabilities
57
57
Derivative liabilities
3,501
151
Other non-current liabilities
50
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; 275.2 million shares and 273.1 million
shares issued at December 31, 2021 and 2020, respectively
1
1
Treasury stock: 21.6 million shares and
20.8 million shares at December 31, 2021 and 2020, respectively, at
cost
(928
)
(872
)
Additional paid-in-capital
4,377
4,273
Accumulated deficit
(6,021
)
(3,593
)
Total stockholders' deficit
(2,571
)
(191
)
Non-controlling interest
2,538
2,409
Total equity (deficit)
(33
)
2,218
Total liabilities and stockholders’ equity
(deficit)
$
39,258
$
35,697
______________________________
(1)
Please refer to the Cheniere Energy, Inc.
Annual Report on Form 10-K for the year ended December 31, 2021,
filed with the Securities and Exchange Commission.
(2)
Amounts presented include balances held by
our consolidated variable interest entity, Cheniere Partners. As of
December 31, 2021, total assets and liabilities of Cheniere
Partners, which are included in our Consolidated Balance Sheets,
were $19.0 billion and $18.6 billion, respectively, including $0.9
billion of cash and cash equivalents and $0.1 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 quarters
ended and years ended December 31, 2021 and 2020 (in millions):
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
Net loss attributable to common
stockholders
$
(1,323
)
$
(194
)
$
(2,343
)
$
(85
)
Net income attributable to non-controlling
interest
234
196
778
586
Income tax provision (benefit)
1,151
(76
)
(713
)
43
Interest expense, net of capitalized
interest
350
351
1,438
1,525
Loss on modification or extinguishment of
debt
21
2
116
217
Interest rate derivative loss (gain),
net
(2
)
—
1
233
Other expense (income), net
8
(3
)
22
112
Income (loss) from operations
$
439
$
276
$
(701
)
$
2,631
Adjustments to reconcile income from
operations to Consolidated Adjusted EBITDA:
Depreciation and amortization expense
258
233
1,011
932
Loss from changes in fair value of
commodity and FX derivatives, net (1)
624
515
4,450
215
Total non-cash compensation expense
11
26
100
108
Impairment expense and loss on disposal of
assets
5
1
5
6
Incremental costs associated with COVID-19
response
2
1
2
69
Consolidated Adjusted EBITDA
$
1,339
$
1,052
$
4,867
$
3,961
______________________________
(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 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 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 quarters
ended and year ended December 31, 2021 (in billions):
Three Months Ended December
31,
Year Ended December
31,
2021
2021
Net loss attributable to common
stockholders
$
(1.32
)
$
(2.34
)
Net income attributable to non-controlling
interest
0.23
0.78
Income tax provision (benefit)
1.15
(0.71
)
Interest expense, net of capitalized
interest
0.35
1.44
Depreciation and amortization expense
0.26
1.01
Other expense, financing costs, and
certain non-cash operating expenses
0.67
4.70
Consolidated Adjusted EBITDA
$
1.34
$
4.87
Distributions to Cheniere Partners
non-controlling interest
(0.17
)
(0.66
)
SPL and Cheniere Partners cash retained
and interest expense
(0.44
)
(1.54
)
Cheniere interest expense, income tax and
other
(0.19
)
(0.65
)
Cheniere Distributable Cash
Flow
$
0.54
$
2.02
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 Corpus Christi Holdings, LLC (”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 (loss) attributable to common
stockholders
$ (0.2)
-
$ 0.2
Net income attributable to non-controlling
interest
1.1
-
1.2
Income tax provision
1.1
-
1.2
Interest expense, net of capitalized
interest
1.5
Depreciation and amortization expense
1.1
Other expense (income), financing costs,
and certain non-cash operating expenses
2.4
-
2.3
Consolidated Adjusted EBITDA
$ 7.0
-
$ 7.5
Interest expense (net of capitalized
interest and amortization) and realized interest rate
derivatives
(1.4)
Maintenance capital expenditures, income
tax and other
(0.4)
-
(0.3)
Consolidated Distributable Cash
Flow
$ 5.2
-
$ 5.8
CQP distributable cash flow attributable
to noncontrolling interests
(0.9)
-
(1.0)
Cheniere Distributable Cash
Flow
$ 4.3
-
$ 4.8
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 our 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 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 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/20220223005978/en/
Cheniere Energy, Inc.
Investors Randy Bhatia,
713-375-5479 Frances Smith, 713-375-5753
Media Relations Eben
Burnham-Snyder, 713-375-5764
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